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March 8, 2021

PNGSDP: PM Presents Report On State Takeover

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During debate time in parliament, Prime Minister Peter O&rsquO’Neill presented a report by the Eminent Persons Group (EPG) on the state’s takeover of the PNG’sustainable Development Program.

The EPG report clarified the government’s initiative and intentions to re-negotiate arrangements regarding the exit of BHP from OK Tedi Mine in 2001, and compensation packages for the impacted mine communities of Western Province.


The report was compiled by NEC-appointed Eminent Persons Group to mediate and facilitate an agreement between the state, PNGSDP, BHP and OTML.


Prime Minister Peter O&rsquO’Neill told parliament that Eminent Persons Group was headed by former Prime Minister Sir Rabbie Namaliu, former Lae MP Bart Philemon and Minister for Public Service, Sir Puka Temu.


The EPG report finalised an agreement between the state and PNGSDP on December 5, 2013.


In the heads of agreement, the three main issues included matters relating to Ok Tedi mine.


The report stated that the state would pay compensation to PNGSDP for its’ shares in OTML. This amount would be equal to the value of PNGSDP’s share in the money spent by OTML for the extension of mine life. 


An agreement by the state and the PNGSDP that it is entitled to will receive dividends from OTML for 2012 and 2013 if and when the OTML Board declares a dividend.


Secondly, on BHP Billiton, the EPG recommended that the state, with support from PNGSDP and BHP, discuss the exit of BHP on three specific issues.


This includes the indemnity against environmental claims brought against BHP, its interest in the long term fund and continued independence of PNGSDP.  


Lastly, the report stated that the government and PNG’sustainable agreed that PNGDP would continue as an independent Singapore Incorporated entity.


It would then focus on the investment and management of the long term fund. It recommended that a new Western Province entity or organisation would be established for development program management in the province.


However, Prime Minister Peter O&rsquO’Neill said despite the efforts and recommendations of the EPG report, the PNGSDP Board rejected these recommendations.


Therefore, NEC agreed that further negotiations will be made directly with BHP and, although early, Mr O&rsquO’Neill said BHP has shown keen interest for further discussions. 


The issue drew a lot of comments from Members of Parliament who expressed disappointment in whole issue.


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