July 2010
PNG – AUSTRALIA TALK ABOUT WEALTH MANAGEMENT
PNG and Australia held an inter-governmental meeting discussing the management of wealth generated from PNG’s forthcoming LNG project. The meeting reportedly looked at ways PNG could best utilise funds generated from the resource project to secure long term financial benefits. The meeting was co-chaired by PNG Minister for Public Enterprise Arthur Somare and Australian Minister of Foreign Affairs and Trade Steven Smith. The project, expected to cost $16 billion, is due to begin production in 2014 and will see PNG's natural gas sold across Asia.
PNG INVOLVED IN INTERNATIONAL RESEARCH PROJECT
Researchers from PNG Institute of Medical Research (PNGIMR) are taking part in a major malaria research project that includes PNG as a case study in understanding how national and international programs control the disease. The PNGIMR will work with several research institutes, including project leader Case Western Reserve University in the United States, during the seven year study programme. The research project follows an earlier announcement that the PNGIMR is developing a new state-of-the-art research facility in Madang. According to media sources, the new K15 million development will also act as the organizations headquarters featuring laboratories, staff housing and a residential area.
NEW AGREEMENT ON KOKODA TRACK
A new joint agreement to protect the special values of the historic Kokoda Track was recently signed by Australia and Papua New Guinea (PNG). The joint understanding agreement aims to support sustainable development of the Owen Stanley Ranges, Brown River Catchment and Kokoda Track region. PNG Environment minister Benny Allen and Australian counterpart Peter Garret commented that the agreement signalled a continued commitment to work together to protect the Kokoda track region. The agreement is the second joint understanding regarding the region to be signed and covers a number of key objectives, including management of the Kokoda Track as well as the development of renewable resources such as hydropower, water, and tourism.
STUDY TO SCOPE PNG - CAIRNS SHIPPING ROUTES
The North Queensland Ports Corporation has commissioned a study that will investigate the potential for increased shipping trade between PNG and Cairns. The Corporation has commissioned a three-man team consortium to undertake the research. According to reports in the Cairns Post, Corporation chairman Dr. Ken Chapman says there is considerable potential to increase shipping traffic between the Far North Queensland and PNG, mostly because of the $16.5 billion ExxonMobil liquefied natural gas project in PNG and other potential projects. Major potential exports from Papua New Guinea could include timber, palm oil and coffee.
June 2010
MALL DEVELOPMENT DRIVING EMPLOYMENT
Vision City Waigani Megamall is expected to generate employment for at least 400 people when it opens in September 2010. Developers of Vision City, Rimbunan Hijau, have begun advertising recruitment vacancies for the new shopping centre. The development is expected to house a large food court, underground and open air car park with capacity of 1000 vehicles, and extended business hours.
WORLD BANK INVEST USD 140 MILLION
The World Bank’s private lending arm, the International Finance Corporation (IFC), announced the investment of US$140 million in PNG-based Bank South Pacific (BSP). According to media sources the IFC is buying a large stake from the PNG Government-owned investment body – the Independent Public Business Corporation of Papua New Guinea. The IFC investment is reportedly the largest ever made by the World Bank Group in the Pacific, and equates to a 10 percent stake in BSP. The IFC’s Principal Investment Officer, Adel Meer, said the IFC was impressed with BSP's plans for expansion and hopes to facilitate its future growth.
RUGBY LEAGUE MIGHT FOSTER FOR ECONOMIC DEVELOPMENT
Several high profile commentators have suggested there may be potential for Rugby League to facilitate development in PNG. Former NSW Rugby league coach Phil Gould and Massy University academic Dr Rochelle Stewart-Withers have both suggested Rugby League could be used as an effective tool for development in PNG. The suggestion follows recent media criticism and a government review of Australian aid spending in PNG. The review confirmed AusAID's "heavy reliance" on technical assistance, and questions the effectiveness of the 'capacity building through advisors' model. Gould recently spent time in Papua New Guinea at the request of a team promoting the development of a NRL franchise in PNG.
PNG WELCOMES NEW AUSTRALIAN PRIME MINISTER
PNG Prime Minister Sir Michael Somare welcomed Australia’s new leader Julia Gillard. Somare congratulated Gillard on attaining the role as Australian Prime Minister, and extended an invitation to visit PNG. Somare commented that the PNG Government had enjoyed strong relations with previous Labor Governments and was confident that this would continue in the future. Gillard attained Australia’s top leadership position after challenging the leadership of former Prime Minister Kevin Rudd in the build-up to federal elections. Sir Michael Somare reportedly sent a personal letter to Rudd thanking him for his work in building relations between the two countries.
May 2010
CONSTRUCTION BEGINS ON LNG PROJECT
According to media reports, construction has commenced on the PNG LNG project with the mobilisation of key engineers and contractors. Sale revenues from Oil Search, one of the project partners, have doubled as a result of increasing oil and gas prices. Managing director of Oil Search, Peter Botten, told the AGM in Port Moresby that Oil Search planned to reinvest a large proportion of the company earnings into the PNG project. Mr. Botten reportedly said the company would spend between $US1 billion and $US1.35 billion, including capitalised interest and upfront fees, on the PNG LNG project in 2010. The first shipments of LNG are expected for the end of 2013/14.
AMENDMENTS TO OMBUDSMAN COMMISSION
PNG Member of Parliament, Moses Maladina, believes the Ombudsman Commission will retain its power despite Parliament passing recent constitutional amendments. The amendments, introduced to parliament by Mr. Maladina, will affect changes to the function and powers of the country’s Ombudsman Commission. The Ombudsman Commission has reportedly responded by stating that certain amendments will restrict the commission’s ability to combat public corruption. Protests against the amendments were held in the country’s capital of Port Moresby.
ATTORNEY GENERAL RESIGNS
Allan Marat has resigned from his position as PNG’s Attorney-General. Several news sources believe Marat’s resignation followed tense discussions with PNG Prime Minister Sir Michael Somare. Marat recently voiced concerns over recent constitutional changes and several large scale development projects in the country. Ano Pala succeeded Marat as the county’s new Attorney-General
AUSTRALIA SIDELINES EMISSION TRADING SCHEME
The Australian government has formally removed its emissions trading scheme from its current budget, raising questions over the future of carbon markets in Papua New Guinea and Indonesia. The budget also proposed increased funding for Australia’s renewable energy future fund. According to aid and environment groups, the budget failed to provide for the international financing mechanisms discussed at last year's Copenhagen climate change summit. The budget allocates $A100 million to the Copenhagen accord fund, another $A56 million over two years for a forest carbon initiative with Indonesia and Papua New Guinea and $A178 million to help developing countries and island states adapt to climate change. The money comes from previously allocated overseas aid funding.
April 2010
PNG GOVERNMENT CALLS FOR REVIEW
The PNG Minister for Foreign Affairs, Sam Abal, called for a review of AusAID funding after it was discovered that nearly half of Australian aid is spent on advisors, contractors and experts. The Minister reportedly raised concerns about the effectiveness of AusAID spending and intends on discussing the issues with Australian official later this year. The call for a review came after a 2009 AusAID report found that despite billions of dollars of past aid provided to PNG, the country is not meeting its human development goals.
PNGFA FINALIZES AMENDMENTS TO FOREST ACT
Media sources have reported that PNG Forest Authority (PNGFA) has finalised draft amendments to the Forestry Act 1991. The proposed amendments are believed to give the Provincial Forest Management Committee (PFMC) the capacity to negotiate forest harvesting deals with investors and the PNGFA Board. Kanawi Pouru, Managing Director of the PNGFA, purportedly stated that the aim of the drafted amendments is to accelerate the process of selecting recipients of forest harvesting licenses in the country. Media reports claim that the amendments have already been discussed by stakeholders including NGOs. The final draft amendments are expected to be presented to Parliament in May.
PNG SET TO RECORD HIGH GROWTH
Queensland State Treasurer Andrew Fraser predicted the PNG’s economy will grow by eight per cent in 2010. After attending a three-day trade mission in mid March, Fraser has been quoted as stating that “the PNG economy is poised to take off” with “China-type” growth. Fraser claimed the expected high economic growth is partly fuelled by the impending PNG LNG project. Media sources have quoted Fraser as saying that the $14 (K35) billion LNG project is set to deliver $30 (K75) billion to the PNG government over the next 30 years.
AID WORKERS EARNING MORE THAN AUSTRALIAN PRIME MINISTER
Reports have emerged that Australian aid workers are being paid exorbitant tax-free salaries from AusAID. Media sources exposed at least two consultants, one based in PNG, on salary packages that are substantially higher than that of Australian Prime Minister, Kevin Rudd. Australia's aid budget has significantly grown since 1995 and the Rudd government is pushing to meet an election promise by doubling current aid spending to $A8 billion a year within in next five years. AusAID spends almost half of its budget on "technical assistance", twice the average in other industrialised countries' aid budgets.
March 2010
GLOBAL DEFORESTATION SLOWED IN PAST DECADE: FAO
New findings from the Food and Agriculture Organization of the United Nations (FAO) indicate that the global rate of deforestation slowed over the last decade. The report, covering 233 countries and areas, is FAO’s most comprehensive study to date. The data shows that deforestation rates decreased over the last 20 years. Approximately 13 million hectares of forest were converted or lost annually in the last decade, compared to a rate of 16 million hectares per year in the 1990’s. The study stated that Brazil and Indonesia, which had the highest loss of forests in the 1990s, have significantly reduced their deforestation rates. The release of the key findings preceded the publication of the complete report, Global Forest Resources Assessment 2010 (FRA 2010), scheduled for October 2010.
CARBON TRADING TO BE TRIALED IN PNG
The Goroka-based Wildlife Conservation Society (WCS) has developed a proposal to trial a village orientated carbon trading project. WCS developed the proposal with funding from AusAID and expressed interest in trialling the concept, called Village REDD (reduced emissions from deforestation and forest degradation), in the provinces of Manus and New Ireland. WCS reportedly built the proposal after conducting a community survey in 2009, involving 590 people from local communities, local government, provincial administrators and NGOs.
PNG AND INDONESIA HOLD SUCCESSFUL TALKS
PNG Prime Minister Sir Michael Somare and Indonesian President Susilo Bambang Yudhoyono held talks in Port Moresby. The talks raised the levels of bilateral relations, with new co-operative arrangements focussing on the military, taxation, agriculture and development. The two leaders signed several strategic agreements in Port Moresby during Yudhoyono’s two-day visit, including the Defence Co-operation Agreement, Double Taxation Agreement and letters of exchange on Agriculture Co-operation. Media reports confirm that Indonesia has agreed to play a leading role in nominating and supporting Papua New Guinea’s bid to become a member of the Association of South East Asian Nations (ASEAN). Sir Michael has been quoted as saying that Yudhoyono’s successful visit “would catapult our relations to even greater heights.”
PNG LNG PROJECT FULL STEAM AHEAD
ExxonMobil has announced that the K40 billion PNG LNG project has reached financial close. The finalised project plans to commercialise petroleum resources in the Hides, Angore and Juha fields in addition to the currently operating oil fields of Kutubu, Agogo, Gobe and Moran in the Southern Highlands and Western Provinces. Under the planned project, gas will be transported by pipeline to an LNG facility some kilometres northwest of Port Moresby. Production is expected to reach approximately 6.3 million tonnes of liquefied gas per year. A press release from PNG LNG stated that Esso Highlands Limited, a subsidiary of Exxon Mobil Corporation and operator of the PNG LNG Project, have finalised a Sale and Purchase Agreement with project participants, CPC Corporation.
February 2010
PARLIAMENTARY SECRETARY STANDS DOWN
Duncan Kerr stood down as Australia’s Parliamentary Secretary for Pacific Affairs, whilst delays in appointing his replacement have raised criticism. The High Commissioners from Papua New Guinea and Samoa have reportedly expressed concerns that Mr. Kerr is yet to be replaced. Australia's Foreign Affairs Minister Stephen Smith purportedly responded to criticism by stating that Australia's commitment to the Pacific region is focussed on long term objectives and will not be diminished by the resignation of any one individual. He further stated that the decision to replace Mr. Kerr is up to the Australian Prime Minister.
URBAN GROWTH AND AGRICULTURE KEY DRIVERS OF DEFORESTATION
According to a recently released study, led by Ruth DeFries of Columbia University, the biggest causes of deforestation in tropical countries are population growth in cities and agricultural exports. The report warned against fast tracking schemes such as the UN-backed REDD (reducing emissions from deforestation and degradation), before causes of deforestation are better understood. The study looked at satellite data for forest loss in 41 countries from 2000 to 2005 and found that two factors were the leading causes of accelerated forest loss - the demographic growth of the host country's cities; and increasing land demand from agricultural exports. The study suggested that policies to reduce deforestation among local rural populations will not address the main cause of deforestation in the future.
AUSTRALIA AND INDONESIA LAUNCH REDD PROJECT
Indonesia and Australia launched an A$30 million project to counter deforestation in the Jambi province of Sumatra. The project is designed as a trial for the UN-backed REDD scheme (reducing emissions from deforestation and degradation) whereby developing countries earn money from carbon credits by protecting their forest resources. The Indonesian and Australian joint project falls under the auspices of the Sumatra Forest Carbon Partnership and aims to address the causes of deforestation in Jambi and to help rehabilitate deforested or degraded land. The announcement of the trial follows an earlier project launched by Indonesia and Australia in 2008 to rehabilitate 100,000 ha of peat land in Central Kalimantan, Borneo.
January 2010
UNPRECEDENTED BOOM PREDICTED FOR PNG
The ANZ Bank’s Chief Executive Officer for Asia-Pacific, Europe and America has predicted an unprecedented boom in PNG. During a recent visit to the PNG, Alex Thursby reportedly said that in 2009, PNG contributed 19 per cent to the Bank’s regional results. He added that the proposed liquefied natural gas (LNG) projects are likely to lead to further growth. Mr. Thursby’s trip was part of a recent visit by an ANZ delegation as part of the ANZ Pacific Road Show. It included a visited to Madang Province.
PNG POWER, TELIKOM STRIKE DEAL ON PNG OPTIC FIBRE
PNG Power Ltd (PPL) and Telikom PNG Ltd have struck a deal to develop an optic fibre network in the country. The agreement, signed recently in Port Moresby, involves PPL carrying the optic fibre network as part of its transmission and distribution network. It marked the beginning of preparations for PPL to construct, test and commission the optical ground wire (OPGW) and cables on PPL’s power network. This would link Madang and Lae through Walium, Gusap, Yonki, Mutzing and Erap. The deal followed negotiations that continued for a number of years.
NEW AUSTRALIAN HIGH COMMISSIONER TO PNG
Australian Foreign Minister Stephen Smith announced the appointment of Ian Kemish as Australia’s High Commissioner to PNG. He replaces Chris Moraitis who has been High Commissioner since December 2006. Mr. Kemish, most recently Australian Ambassador to Germany, is to assume his position in February. He completed his primary school education in PNG and speaks Tok Pisin, Indonesian and German. Mr. Smith also announced that the Australian Consul-General in Nauru, George Fraser, would become Australian High Commissioner to Nauru as a result of an agreement between the two countries. On 19th January, Parliamentary Secretary for International Development Assistance, Bob McMullan, announced that he would not contest the next federal election. In September 2009, then-Parliamentary Secretary for Pacific Island Affairs, Duncan Kerr, made a similar announcement.
ADB TO FUND RE-DEVELOPMENT OF PNG AIRPORTS
The Asian Development Bank (ADB) is expected to sign agreements with the PNG Government to proceed with a K1.8 billion loan to the Civil Aviation Authority (CAA) for the re-development of a number of the country’s regional airports. The airports include Mt Hagen (Western Highlands), Tokua (East New Britain) and Nadzab (Morobe). The US$640 million project will be funded by both the ADB (US$480 million) and the PNG Government (US$85 million). In addition, US$75 million will be sourced through public-private partnerships. The project will be managed by the State-owned National Airports Corporation (NAC). It is expected to be completed in around 2020.
December 2009
NEW HENGANOFI HOSPITAL SET TO START
Construction of the K5 million rural hospital at Henganofi Station in Eastern Highlands Province will begin in early 2010. The new hospital will provide services for over 60,000 people in Henganofi, as well as Kainantu, Unggai-Bena, Okapa and Lufa Districts. It will be equipped with modern facilities, including an operating theatre, maternity and child care ward, emergency ward, dental care, dispensary, in and out patients wards as well as general health care. Henganofi MP Ferao O’Rimyo stated that the new hospital will provide relief to Goroka Base General Hospital, and will reduce the travel distance for patients in the region.
GRANT TO BOOST PACIFIC ECONOMIC GROWTH
The Asian Development Bank (ADB) together with the Government of Australia has announced a US$12 million grant aimed at stimulating private sector investment in the Pacific Region, according to the joint press release. The co-financed package which is an extension of the Private Sector Development Initiative (PSDI) will improve access to financial services, increase private investment opportunities through State Owned Enterprise (SOE) reform and public-private partnerships, and facilitate expansion of the private sector through reform of business laws. ADB’s Vice-President C. Lawrence Greenwood Jr. stated that "PSDI provides an innovative mechanism that can rapidly respond to reform initiatives in the Pacific Islands."
BSP NOW THE BIGGEST BANK IN THE PACIFIC
Bank South Pacific (BSP) has acquired the Fiji’s Colonial Group from Commonwealth Bank of Australia (CBA), making BSP the largest bank in the Pacific Region with total assets in excess of K9 billion and nearly 3,000 employees. BSP Chief Executive Ian Clyne stated that Fiji, being second largest economy in the region is “critical to BSP’s plans to build a substantial Pacific franchise”. He pointed out that the bank’s ratio of common equity to total assets is more than twice its competitors in the region, making it the best capitalised bank in the Pacific.
EXXON ARRANGES RECORD LOAN DEAL FOR PNG GAS PROJECT
Exxon Mobil and its partners have agreed to proceed with $15 billion PNG liquefied natural gas project (LNG). According to news reports Exxon will lend $3.75 billion, in addition to $US10.25bn worth of commitments gathered by the partners including Oil Search and Santos. Oil Search stated that the project has the potential to double the GDP and triple export income of the PNG economy, as well as countless opportunities on the ground for local communities. The company added that the financial close on the project is targeted for mid-February 2010.
November 2009
PAPUA NEW GUINEA AT THE ITTO MEETING
Papua New Guinea was well represented at the annual meeting of the International Tropical Timber Organization, in Yokohama, Japan, in November. The meeting took place at a critical point in history for tropical timber producing nations, with increasing pressure on forest industries ahead of the international climate negotiations in December. PNG’s Ambassador to Japan, HE Michael M. Maue chaired and opened the meeting. Among the motions supported by PNG was the call for greater access to funding for small- to medium-sized forest enterprises. PNG also presented a report on an ITTO-funded teak reforestation project, which prompted interest from Indonesia, one of the region’s largest teak producers. The ITTO is an intergovernmental body that represents the interests of both producers and consumers of tropical timber. Papua New Guinea hosted a major ITTO meeting in 2007. - (CLICK IMAGES TO ENLARGE)
BAHA MARKS WORLD AIDS WEEK
BAHA – Businesses Coalition Against HIV & AIDS, a coalition of businesses promoting initiatives against the disease – marked World AIDS Week this year with the publication of an ‘activity book’ aimed at raising AIDS awareness. BAHA is supported by numerous businesses in Papua New Guinea, including Rimbunan Hijau and Ok Tedi Mining. The National AIDS Council marked World AIDS week this year with a campaign focused on raising AIDS awareness in PNG’s remote areas. The global AIDS week campaign this year is calling for free universal testing and treatment in all countries. While this is not a problem in PNG, access to medical services is difficult in many remote areas, and AIDS is often stigmatised by communities.
PAPUA NEW GUINEA DEPENDENT ON AGRICULTURE – ANU
A new study published by Australian National University (ANU) indicates that agriculture plays a vital role in everyday life in PNG – but its significance is not appreciated. The study, ‘Food and Agriculture in Papua New Guinea’ notes the disparity in decision making between PNG’s large rural population (81 percent) and the urban centres, where most policy decisions are made. According to the study, just four other nations in the world have a higher percentage of the population living in rural areas. The report authors also note that more than 1 million households are dependent upon non-market subsistence agriculture.
PRIME MINISTER SOMARE CALLS ON US TO IMPROVE CLIMATE POLICY
Papua New Guinea’s Prime Minister Sir Michael Somare has called on the US Government to improve its international climate policy, describing the US position as both ‘irresponsible’ and ‘unacceptable’. Prime Minister Somare said that many nations in the Pacific region were already being impacted by climate change, citing the Maldives, Tuvalu and Kiribati as examples. According to press reports, Somare said, "While the developed and industrialised nations are dragging their feet in committing themselves, PNG and other smaller states continue to witness instances of islands disappearing, food shortages due to soil erosion and salinity, and irregular weather patterns."
October 2009
PNG PRIME MINISTER AWARDED ‘STAR OF THE SOLOMONS’
Papua New Guinea’s Prime Minister Michael Somare received the prestigious ‘Star of the Solomons’ award during a three-day trip to the Solomon Islands in mid-October, The National has reported. He was awarded the highest honour in the Solomon Islands by Governor-General Frank Kabui. In an address that he delivered during the visit, Mr Somare said that he was grateful to both the government and the people of the Solomon Islands for the “great honour”. During his visit, Prime Minister Somare and his counterpart, Dr. Derek Sikua, held a bilateral meeting.
AUSTRALIAN PARLIAMENTARY SECRETARY ON OFFICIAL VISIT TO PNG
Australia’s Parliamentary Secretary for Pacific Island Affairs, the Hon Duncan Kerr SC MP, made an official visit to Papua New Guinea in the first week of October. Mr Kerr met with several senior PNG ministers, including Prime Minister Sir Michael Somare and several national Ministers and provincial leaders. Mr Kerr, who arrived in the country on 30 September, was scheduled to travel to Western Province and Milne Bay, in addition to attending meetings in Port Moresby. The visit to Papua New Guinea followed both the 19th Australia-Papua New Guinea Ministerial Forum (which was held in June in Brisbane, Australia) as well as the 40th Pacific Islands Forum Leaders’ meeting (held in August in Cairns, Australia). It was also Mr Kerr’s final overseas visit as Australia’s Parliamentary Secretary for Pacific Island Affairs. He had previously indicated that he would not contest the next federal election.
OIL SEARCH ANNOUNCES TERMINATION OF PNG LNG INVESTMENT DEAL
Oil Search has announced the termination of a deal which would have funded the development of the multibillion dollar liquefied natural gas (LNG) project in Papua New Guinea. In August, Oil Search indicated that it was in advanced stages of completing a deal to sell a 3.5 per cent stake in the PNG LNG project to Abu Dhabi-based International Petroleum Investment Co (IPIC). The Australian Stock Exchange (ASX) had advised that any such deal with IPIC would require shareholder approval because IPIC was considered to be a related party. Oil Search has indicated that it would instead pursue a capital raising, in light of the timing uncertainty associated with the potential deal with IPIC. The termination of the deal is unlikely to cause significant disruption.
REMARKS BY SENIOR PNG MINISTERS AT THE UNITED NATIONS
Papua New Guinea’s Prime Minister, Sir Michael Somare, and Minister for Foreign Affairs, Trade and Immigration, Mr. Samuel Abal, made remarks relating to forestry and climate change at the United Nations in New York in late September. Prime Minister Somare delivered an address at a United Nations High-Level Event on REDD (reducing emissions from deforestation and forest degradation). The Event was held on 23 September (the day following the UN High-Level Event on Climate Change). A number of other world leaders and senior ministers delivered addresses at the summit, among them Australian Prime Minister Kevin Rudd and Indonesia’s then-environment minister, Rachmat Witoelar. Mr. Abal delivered an address to the 64th Session of the UN General Assembly on 29 September. He devoted the second half of his address to discussion of Millennium Development Goals (MDGs) and climate change.
September 2009
PNG LEADING PACIFIC ECONOMY
AusAID’s Pacific Economic Survey for 2009, released earlier this month, confirmed PNG’s position as the region’s leading economy. PNG accounted for 63 per cent of all economic output in the region. The next largest economy was that of Fiji, accounting for 16 per cent. While PNG’s GDP for 2009 is projected to fall back to 2007 levels, foreign direct investment in the nation is rising after having fallen for a number of years. The report also noted that the agricultural sector is growing rapidly, largely driven by stellar growth in the palm oil sector, which expanded exports by 44 per cent over the last year. Not so sunny was the outlook for the forestry sector, which has seen a decline since 2008. However, the report said that a move to greater downstream processing will shore up the industry. This is in line with Rimbunan Hijau’s long-term strategy for the industry. Rimbunan Hijau has greatly expanded its downstream processing operations and has received awards for its manufacturing operations.
OVERSEAS INVESTMENT INCREASING
Meetings between officials from PNG and China confirm that there is high international interest in investing in PNG’s economy. Delegates from the Shanghai Municipal Commission of Chinese Commerce recently met with the PNG Investment Promotion Authority to discuss approaches to enhance economic co-operation between the two countries. Representatives from the forest sector indicated that China is still one of the main export destinations for PNG timber. Chinese representatives also indicated that there was potential for co-operation on developing PNG’s downstream processing industry, citing a similar arrangement with Brazil.
EXPERTS WARN ON CARBON CREDITS, CRIME
Crime experts from international law enforcement agency Interpol have warned that the carbon trading market will attract organised crime. With the voluntary carbon market attracting increasing sums of money from the private sector, there will also be an attempt by criminals to take advantage of fledgling systems of governance. “Alarm bells are ringing,” Peter Younger of Interpol told the Guardian newspaper. “It is simply too big to monitor. The potential for criminality is vast and has not been taken into account by the people who set it up,” he was quoted as stating. “Organised crime syndicates are eyeing the nascent forest carbon market. I will report to the [World] Bank that REDD [forest carbon] schemes are open to wide abuse.”
PALM OIL SUSTAINABLE, SAYS NGO
US-based NGO World Growth released a report at the recent Bangkok climate change conference highlighting the positive economic, social and environmental aspects of palm oil. Palm oil, which has been criticised heavily by international Green groups for purported damage to the environment, is fast becoming one of PNG’s leading exports. The report stated that many of the criticisms directed at the palm oil industry have been unfounded. It highlighted that palm oil is a more productive and efficient crop than all vegetable oil crops currently on the market, and that the crop also provides sustainable economic livelihoods for small landholders.
August 2009
RIMBUNAN HIJAU MAKES CONTRIBUTION TO BATTLE AGAINST HIV & AIDS
Rimbunan Hijau (PNG) Group made a significant contribution to the fight against HIV/AIDS in PNG with a Kina 200,000 to the Papua New Guinea Business Coalition Against HIV & Aids (BAHA) in August. This most recent donation brings the total amount contributed by Rimbunan Hijau to PNG BAHA to Kina 600,000 since 2007.
PNG BAHA is an organisation which represents the private sector in PNG’s response to HIV/AIDS. Its mission is to educate and assist business enterprises in developing and implementing policies and programs which serve to promote the prevention and treatment of HIV and AIDS in Papua New Guinea. It seeks to safeguard the private sector workforce and their families from HIV and AIDS and ensure a healthy and constructive environment in workplaces on HIV and AIDS and related issues.
Rimbunan Hijau’s contributions to BAHA are consistent with its support for the health of the PNG community. Rimbunan Hijau recognises the potential impact of HIV on the development of the PNG economy and is working with BAHA to minimise this impact. RH has supported the addressing of HIV- and AIDS-related problems in PNG for a number of years. In 2006, Rimbunan Hijau became a founding sponsor of BAHA, and is one of only four platinum members of BAHA. In 2007, Rimbunan Hijau became the first forestry company in PNG to release a full HIV/AIDS workplace policy.
Australia’s Ambassador for HIV, Murray Proctor, visited PNG in late July. The aim of the visit was to allow him to witness first-hand the work being done to address HIV and AIDS in PNG, with a particular focus on the Western Highlands Province. “This visit is to reaffirm our support to their efforts to enable people to have access to HIV prevention, treatment, care and support,” Mr. Proctor said. Mr. Proctor, along with his Indonesia counterpart, co-hosted a high-level meeting of AIDS Ambassadors in August in Bali, which preceded the 9th International Congress on AIDS in Asia and the Pacific (ICAAP).
GLOBAL FOREST DESTRUCTION SEEN OVERESTIMATED: EXPERT
The Head of Brazil’s National Institute for Space Research (INPE), Gilberto Camara, has claimed in an interview with Reuters that the level of carbon emissions caused by global forest destruction is likely to be significantly lower than 20 per cent. Camara said that the 20 per cent tally was based on poor science, adding that rich industrialised countries had no interest questioning the figure because it placed greater pressure on developing countries to stem greenhouse gases. He is quoted as stating that “…I should only state that the two people who like these figures are developed nations, who would like to overstress the contribution of developing nations to global carbon, and of course environmentalists”.
PACIFIC ISLANDS FORUM COMMUNIQUE RELEASED
The final communiqué of the 40th Pacific Islands Forum has been released. The Forum was held in early August in Cairns, Australia. The communiqué states that leaders agreed to commence PACER Plus negotiations. Leaders also directed that Trade Ministers should discuss a framework for the negotiations. Leaders agreed that the Fiji military regime would not participate in the PACER Plus negotiations, but that Fiji should be kept informed on the progress of the negotiations. Leaders also welcomed a decision by Trade Ministers to establish the Office of Chief Trade Adviser (OCTA).
GREATER AVIATION TIES WITH JAPAN ANNOUNCED
A new air services agreement between PNG and Japan will mean greater capacity on the Port Moresby-Tokyo air route. The new deal, signed in August, means that the current weekly flight between PNG and Narita airport in Tokyo can increase to two flights. Increased capacity at Narita means that further expansion of services is possible. New services to Nagoya and Osaka are also possible.
Despite the capacity increase, Air Niugini has not announced a new weekly flight, and cited a current lack of demand for maintaining the current level of service. Air Niugini has stated that this is due to the current economic downturn. The Port Moresby - Tokyo route is dominated by Japanese tourists who visit diving, trekking and historical military sites.
July 2009
ADB: POSITIVE ECONOMIC OUTLOOK FOR PNG
The Asian Development Bank (ADB) has issued a positive outlook for the Papua New Guinea economy this month, despite bleak forecasting for the rest of the South Pacific. While the South Pacific region is expected to contract by 0.4 per cent over the next year, the PNG economy is expected to expand by 2.8 per cent, primarily on the back of natural resources and other commodities. The outlook is equally rosy for resource-rich East Timor. The economies of the Cook Islands, Fiji, Samoa and Tonga are all expecting negative growth. The Solomon Islands will face zero growth, with timber exports stabilising the economy, despite falling international prices. Much of the contraction in the Pacific is dues to a collapse in the international tourism market, which has been exacerbated by political instability, particularly in Fiji.
NEWS ON CHILD HEALTH SERVICES WELCOME
The Australia Network has reported that paediatric services provided by Australian development agency AusAID have been expanded over the past 13 years. According to the report, the number of provinces with paediatric services has expanded from 5 in 1996 to 15 currently. According to AusAID, Papua New Guinea received more than A$370 million in aid in the financial year 2007-2008. Australian aid makes up more than 80 per cent of total aid spending in PNG. However, the report notes that just 55% of PNG’s schoolchildren complete primary school, and that more than 13,000 children under the age of five die every year. Australian aid minister Bob McMullan publicly stated that these numbers require “a new approach” to aid in the region.
RETURNS FROM FORESTRY POSITIVE
World Growth, a US-based NGO has reported that economic returns from forestry are as much as “four times higher” as from carbon sequestration using conservative estimates on both carbon and timber prices. The NGO released the report during the international climate change negotiations currently underway in Germany. According to the report, the returns from forestry outstrip those for carbon, traditional forest use (such as fuelwood or non-timber forest products) and payment for environmental services. Converting forests for crops such as palm oil gave even higher returns.
FOCUS ON TRADE AT PACIFIC ISLANDS FORUM
The recent Pacific Islands Forum had a major focus on trade within the Pacific region. According to news reports, states agreed that there is a widespread need for economic reform in the region. The meeting also called upon development agencies to better coordinate their aid spending in order to alleviate rising poverty levels. However, much of the meeting focused on commencing negotiations for the PACER-Plus free trade agreement for the region, which has the potential to boost economic growth among the island states.
June 2009
WALK AGAINST CORRUPTION
Rimbunan Hijau participated in the Transparency International ‘Walk Against Corruption’ in Port Moresby on June 14. Rimbunan Hijau employees made up two teams participating in the event. The company also sponsored six school teams, comprising local students from the Caritas Technical Secondary School. Axel Wilhelm, Rimbunan Hijau’s Corporate Policy manager said the company was thrilled to be taking part in the event. “Corruption is a problem that affects everyone in Papua New Guinea, from businesses to families,” said Mr. Wilhelm. “Rimbunan Hijau has always condemned corruption and corrupt activity. Not only is it morally wrong, it makes doing honest business difficult. Everyone must do their part to stop it.” The event attracted a total of 2,400 people and raised a total of Kina 230,000. Rimbunan Hijau contributed a total donation of Kina 6,000 to the event. The Port Moresby event ran in conjunction with an event in Kokopo / East New Britain, which attracted more than 500 participants.
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AUSTRALIA-PNG JOINT FORUM
A joint ministerial forum between the Australian and Papua New Guinean governments was held in Brisbane, Australia, on June 10. The forum brought together 29 ministers from both countries to discuss issues ranging from trade to development, veterans affairs, tourism and climate change. A memorandum of understanding on forestry was signed between PNG’s forest minister, Mr. Belden Namah and his Australian counterpart, Mr. Tony Burke. A joint statement issued at the conference stated that the MOU calls for cooperation on sustainable forest management, forest certification and governance between the governments of Australia and Papua New Guinea, as well as facilitation of trade in legal forest products.
BUSINESS LEADER SAYS GOOD ROADS ‘VITAL’
A local business leader has said that good roads are the key to the development of other service networks such as electricity and communications in Papua New Guinea. William Naginel, Managing Director of Eagles Construction said in early June that people in PNG’s remote areas such as the Highlands were ‘struggling to survive’ because of lack of access to villages, towns and markets. Naginel’s comments are supported by reports from the World Bank, which have shown that road development is a key spur to economic development. Rimbunan Hijau has long made roads a key part of infrastructure developments for local landowners in its forestry operations. In Wawoi Guavi / Western Province, for example, Rimbunan Hijau has spent more than Kina 92 million on road developments.
HIGHLANDS MEN SUE NEW YORKER: CASE CONTINUES
Two Highlands men are suing the US-based New Yorker magazine for US$10 million for defamation. Daniel Wemp, a former employee of the World Wide Fund for Nature (WWF) and Isum Mandingo are suing the magazine for a story published by internationally renowned pop-historian, Jared Diamond. In the story, Diamond claimed that Wemp organized a blood feud resulting in the death of 29 people and left another man, Isum Mandingo in a wheelchair. Wemp has claimed in turn that he had nothing to do with any feuding, and that he was never told about the story. The journalism website that raised the story has since published a picture of Mandingo standing – without a wheelchair. According to the latest reports in Science magazine, both Diamond and the New Yorker are standing by their stories.
May 2009
GOGODALA CANOE FESTIVAL A SUCCESS
Rimbunan Hijau was again honored to sponsor this year’s annual Gogodala Canoe Festival. The Festival took place last month in Balimo, Western Province and was hailed as a resounding success by all participants. The Festival is a celebration of the long, single-hulled canoes synonymous with Gogodala culture. The canoes are impressive – brightly painted and holding up to 30 Gogodala warriors. The festival emphasizes the significance of canoes to Gogodala culture, and how these craft are an essential part of fishing, transport commerce and everyday tasks. Rimbunan Hijau donated K10,000 to the Gogodala Festival Organizing Committee.
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MALAYSIANS DONATE TO OPERATION OPEN HEART
The Malaysian Association of Papua New Guinea (MAPNG) made a donation of K30,000 to the Operation Open Heart (OOH) Programme at Port Moresby Hospital. MAPNG raised funds through a charity golf game last year, which raised more than K300,000 now being disbursed to various charities. A cheque from the Malaysian Association of Papua New Guinea was presented by MAPNG President, Mr. Nathan Ho, to the Chairperson of Operation Open Heart Programme, Mrs. Kathy Johnston, on June 1.
Rimbunan Hijau has also donated to the Operation Open Heart Programme at the Port Moresby Hospital for a number of years. Operation Open Heart (OOH) is a program where volunteer medical teams from Australia visit developing countries to perform surgery which otherwise would not be available in those countries.
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CONDEMNING THE VIOLENCE
Rimbunan Hijau has publicly condemned the recent violence that has taken place across Papua New Guinea committed against businesses and individuals with roots in Asian countries. This action perpetrated by a number of fringe groups in Papua New Guinea is overtly racist and criminal, and is at odds with the Papua New Guinea way of life. Rimbunan Hijau calls on citizens, governments, businesses and civil society to work together to resolve the issues of Asian resentment in Papua New Guinea, and to cease any activity – in word or deed – that targets or discriminates against minority groups.
LANDOWNERS APPROVE NEW LNG PROJECT
A new liquefied natural gas (LNG) project will shortly be commenced in Papua New Guinea. The final element to the secure the deal was an agreement between the project proponents, Exxon Mobil, and the various landowner groups. According to news reports, hammering out the deal took approximately five weeks. Resource Owners, Provincial Governments and PNG’s National Government agreed to a US$7b deal over the 30-year life span of the project. The agreement gives Landowners and Provincial Governments a 7 per cent stake in the project.
April 2009
CIFOR: Deforestation Drivers outside of Forest Sector
Frances Seymour, head of one of the world's most influential forestry institutions, CIFOR (Center for International Forest Research), has pointed the finger at drivers outside of the forest sector for much of the world's deforestation. Delivering a speech at the United Nations Food and Agriculture Committee on Forestry meeting in Rome last month, Ms Seymour stated that "after a decade of research into deforestation, the main drivers lie outside of the forest sector." Ms Seymour had previously worked with both the World Bank and the World Wide fund for Nature (WWF) prior to joining CIFOR and is well aware of all facets of the forestry debate. Her long overdue comments give credence to claims that many industry leaders have been making for a number of years, i.e. that the main drivers of deforestation lie in the agricultural sector and with subsistence farming. CIFOR itself has been on the cutting edge of forest policy research since it was established in Indonesia in 1993.
World Growth: Stop Green Protectionism
World Growth, a non-governmental organisation based in Washington DC, has called on the world's developed economies to halt a prospective new set of 'Green trade bans' that are emerging. Trade measures adopted by the United States, the European Union and potentially Australia have taken aim at timber exports from developing countries, as well as the export of other commodities such as palm oil. The call was made during the united Nations Forum on Forests meeting in New York at the end of April, where World Growth released a research report on the implementation of sustainable forest management in the developing world. While the report found that SFM implementation in developing countries had been slow, it also pointed out the intergovernmental and state aid agencies had been reluctant to provide economic aid in areas that would see an expansion of sustainable forest practices, instead funding conservation programs, potentially resulting in poor forest practices by smallholders and agriculturalists.
PM meets with President Hu
Grand Chief Michael Somare met with Chinese President Hu Jintao in Beijing during April. Somare and Hu met at the Great Hall of the People in Beijing. Hu stated that PNG plays a "crucial role" in the Pacific region and described PNG as a "good friend". Hu also stated that the Chinese and PNG economies are complementary and suggested that cooperation be increased in the key areas of trade, agriculture, forestry, fishery, transportation, resources and energy. Hu also said it actively encouraged investment in PNG. Somare said that PNG "cherished" its releationship with China and described it as sincere and reliable. Somare also expressed a desire to work more closely with China on trade, energy, resources and construction.
PNG to export LNG to China
Papua New Guinea is to export liquified natural gas to China. According to a news report on the Bloomberg website, a state energy company in China has agreed to buy approximately 2 million metric tones of LNG annually from a new PNG operation headed up by a number of international firms including Exxon Mobil. According to the report, the project will be the largest single investment in Papua New Guinea, worth approximately $11 billion. The project's backers are to give the green light to the project within months. Another major LNG investment is currently in the pipeline, backed by the PNG-owned Petromin corporation. However, a group of landowners has already made the first claim on the Exxon project, requesting an extension to a restraining order preventing royalty negotiations from taking place.
March 2009
PNG ECONOMY "IN GOOD SHAPE": PMCI
The Port Moresby Chamber of Commerce has stated that the PNG economy is in a 'promising' state. At a presentation last month in Cairns, Australia, PMCI CEO David Conn said that PNG's economy was "in good shape". Conn quoted NASFUND CEO Rod Mitchell, saying that the economy is "largely immune" from external shocks. Conn also highlighted the large number of building projects currently taking place in Port Moresby as the sign of a "different growth trajectory" compared to other parts of the world. Among the projects Conn listed was Vision City Waigani, a new residential, retail and business complex currently under construction by Dynasty Developments, a RH PNG subsidiary.
SUSTAINABLE FORESTRY KEY TO JOBS: FAO
The FAO has issued a report stating that sustainable forest management could potentially create 10 million new 'green jobs' for the global economy. Released during World Forest Week in Rome from March 16 to 20, the FAO said that the implementation of SFM has the ability to assist cope with two of the world's current major challenges: the economic downturn and climate change. The report also note that an increase of timber use in green building over emissions-intensive materials such as concrete or steel could increase investment forest operations and management.
SAWNWOOD PRICES STABLE: ITTO
The International Tropical Timber Organisation (ITTO) has reported that global prices for tropical sawnwood has remained stable, despite falls in prices for both roundwood and sawnwood. The ITTO's market update also reported a firming of prices for Pacific roundwood in Japan. There are also some promising indicators for the furniture industry in the Asia-Pacific region, including anticipated export growth of 15 per cent for the Indonesian furniture industry, as well as stable demand for imported roundwood in Vietnam and positive sales results for Brazilian furniture manufacturers.
PNG TO BID FOR PACIFIC GAMES
Papua New Guinea has declared that it will make a bid for the Pacific Games, to take place in 2015. A motion to back the 2015 bid was tabled by Grand Chief Sir Michael Somare in parliament last Thursday, March 19. The motion enjoyed bipartisan support, seconded by the opposition party. The last Pacific Games were held in Samoa in 2007; the next competition is scheduled for New Caledonia in 2011. If the bid is successful, the event could give the local economy and significant boost and bring an additional 10,000 visitors to the country.
