Social Concerns Notes – April 2011

Social Concerns Notes – April 2011 accessed 30 Mar

PNG Attitude: Strong economic performance continues


PNG’s STRONG ECONOMIC performance continued in 2010, supported by resurgent minerals production and investment in new projects.

GDP is expected to have expanded by 7%, following 5.5% growth in 2009. After contracting 1.8% in 2009, minerals output is estimated to have expanded by 5.4% in 2010, despite strikes affecting major mines in the first months of the year.

Activity in the non-minerals sector also accelerated, expanding overall by 8.2% in 2010 following 5.3% growth in 2009. This upturn was led by sectors most linked to minerals production and the growing income streams they are generating. Construction, manufacturing and retail trade all recorded 20-30% increases. Activity in the transportation and communications sector, which benefited from deregulation earlier in the decade, is estimated at have grown by near 16% in 2010.

The large PNG-liquefied natural gas project moved towards full construction phase, but suffered temporary disruptions due to landowner actions. Construction of the $15 billion project’s first phase is scheduled to complete by mid-2014, although there are risks of this slipping.

Local landowners have slowed or temporarily halted construction work at various sites in recent months. These interventions generally relate to alleged grievances regarding payment of land use compensation and business development grants by the central government to landowner groups. The central government has started distributing funds and has announced spending plans in anticipation of the PNG- LNG revenues.

Other announcements include a K157 million plan to build a national broadband network, piggybacking on the LNG fibre-optic cable.

The strong growth in construction and investment activity is creating capacity constraints and inflationary pressures.

Supply limits are being reached in particular sectors, such as property in Port Moresby and Lae, skilled labour, construction equipment and shipping facilities.

Businesses with looser budget constraints—generally the minerals investors themselves—are able to secure supplies and skilled labour by bidding up prices. Established firms, including the public sector, face growing difficulty in retaining staff.

Optimism continues to surround PNG’s medium-term economic outlook, but the risks are significant, as the government recognises. Growth is expected to slow modestly from recent strong rates. accessed 31 Mar

Women and children fear eviction as homes fenced in for first SEZ

By Joshua Arlo*

Women and children from the Rempi area of Madang fear eviction as the government presses ahead with plans for Papua New Guinea’s first Special Economic Zone.

Together with their men, the women met to air their grievances about the government sanctioned US$300 million Pacific Marine Industrial Zone which promises to bring in 10 new fish canneries and about 30,000 jobs.

The Pacific Marine Industrial Zone is a special economic zone development driven by the national government of PNG. PMIZ will add to the existing RD Tuna cannery plant which has been in the province for the last 15 years. PMIZ was first introduced as a ‘marine park’ concept but now appears to be much larger in scope, incorporating a new shipping dock and other industrial developments as part of the SEZ. … Local families are confused and upset after hearing that they may have to be evicted from their homes because they have found out their land is no longer theirs but RD Tuna’s. … accessed 31 Mar

‘Dutch Disease’ a real threat to Papua New Guinea with gas project

Bank of Papua New Guinea governor Loi Bakani today warned of the effects of the dreaded ‘Dutch Disease’ on the PNG economy, particularly agriculture, in light of the liquefied natural gas project.
Bakani made the warning at a workshop focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
World Bank country manager, Laura Bailey, also warned of the dangers of ‘Dutch Disease’ as she gave an international perspective on this.
‘Dutch Disease’, or the ‘resource curse’, refers to an economic condition where a mineral boom leads to an appreciation of the real exchange rate, which in turn depresses output in the tradeable sector, in this case, agriculture. … cont


PC 4 April: Maternal mortality on the increase


MATERNAL mortality in Papua New Guinea is increasing each year at a rate of 733 deaths in every 100,000 live births.
In both rural and urban commu-nities, up to about five women die every day due to maternal problems.
This ranked Papua New Guinea (PNG) as having the second highest rate of maternal mortality in the world after Afghanistan.
This was revealed by doctors and officers from the Department of Health (NDoH), Population Services International (PSI) and other partners last Friday on FM100’s Talk Back program. …

PC 4 April: Sir J: Lands dept giving PNG away

Fifteen per cent of the total land area in the New Ireland Province has been given away to foreign companies under the Special Agricultural and Business Leases (SABLs), the New Ireland Provincial Government has revealed.
“These leases are granted by the Lands Department with no consultation with landowners or provincial governments. And they are huge, so far six leases have been granted in New Ireland for a total of over 141,000 hectares, which is over 15 per cent of the total land area of New Ireland,” Governor Sir Julius Chan said on the weekend.
And the former Prime Minister has accused the Lands Department of “giving Papua New Guinea away to fly-by-night loggers”. … accessed 5 Apr

Landowners announce public forum on PMIZ

Landowners living on and around the site chosen for Papua New Guinea’s first Special Economic Zone, the Pacific Marine Industrial Zone, have announced a three-day public forum to discuss their concerns about the project. Invitations to the event are being sent to among others, Madang Governor, MP James Gau, his predecessor and now Attorney General, MP Arnold Amet, World Bank representative in PNG, Laura Bailey and MP Gabriel Kapris, the Minister for Trade and Industry. … accessed 5 Apr

Seabed mining a risky business says expert


The Government is taking a big risk with its decision to take up its 30 per cent stake in the Solwara 1 project in the Manus Basin. This is the warning from one of Papua New Guinea’s leading expert on the Manus Basin, the site of the project operated by Nautilus Minerals Niugini Limited.

“Is the government well informed about the Solwara 1 project in Manus Basin before it decided to take up 30% equity in the project?” Dr Kaul Gena, lecturer at the Western Australian School on Mines, Curtins University asks.

Dr Gena, the only person in PNG who has explored the sea bed of the Manus Basin, said a lot of issues have been raised by different authors over the years but none of these issues has been addressed by Nautilus Mineral Niugini Limited.

Dr Gena said he would like to pose these issues again for the Government to consider.

  • What are current ore reserves of Solwara one project and its adjacent areas?
  • What mining methods are they going to use at 1700 metre depth when the ores are hosted by hard dacitic to rhyolitic lava?
  • The ores consist of lead and arsenic bearing minerals, what are the possible mitigation measures that the company will use to avoid environmental contaminations?
  • Where will the company process the ore and where will they dump the tailings? People leaving in areas adjacent to the processing plant will be subjected to lead poisoning like those in Mt. Isa and Esperance, Australia
  • The submarine hydrothermal sites are known to host very unique submarine organisms that host unique symbiotic microorganisms that are noble to understanding the evolution process. How will the company preserve such organism when it is destroying its habitat?

These are some very important questions that need to be addressed by the Nautilus Minerals Niugini Ltd and its joint venture partners…. accessed 6 Apr

Central Bank governor sounds warning on trust funds and LNG impacts

The Central Bank governor has warned the government that its opaque management of trust funds could seriously undermine Papua New Guinea’s economic future.

In his latest bi-annual statement [attached below] the governor, Loi Bakani, says the government has already reneged on a promise to open all new trust accounts at the Central Bank, and K103 million from the K592 million announced in the 2010 Supplementary Budget has not been deposited with the Bank.

In addition, the government still has K2.243 billion, including numerous trust accounts, deposited in the commercial banks. Bakani says these funds must be transferred to the Central Bank otherwise its ability to support monetary policy management and control inflation will be impeded.

The Central Bank is warning that a fast draw down of the trust account funds and high government spending, especially on LNG landowner-related payments will impact liquidity and increase inflation.

The Central Bank wants close monitoring of all government trust accounts ‘to ensure proper application of the funds’. But the government is, so far, refusing to cooperate. accessed 6 Apr

Landowners warn of Civil Unrest if dodgy 99 year leases over customary land are not nullified

15 Landowner representatives from Western, Gulf, Oro, Milne Bay, Sandaun, Central and East New Britain, gathered at the Holiday Inn for 3 hours yesterday, at a media event giving prominence to the PNG government’s issuance of 99 year Special Agricultural Business Leases over more than 5 million hectares of customary land throughout PNG.

The media event, organised by PNG Eco-Forestry Forum  (PNGEFF) and Centre For Environmental Law and Community Rights (CELCOR), was purposely to bring media attention to the plight of landowners who have been caught unawares by dealings involving politicians, bureaucrats and dodgy foreign companies over their customary land. accessed 6 Apr

Understanding the PNG Medium Term Development Plan (MTDP)

Development Policy Centre


Papua New Guinea has no shortage of plans, visions, strategies and policy papers. Some are good, some are bad. All suffer from poor implementation. Despite the plans, and despite PNG’s mineral booms, the sad truth is that Papua New Guinean incomes, adjusted for inflation, have barely risen since independence. … accessed 7 Apr

How the Papua New Guinea government is taking your land

Special Agriculture Business Leases (SABL) is the new method the Papua New Guinea Government is using to take land away from customary owners. The leases are granted for 99 years without the knowledge and consent of landowners. In 2010, more than 2 million hectares was stolen, bringing the total area lost to more than 5 million hectares since 2001. The common scenario: landowners are promised agriculture projects on their land but the company also says they need to clear-fell the forest in order to develop the land. Before you know it, the company has harvested logs and is making its way to new areas leaving nothing behind, but to add to the insult, the 99-year lease means landowners lose control of their land for three generations!



There is a massive land grab happening in Papua New Guinea, according to a leading Australian academic.

In a paper to be delivered at a conference in London Australian National University Associate Professor, Colin Filer, says 5 million hectares of customary land has passed into the hands of national and foreign corporations in PNG using a legal mechanism called the ‘lease-lease-back scheme’.

That land amounts to 11 per cent of PNG total surface area and is twice as much has has been lost to corporate interests in 5 African countries where land aquisition is regarded as a major problem.


Presenter:Geraldine Coutts

Speaker:Associate Professor Colin Filer, Australian National University


FILER: It’s a rather complicated piece of legislation, but basically it allows the customary owners to lease land to the state and agree for the state to lease it back to a body which they approve of which could be a private company. And what we’re seeing is that 5.1 million hectares, about 11 per cent of the total land area has been leased back to private companies in this way since 2003, so that’s how it works. Why is it a problem? There are two aspects to the problem. One is have the customary owners really consented to this arrangement and what is actually going to be done with land? The question of what is being done with the land is basically coming down to the likelihood that most of it is going to be logged on the understanding that it will then be converted to some kind of agricultural development, but the prospect of the agricultural development seems a little bit shaky, which comes back to the question of whether the landowners knew that it would be shaky when they agreed to lease their land to the state in the first place.


COUTTS: It seems that the land is going to corporate entities, will the landowners get adequate share of the profits?


FILER: Well, possibly not, if the deal is the logging activity will fund the agricultural development, then it’s quite likely that the landowners would have been persuaded if they were agreeable that they would forego the benefits they would have got from the logging in order for those benefits to be invested in the agricultural development, but if the agricultural development doesn’t happen, then they might just make a loss on the whole venture.


COUTTS: Well, under these lease backed schemes, how long are they, the leases actually fall. will the landowners lose the say in the right over their own land for how long?


FILER: In most cases, 99 years which is the maximum period allowed under the legislation as in most other countries where these kind of leasing arrangements apply. So yeah, in most cases they would have given up their rights for 99 years, but whether anybody else could actually make use of the land for 99 years through some trading arrangement in the leases, well that’s a very open question. The customary owners are still sitting there in occupation of their land.


COUTTS: So what is actually driving the land grab?


FILER: Well, I think in most cases, it’s simply the interest of the logging industry in getting access to additional forest resources through this mechanism when in fact their ability to access resources through the forestry act and legislation is far more constrained and there is a real pressure on them to try and get that access quickly because of the prospective decline in the market for the sort of logs that Papua New Guinea export, which are things from many sources, because it’s likely to happen within the next two, three, four, five years or so.


COUTTS: How can this happen when Papua New Guinea has constitutional guarantees for customary land?


FILER: That’s a very interesting question, because here I am at the conference in Europe, where everybody is saying kind of the land grab that’s happening in Africa or Latin America because the state ultimately owns the land and customary rights are not protected. So Papua New Guinea is an unusual case where there is this legal protection of customary rights and yet these customary rights are being abrogated. So is it simply the total corruption of the system or is it a degree of consent from the customary owners? This is a really interesting question.


COUTTS: Well, we’ve talked about some of the problems of the 99 year lease and the question mark over whether there’ll be other access given during that 99 years or whether the customary landowners lose it altogether. Is that the extent of the potential dangers of the lease backed scheme?


FILER: Well, look you can’t, I mean there is no serious prospects of customary owners being evicted from their land under these arrangements. They are simply not going to take it. They will resist if necessary with violence, so they will continue to occupy their customary land. The real question is will the arrangements produce any benefits for them. If they don’t, then they will simply ignore the arrangement and who is going to enforce the rights. I don’t think that the state and its police forces are going to be capable of doing that.


COUTTS: Well, if the demand is decreasing as you suggest and the logging supplies are also running out. What’s going to happen?


ASSOCIATE PROFESSOR FILER: Well, it’s not that the logs are running out, it’s mainly because the Chinese market for the logs which currently consumes 90 per cent of the logs that come from Papua New Guinea is by all accounts going to dry out because the Chinese themselves are investigating other ways of securing their raw materials and producing their furniture and so forth. So it’s a bit like what happened with the Japanese already. So word is that the Chinese market will dry up in which case the loggers have to get their logs to the Chinese market sooner rather than later, otherwise they’re won’t be a market.


COUTTS: So hence, the motivation for the land grab at the moment?


FILER: Yes, I think that’s the main driver of it.


COUTTS: What action should the PNG government and the landowners be taking to tackle the issue on their own behalf?


FILER: I don’t see any alliance there right now. I think interesting political consolation is that the sort of key players in the current national government are allied with various logging companies and so-called development partners to push these things through and there is sort of a growing opposition which involve not only environmental NGOs, but elements of the private sector, including the existing oil palm industry in Papua New Guinea, which has interests of its own to stop this happening and also significant elements of the public service, although they are to a degree silenced by the desires of their own political masters.


[Colin Filer’s 36pp paper on this topic is available at ]



Report on Human Rights in PNG by the US State Department 8 April 2011

“Human rights abuses during the year included arbitrary or unlawful killings by police, severe police abuse of detainees, poor prison conditions, police impunity, lengthy pretrial detention, infringement of citizens’ privacy rights, government corruption, violence and discrimination against women, sexual abuse of children, trafficking in persons, discrimination against persons with disabilities, intertribal violence, violence against Asians, and ineffective enforcement of labor laws”. accessed 19 Apr

Women taking action on climate change

WOMEN ARE ideally positioned to influence climate justice according to Oxfam Ireland and the Mary Robinson Foundation.

They are hosting international guests, including a woman from Bougainville, who are speaking about the impact of climate change on women’s lives and how women are acting to achieve climate justice.

“My elders and my community have given me a huge task,” said Ursula Rakova from the Carteret Islands in Bougainville.

“[I have] to tell the world what is happening on my island and what climate change is doing to destroy our lives. We are being forced from our ancient island homeland.”

Ursula is executive director of Tulele Peisa – “sailing the waves on our own” – a local community organisation that is trying to relocate the entire island community of the Carterets to nearby Bougainville because of the impacts of climate change.

“I would say to people who believe that climate change is not happening: if you have the heart to feel that you are flesh and blood, start to think about us on the island. What is a choice of lifestyle for you is a choice of life or death for us,” she said. accessed 21 Apr

It’s not the Chinese; the problem’s corruption


THE ANTI-CHINESE sentiments that exploded into pockets of looting in various centres around PNG in 2009 must be properly analysed and addressed.

At the outset, let me say that the incidents of unrest were not acts of racism as some people would like us to believe. Any person from any country who has had the good fortune of engaging with Papua New Guineans at a personal level will tell you we are not racists.

Rather, the riots were a manifestation of a complete collapse of our governance systems over the years. It was always bound to happen the very first time corrupt Papua New Guinean officials colluded with foreigners in breaking our laws. If this is not clear enough, then we will truly miss a great opportunity to seriously address corruption in our country.

There is no one to blame for our predicament. As one of my friends said, the people have vented their anger at PNG and it was unfortunate that the China man was in its path. But, in saying that, I am not absolving the illegal Chinese immigrants of any wrong doing either.

Instead of pointing fingers, we must focus on fighting the root cause of the problem to avoid such resentment in future. And while we look at addressing corruption and its detrimental effects on our country, there are a number of things we should not ignore about the relevance of China to PNG. accessed 21 Apr

NEW DAWN: end the killings
By Aloysius Laukai
ABG President, JOHN MOMIS is calling on all armed factional leaders in South Bougainville to work with him to end the terror in South Bougainville for good.
He made these remarks from Port Moresby that he wants the killing in South Bougainville to stop immediately.
He said that South Bougainville has seen too much death and injury from weapons and all leaders must unite to get rid of these deadly weapons.
MR. MOMIS said that the Bougainville crisis ended 14 years ago in 1997 and questioned why there was continuous killing in the Konnou constituency which has claimed more than 50 lives since 2006.
He said that these deaths in Konnou have nothing to do with the grievances that caused the Bougainville crisis.
MR. MOMIS said that the killings are the result of personal differences, lawlessness and criminal activity.

TN 20 April: ‘Outlaw sex crime compensation’

Compensation paid for sexual crimes against children should be outlawed as it does not do justice to the victims, a workshop was told yesterday.
Eastern Highlands provincial government adviser John Sari told the “Restorative justice workshop” at the National Research Institute that justice was not done to victim of sexual abuse “if compensation is paid and the matter resolved out of court”.
He said while restorative justice aimed to resolve disputes out of court through other means, “cases involving sexual crimes against minors should never be entertained outside of the established court process”.
“When compensation is paid, the perpetrator escapes with his crime,” he said.

Personal Viability on Lihir – an opinion

The mining company at Lihir has provided substantial amounts of funding for the Personal Viability (PV) program in Lihir through the benefits package (hundreds of thousands of kina – and rising). During the renegotiation of the first benefits package (back in early 2000s), the local elite caught on to PV, and have since redefined the future for Lihir according to PV values/philosophies. This has been a somewhat remarkable achievement (compared to other landowner groups in PNG), especially, since they have been able to articulate a vision of the post-mining future based upon the idea that all Lihirians will become ‘PV literate’, and therefore supposedly self-sufficient. Their social and economic development plans that have been developed through the benefits package agreement are all structured around PV.


Needless to say this has been somewhat contested in Lihir, and not everyone is entirely convinced by the claims made by PV, or its founder, Sam Tam – who is now resides full time on Lihir to help usher in this cultural revolution imagined by the elite. All of this is funded through the benefits package – which speaks to a broader issue around governance of such agreements (and company responsibilities in this area). There is a high degree of scepticism among company management towards PV and Tam, but at the same time, management are caught between the need to ensure a degree of governance and control, and support local attempts at self-determination towards economic and social ends. The problem lies in the way that PV promises to do this, and the very cult-like ways that the local elite have latched on to PV (which is highly consistent with a history of Lihirian socio-political movements that were loosely aimed at unlocking the secrets of wealth. PV now appears to present Lihirians with the answers that were seemingly denied to them for so long – or at least that is how the elite see things here).


The catch cry of PV is ‘Are you viable?’ In Lihir, this has now been turned into the expression  (in English) ‘Are you congruent or incongruent with the Lihir Destiny?’ (the vision of the Lihir future that will only be possible through complete adherence to PV).


The GULL program was introduced here about a year or so ago. From what I can gather, it is designed to provide ‘formal’ qualifications for life experience. How this is intended to be useful I am not sure, except for perhaps concentrating people’s efforts on certain business/entrepreneurial tasks through this ‘everyday learning experience’.  With all these GULL and PV qualifications being awarded, Lihir is fast becoming an island of ‘Doctors’ and ‘Gold level PV members’. I think GULL was set up before any connection with PNG – which is why it is Californian based. The GG – Sir Paulias Matane – seems to be a big supporter, and according to the GULL website, was a founding chancellor of this alternative university. Similarly, the idea that the Grassroots University of Life would be set up on Lihir (and provide a basis for transforming the Pacific) is sits neatly with previous beliefs here about Lihir as the centre of the universe, and the idea that change will come here first, and then emanate out to the rest of the world – indeed the elite have used this as justification for their program. accessed 26 Apr

PNG Attitude: Land: questions of ownership & sovereignty


A RECENT PARLIAMENTARY review into mineral resource ownership and management has sparked a debate on transferring ownership from the State to so-called traditional landowners.

Proponents of this shift in ownership include prominent politicians and individuals. Their argument is straightforward: give customary landowners the right to ownership of what is under their land.

For many Papua New Guineans, this seems logical; after all, why should the State have ownership of resources that are under customary land? For millennia, their ancestors have fought to defend those tribal lands and the resources therein. Within their cultural context it seems totally unfair that the State should take away what they regard as their birthright.

The Bougainville crisis that stemmed out of such clash of cultures illustrates the extreme reaction of people towards the State. It is this principle of presumed traditional ownership that plagues the LNG Project in Southern Highlands Province.  … cont. accessed 26 Apr

PNG working to end scam in hospital medicine supply

For the past ten years there has been a sophisticated network in place providing huge kick backs from drugs meant for the PNG health service. It’s alleged the scam has been able to flourish with inside help and it’s further alleged that there has been at least one death threat against an official tyring to shut-down the illegal drug distribution. Authorities are working on strategies to prevent the corruption continuing.

…. MOLA: Various things have started happening as I said about I think ten years ago or so. One ploy has been to create an artificial shortage so that all of a sudden a hospital, a major facility hasn’t got something that’s absolutely critical to the service, like a very important antibiotic or something obstetrics to stop the women bleeding to death or something, and then all of a sudden you haven’t got it. And it’s almost contrived that we haven’t got it because we haven’t ordered enough or we haven’t distributed it properly. And when we run out we now have an emergency, and it’s a contrived emergency, so that now that we can buy locally for the emergency situation so we don’t have to go out to the tender process, we just have to get a couple of quotes from suppliers who are also in on all the corruption, so they just collude in providing inflated quotations and we get our emergency supplies three, four, sometimes ten times the value of the drugs. And then there’s a kickback of course from getting the emergency supplies under those circumstances.

COUTTS: So the people involved in the cartels are actually buying them sometimes at a cheaper price, inflating them as you suggest, and selling them for three and four times the original cost?

MOLA: This is sort of creating artificial emergencies so that there’s then no transparency in the quotation or pro-form, a sort of invoicing process, because we have so few wholesalers, I think there’s only about five wholesalers in the whole country, and it’s very easy for them to get together and collude in arranging quotes that are, like it’s your turn, so we’ll all put our prices up 20 times, and you just put yours up ten times this round and then we’ll take in turns to get the order next time, sort of thing. …. accessed 27 Apr

Former PNG PM wants resources to be owned by landowners

Updated April 26, 2011 16:23:53

A former prime minister of Papua New Guinea says the country’s traditional land owners should own the rights to the natural resources under their land. Sir Julius Chan, who is now governor of New Ireland Province, says the Bougainville crisis, which began as a dispute over who got the money generated by a huge copper and gold mine on the island, is an object lesson in what happens when people feel they are not getting the benefits they feel entitled to. He says his experiences as prime minister during that conflict have convinced him a change is needed in the law which grants the state the rights to PNG’s rich mineral deposits. Sir Julius says that landowners are quite capable of agreeing to mining leases, which would ensure the benefits go directly to local people rather than the government.

Presenter: Bruce Hill
Speaker: Sir Julius Chan, governor of New Ireland Province and a former prime minister of PNG

SIR JULIUS CHAN: I begin from the position that a country an independent state like Papua New Guinea cannot buy what it already own. The resources under the ground by virtue of the act of 1992 make the state the sole owner of anything below, above and in the water and out at sea. If you look at the history of Papua New Guinea for the last 35 years now. We’re approaching 36. With this kind of legislation, it has not proven any development in the lives of the people in Papua New Guinea. For some unknown reason and I must include myself here because of the infancy of self-government independence and haste in which we’ve acquired that. We legislated to restrict ourselves from ownership of this resources.

Let me put it in another way. Does it make any sense of business to transfer title in property to someone freely like foreign investors for paltry payment of ten-thousand kina and then when things are discovered buy back from them at 30 per cent or more for up to 300 million or more? It doesn’t make any sense. Now does it make any sense at all for a country to earn billions and we’ve earned that money in income and not being able to improve the lives of the people. I think if we ask those three questions, then we start thinking of the reason why I have chosen, transform the ownership of the resources back to the traditional landowners. I believe that the wealth of any country should be in the hands of the people so that when the people are rich, then a nation is rich.

HILL: But you were prime minister for a number of years, why didn’t you do something about that when you were in power?

SIR JULIUS CHAN: Yeah, you’re quite right and I admit it just then that I included, that because of the infancy of the period leading to the political status of our country, we don’t want to shake the boat in anyway or form and you can recall the Bougainville situation was created before self-government and independence, so we had that to follow. The pattern is already set for us and it was a colonial pattern that set the stage of the economic development of the resources in the hands of the state. So it was set by the colonial masters at that time.

HILL: And you weren’t able to do anything about it when you were in power, so what’s made you change your mind since then to really come down and say look, it really belongs to the traditional landowners, what changed your mind?

SIR JULIUS CHAN: Well it’s very simple, we didn’t have any more than Bougainville at that time. We now have major resources taking place, we have a lot of disputes going on and they will continue. Something must be wrong in the system of ownership, in defining the ownership of the land. So in this way, I totally disagree with Sir Arnold Ahmet that it should be held by the state, because the state has never solved these problems and you can see what is happening already with the LNG. We’ve lost a lot of lives already. Some are totally unreported, because places are so remote, but tribal fightings have increased. There is a lot of disputes and the closure of the reservoir now in Port Moresby. They’re all related to the ownership and the benefits of the traditional landowners.

HILL: But would that situation be better or perhaps worse if traditional landowners held the title to the resources?

SIR JULIUS CHAN: Well, if they’re involved, if they own the resources and be involved in the initial definition of their land and also involved in the establishment of the benefit sharing. I think at some point, we’ve got to give credit to the mothers and the fathers of Papua New Guinea that they will be more responsible in living up to the conditions that they themselves established, whereas now it’s completely different. It’s just been shoved down their throat!

HILL: But Sir Arnold Ahmed says it’s extremely difficult for that sort of a system to work because who would the people who wanted to extract the resources negotiate with. You have a plethora of tribes and clans and even when you reach an agreement, there’s always some other group of people says what about us we weren’t included? It can be very problematic negotiating with traditional landowners, because there’s no one address for that. There’s lots of people that you all have to sign up?

SIR JULIUS CHAN: That is correct and this exactly what is happening now. This is no solution. The state is doing just that negotiating with the landowners and owning the resources. I am saying that time has come to put the people, to accept their responsibilities, their ownerships of their resources, make decisions that affect them, that development and after the life of the mine. I believe that Papua New Guineans are no different to any other human beings on this planet. When they feel the ownership of the place, they’ll make responsible decisions, so I totally disagree with Sir Arnold Ahmet. It’s the only system that we’ve been used to and I think a change is required, because we have not improved the lives of the people. Now, we ought to take all these things totally into account. It’s not just a matter of building wealth, it’s the wealth is not improving the lives of our people and therefore there must be a big shift in the benefits of that wealth and it must be in the hands of the people, so that the grassroots have the opportunity to develop themself.

HILL: Is this the issue now more urgent to sort out because of the big LNG project and even larger projects in the pipeline which will involve not just millions of dollars, but billions of dollars. There’s a massive amount of money at stake here, isn’t there?

SIR JULIUS CHAN: Yes, yes, and there’s a massive discourse if nothing is resolved between now and the period of developing the oil and gas. So look, I think I’m not going to be very rigid in this, but I am going to say this, that we must research very deeply into the cause of all these problems and we must be prepared to make adjustment necessary to accommodate the development of the people with the current thinking of educated people coming up. I truly believe that the owners of these resources will change, will transform from the current, almost unsophisticated people in the hinterland, to the young, new generation of very educated people who will know the law, who will know that the customary law define the land that belongs to their group and they will accept the responsibility. I’m very certain this will happen with the new generation of young educated people.

HILL: How much of your thinking on this has been shaped by your experiences when you were prime minister dealing with what happened as a result of the copper mine on Bougainville and all the discord that happened as a result of that. Has this played a roll in your thinking about traditional ownership of resources?

SIR JULIUS CHAN: That is basically correct and as you can see there’s really what’s happened in Bougainville should be a lesson for all of us. It cost up to 15,000 lives lost and the Bougainvilleans, one of the sad, the resource, this is our custom, the resource on top, under, elsewhere belong to the people. They welcome the mine the Rio Tinto and Bougainville Copper to come in and develop it, but they want to make sure that they have the maximum share of that wealth and it is because of that that the Bougainville crisis flared up. It was not because of anything else. And I think it was speaking the truth, I think it was speaking the thinking behind every Papua New Guinean that the ownership of the resources must be in their hand, not the state.

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