The staff of PNG Extractive Industries Transparency Initiative (PNGEITI) attended a one day workshop hosted by ExxonMobil’s Government Relations team.
It was an information sharing session aimed to shed light on various aspects of the PNG LNG project, particularly its benefits that will have a positive and long lasting impact on the country.
ExxonMobil PNG, the developer of the PNGLNG is a member of the PNGEITI Multi-Stakeholder Group. The company plays a pivotal role as a reporting entity, providing crucial information and data for the PNGEITI’s annual country reports. The EITI reports serve as vital source for the government and the citizens in promoting transparency and fostering public trust by disclosing revenue payments, and other relevant information related to mining, oil and gas sectors.
The workshop covered an array of topics, including updates on the PNG LNG Project, revenue distribution to the State, the Infrastructure Tax Credit scheme, and National Content initiatives such as workforce and supplier development, along with corporate social responsibility efforts in community investment.
During the session, Jonathan Omae, Government Relations Advisor and workshop facilitator, underscored the diverse array of benefits stemming from the LNG project. He highlighted both direct and indirect opportunities, citing royalty payments, dividends, equity entitlements, and development levies as direct benefits. Additionally, Omae emphasized indirect benefits such as employment, training, business opportunities, and infrastructure development such as roads, clinics, and schools.
However, questions were raised regarding the distribution of payments to provincial governments and their subsequent impact on local communities. Diclah Taureka, PNGEITI Director of Projects and Procurement, queried the transparency and efficacy of this process, and if the company is providing data and information as required for the EITI reports.
In response, Omae clarified that payments are distributed as per the Umbrella Benefits Sharing Agreement (UBSA), an agreement between the State, landowners, and the local government. The agreement, a prerequisite under the Oil and Gas Act, outlines a framework for fair benefit distribution. Omae added that unlike other revenue streams, the company pays development levies directly to the provincial governments. He emphasized that ExxonMobil adheres strictly to this agreement, leaving the allocation decisions and reporting to the provincial governments.
Echoing similar concerns, Dickson Sorariba, PNGEITI Director of Communications and Stakeholder Engagement, queried if the benefits trickle down to the local communities. He highlighted instances where communities voiced grievances over inadequate benefit sharing and lack of tangible development in the impacted areas such as Gulf and Western provinces.
PNGEITI currently reports at the national level, with discussions ongoing regarding subnational reporting. In the interim, stakeholders in the sector should continue to advocate for a more equitable distribution process, one that ensures clear criteria on revenue distribution, and transparent decision-making, that is accessible to the public.
The challenge now lies with industry stakeholders and impacted communities to advocate for change and ensure that revenue from not only the PNGLNG Project but other extractive projects is distributed fairly and transparently to benefit all stakeholders, particularly the communities in the provinces directly impacted by the project.
