The National

PORT MORESBY, Papua New Guinea (April 30, 2009) – As prime minister of PNG, Sir Julius Chan signed into existence the Lihir gold mine in 1995.

Yesterday, as governor of New Ireland where the Lihir mine is situated, he was a bitterly disappointed man, angry at the incompetence of civil servants who he claimed had failed to honour the terms of the Lihir memorandum of agreement (MoA).

Some K500 million, [US$182 million] already committed by Prime Minister Sir Michael Somare earlier this year, is yet to be released to the New Ireland provincial government.

Major projects committed under the MoA such as the Lihir Island ring road, the Namatanai hospital, the international wharf, the international airport and improvements to the Buluminski Highway are still outstanding.

Sir Julius flew his entire cabinet to Port Moresby to pursue the outstanding projects and money.

He said he wanted his provincial executive council members to see where the money contributed by New Ireland ended up.

They did and they were not terribly impressed.

At a press conference later at Parliament House, PEC members were vocal about the contempt with which National Government instrumentalities seemed to hold provinces and, particularly, agreements and the laws of PNG.

Rudolf Tongop, president of Lihir and chairman for mines, said: "We have nothing. The people own nothing.

"If only the Government can give what is owed to us, it would make it easy. We have been talking about this outstanding money for the last 14 years."

The frustration among the members of the PEC is obvious and understandable. These are the politicians who are closest to the people. The pressure is always on them to deliver.

And this particular group is not here to follow a claim or beg for some money from the National Government.

New Ireland plays host to the Lihir gold mine, one of the biggest mines of its kind in a geothermal region.

Benefits to the State over the life of the mine rank in the billions of kina.

It is shocking to learn that the host government, the respective local level governments and the landowners have not been given what the State has promised to give in return for the mine.

Only this week, landowners of the oil and gas regions of Southern Highlands province are converging on East New Britain to discuss what benefits will accrue to them from the liquefied natural gas (LNG) project.

Landowners are divided, frustrated and angry going to the benefits sharing agreement (BSA) talks because they are owed many millions of kina in projects and funds promised by the State under the Hides MoA, the Kutubu MoA, the Gobe MoA and the Moran MoA.

Only last May, the midnight before the signing of the Gas Agreement, did Cabinet approve K300 million in outstanding MoA funds to be released to Southern Highlands and for K200 million to be released to the Gulf province.

Quite obviously, this had to be done or it would never have got the landowners and their provincial governments to agree to the gas project.

The New Ireland provincial government seems to be quick off the mark to learn from this midnight exercise.

The New Ireland government has imposed a moratorium on all future exploration work and on granting of development licences for projects in the province.

Immediately affected is the Government-backed Nautilus deep sea mining project and three other promising mining tenements in the province.

The ploy worked.

Early this year, the Prime Minister himself visited New Ireland to promise the outstanding K500 million in MoA funds.

Try as he might, Sir Julius and his administration have been unable to get the money.

It is a very serious lapse that impacts on PNG’s international reputation. If it cannot honour its commitments in an agreement, why execute any more agreements?

The State quickly loses trust and confidence in its ability to perform to expectations.

As was mentioned yesterday, we do not seem to have learnt from history. The same history of broken promises led directly to the Bougainville crisis.

Yet the utter neglect of its own promises to the people remains successive governments’ single biggest problem.

Be sure that it will not be long before people turn to violence to make their views known.

State instrumentalities and those charged with running them must recognise that these are genuine concerns and address them before they get out of hand.

The National:

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