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Special Report P a g e | 1 The National Research Institute Development Perspectives Paper No. 1 NRI A REVIEW AND ASSESSMENT OF THE BENEFIT-SHARING ARRANGEMENTS OF LARGE-SCALE MINING ACTIVITIES IN WAU-BULOLO, PAPUA NEW GUINEA by Osborne Ogis Sanida Andrew Anton Mako Charles Yala NRI THE NATIONAL RESEARCH P a g e | ii First published in April 2015 Copyright © 2015 The National Research Institute. Development Perspectives Paper No. 1 The NRI is an independent statutory authority established by an Act of Parliament in 1988 and confirmed by the IASER (Amendment) Act research into the social, political, economic, educational, legal, environmental, and cultural issues and problems of Papua New Guinea and to formulate practical solutions to these problems. Research results are published in the following NRI publication series: Research Reports; Discussion Papers; Development Perspectives Papers; Issues Papers; Spotlight with NRI; and books, books, conference proceedings, bibliographies, indexes and other compendiums. Direct any inquiries regarding these publications to: The Publications Sales Coordinator National Research Institute P.O. Box 5854 BOROKO, NCD. 111 Papua New Guinea Tel: (675) 326 0300/326 0061 Fax: (675) 326 0213 E-mail: [email protected] Website: www.nri.org.pg ISBN 9980 75 229 7 National Library Service of Papua New Guinea ABCDE 20198765 Permission to publish: This report was prepared and submitted to the Bulolo Joint District Planning and Budget Priorities Committee (JDP&BPC), which commissioned the study, under the chairmanship of the Member for Bulolo, Hon. Sam Basil, in October 2014. Due to the important issues having wider implications on other resource developments, particularly regarding benefits sharing arrangements, permission has been granted by the Bulolo JDP&BPC for public dissemination of the report by NRI. The opinions expressed in this report are those of the authors and not necessarily those of the National Research Institute or the Bulolo Joint District Planning and Budget Priorities Committee. P a g e | iii TABLE OF CONTENTS LIST OF FIGURES .................................................................................................................. v LIST OF TABLES .................................................................................................................... v ABBREVIATIONS/ACRONYMS ......................................................................................... vi EXECUTIVE SUMMARY ................................................................................................... vii ACKNOWLEDGEMENTS .................................................................................................... ix 1. INTRODUCTION ................................................................................................................ 1 1.1 Aim and Objectives .................................................................................................... 2 1.2 Methods ....................................................................................................................... 2 1.3 Scope of the Study ...................................................................................................... 3 1.4 Policy Relevance ......................................................................................................... 3 1.5 Population and Household Background of Bulolo District .................................... 3 1.6 Structure of the Report .............................................................................................. 4 2. THE MEMORANDUM OF AGREEMENT (MOA), 2005: EXPECTATIONS ............ 6 2.1 Financial Benefits ....................................................................................................... 6 2.1.1. Royalties ............................................................................................................... 7 2.1.2. Special Support Grant (SSG) ............................................................................. 8 2.1.3. Project Equity...................................................................................................... 9 2.1.4. Financial Assistance to Landowners ................................................................. 9 2.1.5. Future Generations Trust Fund ........................................................................ 9 2.2 Employment and Training ...................................................................................... 10 2.2.1. State Responsibility ........................................................................................... 10 2.2.2. Company Responsibility ................................................................................... 10 2.3 Business Development and Income Creation ........................................................ 10 2.3.1 Business Development Plan .............................................................................. 11 2.3.2 Landowner Businesses: NKW Holdings Ltd .................................................. 11 2.3.3 Supply and Procurement .................................................................................. 12 2.3.4 Agricultural Activities ...................................................................................... 12 2.4 Physical and Social Infrastructure ......................................................................... 13 2.4.1. Infrastructure Projects for Impacted Communities ...................................... 13 2.4.2. Tax Credit Scheme (TCS) ................................................................................ 14 2.5 Community Development ........................................................................................ 14 2.5.1. Family Development Program ......................................................................... 14 2.5.2. Community Sustainable Development Program ............................................ 14 2.6 Stakeholder Cooperation and Law and Order ...................................................... 14 2.6.1. Stakeholder Cooperation.................................................................................. 14 2.6.2. Land Dispute Settlement .................................................................................. 15 2.6.3. Village Courts .................................................................................................... 15 3. OUTCOMES OF THE 2005 MOA ................................................................................... 16 3.1 Financial Benefits ..................................................................................................... 16 3.1.1 Royalties ............................................................................................................. 16 3.1.2 Special Support Grant (SSG) ........................................................................... 17 3.1.3 Project Equity.................................................................................................... 18 3.1.4 Financial Assistance to Landowners ............................................................... 20 3.1.5 Future Generations Trust Fund ...................................................................... 22 3.2 Employment and Training ...................................................................................... 22 3.2.1 Employment....................................................................................................... 23 3.3 Business Development and Income Creation ........................................................ 27 3.3.1 Business Development Plan .............................................................................. 27 P a g e | iv 3.3.2 Landowner Businesses......................................................................................27 3.3.3 Supply and Procurement..................................................................................29 3.3.4 Agriculture Activities........................................................................................30 3.4 Physical and Social Infrastructure .........................................................................31 3.4.1 Infrastructure Projects for Impacted Communities......................................31 3.4.2 Tax Credit Scheme (TCS) ................................................................................32 3.5 Community Development........................................................................................32 3.5.1. Family development program..........................................................................32 3.5.2. Community sustainable development program .............................................33 3.6 Stakeholder Cooperation and Law and Order......................................................34 3.6.1. Stakeholder Cooperation.................................................................................. 34 3.6.2. Land Dispute Settlement ..................................................................................35 3.6.3. Village Courts....................................................................................................35 4. STRUCTURAL ISSUES....................................................................................................36 4.1 The 2009 MOA between MPG and Bulolo JDP&BPC.........................................36 4.1.1. Summary of the 2009 MOA .............................................................................36 4.1.2. Implementation of the 2009 MOA ....................................................................... 36 4.2 Compensation Payments
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