Exxonmobil PNG Invests K8.4M In Local Communities In 2020

by PNG Business News - July 08, 2021

Photo Credit: Post Courier

In the year 2020, Exxonmobil PNG has invested a total of K8.4 million in local communities through contributions, sponsorships, in-kind assistance, and community-based initiatives.

Through tax credit initiatives, an additional K57.4 million was spent on local infrastructure.

Despite multiple COVID-19 challenges, EMPNG's team achieved record LNG production levels, delivering the company's best safety performance since production began while continuing to meet environmental and social commitments, according to outgoing managing director Andrew Barry's annual PNG LNG Environmental and Social report.

“EMPNG has completed over 70 million hours of work since production began and had not lost time incidents for more than three years, with no significant process safety events for almost seven years.

“A significant milestone was achieved on September 1 with EMPNG’s first shift fully managed and operated by qualified Papua New Guinean workers.

This included the Hides Gas Conditioning Plant and Pipeline Operations Supervisors, and control room, field and pipeline technicians,” Barry said.

He said the K8.4 million investment comprises the continuation of the PNG LNG Project's contract with ANU enterprise proprietary limited, which began in 2015, to enhance community livelihoods.

According to the study, more than 5400 community interactions would be held in 2020, with over 2000 official and 3400 informal encounters with 36,650 stakeholders.

New managing director Peter Larden remarked, “I look forward to building upon the standards Andrew Barry and EMPNG have set to further cement PNG’s reputation as a world-class LNG producer and to be able to contribute in a sustainable and meaningful way to enhancing the communities in which we operate and the nation of PNG.”

 

Reference:

Post-Courier (7 July 2021). “ExxonMobil Proud OfK8.4M Investment In Local Communities”.



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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. 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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. 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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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