Ok Tedi Pledges PGK20 Million to Support PNG in the Fight Against Covid-19

by PNG Business News - March 31, 2021

Ok Tedi Mining Limited (OTML) has pledged PGK20 million to assist Papua New Guinea in combating the country's rising COVID-19 cases.

Acting Managing Director and Chief Executive Officer Kedi Ilimbit, OTML General Manager Community and Operations Support, made the statement in March 2021, adding that OTML's dedication reflects the company's sincerity in tackling PNG's worsening COVID-19 situation.

Ilimbit said PGK10 million will go to the Port Moresby General Hospital and other government departments as decided by the National Government, while the remaining PGK10 million will go toward vaccine procurement, delivery, and roll-out in the Western Province, with preference provided to OTML employees, contractors, and people.

“We will be working closely with the Sustainable Development Program (SDP) and the Western Province Health Authority to implement the COVID-19 vaccine roll-out plan in the Western Province,” Ilimbit said. “Ok Tedi is fully committed to take the lead and join forces with the Government, and other relevant agencies to address this pandemic that is affecting all of us. Our commitment demonstrates the same duty of care we have for our employees, to be extended to other Papua New Guineans, including our people of Western Province.”



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PNG Business News - March 29, 2021

Mass Testing Program Implemented at Ok Tedi Mining

Ok Tedi Mining Limited (OTML) has begun introducing a Mass Testing Program within its activities in order to avoid further COVID-19 transmission and ensure a secure return to operations. Following a spike in COVID-19 cases on the mine site and in Papua New Guinea, the company began introducing the program on Friday, March 19th, for a period of 14 days. OTML has successfully implemented the research initiative, collecting over 4,000 test samples from its staff, contractors, corporate associates, and families so far. These samples are being sent to Australia for processing, and the National Control Centre in Port Moresby is receiving daily reports. People who achieve a positive outcome are cared for and supported in the isolation and quarantine process, according to OTML's contact tracing and isolation protocols. The mass testing program, according to OTML Health Manager Dr. Charlie Turharus, has aided his medical staff, which consists of physicians and health care practitioners from the OTML-funded Tabubil Hospital, in quickly testing and isolating COVID-19 cases. “Fortunately, almost all the cases we have recorded are asymptomatic or only showing mild to moderate symptoms,” he said.  OTML's Mass Testing scheme has included almost all of the mine's work areas, including Kiunga and Bige, where the company's wharf and dredging operations are located. Personnel in Port Moresby and its geographic discovery sites were also put to the test. “Our priority is the safety, health and wellbeing of all our personnel, and we will ensure that this mass testing program is implemented successfully so that we contain the spread of the virus and resume safe productions,” Dr Turharus said.  The testing schedule is on target to prepare for the resumption of operations after the closure time is completed.

Mining

PNG Business News - March 31, 2021

Ok Tedi Mining Welcomes 40 New Trainees

Ok Tedi Mining Ltd (OTML) has added 40 new interns to its internship programs for 2021. Sixteen of the intakes will be part of the Graduate Development Scheme for two years, while the other 24 will be trade graduates who will complete a four-year apprenticeship program. OTML Managing Director and CEO, Musje Werror said, “Ok Tedi’s training programs are second to none and aimed at developing trainees to reach their full potential in their professional career paths and personal development.” Despite the fact that the recruitment drive was postponed due to the outbreak of the pandemic, he said that all trainees are on site and ready to join the Ok Tedi family. “The Training Centre is fully equipped to deliver high-quality training programs for both apprentices, graduates and employees which we have been doing for the past 32 years,” Werror said. One of the three main elements of OTML's commitment to developing a high-performing cohesive team is developing staff skills. He urged the newcomers to take advantage of the chance to start a new career and personal life. Werror said, “In life, you will be given opportunities, but how you approach these opportunities will determine where you end up.” Werror joined Ok Tedi as a fresh graduate from the University of Papua New Guinea thirty years ago, and today, as the managing director of the business, he is welcoming the new graduate trainees into OTML. Referring to Mr Werror’s story with OTML, Dauba Dauba, a graduate geologist from the University of Papua New Guinea said, “This in itself is an inspirational story for us.” At the programs' inception, 561 graduates and 1,194 tradesmen and women have graduated from their respective programs. Ok Tedi also provides the Preferred Area Development Training which is tailored for the locals in the Mine Preferred Areas. Manager, Organisational Development and Training, James Munro said, “We look forward to training another great batch of graduates and I encourage each and every one of you to work hard to succeed in this program.”

Mining

PNG Business News - March 19, 2021

Ok Tedi Halts Operations in Order to Contain the Spread of Covid-19

COVID-19 has forced Ok Tedi Mining Limited (OTML) to pause operations in order to protect its employees, communities, and operations. Due to a recent increase in COVID-19 cases at the mine site and in Papua New Guinea, OTML will temporarily pause operations on Friday, March 19th for 14 days to prevent further virus transmission within its operations. This suspension, according to OTML, coincides with the PNG government's National Isolation Strategy, which will go into effect on Monday, March 22nd. The success of the control steps, as well as when the virus has been contained, will decide when regular operations will resume. The decision to halt operations reflects OTML's commitment to take all reasonable steps to ensure the protection, health, and well-being of its staff, families, contractors, and host communities, as well as to allow a stable, cost-effective, and timely resumption of operations for the benefit of all stakeholders. During the suspension, the organization will take steps such as repatriating non-essential workers to their home provinces and introducing a mass testing program for its staff. Any staff may be forced to work regular hours during the suspension of operations in order to maintain essential services or for treatment and maintenance. The suspension is expected to result in a revenue loss of about PGK210 million, which will have a direct effect on foreign currency inflows into PNG. Meanwhile, the Company is weighing its options in light of the Australian government's decision to temporarily halt the fly-in and fly-out of mineworkers based in Australia. It said, “We do not anticipate significant disruption to our operations as a result of the Australian  Government’s announcement, however, we are looking at alternative ways to repatriate  several of our expatriate employees during the suspension of operations.”   After COVID-19 cases were discovered in Queensland from international travellers in hotel quarantine, the company declared that it was suspending international charter flights into Australia. OTML hires over 1,800 people directly, with less than 4% of them being expatriates. OTML also confirmed that it would collaborate with the PNG government to help with vaccine procurement and distribution for OTML employees.


Recent Articles

Agriculture

Paul Oeka - September 29, 2022

AGRICULTURE HAS HUGE ECONOMIC POTENTIAL

Photo credit: Oxford Business Group The creation of the new ministries by the current government for both major agricultural commodities, Coffee and Oil Palm is a huge step forward in achieving the agriculture sectors economic potential. For the past years the agricultural sector had not been fully utilized by consecutive governments as the focus had mostly been centered on the extractive industry and Mining & Petroleum sector. This important and vital sector is eventually and currently being recognized as an economic pillar to boost the state coffers. Prime Minister Hon. James Marape said the allocation and restructure of the four newly created ministries concentrating on Horticulture (Fresh produce), Coffee, Oil Palm, and Livestock to the agricultural sector is a complete paradigm shift to get agriculture moving again. The focus of the Marape Government on ‘Taking Back PNG’ is deeply rooted and aligned with the mechanisms and functions of the agricultural sector as most of the country’s population are situated in rural settings and largely depend on subsistence agriculture to sustain themselves. Coffee, Cocoa, Oil palm and Fresh produce have been a mainstay that this rural population rely on for income for so many years. As far as many Papua new Guineans can recall and relate, Agriculture has always been the foundation and backbone of the country and it can surely drive the economy forward. Although the agricultural does not match in monetary turnovers for the country, it is an economic foundation and is here to stay. In comparison over monetary benefits with other sectors, Agriculture had not been performing to expectation due to so many underlying issues concerned and faced with the value chain of agricultural commodities prompting a decline in agricultural activities over the years. The Prime Minister said it was no secret that agriculture had declined since independence in 1975, and the current allocation of the four agricultural ministries was to revive the sector for it to be a major income generator for PNG. PM Marape said this when explaining the concept and rationale for his allocation of four ministries to the agricultural sector. This direction by the Marape/Rosso Government to emphasize more on agriculture will boost agricultural activities in and around the country. Mostly the sector had not been given proper recognition for decades and had been lacking government intervention from past successive governments. Now with the current Government’s backing, the respective agricultural ministries and its industries are expected to flourish dramatically and are likely to bring more benefits. The new ministries will also empower provinces that currently do not have mining and petroleum resources. This will certainly build stronger local economic activities for future generations. “We want to see import replacement and more exports within the agriculture sector, which is why we have allocated four separate ministries to agriculture,” PM Marape said. The recognition of this agricultural industries will also ease and slowdown rural-urban drift. The number of people migrating from rural areas into towns and cities in search for better opportunities have risen in the past couple of years due to inequality in the distribution of wealth and lack of government services. Thus, the governments focus on agriculture will encourage many unemployed Papua New Guineans living in urban areas to go back to their home Provinces or villages and be self-reliant. As economic opportunities arise in rural areas from vibrant and innovative policy interventions within these newly created agricultural ministries, it will attract many to contribute meaningfully and be productive on their own customary land. Prime Minister Marape said over the last three years prior to the creation of the new agricultural ministries, his government has given millions of kina to support agriculture through price and freight subsidies and SME support. “We are now targeting specific commodities through the establishment of the four ministries. Over the next term of government, we will give specific production targets for Coffee, Oil Palm and all other major agricultural Commodities” he said. The government also plans to revive and rehabilitate once thriving agricultural hubs in the country such as Cattle farming in the Central Province and the Coffee plantations of the Highlands region that produced quality organic Coffee and grew the fledgling industry pre-independence in the 1960’s.   Now that the agricultural sector has been categorized into four industries, there will be room for much improvement in economic activity within the agricultural sector as people will start contributing meaningfully to the economy.

Business

Paul Oeka - September 28, 2022

TREASURER WANTS REVIEW OF ELECTION FUNDS

Treasurer Ian Ling-Stuckey is dismayed at how the 2022 National Elections were conducted and is now looking forward to a complete review of the allocated funds that were spent on the elections. Ling-Stuckey recently stated in parliament that the government had allocated and funded enough money for the election process to be conducted this year. “We provided a further K50 million to cover the costs for the 2022 election, bringing the total funding for the election to nearly double the level of expenditure in the 2017 national elections. There was enough money to support a much better election this year, so I look forward to the proposed parliamentary committee examinations of what went wrong and what can be done better” he said. The Treasurer also expressed concern that there was a decrease in the public servants’ salaries. He explained that “Once again there is a salary cost overrun. This is K201 million much lower than in previous years, and out of this, over 70 percent is related to teacher wage overruns. We contributed to bring this area under control. After no pay increases during the latest part of the Covid-19 crisis, it is now time to start increasing some salary payments”. “There is also the need to provide additional funding for the seven new districts that have been created and K3 million each has been provided. There are also new members in existing electorates, and it is appropriate that they be given some funds for commencing programs through to the end of the year. For equity reasons all districts and provinces needed to benefit the same so an additional 2 million per district and province have been allocated bringing the funding back to 10 million per districts and provinces” he said. Meanwhile there was an announcement on Thursday last week that the Department of personnel management, Treasury and Finance are working together to ensure that there will be a three percent pay increment in the salary of public servants. This pay increment is to be adjusted and effective by December this year, the welcoming news for public servants was confirmed by the Secretary of the Department of Personnel Management, Taies Sansan.

Commentary

PNG Business News - September 28, 2022

PNG’s minimum wage

Commentary by Stephen Howes, Kingtau Mambon and Kelly Samof The urban minimum wage has been an important part of Papua New Guinea’s economic history. In the last few years before independence (in 1975), it was greatly increased. In the decade or so after independence, it was widely regarded as too high. In 1992, it was slashed, merged with the rural minimum, and hardly increased again for more than a decade. We can compare the minimum wage in PNG today with other Asia and Pacific developing countries using International Labour Organization (ILO) data. As Figure 1 shows, PNG’s minimum wage is 18% below the average of the 19 countries shown if the market exchange rate is used to compare minimum wages. It is 37% below the average if differences in cost of living are also taken into account (with conversions made on the basis not of market exchange rates but so-called purchasing power parities or PPPs). The greater difference in terms of PPPs reflects PNG’s relatively high cost of living. Of the countries shown, only Samoa and Kiribati have a lower minimum wage than PNG when a PPP comparison is made. This is very different to the past. Raymond Goodman, Charles Lepani and David Morawetz in their 1985 report The economy of Papua New Guinea compared minimum wages in PNG with a subset of the countries above back in 1978. Then, the PNG minimum wage was about twice as big or more than the other comparators. Today (using market exchange rates, and the earlier authors do), PNG comes in the middle of the pack, as Figure 2 shows. So far, we have shown that around the time of independence minimum wages were very high in PNG by international standards, and that they no longer are. Figure 3 shows how this change came about – also, for interest, comparing trends in PNG with those in Australia. Both the PNG and Australian weekly minimum wages are shown in Figure 3 measured in Australian dollars. The PNG minimum wage is converted into Australian dollars using the current exchange rate. Both wages are then adjusted for inflation and expressed in 2021 prices. The two series follow diametrically opposed paths. The Australian minimum wage fell with the high inflation of the 1970s and industrial relations reforms of the 1980s, and by the early 1990s was little more than half its value in the 1970s. It then increased in the late 1990s and 2000s during the resource boom, and has continued to increase. Adjusting for inflation, it is now almost back to where it was in the early 1970s. The PNG minimum wage does the opposite. It increased in the 1970s and was then held stable due to indexation, until the big bang reforms of 1992. Adjusted for inflation, PNG’s minimum wage continued to fall until 2004. There have since been some significant increases, but today PNG’s minimum wage is only about one-third of its value at independence, and below its value even in 1972, which is when the steep minimum wage increases began. The Australian minimum wage has always been significantly higher than the PNG one, but the ratio has changed a lot over time. The lowest that ratio has ever been is 2.2 in 1986, the highest 45 in 2004. The gap between the two wages is much higher now than at independence: the ratio of the Australian to the PNG minimum wage was 14.5 in 2021, compared to only 3.2 at independence (1975). This reflects PNG’s 1992 deregulation, and the faster growth in the Australian economy, which has enabled an increase in the Australian minimum wage. The solution to low wages in PNG is not necessarily to increase the minimum. In some sectors, where there is a lot of international competition, a higher minimum wage might lead to job losses. For example, in tuna processing, one of PNG’s main competitors is the Philippines. From Figure 1, we can see that PNG’s minimum wage is lower than the Philippines' on the basis of PPPs, but actually higher on the basis of market exchange rates. While the former is what matters for the welfare of workers, the latter is what matters for international competitiveness. Whether PNG’s minimum wage should be increased will require a lot more analysis. The point of this blog is simply that PNG’s minimum wage does not look high any more by international comparisons, as it has fallen a lot since independence. PNG is often described as a high-cost economy, and this is a fair description. However, with regards to unskilled labour, it is no longer a high-wage economy.   Data note: The PNG Economic Database provides the weekly minimum wage of PNG going back to 1972, and the PGK-AUD exchange rate. Wikipedia provides the Australian weekly minimum wage data (hourly and weekly, on the assumption of a 38-hour week) starting from 1966. The Australian CPI is from the Australian aid tracker. There are some years where Australian minimum wage rates change more than once in a year. For such cases, we took the average as annual minimum wage rate. The data for Asia-Pacific comparisons are from the International Labour Organization and the World Bank. The different frequencies of minimum wages for each country in 2019 in the ILO’s report are adjusted to convert to weekly rates. World Bank data is used to obtain market exchange rates and PPP conversion factors. For the Goodman, et al., data go to Table 3.6 on p.61 in their report.\ Disclosure: This research was undertaken with the support of the ANU-UPNG Partnership, an initiative of the PNG-Australia Partnership, funded by the Department of Foreign Affairs and Trade. The views are those of the authors only. This article appeared first on Devpolicy Blog (devpolicy.org), from the Development Policy Centre at The Australian National University. Stephen Howes is Director of the Development Policy Centre and Professor of Economics at the Crawford School of Public Policy, at The Australian National University. Kingtau Mambon is currently undertaking a Master of International and Development Economics at the ANU Crawford School of Public Policy, for which he was awarded a scholarship through the ANU-UPNG Partnership. Kelly Samof is a lecturer in economics at the School of Business and Public Policy, University of Papua New Guinea.

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