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EITI Implementation in Papua New Guinea Helps Shape Policy in the PNG Mining and Petroleum Sectors

by PNG Business News - May 31, 2021

The publication of the PNG Extractive Industries Transparency Initiative reports are meaningless if they do not give rise to critical policy debates for a robust mining and petroleum sector in Papua New Guinea, an official says.

Head of PNGEITI National Secretariat Mr. Lucas Alkan told leaders at the 36th Australia Papua New Guinea Business Forum on Wednesday that EITI work in PNG is progressively helping to shape public policy discussions through EITI report recommendations, and open discussions within the PNGEITI Multi Stakeholder Group (MSG).   

Papua New Guinea to date has published a total of seven (7) EITI country reports since the PNG Government signed up to join other 50 plus mineral resource rich countries in 2014 to implement the EITI Global best practice Standard.  

To promote transparent and accountable conduct of business in the mining and petroleum industry the core function of EITI implementation is the publication of annual EITI country reports consistent with the requirements of the EITI Global Standard. 

Mr. Alkan said those reports must form part of policy discourse in mining and petroleum sectors of the economy as opposed to collecting dust in the shelves.    

“Producing EITI reports are meaningless if these reports do not give rise to critical policy and legislative reforms for better management of the sector, “he said.

Mr. Alkan said important progress had been made since PNG’s first EITI report in 2015, providing greater transparency over revenue received by the government from the country’s mining and oil and gas industry.

He said the PNG Government and resource owners receive maximum resource project benefits, with that EITI reporting process identifies revenue leakages to improve corruption perception which would in turn boost investor confidence.   

“To improve the country’s investment climate, we have to be transparent in all forms of payments, starting with the negotiation process for development projects to how licenses are issued.

“EITI is a platform that enables all stakeholders to work collaboratively and build trust to realise PNG’s vision for resources development,” Mr. Alkan added.

“Some of the improvements and reforms arising from the work of EITI in PNG are that EITI;

  • has been complementing other Government initiatives like the Open Government Partnership (OGP) and the Independent Commission Against Corruption Law (ICAC);
  • through its first report, ensured that the Income Tax Act was amended to remove secrecy provisions in the Act to enable the IRC to disclose tax revenue data for EITI reports.
  • provisions have been included in project MOAs and Agreements on benefits sharing arrangements for contract transparency;
  • establishes a platform for better collaboration and open discussions between different stakeholders to build trust; 
  • ensures a comprehensive report with available data covering the extractive sector that is now used as reference in debates, which is not the same some years back;
  • Report outcomes have influenced the Government to embark on reforming policy and resource laws to strengthen government systems and to ensure fair share from the benefits derived from resource developments;
  • is now making progress in comprehensively reporting at sub-national levels of government, beneficial ownership disclosure, and increase transparency in State Owned Entities.
  • has forced the government to disclose quasi-fiscal data and taken steps to address opaque nature of some tax incentives such as the Infrastructure Tax Credits. 
  • report recommendations have pushed the PNGEITI Secretariat and the Auditor General to work together to improve the quality of the financial data in the EITI reports.

“In addition, a National Policy Framework on Transparency and Accountability was approved by Cabinet in 2018,” he said.

Mr. Alkan said among the achievements made so far in EITI implementation in the country, the National Policy Framework on Transparency and Accountability has set the basis for the creation of EITI PNG as an independent administrative body to sustain its operation and the draft law is now being finalised.

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