PNG Business News - September 13, 2021
Australia Wishes to Help PNG Government: Saselija
The Minister for International Development and the Pacific, Zed Saselja, stated that Australia wishes to assist the PNG government in addressing its budgetary and economic issues. During a press conference, Saselja stated that Australia has provided US$400 million (K1.3 billion) in loans to PNG's budget priorities over the previous two years. “This is on top of substantial development assistance provided through our bilateral programme,” Saselja said. “We are working to support PNG’s aspirations to lay the foundation for future growth. “PNG faces a significant challenge in providing employment and prosperity for its young and rapidly growing population. “We have heard PNG’s call for quality infrastructure to support development. “There is now a pipeline of projects under the AU$2 billion (about K5 billion) Australian infrastructure financing facility for the Pacific. “These will include investments in electricity, roads and ports.” The Coronavirus (Covid-19) pandemic, he noted, posed a difficulty for cross-border businesses. “We have worked with Air Niugini to ensure that commercial flights to Australia never stopped. We have also assisted the PNG government to introduce pre-departure Covid-19 testing at Jackson international airport. “We also worked closely with businesses to support travel exemptions arrangement for workers in the resources sector.” Travel restrictions from Australia to PNG were restored to global settings on August 11, while Covid-19 limitations remain in place. Reference: The National (8 September 2021). “Aust open to help PNG: Minister”.
PNG Business News - September 09, 2021
Sovereign Wealth Fund important as government savings for PNG’s economic future
The Papua New Guinea Chamber of Mines and Petroleum is encouraged by Prime Minister James Marape’s recent announcement of a clear policy on the payment of dividends from resource projects through to a Sovereign Wealth Fund (SWF). Prime Minister Marape made the announcement upon receiving a K100 million dividend payment from Kumul Petroleum Holdings Ltd (KPHL) on August 18. President of the PNG Chamber of Mines and Petroleum, Anthony Smaré, said this was a good sign of the government’s commitment to ensuring economic returns from resource sector projects are rightfully accounted for, and properly invested and managed for the long term. “The resource sector contributes approximately 28 percent annually to the PNG economy. While this has a massive indirect multiplier effect in the form of employment, crucial infrastructure and education and health support. There is still a misinformed opinion as to how the real economic returns of the sector are being recorded, and correctly valued. “The establishment of a sovereign wealth fund with strong and transparent management processes will ensure that these direct economic returns from our resources are adequately captured and managed for the long term, and be used for development, right down to people in our districts and communities,” Mr. Smaré said. Mr Smaré, the former long-serving Chairman of Nambawan Super, said from his experience “The growth of the country’s superfunds like Nambawan Super and Nasfund from mere hundreds of millions, to over K15 billion in 20 years for the benefit of millions of superfund members and their families, demonstrates the value of putting away money for the long term to support you in times of need, and the country can do this for itself by saving and investing a significant portion of its resource revenues in the SWF for the future. “The legislation for an SWF has been existence for over a decade, but the political will has previously been lacking. However, the Prime Minister’s commitment is a very important step in the right direction and this important statement by Prime Minister Marape should be recognized and applauded.” He acknowledged Prime Minister Marape’s observations that the establishment of a Sovereign Wealth Fund has been effected in law, but this is the first time a government has shown its determination to have the SWF set up to ensure a saving’s culture for the government, through its resources revenue. “The resource sector has always been a willing party in the setting up of a Sovereign Wealth Fund for the country. And I am sure the resource sector, as well as the entire business community, will work closely with government to ensure this is achieved in a timely and proactive manner,” Mr. Smaré said. Article Courtesy of the PNG Chamber of Mines and Petroleum
PNG Business News - September 09, 2021
PM MARAPE OUTLINES MAJOR RESOURCE PROJECTS OF HIS GOVERNMENT
Prime Minister Hon. James Marape has outlined the six major resource projects his Government is focused on. They are the Papua LNG Project, New Porgera Mine, Wafi-Golpu Mine, P’nyang LNG, Pasca LNG and Pandora LNG. PM Marape announced this today when responding to the Ministerial Statement by Treasurer Hon. Ian Ling-Stuckey on the ‘2020 Final Budget Outcomes (FBO) and 2021 Mid-Year Fiscal and Economic Outlook (MYEFO) and the Way Forward’. He said this was more than the previous O’Neill regime which had only the Papua LNG Project to its name. “Mr O’Neill, in eight years, delivered only the Papua LNG Project,” PM Marape said. “We are working very hard, and in just two years, we are discussing Papua to ensure that it takes off, Wafi-Golpu, New Porgera, Pandora, Pasca and P’nyang. “These big five projects apart from Papua LNG project, remain our focus, but more importantly in the medium term going forward to ensure our economy is strong.” PM Marape said the difference between his Government and O’Neill’s was that his Government was for a better deal for Papua New Guinea on all these projects. He said the Papua LNG Project was not one that was supposed to have begun right away as the Opposition was claiming. “The Papua LNG Project was not supposed to have been constructed in 2019 or 2020,” PM Marape said. “It would have to go into pre-FEED (front end engineering and design), then FEED, and then FID (final investment decision). “They (Opposition) are making it (Papua LNG Project) as if it was going to be a miracle that would have brought money into the country in 2019 or 2020.” PM Marape said the Papua LNG Project was going into FEED in 2022, an FID by 2023, and construction to start in 2024 or 2025. “I appreciate what the Petroleum Minister, Hon. Kerenga Kua, is doing now by trying to squeeze a little more in the area of local content, so that we get a bit more on top of what was already signed,” he said. “I thank the former government, which left our gain at 51 per cent.” PM Marape said his Government was pushing for more than 50 per cent stake in P’nyang, Pasca, Pandora and any other new LNG projects. He said this was the same at mining projects. “We’re trying to push for a gain at Wafi-Golpu and Porgera with a return of above 55 per cent,” PM Marape said. “We will not come below 52 per cent.” The Prime Minister said at Porgera, his Government had settled for 53 per cent over the long term, with the first five years being 65 per cent. “This is what we are doing, making the hard decisions,” he said. “We have to make these tough calls to ensure that we anchor our economy correctly, not just for today but for the next generation. “The more we collect today contributes to a better Budget three, four, five, six years down the line.”
PNG Business News - September 07, 2021
Governor Numu officially opens lower highlands consultation
Governor for Eastern Highlands Province Hon Peter Numu has given his full support for the establishment of the Extractive Industries Transparency Commission. Governor Numu opened the lower Highlands Consultation workshop on the PNG Extractive Industries Transparency Commission Bill in Goroka on Monday, September 6th, 2021. He welcomed the State legal and policy officials from key government departments, Department of Petroleum and Energy, Department of Treasury, Constitutional and Law Reform Commission, National Economic and Fiscal Commission, Internal Revenue Commission, including Provincial administration key representatives from Western Highlands, Jiwaka, Chimbu, Eastern Highlands, and the PNGEITI staff who gathered in Goroka for the week-long consultation. “As the Governor of Eastern Highlands Province, I am in support of transparency and accountability in the extractive sector. “The government must be accountable and it must make sure the developer is transparent in the extraction of our natural resources,” he said. “Our government recognises the need to have transparency and visibility of revenue received from the extractive projects and other sectors in the country particularly in our province. “We also acknowledge the importance of having factual data from the sector to ensure we are able to make informed decisions in the governance of the sector. He added that Eastern Highlands Province contributes significantly to the economy of the country through coffee production and exports. The province is a major coffee producer and from coffee exports revenue is generated for the country, while local farmers benefit directly from selling their coffee produce. “The province also hosts the K92 Mine located in the Kainantu District, that started four years ago. The company K92 Mine Ltd paid K25 million to the government last year, given the tough economic times and is looking at a promising future for the province,” he said. “Our government also recognises the importance of supporting the work of the PNGEITI in transitioning to an independent entity as proposed ‘Commission’ to fully implement the EITI requirements and best practice Standards that PNG has signed up to implement for our benefit. “We look forward to providing our comments and views on the proposed PNGEITI Commission Law and work in close consultation with the PNGEITI as it promotes good governance, accountability and transparency in the resources sector. He acknowledged the National Secretariat’s leadership and the government agencies for their participation and contribution to drafting of the Commission law and the consultation process and reiterated that consultation is the way forward as it captures our people’s views in framing this important legislative requirement.
PNG Business News - September 06, 2021
‘Economy Would Rebound Later This Year’
According to Steamships Trading Company Ltd, the national economy would rebound later this year and beyond 2022. In its half-year report for the fiscal year 2021, the corporation indicated that recent government announcements on key resource development projects were encouraging. The group's Coral Sea Hotels had a strong start to the year, aided by the quarantine requirement for visitors to PNG. “The Ela Beach Hotel food and beverage offering improved considerably with a new restaurant, bar and takeaway outlets which opened early this year,” the company said. “Cost management remained a key focus. “Demand is currently stable but any relaxation of quarantine requirements will have a negative impact on second-half performance. “Steamships is adapting to meet the changing demand in the economy and positioning its businesses for a medium-term economic recovery.” In the meantime, the group successfully secured the renewal of a portion of its existing funding arrangements with a major bank in PNG. “Also, after the period ended, Steamships agreed to sell its wholly-owned subsidiary, Croesus Holdings Ltd, an indirectly wholly-owned subsidiary, Croesus Re PCC Ltd, both incorporated in the Isle of Man, to its majority shareholder John Swire & Sons Ltd at net book value. “The valuation was supported by an independent accounting expert. “The transaction was recommended by a sub-committee of the independent directors of the Steamships board and approved by the Steamships board. “Completion of the transaction remains subject to approval from the Isle of Man Financial Services Authority.” Reference: The National (1 September 2021). “‘Economy to recover this year’
PNG Business News - September 06, 2021
Council: Businesses Have Spent Close to a Million Kina on COVID-19
According to a poll conducted by the Business Council of PNG, businesses have spent close to a million kina on COVID-19 protective equipment and facilities to protect their employees and operations. According to the findings of their COVID-19 vaccination for a business survey, 70 per cent of the cost was spent on face masks and sanitisers, 21 per cent on testing kits, and 11 per cent on building their own COVID-19 facilities and clinics, according to Business Council Executive Director Douveri Henao. Businesses have spent more than K70, 000 on facemasks and hand sanitisers, and more than K136, 000 on testing kits and ventilators, according to Henao. According to him, some companies have invested between K50, 000 and K9.5 million to put up an in-house clinic or medical centre for their staff. Henao also pointed out that whereas only 19 enterprises had medical insurance coverage for their employees on COVID-19 in 2020, that number has now risen to 64 per cent. “From the findings, sensitive value chains need to be COVID-19 free. The Business Council is not forcing anyone to be vaccinated as it is their right… and with the hesitancy, businesses have now been able to absorb that cost. Businesses are continuing to adjust to these changes and have made these big expenditures with the hope that the vaccinations will rebalance the cost,” he said. Reference: Yafoi, Melisha. Post-Courier (2 September 2021). “Businesses Have Spent Close A K1m For COVID-19”.
PNG Business News - August 30, 2021
Plans For Connect PNG Road Program
When PNG becomes 50 years old in 2025, the Marape/Basil government hopes to complete its Connect PNG Road Program, which will connect the country's missing links. David Wereh, the Works Secretary, and his staff are currently working to connect all of the highways in the Northern and Highlands areas. He said the Department of Works and Implementation is carrying out the program, which includes the engineering and construction of key missing links such as the Mamose coastal highway, Ramu highway, Highlands Highway, Wau highway, Hiritano Highway, and Magi Highway, as well as the improvement of existing highways such as the Mamose coastal highway, Ramu highway, Highlands Highway, Wau highway, Hiritano Highway, and Magi Highway. “We hope our target for linking PNG through the road sector is realised before PNG celebrates its 50th Independence anniversary,” Wereh said. “Port Moresby will be linked to Northern and Highlands regions from Lae to, Goroka, Madang, Mt Hagen and Alotau.” PNG should have a single undivided road network on the mainland by 2030, as well as a single-road corridor in the island provinces of Manus, New Ireland, East and West New Britain, and the Autonomous Region of Bougainville (AROB), according to him. “Phase one will start with a road link between Port Moresby and the main urban centres including Lae, Goroka, Madang, Mt Hagen and Mendi.” The first phase, which focuses on the country's most critical core roads, is ongoing. Among the most recent significant Phase 1 accomplishments were: Wau-Bulolo road maintenance from 9-Mile Junction to Wau, K65m; Maintenance and improvement of Mendi-Tambul road in Southern and Western Highlands provinces (55.53km) Kl72.1m; Upgrade and rehabilitation of Kundiawa-Gembogl-Bundi highway in Chimbu Province, (20.4km) Kl13.9m; Sealing and upgrade of the East Cape road in Milne Bay (52km), K96.5m; Upgrade and rehabilitation of Pangia-Wiru loop road in Southern Highlands (31.14km) K86.0m; Upgrade and rehabilitation of Henganofi-Nupuru road in the Eastern Highlands (34.0km), K85.2M Construction of 12 bridges on the New Britain Highway Hiritano Highway rehabilitation and long-term maintenance (125km), K77.56m. Connect PNG Phase 2 (2027-2034) would see an additional 300 kilometres of provincial and district highways improved and maintained across the 21 provinces. The project from stages one and two will be completed in phase three, and the construction of the Gulf-Madang corridor through Chimbu will begin. This will improve connections between major urban, commercial, industrial, and transportation centres in the Highlands and Mamose regions, as well as Port Moresby in the Southern region, and connect regional areas with significant economic development potential, particularly in the agriculture, fisheries, and tourism sectors, to the national land transport network. “In this regard, strategic national and sub-national land linkages are planned for development over the next 20 years under the Government’s Connect PNG Economic Roads Development program (Connect PNG 2020-2040), which will reduce transportation costs and promote economic development at the cost of K20 billion,” Wereh said. The ADB (SHHIP) will be improved for K3 billion from Nadzab Airport junction to Kagamuga Airport junction, a distance of 340 kilometres. The SHHIP initiative is being developed on three different portions of the Highlands Highway, which runs through the provinces of Morobe, EHP, Simbu, Jiwaka, and Western Highlands. The first section under the SHHIP: Maintenance, upgrading, and rehabilitation from Nadzab to Henganofi (210km), K264.1m; The second section under SHHIP: Maintenance, upgrading, and rehabilitation from Henganofi to Mangiro and Miunde to Kagamuga (218km) K203.26m; The third section under SHHIP: Reconstruction from Mangiro to Miunde in Chimbu (57km) K341.3m; High impact projects under the DoW high impact office saw two major infrastructure investments to Lae and Mt Hagen; Upgrade to Mt Hagen four-lane road from Keltiga to Kagamuga in Western Highlands (13.76km), K306.31m; Completed Lae four-lane of the Highlands Highway section from Lae to 9-Mile junction; and, 9-Mile to Yalu bridge in Morobe Province (9.3 km) K134.84m. Reference: Kenneth, Gorethy. Post-Courier (25 August 2021). “Connect PNG Road Plan 2020-2040”.
PNG Business News - August 30, 2021
NAC Gives Approval for Madang Airport Flights
The National Airports Corporation has granted the go-ahead for flights into Madang Airport to resume on Monday. Flights have resumed following NAC's extensive runway rehabilitation work, the airport's anticipated closure from July 23 to August 8, and a further delay of flights on August 13 due to weather. Regular passenger transport (RPT) flights into Madang Airport have started, according to NAC interim managing director Rex Kiponge, following CASA's inspection and clearance to open the completed 930 meters of the runway over the weekend. He explained that the airport was downgraded after work on Stage 6 Method of Works Plan (MOWP) began on July 23, 2021, and that after completion of Stage 6 Method of Works Plan (MOWP), a total of 930 meters of runway will be available for RPT flights. “Works on stage 7 of the runway has also commenced and is expected to take approximately four weeks to complete which is again subject to weather conditions on-site. “The upgrade works on the runway are very important and critical to ensuring all airports operate in a safe environment and in compliance with appropriate international standards and the Civil Aviation Rules,” Kiponge said. Meanwhile, owing to the present runway length available, PNG Air has resumed flights into Madang Airport, albeit only with their Dash 8-100 series aircraft. “We will resume our ATR 72-600 flight operations following completion of the full runway length pending approval from NAC,” the company said. It claimed that with up to four weekly flights to Madang, passengers and air cargo partners may now book flights and goods into the province with ease as flights restart. The airport's runway is planned to be upgraded in its entirety by October 31st, 2021. Reference: Post-Courier (25 August 2021). “NAC Gives Okay For Madang Airport Flights”.
PNG Business News - August 30, 2021
Chamber congratulates government on positive action on Papua LNG Project
Photo Credit: peopleconnexion The Papua New Guinea Chamber of Mines and Petroleum congratulates the Marape-Basil government for its positive action on resource projects, which it says, the country urgently needs to get moving, and to provide economic support to the national economy. Last Friday (August 20th) the government tabled, debated, and overwhelmingly passed the Oil and Gas, Papua LNG Project Amendment Bill, 2021 79 votes to 0. Chamber President, Anthony Smaré said: “The Government’s passage of this important legislative changes illustrates the sincere commitment from the government of the need to get the Papua LNG Project off the ground. All parties recognize that we need the Papua LNG Project to go into construction to provide a boost to the economy, create jobs and business opportunities for PNG businesses and boost revenue from the government to keep funding essential services to our people.” Mr. Smaré acknowledged the sincerity of government through Petroleum Minister, Kerenga Kua, in explaining the significant costs involved in a project like the Papua LNG Project. “Given the significant capital intensity of the Papua LNG Project, which will be around 10 Billion US Dollars to 12 Billion US dollars, it must be financed using a combination of debt from lenders and equity from project sponsors, or joint venture partners,” Minister Kua told Parliament when tabling the bill. “Mr. Speaker, the Papua LNG Project participants are currently progressing the technical work necessary, so that the two Papua LNG Project Liquification trains may proceed within the PNG LNG Projects site at Caution Bay. Once this is complete, and following the start of FEED, they will submit an application for a Petroleum Development License,” Mr. Kua explained in parliament. Minister Kua had said: “Prompt passage of the proposed bill during this parliamentary session, will demonstrate to sponsors, LNG buyers and financiers, the State’s continued full commitment to the Papua LNG Project, contract sanctity, and the fiscal regulatory regime, contemplated by the Papua LNG Project Gas Agreement. This is why we are proposing this bill for approval today.” “The passing of this amendment bill is the first positive sign industry has seen that indicates to investors in the extractives sector, that government is mindful of returning investor confidence to the levels they were at, before the closure of the Porgera mine.” Mr. Smaré echoed Minister Kua’s acknowledgment that the passing of this amendment bill, would help improve confidence of investors in the resource sector, which has recently been on the decline. “The Chamber, as a representative of its members in the resources sector, has always highlighted the need for a stable, regulatory and legislative environment. This ensures that investor confidence remains high and keeps the focus on Papua New Guinea as a viable investment destination,” Mr. Smaré said.
PNG Business News - August 26, 2021
New Ireland Obtains K460 Million In Foreign Investment, Says Authority
According to Investment Promotion Authority (IPA) chairman Leon Buskens, New Ireland has received K460 million in foreign investment in the previous six years, with Namantanai accounting for 80% of it. Buskens, who recently presided at the inauguration of a Bank South Pacific branch in Namatanai, claimed that according to IPA investment data from 2014 to 2020, Namatanai received 80% of foreign investment. According to him, forestry, the Lihir gold mine, and the Simberi mine have accounted for roughly K340 million in foreign investment in Namatanai during the previous six years. “Namatanai is a powerhouse in PNG so let’s work together because we have a good leader and we have a bright future,” he said. Namatanai administrator Neville Tomon said the community has gone nearly two decades without financial services. “The people of Namatanai witnessed the return of banking services with the launching of the high breed branch of (BSP) BSP Financial Group Ltd,” he said. “We are now on equal footing with other districts in terms of banking facilities. “The former PNG Banking Corporation and BSP provided banking services at the sub-branch status in the early 1990s but withdrew due to no businesses in Namatanai. “We had the Asians joining the business community in Namatanai but without a bank. “We have done something positive that hasn’t been done before and that is to create a business environment to reconsider the bank’s position and return with its high breed branch facility and other products like automated teller machines, loans, and other facilities. “I’m pleased to announce that the business arm of Namatanai development authority, Walter’s Farming Association Buying Point, has increased the cash circulation in our district. As a result, our small farmers (especially women) have the cash they didn’t have before and they are putting food on the table instead of their male counterparts.” Reference: The National (23 August 2021). “Authority: New Ireland attracts K460mil in foreign investment”
PNG Business News - August 26, 2021
Prime Minister Marape launches the Managalas Forest Carbon Pilot Project
Photo Credit: Department of Prime Minister and National Executive Council Prime Minister Hon. James Marape officially launched the Forest Carbon Pilot Project today at the Afore District Sub-Station, Oro Province. This new project is unlike the Carbon Trading Program where countries are given credits for just conserving their Rainforest. The Managalas Forest Carbon Pilot Project is a sustainable intergrated land development project where the actual rainforest is conserved and the grass plains are reforested with cash crops like coffee, coconut and even timber. Prime Minister Marape Marape commended the Governor for Oro, the Hon. Gary Juffa for his leadership in this area and urged the people of Afore to work with him on the project. To help start off the project, the Prime Minister committed K5 million to the project. "This is to ensure what we are talking about becomes a reality. We do not want to come and just talk about it. We want the project to really happen," Prime Minister Marape said. The Prime Minister told the people that the benefits for this project may take time to manifest but it will benefit their children and their children's children over the many years to come. He urged them to use the opportunity to go into agricultural SMEs and the government will give price support so that they sell their produce at a good K6 per kilogram for coffee and K3.00 per kilogram for cocoa. The Prime Minister also said the government will set up buying hubs in the district so that the people do not have to travel all the way to Popondetta to sell their produce. "This will not be the only developments taking place. We will also bring in schools. I am going to give K1 million to provincial government for the only High School in Afore," he said. "We will also give K500,000 to be distributed equally to schools in the Afore Local Level Government. "We will also fix and upgrade the road. I will be giving K5 million to Governor Juffa to continue with the road upgrade already happening from Oro Bay." Prime Minister Marape said when the conservation project becomes a reality, your schools, hospitals and roads must become better. Conservation has money in it and it will come in a holistic way. According to a report in the Vivid Economy in 2020, nature based solutions such as these not only conserve biodiversity and strengthen community resilience, it also has the potential to generate USD 800 billion in annual revenues by 2050. Article Courtesy of The Department of Prime Minister and National Executive Council
PNG Business News - August 23, 2021
Bakani Says to Increase Exports
Increased exports are the greatest way to boost PNG's foreign exchange. During the Certified Practising Accountants of PNG conference in Lae, Governor of the Bank of PNG, Loi Bakani, made this remark. The Momase and Highlands area conference of the Certified Practising Accountants of PNG began on Thursday at the Lae International Hotel. Bakani spoke on how the global economic crisis has affected PNG's foreign exchange market. During question time, one audience member brought out Kina's 41% depreciation from 2012 to 2020. Bakani reacted by claiming that export encouragement would have kept the Kina stable. “For us now to be able to support the foreign exchange, it means for us as advisers to look at ways of minimizing our imports,” he replied. “We encourage more exports. Minimizing imports will reduce the demand for foreign exchange, and that’s why the Kina can remain stable and if we have more foreign exchange coming in, the Kina will go up.” PNG, according to Bakani, is an "import-dependent country." While the current inflation rate is 3.3 percent, he explained that the unpleasant truth can be seen on store shelves. He feels that encouraging the agriculture sector and getting large projects like the Wafi-Golpu mine and Papua LNG off the ground are the best ways to alleviate PNG's financial load. Reference: Gware, Carmelita. Loop (21 August 2021). “Increase exports, stresses Bakani”.
PNG Business News - August 23, 2021
PNG Signs Multilateral Convention on Mutual Administrative Assistance with OECD
His Excellency Mr. Joshua Kalinoe, Papua New Guinea Ambassador to the Kingdom of Belgium and the EU with concurrent accreditation to the Republic of France (right) exchanges the signed Agreement with Josee Fecteau, Director for Legal Affairs of the OECD in Paris. Papua New Guinea signed the Multilateral Convention on Mutual Administrative Assistance with the Organization for Economic Co-operation and Development (OECD) in Paris, France, on 11 August 2021, joining 142 other countries, that include countries from the G20, OECD, and a growing list of developing countries from the Organization of African Caribbean and Pacific States (OACPS) Group. Papua New Guinea Ambassador to the Kingdom of Belgium and EU with concurrent accreditation to the Republic of France, HE Joshua Kalinoe signed the Agreement on behalf of the State of Papua Guinea with delegated powers from the Minister for Foreign Affairs and in his capacity as Ambassador Extraordinary and Plenipotentiary. Accession to the Convention means that Papua New Guinea will firstly open up its treaty network for the exchange of information for tax purposes, including on tax evasion and avoidance with signatory jurisdictions. Secondly, this will facilitate and strengthen access to OECD led initiatives such as Tax Inspectors without Borders and other internationally accepted tax compliance and transparency standards. In thanking the OECD for facilitating PNG's accession to the MAAC, Ambassador Kalinoe said that PNG has so far been compliant with the EU standards on tax compliance and money laundering and noted that the OECD could assist in working with the country's competent authorities to ensure that PNG continue to meet international standards, including those of the EU. "It is my hope that PNG will work closely with the OECD to ensure that my country meets international financial accountability standards, including on tax compliance and money laundering," Ambassador Kalinoe said.
PNG Business News - August 23, 2021
PNG Ports Corp Upgrades Lae Port
Photo Credit: Tim Scott, Flickr PNG Ports Corporation Limited is adamant about having huge international shipping boats berth in Papua New Guinea ports. The Lae International Berth is being renovated to meet international vessel requirements, according to Rodney Begley, PNG Ports' chief operations officer. According to him, the berth can accommodate boats with up to 2800 containers. “We are working on a plan to upsize the port to the capability that can handle a 9000 container vessel,”. “That is about future proving the Port and the operations as we move forward.” According to Begley, they can now handle 5600 container boats with a length of around 270 meters. “At the moment, larger ships coming into the country is 2800 containers or about 200 meters long. “This is about bringing opportunities of larger ships coming into the country to improve the supply chain,” he said. “As we look beyond the next five years, we want to have a Port that can handle a 9000 container vessel. Those vessels currently move from Asia through to Australia and they bypass PNG,” he said. “Our vision is for PNG to become a hub point for the Pacific, which will allow the moment of freight in and out, agricultural, general cargo, machinery, mining and whatever commodities you can think about through the International Port from Lae through the Pacific. Again this is about future proving and making new business decisions for PNG.” Reference: Tom, Patrick. Post-Courier (18 August 2021). “Lae Upgrades Port”.
PNG Business News - August 23, 2021
Discussions Continue On Purchase of Westpac
Photo Credit: PNG Buzz Should the deal be authorized by the ICCC, Kina Securities Limited's position on purchasing Westpac PNG remains on the table, with a discussion of more competition in the banking market. The bank recently met with the Independent Consumer and Competition Commission to explain its acquisition plan for Westpac PNG. Greg Pawson, the company's CEO, pledged a K25 million investment in technology and digital innovation, as well as a 50 per cent expansion of Westpac PNG's branch and in-store network in the first three years following the purchase, and the creation of a pan-Pacific bank based in PNG. “We will expand the distribution footprint of banking services across PNG to reach more Papua New Guineans,” said Pawson. “We will retain the existing Westpac corporate structure, banking licence, operations and technology – and simply rebrand as East-West Commercial Bank. “This exciting new bank brand will also be used for Westpac Fiji and positioned as PNG’s international bank brand.” According to him, East-West Commercial Bank will compete directly with Kina Bank under this multi-brand approach, which is popular in many countries and will provide clients with a full range of competitive, innovative financial services. “Expanding the distribution footprint will ensure more competition in locations across PNG which are currently only served by one bank or not at all. “It’s a huge commitment to reinvigorate financial inclusion,” said Pawson. Kina also sees the possibility of obtaining banking licenses in Australia and Singapore in the longer term, which would increase PNG's access and reach in the area. Pawson proposed seven important and substantial public benefits to enhance competition, improve access, and create more jobs for Papua New Guineans in his speech. “Kina will prevent job losses and retain all existing Kina Bank and Westpac employees. “We will create 50 new PNG based jobs within the first 12 months following the acquisition,” he said. “All of Westpac PNG’s existing senior management and executive positions will be nationalised and given to PNG local talent, including the country head position.” Kina Bank's purpose, according to Kina Securities chairman Isikeli Taureka, is to continually increase the prosperity of the people, communities, and markets it serves. “We strongly believe that this transaction should be approved by the ICCC,” he said. Taureka also took the opportunity to address head-on the contention by the ICCC that the acquisition would lead to tacit collusion and reduce competition: “While the concepts of a duopoly and tacit collusion will be addressed in detail in our final economic and legal submissions, the significant disparity in market positions between Bank South Pacific and Kina indicate that such a result is impossible. “This transaction is in the best interests of the people of PNG, and the banking and financial services industry more broadly. “The significant public benefits to PNG will be entrenched in the binding commitments by Kina Securities Limited, and enable increased competition with the current dominant force,” Taureka said. Reference: Post-Courier (17 August 2021). “Kina Adamant On Westpac Takeover”.