PAPUA NEW GUINEAS ENERGY SECTORS FUTURE IS BURNING BRIGHT – BUT FOR WHO?

In December from the 3rd -0 5th, 2012, the 12th PNG – Australia Gas and Petroleum Conference will be held in Sydney, NSW, Australia, organized by the PNG Chamber of Mines and Petroleum. It will be held at the prestigious Sydney Hilton and once more all manner of people involved in the gas and petroleum industry in Papua New Guinea, either directly or indirectly will be there networking, hoping to impress one another with what they know, or who they are or who they know.

There will be many current and ex politicians from PNG and Australia even, experts, gurus on this and that and econometrics, geologists, engineers, lawyers and accountants and so forth. There will be middlemen and agents, those who actually mine and those who mine the stock exchanges around the world, boosting their shares up with great news from the last frontier. In fact there will also be many experts on PNG, some who have actually lived there, some are even Papua New Guinean.

Again, there will be much to discuss and much is at stake – for instance PNG’s future economic prospects and the future profits of the investors in this industry. The two significant questions that come from both these areas of concern are: how does PNG benefit and, how do the investors benefit?

Of course, the investors care very little how much PNG benefits as long as PNG allows access to its resources, grant all manner of Tax and Customs exemptions and allows the Mobile Squad to stand guard at project sites to counter irritating landowners. All the while, PNG is supposed to feel very grateful for a pittance of a stake of some sort in such projects. Clever schemes set up by lawyers and accountants force the PNG Government to excessively fund costs associated with being a stakeholder of some sort and undertake to handle all landowner issues an example of which was witnessed by Papua New Guinea and the rest of the world in Bougainville with the loss of 20,000 lives from 1988 to 1998 and the destruction of a province and a people who are still recovering to this day.

But they can’t say that, at least not in public, survival is their focus, profit is their agenda.

A test of care would be to measure the stake Papua New Guinea owns in any mineral resource project – less then 10% in many instances and this often very reluctantly from the investor.

Meanwhile, Papua New Guineans are always being told in overt or covert manner by investors how grateful they should be for the developments taking place in their country. Expert spin Doctors paid oodles of money arrive on PNG shores literally every day with brand new ideas on how to convince the people to not only accept but to demand and ask and even pay for investments in their country, for their own resources. These magicians who write and talk up a great and convincing hype arrive heeding the call by the industries major players who are willing to pay buckets of money so that they do not have to pay what is rightfully due to the resource owners, that is the people of PNG.

As for the keepers of the gate of the economy, the Government, well they are usually the first to sell out. At least that has been the case and has become the tradition since the first missionaries were sent to urge Papua New Guinea to help the people turn a collective cheek so that the administration that followed could plunder at will and whim and “civilize” the people, often brutally and in condescending and discriminatory fashion until their independence, where by they could now be geographically and politically independent but remain economically manipulated for as long as possible.

So, while the spin doctors churn out propaganda products galore, referred to by the corporate world as “marketing tools” or “community affairs promotion efforts” that are designed to pacify the people and assure the developers that their conscience is clear, the reality is just the opposite for the average Papua New Guinean who has to cope with the burgeoning cost of living, food and accommodation costs ever more while salaries and wages remain ever low with increasingly less accessible government services and increasing crime and fewer opportunities for employment or business. As for the landowner, few genuine landowners benefit, most often miss out. It is usually those who are educated to some degree and in the right place at the right time that end up benefiting. For many, benefiting means they are a conduit for funds from the investor in the form of royalties paid to a plethora of service providers such as prostitutes, loan sharks, pokies outlets and so forth – all in Port Moresby and Lae and increasingly Suva and Nadi and Cairns. Their actual homes remain largely unaffected in any positive way, many have abandoned their wives and children and live their new lives in Port Moresby or Lae.

Now let us look at the national scene in so far as development is concerned. Let us just look at Education and Health as examples. One always hears about the law and order situation and how Port Morbid is in the top 10 list of most dangerous cities in the world and where rape and murder are but daily events throughout much of PNG where many crimes go unreported and unpunished and where ethnic tribal fights are now modernized into raging gun battles that run for days and where many are killed – often unreported.

One can measure how a country is actually progressing by glancing at the indicators in these two areas of development – Health and Education. Papua New Guinea boasts of the worst indicators in the region in so far as Health and Education are concerned. Illiteracy is making a huge comeback and ignorance is his dear friend. Schools are overcrowded with classrooms of 80 – 100 children common and children sit on dirt floors listening to exhausted teachers. Every year almost 80,000 school leavers are ejected from Papua New Guineans education system with only 10,000 finding meaningful employment, the rest experience lives turmoil and challenges witness their dreams evaporate and are forced to downscale them to accommodate reality. Meanwhile the education system itself is a disaster with outdated curriculum and poor administration forcing teachers to leave for other vocations or even depart for positions in smaller pacific island countries where safety is guaranteed and benefits are far more reasonable.

As for the Health Sector, it is unhealthy and hospitals are crammed full with those seeking medical treatment, dying on emergency floors, mothers literally bleeding from childbirth, ordinary people of severe wounds from growing violent crime or ethnic tension in Port Moresby, the cities capital. Doctors are scarce and the Doctor to patient ratio is alarmingly well below UN recommended figures - in one province it is an atrocious ratio of 1 Doctor for 30,000 people. Health indictors paint a gloomy and depressive picture, the specter of Death is very much visible here, gliding over the vulnerable, the very young, expectant mothers and the elderly, picking at what seems to be will and whim, where he so pleases. All the while the nation is reeling from AIDS, TB and malnutrition while the population growth is the highest in the region at 2% and one of the highest in the world and there seems to be no effort to check its growth.

What of the remote parts of PNG, inaccessible by road? Well, if you get sick, you die. It’s that simple. A terrible story is increasingly told in PNG’s media, the papers, radio and television, sad reports of mothers who die from birth complications, of village children often from snakebites or dysentery or other easily treatable (anywhere – else – in - the world ailments) almost daily throughout Papua New Guineans rural areas where 85% of the people live. Health Stations and Aidposts that once covered PNG providing basic medical services are disappearing, slow agonizing deaths where nurses and doctors do not replace those who retire or die, and how can they when any supporting infrastructure in these areas such as electricity, Police, banks, post offices, bridges and road even deteriorates in direct correspondence.

Entire district stations, built during the colonial period and unmaintained since are now dilapidated and decaying, most have closed down. The Churches are increasingly the only providers in these areas where Government services are but whimsical yearnings for yesteryear by those who can still remember what a Health Extension Officer was. But even they are abandoned increasingly, as foreign interest is turned over to the local priests and pastors and funds that once flowed dry up. Here, Christian spirit is truly tested.

These snapshots of Papua New Guinea’s state of national health and education do not suggest a nation progressing. But can corporate entities be blamed for this?

Of course not! They are corporate entities and their primary function is to turn over a profit and minimize overheads and heed their boards and or shareholders. The parameters of what they can and cannot do in so far as business is concerned, what they must and should pay and their responsibilities to an economy, a people and the environment have to be clearly drawn by the Government on behalf of its people and then, enforced and administrated effectively and with much resilience and constant review to improve by the Government. So no, the corporate sector is not to blame at all because they are doing exactly what they must.

This is where the PNG Government has failed for the last 37 years. They have not exactly done what they should have.

What is the hope in PNG? There is light at the end of the tunnel of doom and gloom for PNG.

The light is a growing middle-income class. A more educated and concerned Papua New Guinea that are communicating and coordinating their concerns, gathering and applying pressure on their government to be more proactive and protective of PNG interests, the hope is the emergence of politicians who are not intimidated by foreign influence and are able to speak their mind out, think long term and be more conscious of the situation their young nation is in. This growing group of Papua New Guineans is finding means and ways to become increasingly involved in business, either as partners or as sole proprietors. They are becoming confident, adventurous and financially prudent. Internet has opened new doors and developed opportunities for greater communication, debate, learning, commerce, networking and coordination of common concern. From everywhere and virtually anywhere, Papua New Guineans are communicating in real time and about real issues that confront their country and they are finding ways to have their say and be heard and they have a lot to say. Social media has become a platform to launch almost radical movements for common causes and the educated Papua New Guinean can now carryout their role in ensuring that the elected leaders, elected by the largely uneducated and innocently ignorant masses, can be held to account.

In what appears to be direct tandem, the greater masses are now being greatly influenced by the middle class, by the educated that are now informing and influencing voting patterns and therefore outcomes. As a result, a greater number of more responsible, more outspoken and more conscious politicians are being elected into parliament. The 9th parliament of 2012 is a testament to this and the next elections will no doubt see an increase in leaders who are not willing to be just politicians but agents of change, actually leading in every sense of the word, critical of the direction PNG is taken and no longer silently ignorant or negligently so of the efforts of foreign powers and multinational corporations.

Perhaps we will see a government that actually reviews the state of our economy and scan the deplorable and despairing state of our rural communities and do something about it. Already there appears to be greater funding opportunities but that can only work with greater financial controls. The Government has claimed that it is reviewing the audit and financial management mechanisms in place to ensure improved effectiveness and efficiency in the delivery of goods and services. The Government has also borrowed substantially from CHINA – K6 Billion to be exact – for much needed infrastructural development purposes.

Hopefully this will be managed prudently, otherwise, as is the usual formula for any funds available for development of any sort, 40% will be soaked up in consultants fees, overstated contracts and dished out to cronies and friends unless the national procurement system is overhauled and stringently applied to ensure proper application of the borrowed funds. And what of the fine print? The media has not yet informed the people that CHINA has insisted that 50% of all projects to be funded by the loan MUST go to Chinese companies. Will this sacrifice be worth it for the progress of Papua New Guinea? Perhaps. Only time hold’s the answers.

Meanwhile, the Opposition of the 9th Parliament looks formidable and is strategizing to demonstrate that it will not oppose for the sake of opposing but be critical and hold the Government to account. This was evident in parliament when the Opposition leader stood up and made a speech supporting the budget and the extension of the 18 month grace period to 30 months to allow the Government more time to prove what it has been preaching.

Meanwhile a new political development is emerging. Here there are a few who sit neither right nor left, neither in Government of Opposition. But they claim to heed the voice of their people and project that voice, those views and thoughts and consideration on the floor of parliament.

Perhaps, all these efforts from all these changes...can collectively exert greater effort into determining their own destiny and demand greater participation in the development of their resources, including and perhaps especially the energy resources… Perhaps they can then ensure that conferences such as the PNG Mining and Petroleum Investment Conference can be held in PNG…where the resources being determined for sale are actually found….