Ex-Treasurer backs probe into LPG non-payments, slams ‘negligence’

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Prime Minister Peter O’Neill campaigns for his People’s National Congress (PNC) candidates contesting in the 2017 National Elections in the Highlands this week. Video: EMTV News

By Charles Yapumi in Port Moresby

Papua New Guinea’s former Treasury Minister has welcomed the Estimates Committee of the Australian Senate’s probe into non-payment of royalties to LNG area landowners.

“It is pleasing to see the concern expressed by Senator Scott Ludlam for the plight of LNG project landowners who have not received any royalty payments three years after annual exports worth billions of dollars have commenced,” said Patrick Pruaitch, leader of the National Alliance Party.

Pruaitch was dumped as Treasurer by Prime Minister Peter O’Neill last month after claiming the economy was “falling off a cliff”.

Senator Ludlam expressed concern at a recent meeting that the Australian government’s Export Finance Insurance Corporation (EFIC) had not taken measures to ensure royalty payments — now totalling K904 million (about NZ$420 million) — had been distributed to landowners in the PNG LNG project area.

He noted that the loan to the PNG LNG project was the biggest ever foreign loan made by the Australian government.

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“While the inquiry highlighted EFIC’s silence and non-action towards protecting Australia’s interest, more significantly for PNG, it raises the government’s negligence and lack of responsibility to the people of PNG, specifically the wellhead landowners and beneficiary groups in the PNG LNG project,” Pruaitch said.

“By right, the clan-vetting exercise to determine the rightful people to whom royalties should be paid should have been completed well before the first LNG shipment left PNG’s shores in May 2014.

“The O’Neill government has to date failed to resolve this issue,” Pruaitch said.

Landowner patience running out
Senator Ludlam was right in expressing fears about project risk because the patience of landowners has been running out.

“I thank Senator Scott Ludlam for his courageous position in seeking EFIC’s explanations as to why the Australian export credit agency that financed the mega LNG project in Papua New Guinea had, to date, not initiated at the very least a telephone conversation between the Australian Foreign Minister and PNG officials to raise the concern about non-payment of PNG LNG project royalties to project area landowners.”

Pruaitch was the former Treasurer in the Somare government in 2009, and was also the chairman of the Ministerial Sub-committee on Economic Matters responsible for the delivery of the PNG LNG project.

“The senator’s probe has highlighted the fact that international companies also have a corporate responsibility to adhere to international principles and best practices and EFIC should also do its part to protect Australia’s investment while, at the same time, honouring the letter and spirit of the project agreement.”

Charles Yapumi is a Loop PNG reporter.

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