As Papua New Guinea (PNG) approaches its 50th Golden Jubilee of independence, the country reflects on its development across the business, resource, and industrial sectors.
A key topic at the forefront of discussions is National Content, which emphasizes the participation of local businesses and workforce in resource projects, aiming to ensure that PNG maximizes its benefits from natural assets.
National Content refers to the active involvement of local businesses, workforce, and investments in sectors like mining, oil, and gas. This global agenda is rapidly gaining momentum, and PNG is at the forefront of these efforts, aiming to transform into a middle-income economy by 2030.
In 2009, the PNG government launched its 40-year development strategy, known as the PNG Vision 2050, aiming to guide the country toward economic growth, wealth creation, and national development.
One of the central agenda’s in discussion is this strategy, ‘National Content’ which ensures that the benefits from PNG’s natural resources remain within the country.
For PNG to meet its Vision 2050 targets, improvements in governance, service delivery, law and order, and investor relations are essential. These improvements are vital as the country reaches its 49th Independence Day on September 16, with the 50th Jubilee just around the corner in 2025.
The Growing Focus on National Content
The PNG Chamber of Resources and Energy (PNG CORE) hosted the 2nd Community Affairs and National Content Expo (CANCONEX 2024), reinforced the significance of National Content in shaping the country’s future.
Participants from government, industry, and international experts came together to discuss strategies to align national content policies with global standards. The PNG Resource week was held in July 1-4 at the University of Papua New Guinea.
The PNG National Content Policy (PNGNCP) for Resources Sector 2023’ will be launched later this year by the National Government and the Department of Commerce and Industry.
It is a roadmap that will provide a strategic policy and institutional framework to promote and facilitate greater national participation and partnership in all resource development investments in the country.
The policy covers six focus areas; Domestic Procurement of goods and services, Supplier and Entrepreneurship development, Employment Opportunities for Papua New Guineans, Skilled Workforces Development for graduates, Greater Equity participation by PNG institutions and citizen, and Oversight on investments on Sustainable Development for project impacted landowner communities and the economy as a whole.
In light of the National Content agenda, the Governor of the National Capital District, Hon. Powes Parkop expressed his thoughts on it in an interview with PNG Business News (PNG BN), emphasizing its importance for the country's long-term prosperity.
“National Content is that development must capture national interest,” he said, highlighting the need for equity, royalties, and tax structures that maximize national benefits.
“National content is very important to any project development especially in the non-renewal sector as these are resources and opportunities we will never have again.
“Having national content ensues we gain maximum benefit that benefit us of today and we ensure the generation of the future equally benefits by saving some of these benefits in facilities like sovereign wealth fund and other investments,” he added.
MRA’s Jerry Garry on National Content:
In an exclusive interview with PNG Business News, Managing Director of the Mineral Resources Authority (MRA), Jerry Garry, offered his perspective on the national content in PNG, focusing on the country's natural resource sectors.
His comments highlighted the crucial role that national content plays in ensuring fair and equitable development from Papua New Guinea’s natural assets, including its fisheries, forestry, agriculture, oil, gas, and minerals.
Garry underlined the importance of PNG’s natural resources, stating that these are the country's most valuable assets. Since independence, the mining sector has been the largest contributor to export revenue. This remained true until 2014, when the country’s first LNG export shifted the balance.
However, Garry explained that the debate surrounding national content extends beyond the financial contributions of these projects.
"The fundamental question is: How much of the development cost and the benefits emanating from a project remain in the country? That defines what national content really is," Garry stated.
He urged stakeholders to look beyond taxes, such as corporate income tax and royalties, to assess the full picture of a project's contribution. This includes considering the number of people employed, the skill transfers achieved, and the infrastructure built through the project.
Garry said one of the most overlooked aspects of national content is the role of skill transfer and infrastructure development. He praised PNG's mining sector for fostering the development of skilled professionals, noting that many of these professionals have gone on to work in international markets such as Australia.
The challenges presented by PNG’s terrain have led to the deployment of advanced technologies, and this exposure has equipped local professionals to be competitive on a global stage.
However, Garry expressed concern about the lack of attention to building infrastructure and meeting corporate social responsibilities. He emphasized that many extractive companies in PNG have failed to provide adequate infrastructure for local landowners.
"I have not seen one respectable company in this country that built decent homes for the landowners and put electricity into them," he remarked, noting that the Woodland Vault Project is a rare exception in this regard.
Garry urged companies to consider how much of their revenue remains in PNG to support local development. He pointed out that many companies are not paying corporate income tax, claiming that they have not made a profit, even though they continue to export significant volumes of metals, gas, and other resources.
“There’s a lot of work that needs to be done to improve on corporate income tax,” he added, stressing that more transparency and accountability are required in the way profits are reported.
On the broader challenges of national development, Garry emphasized the critical need for reliable energy infrastructure. “If you don’t have cheap, reliable, and stable energy, you can’t build other infrastructures or talk about industrialization," he said.
Garry argued that without proper infrastructure, including energy, PNG will struggle to fully leverage its natural resources to develop other industries and create sustainable growth.
‘National Content Must Benefit PNG’
Garry reiterated that the goal of national content should be to ensure that a reasonable portion of the revenue generated from PNG's natural resources remains in the country.
He advocated for a national content policy that mandates a significant percentage—at least 20% to 40%—of the economic value generated by resource projects to be reinvested in the country. This includes contributions to public infrastructure, community projects, and landowner development.
"At the end of the day, that pie you produce from the land must show that 20% to 40% remains within the country. That would be a good national content policy," Garry concluded.
PNG CR Leading the Way in Support of National Content
A company that embodies the goals of the National Content is PNG CR Services, formerly known as Red Sea Housing.
With a longstanding presence in PNG since 2008, PNG CR has proven its commitment to supporting local businesses and communities while providing top-tier services in various sectors especially with the resource sectors.
PNG CR sources the majority of its goods and services from companies registered in PNG and has built strong relationships with local suppliers.
PNG CR’s commitment to local content is evident in its workforce as well. The company boasts a team of over 300 personnel, all of whom are based in PNG.
This local presence enables PNG CR to deliver projects efficiently and in line with the needs of the community, minimizing potential delays and maximizing the benefits for Papua New Guineans.
PNG CR Company’s operations align closely with the agenda of National Content.
The company’s expertise in camp facility management, construction services, and modular building solutions has seen them complete over 127 projects across the country for Tier One clients such as Kumul Petroleum Holdings Limited, ExxonMobil, Newcrest Mining, Australian Federal Police, Australian Defense Force, Abt Associates and PNG Sustainable Development.
In addition to its business activities, PNG CR has a strong focus on corporate social responsibility.
The company has contributed to several community initiatives, including the establishment of Women Sexual Violence Units, providing space for St. John Ambulance, and supporting the Hope Orphanage, the Cheshire Disability Centre and Nature Park in Port Moresby.
PNG CR services success story proves to what can be achieved when local content is prioritized. With its state-of-the-art facilities in Port Moresby, PNG CR designs, engineers, and fabricates modular buildings that are constructed in PNG, providing jobs and skills training for Papua New Guineans.
Companies like PNG CR will play a crucial role in helping PNG achieve its development goals. With a focus on local content, PNG has the opportunity to build a more inclusive and sustainable economy, ensuring that the wealth generated benefits all Papua New Guineans.
Local businesses and well-established companies operating in PNG are central to the nation’s resource projects, this gives a more inclusive and sustainable economic future.
