PNGX consults on new Corporate Governance Code for Listed Companies
by PNG Business News - March 08, 2023
Photo credit: PNGX
PNGX, Papua New Guinea’s national stock exchange, has recently released a proposed new Corporate Governance Code for Listed Issuers for public consultation.
PNGX is proposing to introduce a new Corporate Governance Code for the guidance of Boards of listed issuers.
The proposed Code contains 17 Standards. Within each of the 17 Standards are a number of Recommendations.
Each PNGX listed company is required under the Listing Rules to have corporate governance policies which are appropriate having regard to the nature and scale of its operations. Each company should address each Recommendation set out in the Standards. It is also required to include in its annual report a corporate governance statement or the URL of the page on its website where a corporate governance statement is located.
While the proposed Code has been developed by reference to global standards and practices adopted in other markets, it has been adapted to have regard to the characteristics of the PNG market and to be fit for purpose for the country.
The Standards and Recommendations are not prescriptive. Each company is at liberty to either adopt the Standards and Recommendations or not. However, as they are standards of expectations established through a mechanism of industry and stakeholder consultation, it is expected that directors should disclose in the company’s annual report the extent to which the company has adhered to the Standards and Recommendations, and where there has been no or partial adoption, to give reasons. This “if not, why not” approach is common in markets globally.
Whilst the scope of the Code is limited to listed companies, it is hoped that the governance standards become a benchmark for corporate governance by the private sector in PNG generally. They may also have relevance to governance of SOEs.
The draft Code has been developed based upon the existing PNGX corporate governance standards and with the assistance of the International Finance Corporation (IFC) and the UN Sustainable Stock Exchanges Initiative, which PNGX joined in April 2022.
IFC has provided an expert education program relating to the development of environmental, social and governance (ESG) rules to help create appropriate disclosure standards for PNGX and its companies. Expert training on board gender diversity was also provided. This laid the foundations for a new corporate governance code that, importantly, factors in gender and other elements specific to PNGX. The IFC input has been integral to aligning the proposed standards with international best practice for developing markets and the revised OECD Principles of Corporate Governance to be issued in 2023.
PNGX has solidified its commitment to transparency and sustainability by becoming a partner exchange of the Sustainable Stock Exchanges Initiative which brings together over 110 stock exchanges around the world that are committed to promoting sustainable development. This supports PNGX to help develop the Papua New Guinea capital markets and support the sustainability of the PNG economy.
The Pacific Private Sector Development Initiative (PSDI) also contributed to the development of the corporate governance standards. PSDI is an Asian Development Bank (ADB) technical assistance program in partnership with the Governments of Australia and New Zealand.
PNGX recognizes the number of sustainability challenges that an emerging economy like Papua New Guinea face, which include access to capital for SMEs, corporate governance and transparency, climate change, gender equality, gender-based violence, and environmental sustainability. Addressing sustainability factors is of increasing importance to obtaining access to finance in today’s world and PNGX is committed to it.
The majority of the Recommendations are directed towards matters specific to internal governance and controls of listed companies consistent with international practices. In addition, they include a number of recommendations relating to social challenges within Papua New Guinea including policies supporting equality of gender representation and remuneration, return to work practices and gender-based violence.
PNGX Chairman, Mr David Lawrence, said “Efforts to enhance the corporate governance standards in PNG are one contribution PNGX can make, in partnership with like-minded stakeholders, to lift the reputation of PNG, improve its ability to attract investment and lower the cost of capital for the country. In a time of considerable global disruption arising from pandemics, war and inflation, establishing a vision and standards for the future become particularly important.”
PNGX General Manager, Ms Elizabeth Wamsa, said “The Code includes Recommendations to encourage a broader pool of directors for PNG companies, especially female directors. The Recommendations also include expected disclosures regarding gender pay equality policies, ‘return to work’ policies (for example, women returning to work after childbirth) and gender-based violence policies”.
“Good corporate governance enhances the performance of companies and increases their access to outside capital. It is great to see PNGX proposing these new, world class standards, which have been adapted for the local market,” said IFC Resident Representative for Papua New Guinea, Markus Scheuermaier. “These new measures are also innovative as they include standards around workplace response to gender-based violence, and on childcare. We are proud to support PNGX in this groundbreaking initiative.”
Mr Jeremy Cleaver, Senior Finance Sector Specialist, Pacific Private Sector Development Initiative (PSDI), Asian Development Bank said “the Standards in the Code are very robust and detailed and we are supportive of them. The positive results of PNGX working with IFC and the Sustainable Stock Exchanges Initiative come through clearly, particularly in terms of gender and climate related issues. We are happy with the Standards and fully support them.”
PNGX is releasing the proposed Corporate Governance Code for Listed Issuers for consultation and feedback from interested parties. The proposed Corporate Governance Code for Listed Companies is available on the PNGX website. The consultation period will be open for 2 months.
PNG Business News - August 23, 2021
PNG Stock Market Worth Over K120 Billion
Photo Credit: PNGX According to the PNG Securities Commission, the stock market in PNG is now worth over K120 billion. The PNG National Stock Exchange presently has 13 firms listed, according to acting executive chairman Robert Minak (PNGX). “The total market cap fluctuates around K120 billion,” he said. “The market tracks well and it’s steady all the time for those 13 companies despite the challenges posed by the Coronavirus. “Trading has been slow but steady.” Minak stated this after Zimcare Ltd HR Consultants presented the commission with a report on the organization's audit. The purpose of the audit was to verify that the commission took stock of its operations and that the appropriate personnel were carrying out their allocated duties. “They are elite corporations that have billions of kina,” Minak said. “They hire the best people in the world. “And for the securities commission to challenge or regulate them with people that are not qualified or skilled, is a joke. “We felt that it was fundamental that we get it right from the start. “So we had to hire Zimcare. “They (had done) the organisational structure for the securities commission so they know the commission (well). “We got them to come and fix up things that have gone wrong along the way.” Meanwhile, Minak said the country’s stock market could make money for the Government like other stock markets in the world. “The (PNG) Government does not have the money,” he said. “It gets it from the banks within or goes out and borrows. “The commission regulates an industry where the Government or anyone else can raise money from an alternative source. “In other countries, the securities commission makes money that contributes to the budget.” Reference: Mauludu, Shirley. The National (13 August 2021). “Stock market worth K120bil”.
PNG Business News - August 30, 2021
PNGX and Securities Commission Sign MoU
Photo Credit: PNGX PNGX Markets Limited, Papua New Guinea's national stock exchange, and the Securities Commission of Papua New Guinea (SCPNG) have signed a Memorandum of Understanding on the preservation of an orderly market for listed securities. The Securities Commission may make public remarks regarding a listed business from time to time in the course of its duties and responsibilities that a reasonable person would anticipate to have a substantial impact on the price or value of the listed company's securities. Making such remarks during trading hours (10 a.m. to 4 p.m.) might jeopardize an orderly and fair market in such assets. The MoU intends to foster collaboration between the Securities Commission and the PNGX in order to support the effective performance of their respective duties and responsibilities, as well as the preservation of orderly and fair markets in Papua New Guinea. According to the MoU, the Securities Commission will avoid making public statements about a listed company that a reasonable person would expect to have a material effect on the price or value of a listed company's securities during trading hours, to the extent that it is reasonably practicable to do so. If it is not possible to avoid making such public remarks during market hours: Prior to issuing the relevant public statement, the SCPNG will inform PNGX; PNGX will impose a trading stop on the relevant listed company's securities; and SCPNG will provide PNGX with a copy of the relevant public statement for distribution to the market as soon as feasible. “It is fundamental that regulatory governance systems are established to ensure a fair and orderly market,” said Robert Salmon-Minak, acting executive chairman of the Securities Commission. “This MoU recognises and respects the differing but complementary roles of the Securities Commission and PNGX in achieving that outcome. “The capital market regulator in any country plays a critical function in the economy of that country,” said PNGX chairman, David Lawrence. We are pleased to be working with the Securities Commission to put in place processes that promote confidence in the PNG capital market.” Reference: Post-Courier (27 August 2021). “Securities Commission, PNGX Sign Agreement”.
PNG Business News - April 08, 2021
Commission Places New Levy on Transactions
The Papua New Guinea Securities Commission has placed a new levy for all trades on the PNG Stock Exchange, the country's stock market (PNGX). The Securities Commission adopted the new levy on February 8 and it went into effect on March 8, according to PNGX chairman David Lawrence. Each buyer and seller are expected to pay an extra 0.75 per cent of the sale value to their stockbroker. He said that the stockbroker was required to pay the money to PNGX on a monthly basis and that PNGX was then required to pay the money to the Securities Commission on a monthly basis. PNGX was worried that the levies would disincentivize business competition at a time when it was attempting to build it up from a low base, according to Lawrence. Buyers and sellers, he added, were immune to paying the levies for on-market purchases. “We have also heard that some buyers and sellers are giving consideration to off-market transfers of listed securities rather than executing orders through the market, as off-market transfers will not be subject to the levies,” he said. PNGX has urged the Securities Commission to notify the public of its plans to reclaim any outstanding levies from investors and sellers, as well as its views on off-market transfer activities, according to Lawrence. “PNGX is concerned that the imposition of the levy at this time is counterproductive to the development of the capital markets in PNG and not aligned with the Government’s financial sector development strategy (FSDS) to create an environment that is equal in its competitiveness to the ASX,” he said. He expressed concern about the possible impediments generated by the levy, which he defined as follows: Both Investors' trader fees will be increased. This would have a negative effect on investment returns, particularly superannuation investors. It would also give other more developed foreign markets in the area and more established international markets an unexpected competitive edge. Detract from Papua New Guinea's investability; Encourage PNG-incorporated businesses to list on existing foreign exchanges with lower sovereign risk; Encourage the expansion of "off-market" transactions, decreasing the disclosure, pricing, openness, and investor rights inherent in the formal, controlled PNGX market, to the detriment of PNG's domestic and international investors. According to Lawrence, the outcomes could decrease competition in an already illiquid sector, eliminate incentives for market development, and raise the cost of financing for PNG companies and the government.
Paul Oeka - March 27, 2023
Papua LNG project to Minimise Economic Challenges
Photo: Petroleum Minister Kerenga Kua Petroleum Minister Kerenga Kua has recently stated that the Papua LNG project is critical in addressing some of the economic challenges that are currently faced in the country. He said about K75 billion will be generated over a 15 year period when the project is in progress. He added that the initial stages of the project has commenced with K500 million said to be inputted into PNGs foreign exchange capacity in 2023. During a press conference on Thursday the 9th of March, The Petroleum minister highlighted the progressive stages of the Papua LNG project and emphasized the importance and significance of the benefits that the project will provide. According to studies the project life is expected to operate over a 15 year period that will generate about K75 billion and significantly boost Papua New Guinea's struggling economy. "The K75 billion benefit is inclusive of what comes to the state directly as levies, to Kumul Petroleum, to the landowners as royalties and the provincial governments. All of us put together are going to be collecting and sharing that benefit in the next 15 to 20 years", Kua said. Minister Kua said that studies for the Papua LNG project began in 2004 following the discovery by Interoil, the resource estimate is in the range of 6 trillion cubic feet of gas and 98 to 100 million barrels of condensive oil. The benefit of this project is immense and a positive component is the national content which is expected to positively impact GDP, export earnings, forex, revenue to impacted levels of government, landowner benefits and Job opportunities. Minister Kua said the project developer Total Energies will inject K500 million into the PNG economy in 2023. "The Papua LNG project is a project of national significance for Papua New Guinea and will stimulate business confidence and will provide a significant impetus for our economy", "The Marape-Rosso government places high priority on the delivery of the Papua LNG project, we have an improved deal for our people, and improved contribution for our national contractors and workforce. The government strongly supports the Papua LNG project and encourages all stakeholders including project partners to work diligently to deliver the project on time and on budget", Minister Kua said. Petroleum Secretary David Manau was also present at the conference, he highlighted that the petroleum department will work closely with impacted provincial governments and landowners as this is important in ensuring that all stakeholder grievances are discussed and addressed. In light of this, a development forum is expected in the third quarter of this year. Meanwhile, Kua also revealed a unique aspect of the upcoming project which will mitigate the project's carbon footprint and is set to make PNG in becoming the first country in the Asia Pacific region and only the second on the world to re-inject carbon dioxide back into the well pad in a LNG project. He said the re-inspection of carbon dioxide into the well pad is a significant step towards reducing the project's carbon footprint and will help mitigate the environmental impact of the project and contribute to Papua New Guinea's efforts to combat climate change. The Papua LNG project is a joint venture between the PNG government, TotalEnergies and Exxon Mobil. It is one of the largest investments in the country's history and is expected to generate significant revenue for PNG's economy. Total Energies holds 40.1 percent interest in Papua LNG, along with its joint venture partners Exxon Mobil (37.1 percent) and Santos(22.8 percent). The Papua New Guinea government may exercise a back-in right of up to 22.5 percent interest at the Final Investment Decision (FDI) planned by end of 2023 to early 2024 and production will be scheduled for four years later.
PNG Business News - March 27, 2023
WanPNG: The Skills Development and Jobs Platform for the People of Papua New Guinea
Wan PNG is a platform and community dedicated to expanding opportunities for local Papua New Guineans. Its goal is to increase the development and sustainable employment of local PNG talent, so everyone in our great nation can share in newfound resources and growing prosperity. With the goal of empowering individuals and businesses with the skills and people they need to succeed in the 21st century world, the Wan PNG platform spans three core areas for job seekers: Employment opportunities: Gain experience with internships, start earning with entry positions, or upgrade your career with the next big job. Career advice: Advance your career with expert advice and professional resources, and stay up-to-date on the latest news. Education and training: Expand your employment prospects by upgrading your knowledge, skills, and competencies through courses. For employers it provides: Free access to upload jobs and find the best talent. Smart matching between jobs and candidates. Diversity promoting candidate suggestions reaching a wide pool of talent. The platform's primary objective is to promote lifelong learning and employment and simultaneously bridge the skills gap in Papua New Guinea by providing accessible training opportunities to all its citizens. WanPNG believes that by investing in the development of its people, Papua New Guinea can unlock its full potential and become a more prosperous nation. WanPNG is now available for job seekers and employers. Visit the website now at www.wanpng.com to learn more.
PNG Business News - March 27, 2023
St John Ambulance First Aid Training for Workplace
The St John ambulance service responded to over 21,000 emergencies across Papua New Guinea in 2022. In addition to being Papua New Guinea’s main emergency ambulance service, St John is the nation’s leading first aid training provider equipping thousands of workers with essential first aid skills and knowledge. With just one day of training, St John’s expert first aid trainers can equip your workers with the basic skills to handle all kinds of first aid emergencies. Workplace accidents and injuries are a common occurrence and it is essential for employers to have a competent workforce that can respond effectively to emergencies. St John’s workplace first aid courses ensure your workforce is equipped with the first aid training to assist a sick or injured person. It also helps organizations comply with legal requirements, reduce workplace injuries and fatalities and promote a culture of safety and preparedness. The Papua New Guinea St John Ambulance provides training routinely in Port Moresby and Lae, and can facilitate training at any location in PNG, which makes it easy for workers to gain or maintain their first aid qualifications. St John’s first aid trainers come from a variety of backgrounds, enabling them to contribute real-life experiences to the training environment. Each course, based on St John Ambulance Australia’s training resources, goesthrough rigorous appraisal by training and health specialists including St John’s Papua New Guinea’s medical expert advisory panel - made up of some of the industry’s leading physicians and health professionals, who ultimately endorse the clinical training content components of the first aid courses. St John CEO Matt Cannon said, “this rigorous appraisal process gives clients the confidence of St John’s commitment to delivering the highest quality in training content and delivery in Papua New Guinea.” Workplace first aid courses cover a broad range of topics, including basic life support, wound care, bandaging, splinting, CPR and using an AED. Participants learn how to identify and manage different medical emergencies such as heart attacks, strokes, burns, fractures, and poisoning. Each training program is designed to be flexible and can be delivered on-site or at one of our training centres. If you want to ensure that your workplace is prepared to respond to emergencies, contact St John today to learn more about our workplace first aid training.