http://www.postcourier.com.pg/20071205/wehome.htm
Governance of Papua New Guinea’s natural resources should address both the legal and illegal exploitation of our resources.
Resources need governance
Natural resources can generate wealth and contribute to peace and development.
However, if poorly managed, they can also become a burden. Conflicts associated with natural resources are problems that require political support at national and local levels in order to generate workable solutions. The United Nation’s fact finding group also acknowledges that good resource governance is essential for peace, security, and sustainable development.
Natural resource “governance” should address both the legal and illegal exploitation of resources in PNG.
It is important to ensure that the country's natural resource wealth serves as an engine for sustainable socioeconomic development rather than being a source of civil conflicts and underdevelopment.
There are several possible pathways to ensure that natural resources are well-managed:
* natural resource exploitation should be treated as a governance issue, and addressed at all levels of government;
* there is a need for a broad and holistic approach that recognises the inter-connectivity between natural resource governance, and peace, security, and development issues;
* natural resource governance requires context-based solutions that derive from lessons learned from past experiences; and
* there is need for co-ordination, co-operation, and partnership when addressing natural resources and their impact on conflict resolution.
In PNG, the nature of resource conflict is associated with political motives and interagency interests. Therefore, proper governance of natural resources must be mandatory, participatory, transparent, and accountable.
The political and economic governance of resources and conflicts are crucial and therefore both must involve development strategies, and efficient and effective management practices, including revenue and expenditure management.
Social responsibility
When it comes to co-ordination and partnership with developers, the state often ignores the corporate aspects of resource governance.
Corporate governance should include government regulatory structures that recognise corporate social responsibility and civic society inputs.
Although national regulatory authorities such as the departments of Petroleum and Energy, mining and forestry and the newly established Mineral Resources Authority and Petromin are in place, most are guided by ad hoc policies and “loose legislative statements”.
A Central Resource Monitoring Authority (CRMA) should possibly be formed by amalgamating the functions of these regulatory authorities with the Department of Lands, as a “natural resource taskforce” dealing with resource management and conflict resolution. Also, a national equity distribution system could be established. The main function of a CRMA would be to oversee the operations of the distribution system, in accordance with a set of national resource governance guidelines. The CRMA, as the chief regulator, should be guided by the following policies:
* as the overseer of all contract agreements, CRMA should ensure that all resource developers' contracts, subcontracts, and joint venture agreements are aligned to the principal contract with the Government, and that they comply with the necessary standards, and eliminate the practice of secret clauses;
* based on past extraction experiences, the developers should cooperate with the State in implementing various guidelines and standards with all relevant stakeholders, especially the resource owners. New developers will be guided by CRMA's regulatory guidelines; and
* resource developers must ensure broad-based, active, visible involvement of affected communities in the approval, planning, implementation, and monitoring of natural resource exploitation, and should comply with international standards on the environment, labour, human rights and conflict sensitivity.
Rationale for the amalgamation
The existing incorporated land groups system has not been effective in resource coordination and allocation, particularly in disbursing royalties and dividends to the landowners.
Royalties from the extracted resources must reflect the true cost of exploitation.
To minimise avenues for conflict, royalties must include the cost of environmental degradation and capital depletion. Environmental accounting should be a key component of an effective socioeconomic and political governance of any development projects.
The use of ILGs was adopted by landowner groups in the Kutubu, Gobe, and Hides oil and gas projects in the early 1990s.
They serve as a benefits-disbursement mechanism, and have been legally endorsed in Part IV of the Oil and Gas Act 1998.
However, problems such as “ghost” ILGs, misuse of resource revenues by ILG leaders, struggles over ILG leadership, land disputes, unfair distribution of benefits, and lack of accountability in the ILGs have arisen.
The proposed governance mechanisms should incorporate the interests of all stakeholders in resource development projects.
A national land classification and allocation system covering all customary land in resource areas should form a national lands database system monitored by the CRMA. This database would be crucial in allocating royalties to the correct resource owners. The State and the developers are vital proponents in this process.
Perhaps recommendations from the National Land Development Taskforce concerning civil registration and birth certificates will have positive effects on ILGs’ functions and resource management.
The need for official documents from genuine landowners upon formation of ILG groups could be legislated under an ILG Resource (Management) Act, to formalise a resource distribution mechanism.
An ILG resource (management) Act
An ILG Resource Management Act would officially organise and recognise principal landholders, their subsidiaries, and associated stakeholders, and their customary land rights.
The present functioning of ILGs occurs under Part IV of the Oil and Gas Act 1998. The Associations Incorporation Act No. 142 and the Lands Dispute Settlement Act are vague in relation to ILGs and genuine resource owners.
Moreover, there are no independent legal provisions specifically outlining the channels through which royalties and other benefits should be distributed.
Therefore, ILGs must be legally strengthened through an Act of Parliament.
The rationale is that previous breaches of ILGs' functions and purposes under the Oil and Gas Act were not fully enforceable.
There is no independent legal framework to which ILGs can be accommodated, in relation to issues such as unfair equity distribution, leadership struggles, corruption, misuse of future generations' funds, and so on.
All existing forms of equities and funds from resource extraction that are held by entities such as the MRDC, and other trustees would be managed by the CRMA, based on the judgement and recommendations from the national lands classification system monitored by the Department of Lands.
This would represent a significant departure from arguments put forward under the colonially contrived Land Groups Incor-poration Act 1974, where the current structures for land registration, land titles, customary land rights, common property land rights, and land tenure systems are managed.
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