NEWS AND PRESS STATEMENTS

The Head of Papua New Guinea Extractive Industries Transparency (PNGEITI), Mr. Lucas Alkan announced today that the country will be validated for the second time since PNG signed up to implement the EITI global best practice Standard in 2013.

The validation exercise is set to commence on the 30^th of October 2020.

Mr. Alkan stated that the validation is an essential feature of the EITI implementation process. It is intended to provide stakeholders with an impartial assessment of whether EITI implementation in a country is consistent with the provisions of the EITI Standard.

PNG underwent its first validation in 2018 in which the EITI Board granted ‘meaningful progress’ in implementing the EITI Standard. The Board commended PNG’s efforts in implementing a number of reforms to address weaknesses in government systems and in improving the level of transparency in the country’s extractive sector.

The Board recognised PNG’s efforts in ensuring appropriate multi-stakeholder oversight of EITI implementation and aligning objectives for the EITI with national priorities. It further commended the country’s efforts to produce EITI data in a timely manner and to effectively disseminate the findings of the EITI Reports to influence public debate.

The Board welcomed the government’s continued commitment to strengthening government systems by using the EITI process as a diagnostic tool to support reforms. As part of improvements of such systems, the EITI Board encouraged PNG to pursue efforts to systematically disclose data required by the EITI Standard as part of routine government and company disclosures.

The outcome of the first validation was a positive step for PNG in the EITI implementation process, and demonstrated that the EITI process can contribute to enhancing transparency and accountability in the management of resources related revenues.

In granting ‘meaningful progress’ to PNG in its efforts to implement the EITI, the Board allowed 18 months (up till 30 April 2020) for PNG to take corrective actions on the areas identified to meet the EITI global standard before a second validation was undertaken.

There were 14 areas identified as having made no progress or inadequate progress which required actions to be taken.

The 14 corrective action areas included:

• public disclosure of information related to the award or transfer of mining tenements and oil and gas licenses pertaining to companies covered in the EITI Report;
• ensuring a comprehensive list of state participation in the extractive industries, including terms associated with state equity and any changes in the year under review, be publicly accessible;
• ensuring that complete production volume for oil and gas, and production values for each of the extractive commodities produced during the year under review be publicly accessible and disaggregated by commodity;
• ensuring that export volumes and values are disclosed publicly for each mineral commodity (including oil, condensate and gas) exported in the year under review;
• ensuring that the materiality threshold for selecting companies ensures that all payments that could affect the comprehensiveness of EITI reporting be included in the scope of reconciliation;
• undertake a comprehensive assessment of transactions between extractives SOEs (and their subsidiaries) and mining, oil and gas companies, as well as between the extractives SOEs (including their subsidiaries) and government in its scoping for future EITI Reports;
• establish whether direct subnational payments (to government entities) by extractives companies are material;
• an assessment of whether the payments and revenues are subject to credible, independent audit, applying international auditing standards;
• clarify which extractive revenues are recorded in the national budget;
• ensure that material subnational transfers of extractives revenues are publicly disclosed, when such transfers are mandated by a national constitution, statute or other revenue sharing mechanisms such as benefit-sharing agreements;
• ensure that reporting of mandatory social expenditures be disaggregated by type of payment and beneficiary, clarifying the name and function of any non-government (third-party) beneficiaries of mandatory social expenditures; and
• undertake a comprehensive review of all expenditures undertaken by extractives SOEs (and their subsidiaries) that could be considered quasi-fiscal.

Mr. Alkan indicated that the onset of the Covid19 pandemic late last year and the associated lockdowns and restrictions to normal operations had severely affected our ability to prepare well by addressing the above areas before the second assessment.

He said that due to the Covid19 pandemic, the EITI Board deferred PNG’s validation from April to October 2020. A further deferment to next year would work well for us in our continued effort to take corrective actions, however this did not seem imminent.

Despite the Covid19 inflicted disruptions, he encouraged all stakeholders involved in the EITI implementation process to prepare as best as we could for the second validation.

The Head of Secretariat emphasised that failure to make considerable improvements in the above areas (in the second validation) could result in PNG being suspended from the EITI in accordance with the provisions of the EITI Standard.

Full details of the PNG’s Validation outcome can be viewed on EITI website or the PNGEITI website, www.pngeiti.org.pg

File photo: February 2020, Port Moresby: PNGEITI Technical Working Group during the second Validation Workshop.

EITI Board recognises Papua New Guinea’s achievements in improving
natural resource governance

EITI Board recognises Papua New Guinea’s achievements in improving
natural resource governance
Papua New Guinea achieves meaningful progress in EITI implementation, but further institutional
reforms are necessary.

At its meeting in Dakar on 30 October 2018, the EITI Board decided that Papua New Guinea (PNG)
has made meaningful progress in implementing the EITI Standard. The Board recognised PNG’s
efforts in implementing reforms to address weaknesses in government systems and in improving the
level of transparency on state participation in the country’s extractive industries.
“The EITI is having a real impact in Papua New Guinea: citizens can now see how the
revenues from oil and gas projects are being distributed and how the government is
managing mining revenues through trust accounts”, said Fredrik Reinfeldt, chair of the
EITI.

“The process has improved the petroleum register and shone a light on the state’s
participation in the sector. I welcome the news that stakeholders will increasingly use
EITI to inform investment decisions and to assess the sector’s contribution to the
economy.”

The government of the Independent State of Papua New Guinea (PNG) committed to implement the EITI on
14 March 2013 by through National Executive Council (NEC) Decision 90/2013. An interim Multi-Stakeholder
Group (MSG) was formed in 2012 and a permanent MSG was appointed in November 2013.

The country was accepted as an EITI Candidate on 19 March 2014 at the EITI Board’s meeting in Oslo.
On 25 October 2016, the Board agreed that PNG’s Validation under the 2016 EITI Standard would commence
on 1 April 2018. This report presented the findings and initial assessment of the International Secretariat’s
data gathering and stakeholder consultations.

PORT MORESBY: Papua New Guinea’s prominent petroleum company, Oil Search Ltd merger into Santos has been welcomed by the PNG Extractive Industries Transparency Initiative (PNGEITI).

PNGEITI hailed the merger  as a milestone achievement for both companies who are prominent and competitive players in the PNG petroleum space.

“The smooth transitioning of this merger arrangement demonstrates an independent and vibrant regulatory environment in Papua New Guinea where business can operate free of undue control and influence” PNG EITI Head of National Secretariat Lucas Alkan commented.

Santos Limited  on Friday 17^th December, 2021 announced on the Australian Stock Exchange (ASX) that the merger of Santos and Oil Search Limited (Oil Search) was effected on the same day. Accordingly, Santos has acquired 100 per cent of the issued capital in Oil Search from Oil Search shareholders.

“Papua New Guinea EITI is happy to witness this merger of two strong companies and we believe that this arrangement will bring enhanced benefits for the shareholders and the economy.

“Oil Search has been a founding member of the PNG EITI Multi Stakeholder Group (MSG) and has played significant roles in the EITI implementation process in Papua New Guinea.

“We thank Oil Search as a company for the support PNGEITI enjoyed for the last eight years and we look forward to welcoming Santos, another significant player in the industry now with boosted capacity and as second biggest player in the PNGLNG project and other significant projects that are in the pipeline- to the PNGEITI MSG,” Mr. Alkan said.

“We also extend our warm congratulations to  MSG representative  Mr. Musje Werror, Managing Director Ok Tedi Mining Ltd for being appointed to the Santos board as non-executive director  and we look forward to working with him in that capacity as well going forward. “ Mr. Alkan added.

International Day for the Elimination of violence against Women.

Port Moresby: This year, in light of the 21 days of activism, we commemorate the International Day for Elimination of Violence against Women, which falls on the 25th of November.