ANNUAL REPORT 2017

Delivering with Innovation www.otdfpng.org 1 OUR FOOTPRINT

West Sepi k A>! Tabubil

Southern Highlands

Samagos Agriculture Centre Legend A>!! CMCA Trust Regions KIUNGA A! OTDF Field Base NOMAD Dudi-South Bank

>! To wn s h i p Kiwaba .! FRPG Growth Centre Manawete-North Bank

i[ Middle Fly Aiambak - Kiunga Road Tabubil to Kiunga Highway West Papua - Indonesia Mine Villages Western Province Province Nupmo

LAKE MURRAY Suki Fly Gogo

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WaiTri and Alice River Trust

Western Province A! Aiambak Gu lf Prov

ince INDONESIA

Nakaku A! >! BALIMO Sturt Island A!

! Tapila A

KOABU WIPIM : >!

DARU 0408020

Kilometers

Ok Tedi Development Foundation Geographic Information Systems W Ok Tedi Development Foundation 2017

2 Contents

OTDF EVOLUTION AND DEVELOPMENT TARGETS 4 2017 AT A GLANCE 6 MESSAGE FROM THE CHAIRMAN 8 BOARD MEMBERS 10 MESSAGE FROM THE CHIEF EXECUTIVE OFFICER 12 OTDF ORGANISATION STRUCTURE AND COMMITTEES 14 COMMUNICATIONS 16 DEVELOPMENT SECTORS, INDICATORS AND PARTNERSHIPS 18 BASELINE SURVEY - LIVELIHOOD DEVELOPMENT PACKAGES 22 OTDF EXPENDITURE AND PROJECT LIFE CYCLE 24 TRUST ADMINISTRATION 26 HEALTH SECTOR OVERVIEW 28 EDUCATION SECTOR OVERVIEW 36 INFRASTRUCTURE SECTOR OVERVIEW ContentsContents 40 LOCAL & REGIONAL ECONOMIC DEVELOPMENT SECTOR OVERVIEW 50 COMMUNITY & SOCIAL DEVELOPMENT SECTOR OVERVIEW 62 CORPORATE SERVICES 68 2017 AUDITED FINANCIAL STATEMENTS 76 ABBREVIATIONS, ACRONYMS AND ACKNOWLEDGEMENTS 86

Picture This Page: Aerial view of Tank 5, TCS water upgrade Front Cover: project, Kiunga Mine village women Back Cover: proudly show off the first Aerial view of the Tapila eggs produced from the Field Base, South Fly Tabubil poultry project OTDF EVOLUTION AND VISION

VISION: To improve self-sustainability and quality of life of Western Province communities

ivery Del 2016- 2020

Ƹ Promoting a transition to more commercial production through improved market access

Ƹ OTDF engages with communities cceptance to support the Livelihood A 2009 - 2015 Development Package concept

Ƹ OTDF engages with CMCA communities and establishes a sound platform for project delivery

Ƹ OTDF sets out new Strategic Direction 2010-2015 Establishment 2001 - 2008

Ƹ New package signed to extend mining operations to 2013

Ƹ OTDF incorporated as required by the 9th Supplemental Mining Agreement as a not for profit Foundation

Ok Tedi Development Foundation (OTDF) was established under Clause 6 of the Mining [Ok Tedi Mine Continuation (Ninth Supplemental) Agreement] Act 2001 with its tax-free status enshrined in the same legislation.

OTDF’s long term Vision is to ensure the self-sustainability of and to improve the quality of life of Western Province communities with consideration for the people of the Telefomin District of the .

The four key Principles of the OTDF Strategic Direction 2016-2020 underpinning all OTDF’s strategic engagement with stakeholders, and guiding day to day operations are:

Ƹ Effective and efficient implementation of development programs in priority sectors Ƹ Strengthened partnerships Ƹ Open and transparent communications Ƹ Appropriate and accountable financial and operations support systems

4 DEVELOPMENT TARGETS 2016-2020 MISSION: Wise management of funds and programs to realise the development aspirations of community partners by delivering with innovation

2016 - 2020 THEME: Community financial self-reliance through socio-economic initiatives and improved infrastructure

Effective and efficient Strengthened Open and transparent Appropriate & accountable implementation of Partnership communication financial and operations development programs support systems

2016 - 2020 Targets 2016 - 2020 Targets 2016 - 2020 Targets 2016 - 2020 Targets

Strategic oversight and alignment of Focus on FRPG Provincial Growth Incorporate OTDF internal and Enhance OTDF staff and OTDF results and sector headline Centres for programs, including external communications channels stakeholders' skills and knowledge indicators with Provincial and National infrastructure development and and key messages, including the of M&E policies and plans service links role of Radio Fly, into the Communications Policy Consolidate and fully integrate M&E Evaluate Village Development Fund Advocate with FRPG for formal systems, headline indicators and projects and incorporate lessons into PEC recognition of OTDF as a Focus Communications Policy key baselines for reporting results new designs preferred implementing partner messages on: (a) Advocacy for the 2016 Strategic Consolidate performance-based HR Evaluate all TCS and high impact Support the Provincial Plan systems and KPI's to align with M&E projects with a focus on sustainability Administrator to establish a (b) Engagement with relevant and lessons learned, then incorporate Provincial Roads Authority National and Provincial Incorporate OTDF staff 'work time' those lessons into new designs government agencies to support into Attache job costing and Access funding from other the 5 key sectors of engagement expenditure reporting Advocate and collaborate with the sources including: DNP&M and FRPG for sustainability of (a) DFAT Business Partnerships Use appropriate mobile and Utilise Attache to generate timely Provincial infrastructure including Program; internet technologies for financial reports options to prioritise TCS programs, (b) PNG Incentive Fund; and Communications Policy and allocate PNGSDP long term funds (c) LNG Projects for Province-wide implementation, data collection and Consolidate and maintain shared for repairs and maintenance of existing priorities results reporting filing systems and data repositories and planned assets using appropriate technologies and Explore options for accessing Implement the OTDF controls Promote developments that position Trust funding for development Communications Policy, including Western Province as an agriculture and priorities after the current Mine Life annual joint communication patrols Provide access to OTDF policies forestry focal Province Extension period of 2025, by Associate Directors and Advisory and procedures in up-to-date including using accrued interest Committee members, Village manuals, including Finance, HR Promote utilisation of all jetties from Trust investments Planning Committee and Trust and M&E as access points to Fly Warrior, Fly Chairmen, Women's Association Zamby and Fly Hope Establish appropriate Presidents, OTDF and OTML Evaluate and enhance management mechanisms for engaging Community Relations and staff capacity to manage Target Trust education sponsorships non-CMCA communities outsourced project implementation towards development needs in the services health, education and agriculture Increase community, private sectors sector, government and Incorporate accountabilities and non-government participation in KPI's into Terms of Reference for all program design and M&E OTDF Committees (Risk, Safety, Disciplinary, Housing, Tender Provide business advisory Evaluation and M&E) services to support SMEs, Regional Women's and Support Trusts' management of Youth Associations transition to investment portfolios and ensure full operational independence that the Trust Investment Guidelines remain relevant to the operating Work with development partners environment to actively manage risks associated with program and Maintain audit and statutory project implementation compliances for OTDF, and all CMCA Trusts, Trust Investment Syndicates and Companies

Transition to a fully independent OTDF IT system with related policies and procedures Key: Target achieved Target mostly achieved Target not achieved Target changed 5/32(16%) 18/32 (56%) 8/32(25%) 1/32 (3%)

* This shows development target progress in the first 2 years of the 2016 - 2020 Strategic Direction 2017 AT A GLANCE

Commercial scale Rice trials Middle Fly women launch successfully completed, the NDB credit scheme, read read more on p. 59 more on p. 51

JAN

JUN 20

Western Province Youth OTDF website refreshed Development Plan launched, and launched, read more read more on p. 64 on p. 16

6 Board Directors open the South Fly singsing group Eaglewood nursery at Tapila, read at the inaugural Madiri more on p. 54 cultural show

JUL

17 DEC

Poultry project Annual Communications groundbreaking ceremony, patrol awareness in the read more on p. 52 Middle Fly MESSAGE FROM THE CHAIRMAN With political will reaching new annual cash compensation payments from the heights following the 2017 mine. This year there was no progress on mobilising General Elections, OTDF hosted the three major impact projects approved by the a brief but extremely important former Minister of Mines, Hon. Byron Chan for visit to Kiunga by the Mining funding under the CMCA portion of the Western Minister, Hon. Johnson Tuke and Province People’s Dividend Trust Fund (WPPDTF). Secretary of the Department of We expect these funds to be released in 2018 to Mineral Policy and Geo-Hazard support improvements in Education, the Livelihood Management, Harry Kore in Development Package programs and Delta Village October. The Minister and Secretary visted some Relocation project. of the Community Mine Continuation Agreement (CMCA) communities and Tax Credit Scheme (TCS) The election of the new and vibrant Members of projects implemented by OTDF in the North Fly and Parliament for the Western Province in the recent Middle Fly Regions. Minister Tuke was impressed National Elections brings hope and a new way with the work of OTDF, stating: forward for the people. OTDF is keen to align its Strategic Direction with the new Provincial Development Plan, and several meetings have “Ok Tedi Development Foundation already been conducted between OTDF and the is a very dynamic organisation with Members. There is support for greater cooperation a unique operational structure between the Provincial Government and OTDF to extend the sectoral programs to other parts of the supported by OTML and is a good Province. With this understanding OTDF will be model for other mines in PNG to working closely with the Provincial Government adopt. I have heard a lot about to host a Development Forum in Kiunga in March OTDF and I am amazed by what I 2018. have seen during this short trip. As The 33% shareholding in OTML to the three they say ‘seeing is believing’ and I Western Province entities – Mineral Resources Star Mountains (9%), Mineral Resources Ok Tedi did.” #2 (12%) and Mineral Resources CMCA Holdings (12%) will bring additional benefits in projects and The Minister’s remarks confirm the significant investment opportunities to the Province. OTDF commitment and efforts of OTDF to work in is keen to work with these shareholders, and the partnership with the communities, Government, Mineral Resources Development Company (MRDC) NGOs and other stakeholders to bring tangible to fund the sectoral programs that have been development to the Western Province, especially identified. the 158 mine associated communities. The professionalism of the management and staff With the mid-term review of the 2016 – 2020 of OTDF has contributed to another successful Strategic Direction (SD) due in 2018 I am also and safe year and I commend their efforts and pleased with the progress on the programs commitment. Towards the end of the year the identified in the five key sectors. The achievements OTDF Board approved a restructure in the Executive of the last two years, particularly in 2017 would not Leadership Team with the appointment of two have been possible without the ongoing support of Executive Managers replacing the vacant Chief OTML, our communities, our development partners Operating Officer position, reporting to the CEO. and the Provincial and National Governments. These appointments were necessary to further We have continued to establish a solid platform improve internal efficiencies, plan for succession, that will enable the transformation of Western and prepare for increased donor funded projects Province into a vibrant economy that is less reliant in the Province. on benefits derived from the Ok Tedi Mine. The programs identified in the economic sector when OTDF appreciates the ongoing budgetary support fully established will enable the communities from its major shareholder OTML who has so far to earn extra income, and be less dependant on

8 contributed over PGK250M since 2008 to fund the Foundation’s annual operating costs. This OTML continues to set an example contribution is in addition to the compensation for the extractive industry where payments made to the CMCA communities. the social licence to operate extends On behalf of the OTDF Board I thank you for the beyond the normal compensation support this year and look forward to an exciting package. 2018 ahead as we continue to implement our sectoral programs in partnership with all our valued stakeholders.

OTDF Board Chairman, Musje Werror shares a light hearted moment with the Hon. Johnson Tuke, the Minister for Mines and fellow Director, Harry Kore while meeting Eaglewood nursery workers at Samagos Field Base and Research Station, Kiunga BOARD MEMBERS - DIRECTORS

Musje Werror Chairman since 2015 and Director since 2009 Mr Werror is the Deputy CEO and General Manager Employees & External Relations with OTML. Mr Werror was formerly the Executive Manager of OTDF. He holds a Master of Business Administration and a Master of Professional Accounting from the Divine Word University and a Bachelor of Science Degree in Chemistry from the University of . He has held various roles with OTML over the last 25 years. Mr Werror is also the Director of Ok Tedi Australia Pty Ltd, Director of Ok Tedi Power Ltd and Director of the Heduru Trust Ltd.

Kuam Sanewai Director since 2016 Mr Sanewai is currently the Community Relations Manager with OTML; he was formerly attached to OTDF, then a Department of OTML from 2005 to 2009, and became Team Leader of Socio-Economic Research with Community Relations in 2012. He was an external Trustee in the Kiwaba Development Trust. He holds a Diploma in Education from the University of Goroka in Papua New Guinea. Mr Sanewai is from Baluan Island, Manus Province.

Harry Kore Director since 2017 Mr Kore is the Secretary for the Department of Mineral Policy and Geohazards Management. A career professional, he has been involved in mining for over 18 years. Mr Kore holds a law degree from UPNG and is the Chairman of the CMCA and Non CMCA Trust Funds, and the Chairman of the State Negotiation Team for all State commercial interests in mining projects in PNG. He is a member of the Mining Advisory Council (MAC), the Mineral Resources Authority (MRA) Board and the Heduru Trust Ltd. Mr Kore is an ex-officio Director on the boards of MRDC, Mineral Resources Ok Tedi No. 2 Ltd (MROT#2), Mineral Resources Star Mountain Ltd (MRSM), Star Mountain Plaza Ltd (SMP), and Mineral Resources CMCA Holdings Ltd (MRCMCAH). Mr Kore has a mixed parentage of Gulf and Eastern Highlands Province.

David Sode Director since 2013 Mr Sode is the Chief Executive Officer of the PNG Sustainable Development Program Limited (PNGSDP). He has a Law Degree from the University of Papua New Guinea. From 1989 to 1993 he served as Legal Counsel to the PNG Bureau of Customs and Excise. He was subsequently appointed as Commissioner of PNG Customs in 1994, then in 1998 he was appointed Commissioner of Taxation and a year later promoted to the Commissioner General of the PNG Internal Revenue Commission serving in this post for a period of 7 years.

10 Annual Report 2017 BOARD MEMBERS - ASSOCIATE DIRECTORS

Clara Fred Dangkim Associate Director since 2014 An OTDF Associate Director since 2014, Clara Fred Dangkim represents the Women and Children in the 8 CMCA Trust Regions and the 6 Mine Villages. Clara was a woman’s representative at the CMCA Review negotiations in 2006 and 2007, representing the Mine Villages. A Secretary by profession, she holds a Certificate in Secretarial Studies from Goroka Technical College and 3 Certificates in Business Management and Computing from Kumul Trainers. She is currently the Director/Secretary of Bugum Investments Limited. She comes from Kavorabip village, one of the 6 Mine Villages in the .

Maino Lucas Associate Director since 2014 Mr Lucas represents the CMCA people of the 3 North Fly Trust regions and 6 Mine villages. He holds a Bachelor Degree in Management from the Divine Word University in Madang and is currently employed by OTML as a Superintendent of the Mine Production D Crew. He is an influential young leader determined to drive positive development changes amongst the Mine village people. He is also the Chairman of the Bultem Village Planning Committee (VPC) and Chairman of the OTML Local Program. He comes from Bultem village, one of the 6 Mine villages in the North Fly District.

Richard Zumoi Associate Director since 2009 (Observer in 2013) Mr Zumoi represents the CMCA people of the Middle Fly Trust region. He is a former primary school teacher and was instrumental in the CMCA negotiations between 1999 and 2001 and then again during the 2006/2007 CMCA review. Mr Zumoi was also involved in the initial creation of the Foundation and throughout the transition period in 2010 which saw OTDF begin operating as an independent entity from OTML. He was further involved in the 2009 to 2012 MLE Community Consultation process and is the CMCA people’s representative regarding consultation and negotiations with the State for a direct share in OTML. He comes from Wangawanga village in the Middle Fly Trust region of the .

Aniba Samo Associate Director since 2014 Mr Samo represents the CMCA people of the 4 South Fly Trust regions. He was a CMCA Regional Delegate during the 2001 CMCA negotiations and then again during the 2006/2007 CMCA review. He has been the VPC Deputy Chairman for Kenedibi village since 2001. Mr Samo has a secondary school education level and is currently doing a Science course with the Institute of Distance College Education in . He comes from Kenedibi village on the North bank of the Fly River in the Manawete Trust region of the . Message from the CEO Welkam olgeta to our seventh In 2017, OTDF submitted a Concept Proposal for annual report, highlighting PGK4.26 million from Australian Government the many achievements in funding, through the PNG Incentive Fund, to 2017. Throughout this year implement the Rice component of the LDP (see more OTDF has continued to plan on page 59). Accessing these opportunities has been operations around the current made possible through the substantial progress Strategic Direction 2016-2020 which communities have made in acknowledging aspirations, associated Yam the importance of self-sustainability. This shift in Chart key principles, strategies attitude has allowed OTDF to maintain momentum and targets; and headline and continue targeting model villages and model indicators across five key farmers across the corridor. development sectors. The achievements outlined in this Annual Report demonstrate how OTDF From 2018, the transition to self-sustainability to has set a solid platform to enable achievement of complement this funding is expected to include the Strategic Direction by the end of 2020. (See targeting Village Development Funds, Women’s Development Targets page 5). Furthermore, I am Association and Regional Trust funds to support very proud of the continued commitment of our LDP infrastructure packages. OTDF’s contribution staff who work tirelessly to help others, doing so as a partner, following the SD principle of in the safest possible manner as OTDF surpassed ensuring effective and efficient implementation 1.25 million man-hours free of Lost Time Injury (LTI) of development programs, includes building on since 2010. its extension services capacity across the Rubber, Rice and Eaglewood LDP packages; and using In keeping with the Strategic Direction Theme of data from monitoring and evaluation to improve “Community financial self-reliance through socio- implementation and outcomes across all five economic initiatives and improved infrastructure”, sectors. OTDF’s strategy of developing appropriate 2017 was the final year in which OTDF directly and accountable financial and operations support funded operating expenditure for sector programs. systems has included an increased focus on results This milestone was enabled by the successful based management of staff, committees and conclusion of Livelihood Development Package programs. With the current prospects of external (LDP) Program trials that have generated income funding, the Foundation has prioritised key areas in from seed funding provided by OTDF; an education finance and operations support to ensure systems focus through the self-funding FODE program; and and procedures can be benchmarked against approval of three major impact projects. similar organisations.

Following a welcome conclusion to court This year, to reinforce our ongoing commitment proceedings, OTDF is expecting a third tranche to monitoring OTDF’s performance against targets of PGK145 million from the CMCA portion of the we have summarised the contributions that the WPPDTF for the delivery of the Western Province Foundation has made to achieving longer term Education Strategy (PGK119 million); Livelihood headline indicators for the five priority sectors. Development Package program (PGK9.9 million These can be found on sector overview pages for to support Rubber, Rice, Eaglewood & other Health (p. 28), Education (p. 36), Infrastructure (p. agribusiness opportunities); and South Fly Village 40), Local and Regional Economic Development (p. Relocation (PGK13 million). 50) and Community and Social Development (p. 62). A key OTDF strategy has been I would like to highlight the Board’s agreement to access program and related to strengthen the Local and Regional Economic operational funding from sources Development Sectors by supporting Innovative outside those generated from OTML Agro Industries (IAI) to develop an agri-business Master Plan for Western Province. The Master Plan mining operations. Concept was presented at the inaugural Agriculture

12 Summit in November and attracted the interest This year I was humbled by the Middle Fly CMCA of the International Finance Corporation, Market people making me an honorary Chief, an occasion Development Facility, MiBank and the Pacific that was witnessed by my family during the Rubber Balanced Fund. This Plan will be presented to the factory groundbreaking ceremony at Aiambak. Board in June 2018. In concluding, I am continuously grateful for the OTDF will continue its commitment to the SD guidance of our Board Chairman and his fellow Principles of Strengthened Partnership and Open Directors and Associate Directors, all of whom and Transparent Communications in 2018. OTDF share a passion to strive to improve the lives of our implements priority initiatives in infrastructure CMCA communities. I look forward to working with across the whole Province through the OTML Tax our partners to deliver beyond the coming years Credit Scheme, and health and education programs development targets as the Foundation reaches that also impact on communities outside the CMCA the mid-point of its Strategic Directon in 2018. corridor. OTDF will work closely with the FRPG and the Provincial Administration, and sub-national sector committees to ensure ongoing alignment of programs with Government priorities; and engagement on on key messages outlined in the the Communications Manual completed in 2017.

I remain optimistic about the near future given the continued support for the LDP Program and progress in achieving the 2016- 2020 Strategic Direction. This was apparent from support by CMCA communities during the the annual Communications Patrol, along with the political will that has been demonstrated b y by the Hon. Governor and t h e new members of Parliament. A l l They have pledged to work closely with the the Foundation, this being reinforced by OTDF being named a s the FRPG’s development partner i n in their latest 5 year development strategy (Tonda Declaration 2017-2022). The Tonda Declaration enables direct partnership options with OTDF to implement socioeconomic projects and programs.

The most rewarding part of my role continues to be the ongoing, village by village engagement with our community partners within OTDF CEO, Ian Middleton, is inducted as an the CMCA corridor. honorary Middle Fly Chief by Edward Kokore, Principal Landowner & Chief, Middle Fly

13 OTDF ORGANISATION STRUCTURE

14 OTDF COMMITTEES

Committee Details 2017 Outcomes Disciplinary The Disciplinary Committee deliberates on staff disciplinary incidents, ensuring staff grievances are heard and judged fairly:

Formed: 2014 Meeting Frequency: as The Committee met once and upheld the Executive Management needed Team’s decision to terminate a staff member. No Members: 7 Meetings Held 2017: 1

Events The Events Committee plans and coordinates OTDF resources and engagement in special events:

Formed: 2015 Meeting Frequency: as The Committee organised groundbreaking for the Tabubil poultry needed project, and Aiambak Rubber factory; and launching of Middle Fly Women’s NDB loans, and the Youth Development Plan. No Members: 6 Meetings Held 2017: 4

Housing The Housing Committee administers the OTDF Housing Policy to ensure safety of residents, monitor properties, and coordinate repairs and maintenance: Formed: 2015 Meeting Frequency: as needed The Committee secured accommodation for all FIFO and residential staff, concluded all reported safety issues, arranged OTDF assistance No Members: 5 Meetings Held 2017: 3 to complete maintenance of 3rd party houses using Trust funding, and ensured all Occupancy Agreements were signed and upheld.

Monitoring and Evaluation The Monitoring and Evaluation Committee supports design, implementation monitoring and evaluation throughout the project cycle for projects over PGK100,000 across all 5 OTDF sectors: Formed: 2014 Meeting Frequency: as needed The M&E Representatives endorsed the Nupmo Footbridge Evaluation Project, Project Review Committee Guidelines/TOR, a No Members: 6 Meetings Held 2017: 4 Standard Annual Work Plan Template; and reviewed a range of processes and templates.

Risk Management The Risk Management Committee reviews the OTDF Risk Management framework and reports changes to the OTDF Board: Formed: 2015 Meeting Frequency: bi- annually The Committee determined there were no changes to the top 5 risks No Members: 6 Meetings Held 2017: 2 for OTDF. Risk ratings were reduced for 8 risk events.

Safety The Safety Committee identifies health and safety issues and develops procedures for safe systems of work:

Formed: 2015 Meeting Frequency: at least The Committee endorsed field base safety inductions and feedback quarterly to improve compliance, and used existing systems and processes to secure reputable contractors for construction works. No Members: 8 Meetings Held 2017: 4

Tender Evaluation The Tender Evaluation Committee ensures compliance with OTDF Tender Guidelines to achieve ‘value for money’:

Formed: 2014 Meeting Frequency: at least The Committee conducted a comprehensive review of the Ten- quarterly der Guidelines and Tender Process flow diagram, maintained the contract data base, created and tested a Contractor Performance No Members: 7 Meetings Held 2017: 4 Evaluation form, created a Contractor Profile template and reviewed all suppliers.

15 COMMUNICATIONS of 2017. Key recommendations arising from the Patrol included (a) a possible two-yearly frequency, or more time spent in each location (b) inclusion of development partners and sectoral stakeholders (c) targeted presentations including results and statistics that are relevant to specific villages. These and other recommendations will be incorporated into planning the 2018 patrol.

Website and Facebook The OTDF website was re-launched in July 2017, it is easier to navigate and has a fresh new look with updated information, pictures, and news. OTDF Paul Barker from the INA takes time out to read publications including newsletters, and annual the 2016 OTDF Annual Report reports can be downloaded from the site. Since the re-launch the site has had a total of 10,287 In 2017 OTDF continued to disseminate its news visits; the OTDF Facebook page has 3,172 followers; and information through the mainstream print and OTDF made 13 posts during 2017. and electronic media, social media and through its revamped website, as well as face to face meetings Fly Breeze Newsletter and during field patrols. OTDF is grateful to the Throughout 2017, 7 editions of the electronic media organisations that continue to publish its newsletter Fly Breeze were circulated by email to all positive development stories for the CMCA people. OTML and OTDF staff, the media, and stakeholders. The Fly Breeze has provided valuable insights Communications Manual into what OTDF is doing within communities, as A draft Communications Manual was finalised acknowledged by Markson Yarrao, from the OTML in December 2017, bringing together in one Environment Department: document the key Strategic Direction 2016-2020 principle of Open and Transparent Communication and related targets, outlining how key messages “OTDF is doing a great job mostly are disseminated through OTDF’s various unheard of by outsiders including communications channels. The Manual guides OTDF’s communications protocols with internal and OTML employees, and the Fly external stakeholders, and identifies appropriate Breeze now gives us a better idea communications channels, including mainstream of what is being achieved.” and social media, community and Trust meetings, and the annual Communications Patrol. The Manual Markson further acknowledged that they no longer also covers Radio Fly, pending re-establishment of have any theft of sampling equipment thanks to coverage in the future. changes in local leadership and OTDF support.

Annual Communications Patrol Mainstream Media Face-to-face engagement with communities OTDF issued 3 media releases and 4 separate news remains a highly valued means of communication, articles in 2017 resulting in publishing of a total however the high cost in duration and operational of 10 newspaper and 15 online articles; 1 social funding led to some changes in the way the media re-post; and 2 television segments. Other 2017 Communications Patrol was conducted. associated news and current affairs coverage of OTDF improved efficiency and effectiveness by OTML and OTDF resulted in 5 newspaper articles, 3 committing to undertake significant preparatory online articles, and 1 television news segment. work to ensure teams had key messages at their fingertips when engaging with communities; OTDF is looking forward to implementing the and were able to document feedback into Communications Manual from 2018, developing a templates. The data collected formed the basis Communications Policy, and improving on social of a comprehensive report finalised at the end media coverage.

16 Dewara youth have taken the lead with farming rice in the South Fly, here one of the young men inspects his crop before harvesting the equivalent of 4 tonnes per hectare, the highest recorded across the CMCA

17 OTDF SECTORS AND RELATED PROGRAMS

Forestry Ƹ Eaglewood Ƹ Rubber

Small & Medium Ƹ CMCA Women’s LOCAL & REGIONAL Enterprises Loan Scheme with ECONOMIC the NDB DEVELOPMENT Agriculture Ƹ Rice Ƹ Root Crops

Ƹ Poultry Animal Production Ƹ Fisheries Ƹ Aquaculture

Ƹ Education Facility Infrastructure Ƹ Education Community Education EDUCATION Sponsorship Service Programs Ƹ Education FODE Institutional Development

Ƹ Community Based North Fly Health Services Health Initiatives Development Program HEALTH Ƹ Health Facility Infrastructure CMCA Middle & South Fly Ƹ Health Institutional Health Services Development Development Program

Transportation Ƹ Water Ƹ Road R&M

Community Housing

Community Water Supply INFRASTRUCTURE & Sanitation

Power & Communications

Commercial Real Estate

Ƹ Community Women & Children’s Infrastructure Program Ƹ Community Capacity COMMUNITY & SOCIAL Building DEVELOPMENT Ƹ Community Youth Development Institutional Support Program

18 OTDF RESULTS FRAMEWORK HEADLINE INDICATORS RESULTS INDICATORS LOCAL AND REGIONAL ECONOMIC DEVELOPMENT SECTOR Increased income earning and employment Percentage increase in non-OTML cash income per opportunities, and reliable subsistence consumption household for CMCA communities Percentage of CMCA population in paid employment Number of SMEs owned and operated by CMCA communities EDUCATION SECTOR CMCA access, quality of curriculum, quality of teacher Net enrolment ratio (%) in primary education (grade 1-8) education & training, and management improved in Percentage increase in FODE students completing Year 10 line with the Western Province and National Education & Year 12 Plans Number of girls per 100 boys in primary education Pupil-teacher ratio Number of elementary schools Number of primary schools Proportion (%) of elementary and primary schools with access to safe water Proportion (%) of elementary and primary schools with hand washing facilities HEALTH SECTOR CMCA primary health care service delivery Proportion (%) of one year old children immunized strengthened in line with the Western Province and against measles National Health Plans Proportion (%) of births attended by trained health personnel Proportion (%) of pregnant women who had at least one antenatal care visit Number of outreach clinics conducted per 1000 children under 5 years Number of aid posts open Proportion (%) of health facilities with access to water Proportion (%) of health facilities with hand washing facilities INFRASTRUCTURE SECTOR Increased access to markets, basic services and village Estimated length of provincial and district roads facilities that contribute to improved local and regional Number of jetties upgraded for domestic vessel traffic economic development opportunities, education Increased number of scheduled shipping routes & health status, and social development of CMCA communities Increased number of scheduled air routes Proportion (%) of rural population using an improved drinking water source Proportion (%) of rural population using improved sanitation facilities Household electrification rate (% of households) Proportion (%) of population covered by at least a 3G network (proxy internet coverage) Number of affordable houses constructed COMMUNITY AND SOCIAL DEVELOPMENT SECTOR Increased participation by CMCA community Number of Regional Women’s and Youth Associations members (including women and youth) in planning, complying with corporate governance obligations decision-making and implementation of community Number of Women’s and Youth group members trained development priorities to implement the LDP program Number of CMCA co-funded partnerships with government and non-government agencies

19 OTDF PARTNERSHIPS As a community based development organisation, OTDF Women’s Associations, CMCA Advisory Committee, and values partnerships as an integral part of achieving its Board Associate Directors are focused on efficient and vision for fulfilling the development aspirations of the effective implementation of high quality sustainable CMCA communities. OTDF’s partnership with these projects. Complementing the CMCA partnerships are communities and their formal structures, including the technical, managerial and funding partnerships to Village Planning Committees, CMCA Trust Boards, support project implementation and augment funding.

Partner Sector 2017 Activities Health Contracted to implement CMCA North, Middle Abt Associates & South Fly Health Services, including Kiunga Hospital and Tabubil Urban Clinic University of Education Affiliation with the Department of Distance Technology Learning for FODE programs in the North, Middle & South Fly Business for Development, Innovative Local & Regional Provide an inclusive market alternative for Agro Industry, Trukai & LBL Economic Development: rubber farmers, collect and export cup lump Rubber & Rice rubber and support commercial rice trials. Develop the Mt Fubilan Agri-business poultry project and write an agribusiness master plan Pacific Forest Local & Regional Develop the eaglewood industry and promote Alliance Economic Development: Forest Conservation programs Eaglewood Local & Regional Support the Fly Rubber Ltd model to buy, PNG Rubber Board Economic Development: process and export cup lump and develop TSR Rubber or RSS rubber products National Development Community & Social Loan facilities for women & youth Bank Development National Youth Community & Social Facilitating the CMCA & Mine Village youths to Development Authority Development develop a 5 year Youth Action Plan Ok Tedi Mining Ltd Infrastructure OTDF operations funding support. Shipping and aviation lease agreements. Tax Credit Scheme funding and impact project approval Fly River Provincial Infrastructure TCS project approval and Provincial growth Government centre program support National Government Department of National Planning & Monitoring - assessing and approving TCS funded projects in line with the MTDS#2. Department of Mineral Policy & Geohazard Management - custodian of the CMCA portion of the WPPDTF Kramer Ausenco Technical project engineering services Steamships Trading Company Group Infrastructure: A Trust Investment & Women’s Association Commercial Real Estate joint venture with Coral Sea Hotels and Pacific Palms Properties for the Cassowary Hotel Starwest Constructions Infrastructure Road and bridge construction. Limited Kiunga water supply & sewerage upgrade Tawap Kamen Infrastructure School and housing construction Investments Nanai Brothers Limited Infrastructure: Contracted to undertake Cassowary Hotel Commercial Real Estate glazing and construct eaglewood nurseries Hevilift Infrastructure Heavy lifting helicopter & twin otter support

20 Recently elected North Fly Member and Shadow Minister for Agriculture, the Hon. James Donald visits the OTDF Head Office to pledge his support to work closely with OTDF, symbolised by a hand shake with the CEO

21 PROFILE: LIVELIHOOD DEVELOPMENT PACKAGES PROGRAM BASELINE SURVEY

The objective of the Baseline Survey was to Data was collected through spatial tracking establish a permanent baseline database to support using hand-held GPS devices to map boundaries implementation of the Livelihood Development and location of farmer blocks; one-on-one Packages. The database will provide relevant interviews; questionnaires and group discussions. information on existing farmers growing the priority Participation of the VPC Chairmen, local Trustees, LDP crops (Eaglewood, Rubber, Rice and others). community leaders and dinghy operators was a Access to the data will facilitate preparation of pleasing indicator of community support. Data realistic annual program implementation schedules collected included the number of farmers growing and targets; and over time, support monitoring Rubber, Eaglewood and Rice; area in hectares of changes to farmers’ income and operations. and the average annual income earned from their Data comparisons year on year will allow OTDF to production. The socioeconomic component of document outcomes and assess impacts of the LDP the survey focused on the status of health and program, and feed into future planning. education services and infrastructure, community projects, economic activities and accessibility for The total survey cost was PGK537,295 funded by each village. OTDF, covering the recruitment of 17 casuals, and hire of vehicles, dinghies and aircraft. PGK417,262 The initial survey findings confirm that there was spent in the CMCA regions and PGK120,032 in are more farmers (1,745) growing Rubber, than the non-CMCA Lake Murray region. Eaglewood (828) or Rice (160), which is unsurprising since Rubber has been grown in Western Province A total of 12 OTDF staff (dedicating for the last 40 years. From a spatial perspective, the highest concentration of Rubber farmers is in the an estimated 2,048 person hours) North Fly, whereas the Middle Fly leads the way with were directly involved over the Eaglewood production. Conversely, 90% of Rice survey period, along with 19,560 growers were from the South Fly. Rice production is still in a trial phase, reflected in the relatively small person hours of inputs by the 17 numbers of farmers. casuals over 13 months. These are all important statistics that support The baseline survey for CMCA regions was planning and resource allocation for each of concluded in December 2017. The survey the three priority LDPs, and provide justification collected data from CMCA farmers and interested for the addition of poultry and fisheries LDPs to householders covering 149 of the 152 villages in accommodate different land capability in the the 8 CMCA Trust regions but excluded the 6 mine mine villages and selected areas of the South Fly villages. A separate survey was conducted from respectively. February to July in 18 Non-CMCA Lake Murray villages covering 90% of farmers growing Rubber.

LDP Farmers by Region: 2,733 Trees by Region: 651,971

1000 350,000

300,000 Eaglewood 800 Rubber Rice 250,000 Eagelwood 600 200,000 Rubber No. of Trees of No. 150,000 400

100,000

No. of Farmers No. 200 50,000

0 0 North Fly Middle Fly South Fly North Fly Middle Fly South Fly

CMCA Trust Region CMCA Trust Region

22 Total number of Mature Trees: 59,561

23 OTDF EXPENDITURE GRAPHS

TOTAL OTDF PROGRAM EXPENDITURE PGK44,180,540 PROGRAM EXPENDITURE BY SECTOR

3% 10%

18% 25% 20% CMCA 20% Local & Regional Mine Villages Economic Development Infrastructure Others Health OTML Education WPPDTF Community & Social Development 20% 28% 24% 32%

TOTAL TRUST FUNDS EXPENDED PGK18,677,465 TOTAL TRUST FUNDS BY SECTOR

5% 6%

13% Mine Villages (6x) Local & Regional Economic Development 4x South Fly Trust 26% 39% Infrastructure Middle Fly Trust Health Wai Tri Trust 47% 19% Tutuwe Trust Education

Nupmo Trust Community & Social Development 5%

8% 16% 16%

TOTAL WOMEN & CHILDREN TRUST FUNDS EXPENDED TOTAL WOMEN & CHILDREN TRUST FUNDS BY SECTOR PGK4,799,549

5% 13% Mine Villages (6x) Local & Regional Economic 4x South Fly Trust 29% Development Middle Fly Trust 27% Infrastructure Wai Tri Trust Health 18% Tutuwe Trust 49% Education Nupmo Trust Community & Social Development

4% 4% 15%

21% 15%

2424 O T Traffic Lights; Flow Chart; Flow Lights; Traffic (C) (B) (A) and advice; Return to proponent M&E EMT TA PRC TRC LEGEND: & NOTES procurement only raise new job code code job new raise only procurement (D) - Trust Administrator D Not funded, not approved not approved Not funded, Approved for for planning/preparation Approved needed information more Referred, Approved for implementation if under under if for implementation Approved 9,//$*(120,1$7(' 27'),1,7,$7(' - Tender Review Committee Committee Review Tender - - Project Review Committee Committee - Project Review - Executive Management Team Team Management Executive - - Monitoring and Evaluation and Monitoring - F GO REFER STOP Non-CMCA Region Fill in and submit a Fill in and submit a Nomination Form Form Nomination NOMINATION NOMINATION P CMCA Region CMCA Region CMCA Region Concept Note Note Concept Trust Project C PROJECT Template O r N N o O C

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t L i f e ± C if over if PGK100,000 more informationmore for proponent B) advised proponent A) more information more proponent for B) proponent advised A) PROCESS FLOW FLOW PROCESS DECISION ACTIVITY PROCESS y Not funded and Not funded Referred to Referred APPROVED FO Referred to Referred & PREPARATION Not funded and Not funded FOR PLANNING FOR PLANNING PREPARATION PGK100,000 c APPROVED PLANNING BY (C, D) (C, D) (C, D) (C, D) BY l e & EMT EMT TA or f o R

r P r o j e c GATE GATE t 1 s w o There are funds available to fund the project and is project and the fund to available funds are There r tabled at the the at tabled Form Fill in and submit a Fill in and submit a Fill in and submit a captures Concept Results Framework and Risk Risk and Framework Results Concept captures t Framework Framework & Work Plan PROJECT APPRAISAL & BUDGET PROJECT APPRAISAL The project now requires a requires project nowThe h Design Work Costings and Indicative Cost Cost Indicative and Work Costings Design NEW JOB/SERVICE REQUEST NEW JOB/SERVICE REQUEST , and , P FUNDING AVAILABILITY FUNDING AVAILABILITY G Engineering Service Request Form Request Service Engineering EMT Project Appraisal Project Appraisal Budget Costings Budget Costings K Assessment Matrix APPROVED BY Resource Plan Resource Plan 1 implementaion implementaion or COSTING ENDORSED EMT Calculations Calculations DESIGN Project Appraisal Form Project Appraisal 0 BY Budget Form Budget New Job Number Request Number Job New (C, D) D) (C, Trust Board (C, D) 0 EMT , 0 , Implementation & If the project is externally funded or contracted out, out, contracted or funded externally is project the If 0 Logframe 0 PRE-FEASIBILITY, FEASIBILITY PRE-FEASIBILITY, FEASIBILITY for approval for for approvalfor . that captures captures that 0 0 , M&E a refer to refer (Internal/External) (Internal/External) that that information for more to proponent B) advised proponent and A) n Referred Not funded d more information proponent for B) advised and proponent A) TRC Guidelines a Not funded Referred to Referred

b o v e

FEASIBLE information more proponent for B) advised and proponent A) APPROVED BY Referred to Referred Not funded EMT D) more information proponent for B) advised and proponent A) IF Not funded Referred to Referred (C, APPROVED APPROVED BY BY (C, D) BOARD (C, D) TRUST EMT

GATE 2 Fill in and submit a A End of project desk or field evaluation (if (if evaluation field or desk project of End required). Contract compliance check of of check compliance Contract required). OPENING OF PROJECT FILES OPENING OF PROJECT FILES END OF PROJECT REVIEW & Deliverables PROJECT IMPLEMENTATION Folder 7. Contractual Arrangements7. Contractual 6. TRCGuidelines 5. Evaluation Templates Report 4. Evaluation Plan Templates 3. Scope Change Templates Templates 2. Monthly/Quarterly Monitoring 1. Project Monitoring Templates (PROJECT FUNDING) CODE FUNDING) (PROJECT Form the company's network drive is created for for created is more information more Referred to proponent for proponent advised approved Not and The requirements during during requirements The if no Pre-Feasibility done no Pre-Feasibility if REQUEST JOB implementation are; implementation EVALUATION EVALUATION COMPLETION BY COMPLETION and APPROVED FOR (M&E) PROJECT New Job Code Request Request Code Job New EMT EMT Financial Records

Storage of Files Files Storage of . in Copyright ©Tedi Ok Development Foundation Version 1.0 December 2016 "Greater Cooperation" GATE GATE 3 Accounts PROJECT COMPLETION PROJECT COMPLETION The The project is closed off in the APPROVED funding agency for approval for agency funding BY PROJECT CLOSED BOARD TRUST (C, D) (C, D) EMT and or REPORT Filed

and submitted and submitted to information for more proponent Referred to B) advised proponent and approved A) Not

2525 TRUST ADMINISTRATION

The primary responsibility of OTDF Trust The OTDF Trust Team assisted with the management Administration is to manage the development and of two subsidiary companies, Middle Fly Investment investments funds for the eight CMCA Trusts and Limited (MFIL) & Upper Lower Ok Tedi Limited their subsidiary companies consistent with the (ULOTL). This support for both operational and 2001 Community Mine Continuation Agreements. governance functions will continue into 2018 and The reduced CMCA Benefits under the 2015-2025 onwards, as the companies’ Executive and Directors CMCA Mine Life Extension Agreement will impact transition to a stage in the future where they can the ongoing programs across all 5 OTDF sectors. operate independently.

In 2017, CMCA Trusts and mine villages expended In 2017, OTDF supported compliance with Trust PGK18,667,465 of their funds across the 5 priority governance obligations by facilitation of annual sectors. This is an increase of 75% on expenditure financial audits of the 8 CMCA Trust accounts for reported in 2016. Contributing to the increased the period 2011-2016. Audits had been significantly activity was the release of funds for South Fly Trusts, delayed by a merger of the contracted auditor, and and a return to more usual levels of project funding subsequent changes in the audit representatives. following the dry weather period. The highest level Audits for the previous 3 years of accounts for of expenditure in 2017 (47%) was directed to Local MFIL were also undertaken after a delay relating to and Regional Economic Development, including an administration of the former Flood Plains Ltd, and investment by Mine Villages and the Star Mountains a first audit was successfully completed for ULOTL. Women’s Association in the Mt Fubilan Agro- All audits will be completed early in 2018. Industries egg and poultry operation (see page 52). The role of the Trust Team in the CMCA Investment This reflects communities’ portfolio is to review the quarterly financials of the investment companies whose accounts are commitment to investment in managed by Sinton Spence Chartered Accountants. activities that lead to self-sufficiency This process ensures that Trust investments are beyond CMCA compensation properly recorded, and that the interests of the Trusts are safeguarded. A diagram on page 27 payments derived from mining shows the current investment processes and flow operations. of funds. In 2018, the Trust Administration team will take over responsibility for accounting and The second highest expenditure was in education financial reporting of the investment companies. (26%), mainly through scholarships (see more on page 38). This demonstrates the importance placed on investing in human development, particularly of young people, to complement economic development initiatives. (See details of Trust and Mine Village expenditure on page 24).

In 2017, 110 new CMCA Trust projects totalling PGK7,585,032 were approved by Trusts and Village Planning Committees, comprising 20 regional initiatives and 90 Village Development Projects, varying in budget from PGK2,000 to more than PGK1.6 million.

The four South Fly Trusts were once again able to approve projects after a 3 year hiatus, and they CMCA Trustees are updated on assets within the accounted for 13% of the total PGK11,372,039 of Trust Investment portfolio CMCA Trust funds expended in 2017.

26 27 HEALTH SECTOR

The OTDF Strategic 5-year goal for the Health Program (NFHSDP) (PGK6.42 million), which were Sector is CMCA primary health care service delivery integrated into one Program in 2016. Results of strengthened in line with the Western Province CMSFHP and NFHDP are described in more detail and National Health Plans. OTDF has prioritised on pages 29-32. The Program’s contributions to health projects funded from a range of sources health indicator improvements for Western Province including OTML, Tax Credit Scheme, Western published in the 2016 National Department of Province People’s Dividend Trust Fund and CMCA Health Sector Performance Annual Review (SPAR) Trusts. These projects have contributed to the are summarised on page 33. achievement of indicators of success in line with national and provincial sector policies and plans, The remaining 7% of health expenditure was funded and in response to demand from communities. by CMCA Trusts and Mine Villages this included a OTDF expended PGK13,043,117 on health sector PGK170,000 upgrade to Senamrai Village Health projects, accounting for 30% of all OTDF sector Centre (Wai Tri Trust), which is under way (see more expenditure during the year. on page 47). Some communities also allocated Village Planning Committee funds to assistance for The major proportion (93%) of health sector individuals to access medical services. Community expenditure in 2017 comprised a total of PGK12.1 health initiatives following the healthy villages million on projects implemented under contracts concept also featured purchase of brush cutters with Abt Associates. These were the CMCA Middle to improve the environment around houses and and South Fly Health Program (CMSFHP) (PGK5.69 reduce incidence of diseases caused by pests and million) and North Fly Health Services Development insects.

Headline Indicator OTDF Contribution 2017 Proportion (%) of one year old children Ƹ 463 measles vaccinations to babies 6-8 months immunised against measles old Ƹ 513 measles vaccinations to babies 9-12 months old Proportion (%) of births attended by trained Ƹ Health promotion sessions to encourage health personnel supervised deliveries and safe motherhood to over 800 males and 1,200 females Ƹ VHVs trained to encourage pregnant women to deliver in a facility Proportion (%) of pregnant women who had at Ƹ Antenatal care provided to 789 pregnant women least one antenatal care visit Ƹ On the job training provided in antenatal care and supervision and female reproductive physiology Number of outreach clinics conducted per Ƹ 7,600 children assessed for nutritional status 1000 children under 5 years during attachment and outreach Ƹ 171 outpatient clinics conducted during outreach Ƹ 244 outreach clinics conducted Number of aid posts open Ƹ Supported quarterly supervisory visits by district health managers Ƹ Supplied essential medical equipment as required Ƹ 95% radio functionality at 22 health facilities in the Middle & South Fly Ƹ 97% radio functionality at 33 health facilities in the North Fly Ƹ On the job communication skills training provided to 8 health facilities

28 COMPARATIVE HEALTH PROGRAM AND SECTOR PERFORMANCE NFHSDP and CMSFHP HEALTH INDICATOR IMPROVEMENTS

The Sector Performance Annual Review (SPAR) is compiled annually by the National Department of Health. It summarises performance at a provincial and district level across core health sector indicators, providing a monitoring tool to measure annual MILNE BAY 357 progress, as well as compare trends over the previous five years. WESTERN HIGHLANDS 322 ENGA 287 In the 2016 SPAR, Western Province was ranked fourth out of 22 for best performing provinces across 16 WESTERN 270 indicators. To take into account the varying level of disadvantage in each province, a constraints index is GULF 258 used. The score is similar to that of 2015, when Western HELA Province also ranked fourth. CENTRAL 258

Overall performance is based on a score calculated NATIONALNATIONAL AVERAGE AVERAGE 182 199 across 16 indicators, relative to the best provincial level performance for each indicator. Western Province performance compared to other top performing provinces and the national average is displayed. Performance clearly exceeded the national average in 2016. TOP 5 PERFORMING PROVINCES IN 2016, OVERALL SCORE WITH CONSTRAINTS INDEX APPLIED

Improvements in the individual indicators suggest the Program has contributed to the positive outcomes for health service delivery in Western Province. These improvements are displayed below from prior to baseline year of each program to 2016. NFHSDP CMSFHP North Fly District Performance from the 2016 SPAR Performance across the 8 program supported facilities in Middle and South Fly Districts from district-level 2016 SPAR

3.27 4.6 1.3 1.6 OUTPATIENT VISITS PER PERSON PER YEAR OUTPATIENT VISITS PER PERSON PER YEAR 2007 2016 2012 2016

17 33 4 16 OUTREACH CLINICS PER 1000 CHILDREN OUTREACH CLINICS PER 1000 CHILDREN <5YRS 2007 2016 2012 2016 <5YRS

45% 57% 35% 28% MEASLES VACCINATION COVERAGE MEASLES VACCINATION COVERAGE 2007 2016 2012 2016

55% 63% 7% 30% PENTAVALENT THIRD DOSE PENTAVALENT THIRD DOSE VACCINATION COVERAGE 2007 2016 2012 2016 VACCINATION COVERAGE

381 342 COUPLE YEARS PROTECTION FOR 726 2235 COUPLE YEARS PROTECTION FOR CONTRACEPTION CONTRACEPTION 2007 2016 2012 2016

57% 81% 29% 31% ANTENATAL 1ST VISIT COVERAGE ANTENATAL 1ST VISIT COVERAGE 2007 2016 2012 2016

479 367 126 71 MALARIA INCIDENCE PER 1000 POPULATION MALARIA INCIDENCE PER 1000 POPULATION 2007 2016 2012 2016

29 NORTH FLY HEALTH SERVICES DEVELOPMENT PROGRAM and CMCA MIDDLE AND SOUTH FLY HEALTH PROGRAM: KEY COMPONENT ACTIVITIES 2017

The North Fly Health Services Development integrated into one Program with the aim to create Program and the Community Mine Continuation greater efficiency by maximising service delivery Agreement Middle and South Fly Health Program whilst minimising overhead costs. continued to support health services in Western Province. NFHSDP is an initiative of and funded The Program is aligned with the by Ok Tedi Mining Limited and managed through OTDF. NFHSDP commenced in 2009 for an initial PNG National Health Plan 2011- five years and was extended for a further five 2020 and the goal is to strengthen years; the total value of the 10-year program is primary health care for all, and to PGK58 million. CMSFHP is an initiative of and managed by OTDF and funded through the CMCA improve service delivery. portion of the Western Province People’s Dividend Trust Fund. CMSFHP is a PGK43 million program Fly Helt Nius newsletters and Program websites that commenced in 2013. Both programs are are updated regularly and communities receive implemented by Abt Associates in partnership bi-annual poster updates. Key activities in 2017 with existing health service providers and will included implementation of the Transition Plan and end in 2018. In 2016, NFHSDP and CMSFHP were are detailed below:

1. Support to 2. Strengthening 3. Support tailored to Provincial and District fundamental enablers of community needs health services and health care partnerships Component Strengthen partnerships Strengthen health Support clinical service delivery Description and coordination with infrastructure; logistics and and implement community stakeholders medical supplies; and formal based initiatives and on-the-job training 2017 Supported facilitation of Construction of 8 staff Health information sessions Key Updates District Health Management houses completed at Bosset, in the communities on family meetings in North, Middle Obo, Tapila (x 2), Wasua (x planning, cancer, immunisations and South Fly 2), Teapopo and Rumginae and other health topics CHW School Supported District Health Development of Asset Reduction in direct clinical Managers to action issues Registers and Preventive services as per Transition Plan identified in health facility Maintenance Plans to and strengthened supervision, assessments during support transition of training and indirect support quarterly supervisory visits responsibility to partners Transferred responsibility Prepared to hand over Targeted health clinics in for organising and chairing management of health Tabubil, Kiunga and Daru Stakeholder meetings to sector scholarships to OTDF during CMCA Compensation the Provincial Health Office Western Province Education Payment weeks to capture Program in 2018 people from remote locations Supported the convening Coordinated Integrated Supported Village Health of the inaugural South Fly Management of Childhood Volunteers in over 15 villages District Health Management Illnesses Training for 22 with their goal to reach Healthy Committee and facilitated participants (10 female and Village Setting status supervisory patrols with 12 males) across Western District Health Managers Province Facilitated use of data for 31 health workers (27 female Facilitated two-week basic decision making among and 4 male) trained in family emergency obstetric care partners and developed on- planning methods certified practice/observation for VHVs the-job training materials competent to practice for NHIS reporting

30 CMCA MIDDLE AND SOUTH FLY HEALTH PROGRAM

HEALTH PROFILE : SAFE MOTHERHOOD TRAINING

engagement activites advocating safe motherhood where a real difference was seen.

The women’s leader organised a meeting, bringing together 104 women and children with students from the primary schools to advocate for safe motherhood. Women were given the opportunity to identify and discuss some of the challenges they face in accessing health services. Information was provided on antenatal and maternal health, including the importance of delivering in a health Safe Motherhood training conducted at Wasua facility supervised by a trained health worker.

The CMSFHP Essential Obstetric & Newborn In the two weeks following the ‘Safe Motherhood’ Care (EOC) Health Extension Officer conducted advocacy meeting, 8 women came to have their a supervisory visit at Wasua Health SubCentre births supervised at the health centre, one of the in Manawete CMCA Trust region in February, to highest figures recorded in any month. monitor and provide clinical EOC support to health workers. However, it was through community “This was a great response by women with the support of their families, CMSFHP PROGRAM RESULTS 2013-2017 recognising the importance of having 5 1,350+ a supervised birth at the health facility. This was the beginning of HEALTH WORKERS SPONSORED CONTRACEPTIVE IMPLANTS TO ATTEND HEALTH RADIO AND ADMINISTERED IN MIDDLE AND SOLAR MAINTENANCE TRAINING SOUTH FLY DISTRICTS SINCE INTRODUCED BY THE PROGRAM a change when information could be IN 2015 transformed into achievements,” 43,800+ Maria Rumints, EOC HEO OUTPATIENT PRESENTATIONS 25,711 DURING OUTREACH CLINICS AND CLINICAL ATTACHMENTS CHILDREN UNDER 5 YEARS OLD ASSESSED FOR NUTRITIONAL STATUS

687 6 3 204,000+ IN-LINE POSITIONS FILLED AT ATTENDANCES AT COMMUNITY HEALTH FACILITIES IN ALL MOIAN AID POST, AND SAMARI AND AWARENESS SESSIONS ON OUTREACH CLINICS CONDUCTED IN REMOTE DISTRICTS RECEIVED OTJ TRAINING TAPILA HEALTH CENTRES IN 2017 IMPORTANT HEALTH TOPICS VILLAGES IN THE 5 CMCA REGIONS IN COMMUNICATION SKILLS

650 1,455 ON THE JOB TRAINING SESSIONS 15 CONDUCTED WITH HEALTH WORKERS CONTRACEPTIVE IMPLANTS EXAMINATION COUCHES 43,375 ADMINISTERED TO DATE DISTRIBUTED TO AID POSTS

VACCINATIONS ADMINISTERED TO CHILDREN UNDER 5 YEARS OLD VACCINE FRIDGES SAMARI, MAIPANI AND AIAMBAK INSTALLED HEALTH FACILITIES COMPLETELY 10 22 RENOVATED AND RE-OPENED

VILLAGES SUPPORTED TO REACH HEALTHY VILLAGE STATUS VACCINE ICE PACK 14 FREEZERS INSTALLED 7 10 5 CLINICAL ATTACHMENTS CONDUCTED ACROSS THE 5 13 NEW STAFF HOUSES COMPLETED CMCA REGIONS IN 2017 SCHOOLS IMPLEMENTING THE IN-DEPTH REVIEWS OF THE EXPANDED PROGRAM IN 2017, BRINGING THE TOTAL 24 HEALTH PROMOTING SCHOOL ON IMMUNISATION CONDUCTED IN HEALTH BUILT BY THE PROGRAM TO 12. HEALTH RADIOS INSTALLED CONCEPT FACILITIES AND SUPPORTED BY THE PROGRAM IN 2017

31 NORTH FLY HEALTH SERVICES DEVELOPMENT PROGRAM

HEALTH PROFILE : ESSENTIAL HEALTH RADIO AND SOLAR INSTALLATION TRAINING The health radio network is crucial for health workers in remote areas, to stay connected with other facilities and supervisors, especially where mobile phone coverage is poor. The radios are used for clinical consultations, administrative purposes, and health promotion. The overall participant performance and cooperation with the trainers was very good.

“There were a lot of new things that I learnt during the training that I never knew” said Wanai Hari Infrastructure Officer, NFHSDP/CMSFHP. Seven Health Workers from various organisations within Western Province were successfully trained Mr. Hari went on to explain that in the past he by the CRMF in Goroka had relied on his own experience and know-how whenever he was attending to installation and A 2-week health radio and solar maintenance maintenance of equipment. All participants were training was conducted by the Christian Radio given a certificate that authorises them to do Missionary Fellowship (CRMF) in Goroka, Eastern repairs, maintenance and installation of both HF Highlands Province. The training was funded radios and solar power. Each participant was also through NFHSDP and CMSFHP to train 7 health presented a toolbox with tools such as pliers, a workers from Western Province to help maintain multimeter, a screwdriver set, soldering equipment the integrity of the health facility radio network in and accessories that will assist them when carrying various locations. out installation and maintenance works.

NFHSDP PROGRAM RESULTS 2013-2017 3 1,642 STAFF SPONSORED TO ATTEND SNAKE BITE TRAINING PROGRAM CONTRACEPTIVE IMPLANTS ADMINISTERED IN NORTH FLY DISTRICT SINCE INTRODUCED BY THE PROGRAM IN 2015 1,855

ON THE JOB TRAINING SESSIONS 130,000+ 22 8 CONDUCTED WITH HEALTH WORKERS 135,500 CHILDREN UNDER 5 ASSESSED FOR ATTENDANCES AT COMMUNITY AWARENESS SESSIONS ON VARIOUS HEALTH RADIOS NEW SPONSORED STUDENTS IN NUTRITIONAL STATUS HEALTH TOPICS INSTALLED 2017 22

HEALTH WORKERS RECIEVED INTEGRATED MANAGEMENT OF CHILDHOOD ILLNESSES TRAINING 5 47,000+ VILLAGES RECIEVED TARGETTED HIV/TB CLINICAL SERVICES DURING OUTREACH WITH PARTNERS IN 2017

VACCINATIONS ADMINISTERED TO CHILDREN UNDER 5 YEARS OLD VACCINE FRIDGES 19 INSTALLED 26

COMMUNITY MEMBERS TRAINED VACCINE ICE-PACK AS VILLAGE HEALTH VOLUNTEERS 8 FREEZERS INSTALLED 191,370+ CONDOMS DISTRIBUTED

COLD-CHAIN AND HEALTH 114 RADIO FUNCTIONALITY 97,000+ 106,364 CONTINUOUSLY MONITORED LONG LASTING INSECTICIDE MEETINGS HELD AMONG THE 5 TREATED BEDNETS DISTRIBUTED OUTPATIENT ATTENDANCES AT PROGRAM ACTIVITY GROUPS SINCE IN PARTNERSHIP WITH ROTARIANS TABUBIL URBAN CLINIC SINCE ESTABLISHED IN 2009 AGAINST MALARIA OPENING IN 2011 34 AREA WIDE SERVICES TEAM CLINICAL ATTACHMENTS 10 CONDUCTED IN 2017 ACROSS CONTINUE TO WORK ACROSS NORTH FLY STAFF HOUSES MATERNAL AND CHILD HEALTH, BUILT HIV AND TB, MALARIA, AND ENVIRONMENTAL HEALTH

32 NORTH FLY HEALTH SERVICES DEVELOPMENT PROGRAM: KIUNGA HOSPITAL AND TABUBIL URBAN CLINIC

KIUNGA HOSPITAL TABUBIL URBAN CLINIC The NFHSDP continues to support Kiunga Hospital The NFHSDP continues to support development through management and administrative inputs, of and operations at Tabubil Urban Clinic, (TUC) so that ongoing medical care can be provided since it was built in 2011. During the second half to the community. Kiunga Hospital is a Level 4 of 2017, staff at TUC reported a 14% increase facility, providing services for communities across in outpatients, which could be related to the North Fly District and increasingly from other extension of settlements around Tabubil and the districts and provinces. efficiency and quality of services provided.

Key 2017 updates: Key 2017 updates:

Ƹ Provided medical assistance over 2016/2017 Ƹ Provided community awareness sessions Christmas Period and New Year due to staff including diarrhoeal disease control, personal shortages hygiene, TB, and non-communicable diseases Ƹ Medical and allied health coverage was Ƹ Conducted health radio consultations with provided for every day in 2017 Olsobip, , Golgobip, Matkomnai and Ƹ Fourth-year medical students from Griffith Nomad University, Queensland, Australia in partnership Ƹ Implemented TUC and Ningerum Health with North Fly Area Wide Services, provided Center (HC) patrols in accordance with 2017 clinical services during 6 outreach clinics and at NF District Integrated Outreach Patrol Plan, 11 highway village schools and clinical attachment to Ningerum HC Ƹ Donations were received from Repsol, Queensland Rural Medical Education and Griffith University, Castlemaine Rotary Club, Tabubil Hospital Auxiliary, and OTDF Ƹ Visit from the Tabubil Hospital Obstetrician- Gynaecologist to provide clinical services Ƹ Consultation clinic constructed and now being used by doctors Ƹ NFHSDP health workers participated in 5 clinical attachments at the hospital from May to July

“The (NFHSDP and CMSFHP) staff members did not only see patients, but health education was given and mosquito nets were provided… I want to say the timing of the assistance at the time of need during the festive period needs to be noted and appreciated greatly.” Mark Gena, Kiunga Hospital Senior Health Extension Officer

33 34 Abt Associates health program officers do whatever it takes to ensure health services and health facility maintenence was completed in Serki, the CMCA’s most remote South Fly village

35 EDUCATION SECTOR

The OTDF Strategic 5-year goal for the Education Trusts and mine villages, primarily in the form Sector is CMCA access to quality of curriculum, of scholarships (further details on pages 37 & quality of teacher education and training, and 38). OTML funded 20% of sector expenditure for management improved in line with the Western Preferred Area Development scholarships and Province and National Education Plans. OTDF maritime cadets, and the Ok Tedi Community has prioritised education projects and programs Education Trust funded 16% of sector expenditure funded from a range of sources including OTML Tax on scholarships for mine village students to Credit Scheme, and CMCA Trusts which contribute undertake secondary studies in Australia. to the achievement of indicators of success in line with national and provincial sector policies The OTML TCS-funded Montfort Primary School and and plans. These contributions will broaden in Oksapmin High School projects, when completed, scope if Western Province People’s Dividend Trust will improve access to education for students (more Fund funding becomes available for the Western details on these projects are on pages 45 and 46). Province Education Support Program (WPESP). OTDF also supported logistics from its operational Program and project expenditure in the education funds for a PGK70,000 Liklik Skul Foundation project sector of PGK7,977,204 accounted for 20% of all to construct an elementary double classroom at OTDF sector expenditure during the year. Of the Tapila. total, 59% of expenditure was funded by CMCA

Headline Indicator OTDF Contribution 2017 Net enrolment ratio (%) in primary education Pending funding of WPESP (grade 1-8) Percentage increase in FODE students 499 continuing Grade 12 students with completing Year 10 and Year 12 transcripts enrolled in 2017 and completed adult matriculation subjects studied 17 full time Grade 12 students awarded certificates Number of girls per 100 boys in primary Establish baseline from the NDoE to further education support CMCA schools in 2018 Pupil-teacher ratio Establish baseline from the NDoE to further support CMCA schools in 2018 Number of elementary schools 1 x double classroom at Tapila Number of primary schools Pending funding of WPESP Proportion (%) of elementary and primary 1 x 9,000 litre water tank to a community schools with access to safe water constructed elementary classroom at Karemgo village (Middle Fly) Proportion (%) of elementary and primary Establish baseline from the NDoE to further schools with hand washing facilities support CMCA schools in 2018

36 FLEXIBLE AND OPEN DISTANCE EDUCATION PROGRAM

Following on from the establishment of 6 new FODE all CMCA villages, and distributed brochures on the satellite study centres in 2016, a new centre was FODE and Adult matriculation program. They also opened in Daru in 2017, bringing the total number conducted a road show at 4 secondary schools in of centres to 9, including Samagos and Tabubil. Tabubil, Kiunga (2) and Daru. There has been overwhelming stakeholder support for the new centres established in the North, Middle All 499 Grade 12 students enrolled in 2017 and South Fly regions. To help support and sustain completed the subjects they studied, however the interest of students, the Women and Children’s about 60% did not achieve grades to enable funds from each Trust region have contributed a entry to college or university. Adult Matriculation total of PGK555,000 to sponsor students in the certificates were awarded to 17 students. There was FODE and Adult Matriculation programs, and some a high demand from Grade 12 students requesting university and college students. 488 subject transcripts needed for their applications to tertiary institutions or for employment.

OTDF now manages 9 FODE centres ADULT MATRICULATION 2017 2016 located in 3 Secondary Schools, 2 ENROLMENTS: 2017 Total Total High Schools and 4 Primary Schools North Middle South in Western Province, with a total Fly Fly Fly of 30 teachers from these schools Grade Total Total Total 11 130 61 17 208 131 recruited as part time-tutors. The 12 373 57 69 499 157 most in PNG. Total 503 118 86 707 288

To ensure effective running of the program, OTDF Community Education Support (CES) officers In 2018, 116 (56%) of Grade 11 students will be conduct quarterly visits to each centre. The Fly River eligible to continue into Grade 12. Of those who Provincial Government, Division of Education and were not eligible, due to low subject scores, not all School Boards are supporting the FODE program students sponsored for one subject were able to on an annual basis by providing the school finance the remaining subjects to complete their facilities and releasing their teachers to work as grade during the year. tutors. Additionally, the 8 CMCA Trusts shared the PGK56,000 cost of purchasing a printing machine The CES Team plans to increase tutors’ presence in to be installed at the FODE head office at Samagos. the study centres in 2018, and improve their role in contributing to student outcomes. Tutors will be In 2017, the National Department of Education’s encouraged to prepare worksheets and handouts FODE Program converted to a new e-learning to enhance student learning, and to meet regularly curriculum for Grades 8-10, and this impacted with CES officers to discuss ongoing improvements. significantly on the rural students who have little or no access to internet. OTDF therefore deferred the Grade 8-10 FODE enrolments for 2017, and arranged an order for printed materials in preparation for 2018. The 707 Adult Matriculation enrolments in 2017, more than doubled the 2016 number. Female students numbered 242 (averaging 34% between the 3 Districts), up from 25% in 2016. The increase in student numbers was due in part to catch-up from the low enrolments in 2016 following the dry weather period, but also as a result of active promotion by the CES team. During the 2017 Communications Patrol, CES New FODE Center opened in Ningerum with the officers promoted the importance of education in Ningerum High School Deputy Principal

37 COMMUNITY EDUCATION SUPPORT

Communities have recognised the importance that Funding sources for all Secondary and Post- Secondary education plays in improving economic and social Scholarships 2017: PGK3,442,772 conditions in the Western Province. The Scholarships

Program, funded by CMCA Trust, mine villages and 4% OTML Preferred Area Development (PAD) aims to 12% improve access to secondary and post-secondary PAD Maritime education opportunities for children and youth PAD from those communities. The OTDF Strategic Mine villages Direction 2016-2020 has committed to targeting 51% new post-secondary scholarships to support CMCA Trust priority human resource development needs in the 33% Western Province for teachers, health workers, and skilled agriculture workers.

The commitment which CMCA communities and mine villages have shown to education is reflected in their contribution of 84% towards the overall scholarship funding. Of the tertiary students, 68 (82%) studied in the OTDF priority sectors of Education, Health and In 2017 through CMCA, Mine Village Agriculture, up from 42% in 2016. This increase is a direct reflection of the focus to which OTDF and OTML PAD scholarship funding, and sponsoring Trusts have shown by channelling PGK3,442,772 was committed to scholarship students to those sectors. ongoing scholarships for the 546 183 students are scheduled to continue their full-time students studying from studies under the OTDF scholarship program in secondary to tertiary level, both in 2018, and a further 299 new scholarships are on PNG and overseas. offer, bringing the total scholarship ceiling to 482. As a result of the awareness sessions conducted These students are young people from the CMCA, during the Communications Patrol and school road mine villages and PAD including Telefomin in shows during the year, a total of 338 candidates Sandaun Province. This represents an 11% increase applied for the 299 new scholarships. The OTDF in the number of students compared with 2016, for CES team conducted a thorough merit-based a similar level of funding. screening of applicants, ensuring that only the best students who met the scholarship guidelines were The increase in number of places for students was selected. the result of savings made by the OTDF Community Education Support Team to: (a) incorporate 2017 SCHOLARSHIP GRADUATES performance-based financial support with levels Tertiary (83) Post Secondary linked to Grade Point Averages (GPA); and (b) Technical Training to recover fees owing in a timely manner for (42) students who have withdrawn or been terminated Ƹ 49 Diplomas Ƹ 36 in Diplomas in from institutions. Further savings also occurred and Bachelors in Technical Trade because of reduced student applications in 2017 Teaching Ƹ 3 Mate & 3 for OTDF priority courses in Health and Agriculture. Ƹ 10 Diplomas in Maritime Certificates This released funds for an increased number of Nursing of Compliance from applicants to be accepted into other courses. Ƹ 9 Diplomas and National Maritime Bachelors in Authority A total of 83 scholarship students studying in Agriculture tertiary institutions and 42 in other post-secondary Ƹ 15 various other training institutions graduated in 2017. Bachelor degrees

38 FODE students sit their adult matriculation exam at the Kaviananga FODE Center, Middle Fly

39 INFRASTRUCTURE SECTOR

The OTDF Strategic 5-year goal for the Infrastructure The Infrastructure Development Department (IDD) Sector is increased access to markets, basic services expended PGK7.84 million on infrastructure sector and village facilities that contribute to improved projects, accounting for 18% of all OTDF sector local and regional economic development expenditure during the year. CMCA Trusts and opportunities, education & health status, and mine villages contributed 40% of total expenditure social development of CMCA communities. OTDF on infrastructure projects. WPPDTF expenditure of has prioritised infrastructure projects funded from PGK2.66 million was made on the final payment a range of sources including OTML Tax Credit to Starwest for Aiambak to Lake Murray and Kasa Scheme, Western Province People’s Dividend Road and the Obo/Kaviananga Bridge. Also brought Trust Fund and CMCA Trusts. These projects have into the 2017 accounts was PGK2.15 million of contributed to the achievement of indicators of expenditure made in 2015/2016 on the South Fly success in line with national and provincial sector Water Catchment Project (SFWCP). This represents policies and plans, and in response to demand 28% of total sector expenditure reported this year, from communities. however the work was completed in those earlier phases of the project.

Headline Indicator OTDF Contribution 2017 Estimated length of provincial and district roads 2km road access provided by construction of the Obo/Kaviananga bridge. Nupmo footbridge safe crossing - survey in preparation for impact evaluation Number of jetties upgraded for domestic vessel Nil since the recent TCS funded jetty upgrade traffic project completed in 2016 Percentage increase in number of scheduled Agreement to return the MV Fly Hope to shipping routes scheduled Fly River passenger and freight services in 2018 Percentage increase in number of scheduled air Return to downriver Twin Otter services every routes Friday Proportion (%) of rural population using an 26 new water catchment units in villages of 3 improved drinking water source South Fly Trust Regions under the SFWCP Proportion (%) of rural population using Water tanks installed at 2 primary schools, 11 improved sanitation facilities health facilities, and 1 health staff house. Promoting the importance of safe drinking water resulted in the Kaurtru village community purchasing 12 water purifying buckets Household electrification rate (% of households) No contribution Proportion (%) of population covered by at least OTDF field offices in Aiambak & Tapila have been a 3G network (proxy to internet coverage) connected with plans for 2018 to connect Nakaku. PNGSDP are planning to upgrade Provincial telecommunication towers to 4G Number of affordable houses constructed 3 houses - Atkamba Village 8 health centre staff houses- Bosset, Obo, Tapila, Wasua, Teapopo & Rumginae CHW School 7 staff houses – Balimo Hospital

40 MAJOR TRUST INVESTMENT SUMMARY

RESEARCH VESSEL: FLY EXPLORER CARGO VESSEL: FLY WARRIOR

12 mil

3 mil 10

2.5 8 2

6 1.5 Cumulative Annual Cumulative Annual Billing Billing Cumulative Actuals 4 1 Cumulative Actuals Recieved Recieved Cumulative Cumulative Returned to Trust 0.5 Returned to Trust 2

0 2013 2014 2015 2016 2017 Year 0 2013 2014 2015 2016 2017 Year

SERIES 400 TWIN OTTER AIRCRAFT: P2-IRM & P2-IRN REAL ESTATE: OTDF OFFICE & CMCA VILLAGE

20 mil 3

Return to Trust 2.5 15 Actuals Recieved 2 Annual Billing Housing Cummulative 10 1.5 Return to Trust

Cumulative Annual PGK Amount in millions Billing Housing Cummulative Actuals Recieved Cumulative Actuals 1 Recieved Housing Cummulative 5 Cumulative Annual Billing Returned to Trust 0.5

0 0 Year 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Year

Asset Investment Cost Investment Payback END Payback Period Current Total Capital Years of NET Return (PGK) START DATE DATE Realising To Realise Annual Cost Recovered Current Value As at Per Lease Original Capital Capital Cost (In Payback Following Lease 31/12/2017 Cost Years) (PGK) Payback Period Agreements (PGK) (PGK)

SHIPS Passenger Ferry 6,448,805 - - - - - 15 Cargo Ship 18,869,377 1/01/2013 1/08/2022 9.6 1,965,986 18,869,377 15 9,829,930 Research Vessel 5,337,674 1/07/2012 1/10/2021 9.4 569,028 5,337,674 15 3,129,654

30,655,856 Total Capital Cost - Vessels 24,207,051 12,959,585 AIRCRAFT Twin Otter P2-IRM 17,382,881 1/01/2013 1/04/2023 10.3 1,692,274 17,382,881 15 8,741,195 Twin Otter P2-IRN 16,511,655 1/01/2013 1/04/2023 10.3 1,609,232 16,511,655 15 8,332,151

33,894,536 Total Capital Cost - Aircraft 33,894,536 17,073,346 PROPERTIES Office Complex 7,724,635 1/01/2014 1/01/2023 9.1 852,754 7,724,635 10 2,558,262 Housing Estate 6,169,135 1/02/2015 1/05/2023 8.3 743,311 6,169,135 10 2,229,933 Cassowary Hotel 33,000,000 1/02/2018 1/11/2030 12.3 2,680,000 33,000,000 20 -

46,893,770 Total Capital Cost - Properties 46,893,770 4,788,195

TOTAL CAPITAL COST OF MAJOR TRUST INVESTMENTS 104,995,357 34,821,126

41 CMCA TRUST INVESTMENT ASSETS

Kiunga Office Complex and Housing Estate The OTDF Head office continues to be upgraded, undergoing extensive concrete works to cover the entire front of office carpark. The office continues to be shared with OTML Community Relations (OTML CR) and a sub-lease to Ok Tedi Power Limited (OTPL).

Total investment value: PGK7.7 million Projected return on investment to the CMCA communities over the current 10 year contract: PGK8.52 million or 11%

Return to CMCA communities in 2017: PGK852,754 Cumulative return since January 2014: PGK3,553,141

OTDF Office complex (carpark upgrade), Kiunga Capacity: 52 workstations and 15 offices

Kiunga Housing Estate (CMCA Village) After benefitting from extensive maintenence works in 2016 ‘CMCA Village’ has required only minor R&M throughout 2017. An upgrade of the sports courts is planned for 2018 to cater for the growing interest in the Foundations sporting events.

Total investment value: PGK6.2 million Projected return on investment to the CMCA communities over the current 10 year contract: PGK7.43 million or 19%

Return to CMCA communities in 2017: PGK743,310 Cumulative return since January 2015: PGK2,229,930

Capacity: 7 houses and 12 units OTDF Housing Estate (aerial), Kiunga

Series 400 Twin Otters The two aircraft (P2-IRM and P2-IRN) are servicing regional airstrips within Western Province and the Telefomin District of Sandaun Province. They are being used to transport OTML and contractor personnel to and from their homes; OTDF staff to regional field bases; and to conduct urgent medivac requirements within our community partner regions.

Total investment value: PGK33.9 million Projected return on investment to the CMCA communities over the current 15 year contract: PGK49.51 million or 46%

Passengers flown in 2017: 6,701 Series 400 Twin Otter (P2-IRM) Freight flown in 2017: 54,953 kilograms

Return to CMCA communities in 2017: PGK3,301,266 Cumulative return since January 2013: PGK16,781,435

42 MV FLY EXPLORER The FLY EXPLORER is a 30 metre custom built research vessel being used by the OTML Environment Department, primarily to conduct environmental monitoring, riverine biota, levee bank and hydrological sampling, navigability studies and DEC inspections along the Fly River and its tributaries, and Fairfax Harbour in Port Moresby.

Total investment value: PGK5.3 million Projected return on investment to the CMCA communities over the current 15 year contract: PGK8.53 million or 61%

Number of scientific trips conducted in 2017: 11 Scientific trips conducted since July 2012: 47 MV FLY EXPLORER Return to CMCA communities in 2017: PGK569,028 Cumulative return since July 2012: PGK3,177,073

MV FLY WARRIOR The FLY WARRIOR is a 65 metre bulk diesel fuel and container carrier that can ship up to 72 containers and or 1.2 million litres of fuel out of Port Moresby and is registered to call into Australian ports if required.

Total investment value: PGK18.9 million Projected return on investment to the CMCA communities over the current 15 year contract: PGK29.48 million or 56%

Freight shipped in 2017: Fuel: 7,318,608 litres of diesel Cargo: 1,958 containers and 93 break bulk pieces MV FLY WARRIOR Return to CMCA communities in 2017: PGK1,965,986 Cumulative return since January 2013: PGK9,993,762

MV FLY HOPE As foreshadowed in the 2016 Annual Report, the solution to restart operations in partnership with OTML Shipping and their new vessel manager has stalled. While OTML has contracted P&O to take on their fleet, vessels are still in transition from V’Ships and this remains a priority. Additionally the cost to refit the Fly Hope with added freezer capacity and to complete docking and all consequent survey requirements given her extended period at anchor is estimated to be near PGK2 million.

OTDF is exploring funding options, negotiating with OTML Shipping to provide the fuel requirements at no cost and for P&O to provide ships management at cost for a trial 12 month return to operations from mid MV FLY HOPE 2018 to determine the future viability of this community shipping service.

43 CASSOWARY HOTEL

Interior room view

The highly anticipated 40-room, Cassowary Hotel of module components damaged in 2016. The in Kiunga is expected to officially open in March additional cost has been financed in accordance 2018. Substantive completion of internal works with existing CMCA Trust Investment Guidelines by year end enabled staff from Coral Sea Hotels from investment funds that were released to the (CSH), the hotel management partner owned by 4 South Fly Trusts following the court ruling in the Steamships Trading Company (STC), to test February 2017, enabling them to join the other systems, and commence furnishing and stocking CMCA Trusts as project partners and increase their in preparation for the opening. CSH began Trust Investment portfolios. OTDF is pursuing the recruitment of staff in November. Where possible, recovery of cost from associated contractors. Management will give priority to filling the various positions with experienced and qualified applicants OTDF is also negotiating revised terms with STC to from CMCA areas, and those from within Western extend the Cassowary lease agreement from 10 to Province. The investment will not only provide a 20 years: at 6.9% over the first 10 years; and 8% guaranteed return of more than PGK2.5 million per over the second 10 years, yielding a gross return in year to the 8 CMCA Trusts for 20 years and 4 North excess of PGK55 million. and Middle Fly Women’s Associations for 10 years, but will also increase paid employment for locals; The Cassowary is the eighth and final major and create opportunities for sale of local produce investment project to be delivered by OTDF under and provision of hotel operating services. the current CMCA Trust investment processes, completing a real estate, aviation and shipping The investment will provide a portfolio worth in excess of PGK100 million. guaranteed return of over PGK2.5 million per year.

Practical completion was delayed by 8 months due to significant performance issues resulting in the termination of the initial construction contractor in May. OTDF agreed to partner with Pacific Palms Properties (PPP), also part of the STC group, to take on the responsibility of completing the building. The anticipated completion cost of PGK34.8 million is PGK4.8 million (14%) over the original projection of PGK30 million, due to costs incurred as a result Ground floor plastering nears completion of the contract termination and replacement 44 OTML Tax Credit Scheme (TCS) Projects

The OTDF Infrastructure Development Department TCS REGISTERED PROJECTS (IDD) 2017 implementation strategy as agreed with No. Projects Amount % OTML Tax Credit Scheme Administration focused (PGK Complete on completing existing projects in the IDD TCS million) portfolio before commencing any new project investigations. 1 Balimo Hospital 6.55 100 Stage 2 Staff Housing A milestone for the IDD in 2017 2 Oksapmin High 36.27 40 was completion of the PGK6.55 School million Balimo Hospital Stage 2 3 Kiunga Town Water 18.60 88 Staff Housing Project with no safety Supply 4 Kiunga Sewerage 25.69 0 incidents. Treatment Plant 5 Montfort Primary 3.36 45 In May 2017 the houses were officially handed over School - New Build by Department of National Planning & Monitoring 6 Telefomin District 1.00 90 (DNPM) officials to Evangelical Church of PNG Hospital Equipment (ECPNG) who administer the hospital. TOTAL 91.47 In addition to the Balimo project, which was almost complete at the end of 2016, the IDD TCS Team The IDD TCS Team took on one additional project continued working on six approved projects: in 2017 to procure medical equipment for the Oksapmin High School (see profile of the Oksapmin Telefomin District Hospital. The equipment has High School project on page 46); Montfort Primary been procured from Meddent and is in Port School New Build; and the Kiunga Town Water Moresby awaiting final shipment to Telefomin in Supply project. This project included finishing 2018. The IDD team also handed over the Tabubil works at Tank 4 and pressure testing of the new footbridge project for the Lower Ok Tedi to OTML reticulation lines, and a plan to begin construction Special Projects (due to its location). The design of Tank 5 at Pivini Hill, which has been delayed due was subsequently completed and submitted to the to land issues. The Kiunga Sewerage Treatment Plant DNPM for approval. (STP), was further delayed following a review of the costs of the re-designed project. OTML requested The IDD TCS Team continues to respond to the further investigation of scope, and value for money challenges associated with delivery of large scale alternative systems such as containerised plant. infrastructure projects in Western Province, and Other than completing mains water & sewerage consults with all stakeholders to monitor and reticulation lines, the Kiunga Sub-Division project, manage risks to improve project delivery. One which was 30% complete when handed over to IDD example is the unexpected rainfall in Kiunga in July in 2016, was shelved by OTML. and August 2017 which resulted in the proposed STP and new pump station sites being submerged by floodwaters. This event resulted in a review of the project design to mitigate the impact of future flooding.

With a morotorium placed by the National Government on all new TCS projects throughout Papua New Guinea, the IDD Team will focus on completing the current projects in its portfolio within approved budget allocations and planned timeframes in 2018. Multi Purpose Hall nears completion at Montfort Primary School, Kiunga

45 TCS PROFILE: OKSAPMIN HIGH SCHOOL RESTARTED

The OTML Tax Credit Scheme funded PGK36.27 A site visit by OTML and OTDF representatives million Oksapmin High School located in Tekin, in to address issues raised by locals concluded with Oksapmin sub-district of Telefomin District, Sandaun communities giving consent for the airlifting Province will improve access for young people living operations to commence in November. The re- in the 21 wards of the sub district to secondary activation work included replacement material education facilities. The OTDF Infrastructure supply by Badili Hardware, aviation fuel supply by Development Department is managing the Puma Energy Ltd, and airlifting by Hevilift Ltd. construction of the new High School, which will include: an Administration Building, Library, Science During November and December, 33 Laboratory, Mess Building, Recreation Hall and Workshop. Two x 2-level Double Classrooms will be loads of project materials weighing constructed along with a 2-level Girls’ dormitory, 2 more than 118 tonnes were airlifted x 2-level Boys’ dormitories, 3 Ablution Blocks, 2 Day to the project site by Mil 8 helicopter. Toilet blocks, and 7 x 3-Bedroom Staff Houses. Two “Igloo” storage facilities are being constructed Following the termination of the original contractor’s to store project materials which will be progressively services, project work-in-progress was rated at airlifted from Sawmill Flats in Tabubil to the project 30% complete at the project site. Re-activation of site. the Oksapmin High School Project in early 2017 required re-scoping to ensure timely completion The communities have committed to working with and delivery of this long awaited project within the new contractors who have been engaged to the approved TCS budget. The strategy to mitigate complete the project, and overcame significant the risk and speed up work was to engage two challenges associated with poor contractor contractors for two discrete project components. performance, weather conditions hindering Tawap Kamen Investment (TKI) Ltd was contracted transportation & storage of materials, and building to complete the unfinished buildings, and Hausman in a remote location. Additionally, the Member for Building Solution (HBS) Ltd was contracted to Telefomin has been working closely with his people construct the new buildings that had not been to ensure community support for OTDF to enable commenced. TKI mobilised in late November and improved education within his District. commenced site establishment works. HBS will mobilise in the 2nd Quarter of 2018. On behalf of my people from Telefomin District, particularly in Oksapmin, I convey my highest gratitude to OTDF for restarting and managing the delivery of this very important education infrastructure project. I also convey a special thank you to the Management of OTML for continuing to provide funds from the Tax Credit Scheme to now complete this very important project that I wish to open over Independence in One of 2 ‘Igloo’ shelters erected at the Oksapmin High School site to protect all materials airlifted in September, 2018. Minister for Defense and Member for Telefomin, by heavy lifting helicopter Hon. Solan Mirisim

46 CMCA AND OTDF FUNDED PROJECTS

The Infrastructure Development Department team responsible for CMCA and other non - TCS projects managed a portfolio of 49 infrastructure projects totalling PGK21 million in various stages of implementation. Projects that contribute to achieving the OTDF 5-year Strategic Direction were funded by the 8 CMCA Trusts and their entities, 6 Mine Villages and OTDF; including housing, water supply, church buildings, women’s learning centres, and community health centre upgrades.

The non-TCS Team worked closely with other OTDF Departments to provide engineering services to Trusts and Mine Villages, including technical advice, appraisals, feasibility studies, and contract documentation to facilitate infrastructure project approvals and implementation. Gravity fed header tank and site water reticulation upgrade project constructed at the Samagos Field Twenty projects were carried forward from 2016, Base & Research Station, North Fly and 29 new infrastructure projects were approved for inclusion in the IDD portfolio and workplan. Of Community demand for clean water sources is very these 49 projects, 21 (43%) were funded, of which high, compounded by rising water levels in the 6 were completed in 2017. The IDD undertook delta regions of the Fly River. The SFWCP, has been feasibility work on 17 projects that are now pending funded by OTDF since 2013, commencing with funding approval. The non-TCS Team carried 17 Dudi villages, and progressively implemented forward 26 projects into 2018. across 34 villages in the Kiwaba and Manawate Trust regions. In Kiwaba, 82% of target units have been Highlights for 2017 included handing over 3 houses constructed, with 46% completed in Manawete. in Kiunga for Atkamba Village (Wai Tri Trust), with a To enable greater efficiency in delivery of project 4th and final house under construction to complete materials, OTDF relocated material storage from the project. A PGK170,000 upgrade to Senamrai Aiambak to sites closer to the delta Trusts regions. Village Health Centre (Wai Tri Trust), is under way with works including a 4-bed maternity ward Meeting expectations about the delivery of water renovation, water supply and sanitation, ambulance supply infrastructure in the villages was a challenge, shed and security fencing. Additionally, OTDF with officers addressing concerns recorded in the funded a PGK150,000 project to install a water 2017 Communications Patrol feedback from each tank and piping to supply the entire Samagos Field of the three Trusts. The SFWCP project is scheduled Base in the North Fly and continued to support the to be completed in 2018. South Fly Water Catchment Project.

IDD REGISTERED NON-TCS PROJECTS: 2017 Funding Source Carried Fwd New Projects Total Funded 2017 Amount Completed (PGK mil)

CMCA Trusts 11 21 32 11 7.3 1 Mine Villages 5 4 9 3 1.5 0 OTDF 4 1 5 4 11.6 3 MFIL 0 3 3 3 0.6 2 Total20294921216

47 48 OTML Tax Credit Scheme project, Oksapmin High School site aerial: OTDF facilitated the return to construction in late 2017 following termination of the previous contractor and a revised scope of works, see further details on p. 46

49 LOCAL AND REGIONAL ECONOMIC DEVELOPMENT SECTOR

The OTDF Strategic 5-year goal for the Local and 25% of all OTDF sector expenditure during 2017, Regional Economic Development Sector is increased second only to the major health sector expenditure. income earning and employment opportunities and reliable subsistence consumption for Western Over half of all 2017 expenditure in the sector Province communities. OTDF has prioritised was the investment made by 6 mine villages and economic development projects funded from a the Star Mountains Women’s Association. They range of sources, including the Western Province pooled their funds to invest PGK5.6 million (80%) People’s Dividend Trust Fund, CMCA Trusts and of the PGK7 million capital required to start up Mine Villages. These projects have contributed to the Mt Fubilan Agro-Industries poultry project the achievement of indicators of success in line with (for more details see page 52). PGK1.3 million of national and provincial sector policies and plans, residual WPPDTF funding enabled LDP program and in response to demand from communities. activities and trials to continue pending full funding The PGK10,147,029 expended on projects and becoming available in the near future. programs implemented in this sector accounted for

Headline Indicator OTDF Contribution 2017 Percentage of non-CMCA cash Rubber - PGK221,638 paid to 745 Rubber growers income per household Rice – field trials concluded in preparation for LDP funding of Kaviananga commercial trial Eaglewood – preparation/training for the inoculation of 5,000 trees in 2018, due for harvest in early 2019

Percentage of CMCA population New local employees (casual and full-time): in paid employment 2 - North and Middle Fly Women’s Association Public Officers 6 - OTDF extension officers/didiman graduates from Highlands Agricultural College - LDP program support 3 - LBL – Rubber purchase and logistics 20 - Mt Fubilan Agro-Industries egg and poultry 18 (11 with trade qualifications) - Nanai Brothers Eaglewood nursery contract 76 - Cassowary Hotel construction

Number of SMEs owned and 2 SMEs (Middle Fly Investments Ltd & Upper Lower Ok Tedi Ltd) operated by CMCA communities supported by Trust Team 4 North & Middle Fly Women’s Association Investment Companies & 4 North and Middle Fly Regional Women’s Associations supported by Economic Development Team 4 new South Fly Women’s Regional Associations Mt Fubilan Agro-Industries - operating Poultry project Fly Rubber Ltd – contracted with LBL and OLAM to buy and export cup lump rubber WestAgro Ltd formed to enable delivery of Province wide agribusiness aspirations

50 SMALL AND MEDIUM ENTERPRISE DEVELOPMENT PROGRAM

OTDF’s overall objective for Small and Medium Application forms were distributed to the village Enterprises (SME) is increased income and Womens’ Social Issue Concern Groups as part of a employment in the Western Province from combined awareness program involving the ED and sustainable small and medium enterprises. A key Community Development teams and the respective strategy in the OTDF 2016-2020 Strategic Direction Women’s Association executives. A Client Registry is to provide business advisory services to support database is being established to enable the ED SMEs, and Regional Women’s & Youth Associations Team to track progress of loan applications, and transition to full operational independence. identify candidates for FLT and business planning Aligning their work with the Government’s National support. The database will assist the ED Team to SME Policy 2016, the OTDF Economic Development quantify the OTDF headline indicator measuring the (ED) Team is supporting the establishment of new increase in number of SMEs owned and operated local SMEs in CMCA regions; and assisting existing by CMCA communities. enterprises operating in the non-formal sector to transition to the formal sector. The ED Team has developed a business services advisory capacity for SMEs, and also coordinates the Financial Literacy Training (FLT) conducted in partnership with the Bank of South Pacific (BSP), partly funded under PNG’s National Financial Inclusion Strategy.

In 2017 the ED Team’s client base included ongoing work with a total of four (4) Women’s Investment Companies.

To meet the objective of transitioning to operational independence in a North Fly ladies celebrate at the signing of the period of 2-4 years, the ED Team has MOU with the NDB in the OTDF Office, Kiunga assisted with the appointment of South Fly Delta Fisheries Livelihood Development Public Officers, and then supported Program: The ED Team took the lead in 2017 to their capacity to take on all operating prepare a business case for a new Delta Fisheries functions. Livelihood Development Program initiative for the South Fly in the Dudi, Kiwaba and Manawete Trust Support focused on accounting and compliance Regions. These areas are not well suited to Rice, services to ensure the women’s investments are Rubber and Eaglewood, but fishing is the primary well coordinated, demonstrating good financial subsistence activity for most families. growth, and regularly reporting on profitability. This initiative aims to support communities to National Development Bank (NDB) Credit Scheme sustainably target key species such as barramundi Program for CMCA Women’s Associations: A and tilapia, and add value by processing fish total of PGK1.5 million was deposited with the NDB fillets which will generate cash income. Data was as security for loan applications under Memoranda collected during a 3-week baseline survey in of Agreement between the NDB, Middle Fly February and March, including number and species Women’s Association (MFWA) and the 3 North Fly of fish caught, equipment used, access to markets Women’s Associations (NFWA’s). The first loans are via existing jetties, and fuel costs. Constraints to expected to be approved before the 31st of March establishing a viable business were also reviewed, 2018. Eligible applicants must be registered with including the need for sustainable management the IPA, and provide 10% of the total loan value as of the wild fisheries, collaboration with existing equity in the proposed business. Interest of 6.5% operators in the delta, and compliance with will be paid on loans of PGK500-PGK10,000 to be processing standards under the National Fisheries repaid over a maximum 2-year period. Authority (NFA) regulatory frameworks.

51 MOUNT FUBILAN AGRO-INDUSTRIES POULTRY PROJECT

Six Ok Tedi mine landowner villages (Atemkit, OTDF has also committed to encouraging use Finalbin, Bultem, Kavorabip, Migalsimbip, and of locally-grown and processed feed for animal Wangbin) will soon supply Tabubil, Bige and production, both to reduce input costs, and also Kiunga with over 3.5 million eggs, and 33,000 to provide a reliable and integrated value chain broiler chickens a year through a project initiated within the Western Province that will also generate by OTDF. The Foundation has engaged Israeli agro- additional jobs for locals. A trial was commenced business company, Innovative Agro Industries (IAI), on reclaimed land at Bige during November 2017 as a technical and financial partner to implement to grow 1ha of maize which will be milled at Tabubil. the project. After 18 months of planning, the project The aim of the trial is to evaluate the commercial commenced in May at the OTDF Agriculture Centre prospects for poultry feed production, which would in Tabubil with construction of chicken sheds, then be taken over by local company Lotic Bige Ltd a feed mill and other associated facilities to be (LBL). This enterprise would generate additional fully completed by February 2018. With the first employment opportunities, and also provide cost shed constructed, production commenced in early effective access to poultry feed by smallholder October 2017, when the initial flock of 3,900 day- poultry producers in Western Province. old chicks (layers) arrived on site from New Zealand and are now settled into the first laying shed. A second flock of 2,600 chicks was delivered to the pullet shed in mid-December (by year end, 97% of the total number of chicks delivered were thriving on-site).

3.5 million eggs, and 33,000 broiler chicken capacity per annum

The project has generated keen interest with 60% of the PGK7 million start-up funding committed by the six representative Mine Village Planning Committees; and by the Star Mountain Women’s Association (SMWA) who have committed 20%. This is the first time that mine VPCs and the SMWA have Initial flock of layer birds spread their wings pooled their funds for a common benefit. IAI has in the new pullet shed, Tabubil committed the remaining 20% of the required start- up funding. The project is currently being steered OTDF Associate Director Maino Lucas representing by the Mt Fubilan Agro-Industries Committee, the North Fly and mine villages, encouraged his acting as an interim governing structure pending a people to make use of opportunities the project final corporate holding structure to be decided by will generate, and focus on using income from the OTDF in consultation with the mine village VPC’s. project to support future education needs for mine The Committee met 6 times in 2017. village children.

There is an existing market in Tabubil driven by OTML operations. Local landowner company “We mine villages have enjoyed the Fubilan Catering Services, which has the catering last 30 years of receiving direct contract with OTML, has become the project’s first customer, committing to buy 4,000 eggs per day benefits from OTML, yet have (1.4 million per year), which is 40% of planned little to show for what has been annual production. There are also significant retailer received … the important element markets in Tabubil and Kiunga. The live broilers will be sold at the farm gate, mainly to the Mine villages. to sustain our futures is education, The first eggs and broilers will be produced and and we can realise that through sold by March 2018. The project payback period is returns from agro-industries.” expected to be within 5 years.

52 Aerial picture of the three Mt Fubilan Agro-industries poultry project layer sheds footprint

53 EAGLEWOOD PROGRAM

OTDF has identified Eaglewood as one of three Nursery Production and Seedling Distribution Livelihood Development Package programs for Total nursery capacity was increased in 2017 CMCA communities in all 8 Trust Regions. The to 300,000 seedlings as a result of upgrades at aim of the Eaglewood Program is to establish a Aiambak and Nakaku (50,000 each); adding to the fully sustainable and integrated model from seed construction in 2016 of two new nursery sheds at production to processing resin, or agar, into a Tapila and Samagos (100,000 each). The additional value-added product such as high value chips, capacity of the nurseries allowed OTDF to order fragrant oils and incense sticks, ready for export. 80kg of seed from Vietnam in 2017. In response to the high demand for seedlings, an additional OTDF has been directly supporting preparatory work 50kg of seeds were later procured in June 2017. for the Eaglewood LDP, including establishment Refinement of nursery practices and improvements of 4 nurseries, with a capacity for producing over in the growing media have also allowed seedlings 300,000 seedlings, and providing field extension to develop quicker and be ready for distribution services for growers. OTDF also purchased a 25- earlier. year patent license agreement for PNG for the Cultivated Agarwood (CA) Kit technology in 2016; A total of 240,774 seedlings and entered into a partnership with Pacific Forest Alliance (PFA) for technical and advisory services currently growing in all 4 nurseries along the Eaglewood value chain. will be distributed in 2018.

In 2017, OTDF expended PGK798,362 on the Local Seed Production areas (SPA), (locations which Eaglewood program and propagated over 240,000 have been set aside for the exclusive purpose of seedlings that will be distributed in 2018 to 4,773 seed production) are now reaching maturity, growers, up from a distribution of 70,000 seedlings and starting to produce small amounts of seed. to 1,060 growers in 2016 (including 4 women’s OTDF plans to have all future seed requirements groups in the Middle Fly). sourced from local SPA’s that creates an additional income opportunity for these farmers and reduces Region Seedling % Increase the program’s dependence on external seed Production Year on Year procurement. 2016 2017 North Fly 23,650 71,000 200% Middle 26,251 61,950 136% Fly South Fly 20,054 107,824 438% Total 69,955 240,774

The Eaglewood team is also investigating further value adding, by assessing the processing of the whole tree for extraction of resin, to grinding of the residual agar into incense sticks. This was an outcome of a study trip to Vietnam conducted in late 2016 to evaluate Eaglewood inoculating, harvesting, and seed raising processes. Information gained during the trip also enabled completion of the relevant sections in the Eaglewood Management and Grower Guide. Relevant modules were laminated and provided to growers by extension officers during seedling deliveries. The seedling on the left has developed more vibrant growth and a stronger root system in the new medium 54 Inoculation Program During the application of the CA Kits all trees will be Six field extension officers engaged in 2017 GPS located to allow analysis of the different micro conducted a measurement program, identifying an climates that may potentially influence yield and initial 500 trees from all three regions, with a breast agar development and to model the production height diameter of 14cm or more, suitable for the and processing of the inoculated trees. 2017/2018 inoculation program. Prior to the application of the CA Kit OTDF will Prior to commencing the program, PFA conducted enter into an agreement with the individual a 4-day training course on inoculation techniques growers setting out the roles and responsibilities for the field officers undertaking the CA Kit of each party. This agreement is designed to ensure application in the field. Training for the inoculation growers are aware of their obligations, and this teams commenced in November, with applications includes OTDF processing the harvested agar- made to selected trees in the Samagos field base. producing tree to ensure the sustainability of the Trees were also inoculated at the Catholic Mission, program. Emmaus Farm. The inoculation of 5,000 trees in all three regions is scheduled to commence in Agar Processing Pilot February 2018. To identify the quality and potential variations in oil production that may be present in trees from All trees require a field inspection and follow up the different regions, a pilot distillation unit was booster application 6 months from the initial ordered from China with a delivery scheduled in application, so it is important to stagger the mid-2018. The unit will be located at Samagos and inoculations to allow effective field management of will allow OTDF to sample the oil quality from the the trees. This staged approach will also complement 2017 crop of inoculated trees. harvesting and processing as the trees mature and produce agar. Trees will be ready for harvest some Agreement was also reached with the University 12 to 15 months after the first application of the of PNG to replicate these distillation tests under CA Kits. laboratory conditions to ensure OTDF can produce similar results from the field based unit.

Following the production of oil, OTDF will provide growers with purchasers’ feedback on the quality of oil produced and expected pricing. This critical information will enable refinement of a model of returns to growers and the project as well as quantification of the industry potential, allowing decisions to be made on expansion.

Inoculation training using the CA Kits at Samagos Field Base, Kiunga. The team drills a series of holes into the tree and applies a chemical agent to assist establishment of a natural fungus that will infect Stainless steel Eaglewood distillation unit the tree and produce the agarwood from which manufactured by ‘Shanghai Better Industries’, resin is extracted China

55 Middle Fly long canoes continue to be utilised by the Kasa community, on this occassion to deliver 31,127 Eaglewood seedlings from the Aiambak nursery

56 RUBBER PROGRAM

OTDF has worked closely with communities growing Similar submissions to fund additional nurseries in Rubber to drive their own social development North and South Fly Regions will be made in the (inclusive of women and youth) with expected 1st Quarter (2018) Trust Board meetings. These outcomes of: (a) increasing farmer incomes and nurseries will supply planting materials for growers livelihood opportunities from tapping and adding under the LDP Program. value to latex rubber; and (b) deriving benefits from a company owned by growers. A single Provincial Rubber Development Strategy for Western Province will be incorporated into the Fly Rubber Limited WestAgro master plan (see page 13), and will focus In 2016 OTDF facilitated the formation of Fly Rubber on reaching more isolated farmers, collaboration Limited (FRL) to help secure these outcomes for with North Fly Rubber Ltd, and planning for the Rubber growers. The inaugural meeting of the FRL return of PNGSDP as a development partner. Board was held in March 2017 with representatives appointed from OTDF, Business for Development PROFILE: SOUTH FLY RUBBER PROJECT (B4D) and grower representatives from Lake Murray, Kasa Village, and Highway villages in the North Fly.

FRL signed a contract with marketing partner OLAM based in Singapore in late 2016 to initially supply 60 tonnes of cup lump Rubber for export with the approval of the PNG Rubber Board. Local company Lotic Bige Ltd (LBL) was contracted to purchase the cup lump from growers; and since December 2016 has purchased 178.7 tonnes and paid PGK221,638 into the bank accounts of 745 Rubber growers. Bare Budded Rubber Stumps from the Sturt Island .. purchased 178.7 tonnes and paid nursery are harvested for distribution to South Fly PGK221,638 into the bank accounts farmers of 745 Rubber growers. This 5-year project, which concluded in 2017 under current funding arrangements, initially covered 16 In the 1st Quarter of 2018, OTDF, LBL and key villages from Fly Gogo, Manawete and Dudi in South stakeholders will conduct meetings in the Suki Fly, and was to be jointly funded by PNGSDP and area to increase awareness among growers about Village Development Funds. From 2014 onwards, arrangements for cup lump Rubber buying. In OTDF operational funds were used when PNGSDP 2018 OTDF will be providing technical assistance funding did not eventuate, and the geographical (didiman services) and tapping tools (funded by scope increased to include Suki villages and the the WPPDTF) to growers. Lower Middle Fly region. Three seedling nurseries established from 2013-2015 were the source of In November, the Middle Fly Trust Board approved Rubber planting material that was extracted and a submission for a new 5-year hybrid Rubber distributed from 2014 onwards. In the final year, seedling nursery project to commence in 2018. 2017, field plantings of bare budded stumps included: (a) new growers, (b) growers extending South Fly Rubber Project planted Rubber blocks, and (c) growers replacing Summary of Field Plantings 2014 – 2017 dead points in their Rubber blocks. By the end Year Points Ha Growers Villages of September, seedlings had been distributed to 654 growers in 29 participating villages in a 2014 36,776 81.72 203 9 collaborative effort involving the village leaders. 2015 No planting due to dry weather These farmers will benefit in the near future from 2016 44,496 98.88 60 11 tapping of Rubber from approximately 142,000 2017 76,306 169.57 654 29 trees (allowing for field losses).

57 RUBBER PROFILE : AIAMBAK RUBBER PROCESSING FACTORY

Ok Tedi Development Foundation will soon have The factory is intended to produce Ribbed Smoked a Rubber processing factory in Aiambak, Middle Sheet (RSS) Rubber. Farmers will prepare rolled Fly District to benefit Rubber farmers within sheets from their cup lump rubber with simple the Community Mine Continuation Agreement hand rollers in their villages. The RSS will be areas. The location is in line with the OTDF transported to the factory within 10 days where Strategic Direction 2016-2020 target to focus on they will be smoked, graded, packed and exported developments that position Western Province in containers, initially to South East Asian markets. as an agriculture and forestry province, and to concentrate infrastructure and services in Fly River RSS has a higher value on the international market Provincial Government nominated growth centres. than the cup lump which is currently being sold Aiambak is a strategically located growth centre, by farmers. Sheets are used by tyre re-treading enabling farmers in the remote Middle and upper factories and RSS production is being heavily South Fly areas of the Province to access a ready promoted by the PNG Rubber Board to increase market for their Rubber. Accessibility has been volumes. In the future a domestic market could be greatly improved following the construction of established in which a factory in PNG would service the Aiambak to Lake Murray Road which enables the growing light vehicle market. reliable production volumes to reach the factory from Lake Murray and Kasa Village farmers. A ground breaking ceremony was held at Aiambak, on September 22, 2017 and the final factory design Adding value by processing within has been completed. The contract will be tendered the Province places more money in mid-2018 and subsequent construction is in farmers’ pockets for the same expected by year end. volume of harvested Rubber.

More than 1,000 CMCA Middle Fly and Lake Murray rubber farmers gathered to celebrate the groundbreaking of the Aiambak rubber factory

58 Rice Program

The Kaviananga Village community enthusiastically came together to harvest their semi-commercial trial rice field

RiRicece hhasas bbeeneeen ggrgrownown cocommerciallymmmerciiallllyy tthroughouthhrroughhouut fromffrom ssmallmam ll toto largelaarge scale,scalee, includinginclluudid ng prospectsprosppectst fforor a Asia in environments similar to those found in PNG. centralised, fully mechanised trial in the Middle Fly. This production has been achieved over centuries Preliminary findings from the trial showed that there of growing rice, with high labour inputs and low were significant differences in yield per plot per site mechanisation being the key elements of these among the 4 varieties tested, and the results will be farming systems. available early in 2018.

The PNG Government is committed While waiting on LDP program funding availability to supporting the development of from the WPPDTF, OTDF submitted a concept PNG grown, milled and packaged proposal to the PNG Incentive Fund (IF) to develop a 50ha commercial rice farm at Kaviananga village rice, thereby reducing a reliance on in the Middle Fly region as a way forward for scaling current imports. up to a nucleus estate model. OTDF has progressed to Stage 3: Organisational Assessment which will Under the OTDF Strategic Direction 2016-2020 rice be conducted early in 2018 prior to IF approval is one of the crops identified under the Livelihood to proceed with a detailed proposal and the final Development Package program that has potential stage of funding approval. OTDF continues to to increase income earning and employment encourage smallholder farmer units from CMCA opportunities, and reliable subsistence consumption villages to provide production support for the for CMCA communities after the mine closure. planned commercial scale farm.

A partnership was established with Trukai Industries With the cooperation of all stakeholders including Ltd and CMCA communities in January 2017 to the CMCA communities, OTDF believes this nucleus trial 4 improved rice varieties for commercial estate model has the potential to bring the benefits production. The trial was rolled out in 4 selected of a new rice industry across the Province. The model villages in North, Middle and South Fly regions will facilitate development of a sustainable industry to evaluate the performance of the dryland rice by establishing farms in different locations across varieties grown under rain-fed conditions. The Western Province based on achieving appropriate trials assessed performance and adaptability of economies of scale. varieties; evaluated the grain qualities, and made an economic assessment of rice production systems

59 RICE PROFILE : KAVIANAGA RICE TRIAL SITE

Masola Abilo Middle Fly Landowner In the future, the Sago swamps will be dying out, Middle Fly Trust Chair and we want to shift into Rice farming. I’m very Kaviananga VPC Chair supportive and I want all 18 of my Middle Fly A proactive leader of the villages that have land available to participate in Kavianange people who Rice growing. is leading by example. This year, OTDF contracted construction of a The realisation for self-sustainability is evident permanent bridge linking Kaviananga to Obo in the Middle Fly village of Kaviananga, where station, providing transport access to move rice the community has joined hands to successfully from the fields to the shipping point at Obo station. conduct Rice trials in their area. Four Rice varieties The bridge was built as a variation from the Aiambak from Trukai were trialled over two hectares of open to Lake Murray Road construction, funded from the grass land nearby Kaviananga village: planting of Western Province People’s Dividend Trust Fund. Rice seeds began in February and the harvest of 1.6 tonnes took place throughout August.

Kaviananga Village Planning Committee Chairman and Middle Fly Trustee, Masola Abilo, is happy that people from his village have committed their time to make the Rice trial successful. They are now looking forward to the next stage of rice farming based on Trukai Industries’ and IAI recommendations on suitable varieties to grow on a larger commercial scale (refer to p 59 for further details).

173 people from Obo and Kaviananga villages took part in planting, harvesting and threshing, and PGK100,000 of Kaviananga Village Development Funds was approved to pay all on site costs for this Completed footbridge enabling easy access project. between Obo Station & Kaviananga Village

“With OTDF’s approach of putting “The bridge was completed very money into people’s pockets, we well and can accommodate 12 plus want to do it in a bigger picture and tonnes. I’m very happy with the have given up our land to be used bridge. It’s the first of its kind commercially,” Masola said. The optimistic VPC Chairman confirmed that there are more than and I don’t think I’ve seen a bridge 500 hectares of land available to expand into rice like that anywhere in the Western growing. In the past the Kaviananga people used Province. It’s a good picture for me to burn this grassland for hunting wallabies and bandicoots but now they want to turn that into as a leader and for my community, productive farming land. and also for OTDF.”

“Personally, I feel attitudes are The Kaviananga Village landowners have separately declared their verbal and written support for shifting, especially in the Middle Fly utilisation of up to 500 hectares of land for the LDP communities, from Sago-making to program. A portion of this land will be surveyed Rice and this is a good thing.” and incorporated into a broader agri-business plan for the CMCA corridor in 2018.

60 Model rubber farmer at Kasa Village. Kasa Village farmers made the biggest contribution of all CMCA Middle Fly villages to cup lump rubber sales in 2017

61 SOCIAL DEVELOPMENT SECTOR

The OTDF Strategic 5-year goal for the Community The first two Community and Social Development and Social Development Sector is increased indicators reflect pre-conditions that facilitate participation by CMCA community members engagement in economic activity, and participation (including women and youth) in planning, decision- in formal political and social structures. Since making and implementation of community 2009, OTDF, CMCA and mine village communities development priorities. OTDF has prioritised have invested significant resources in staff and community and social development projects and operational funds to support the establishment of programs funded mainly from Women and Children local structures for women, as well as supporting 10% funds and CMCA Trusts which contribute to village development initiatives, all of which are now the achievement of indicators of success in line transitioning to more independent operations. The with national and provincial sector policies and development of Youth Associations will build on plans. Expenditure of PGK1,169,062 on projects and that experience from 2018 onwards. programs implemented in the sector accounted for 3% of all OTDF sector expenditure during 2017, The third indicator reflects recognition of CMCA with a similar percentage in 2016. This percentage community structures as credible and competent was down from 10% in 2015, demonstrating good development partners and counterpart funders for progress in achieving headline indicators. new projects.

Headline Indicator OTDF Contribution 2017

Number of Regional Women's and Ƹ Public Officers recruited and office lease agreements Youth Associations complying with set up for North and Middle Fly Regional Women’s corporate governance obligations Associations Ƹ South Fly Women’s Associations elections conducted Ƹ 3 Regional Youth Associations in the North, Middle and South Fly established and executives elected Ƹ 8 CMCA Trust and mine village Regional Youth Groups established Ƹ 68 Youth Association chairs from North & Middle Fly, and Mine Villages attended Leadership & Governance training Ƹ 10 Women Directors attended a 2-day “Essential Skills for Directors” course

Number of Women's and Youth Group Ƹ Rice harvesting and milling training conducted at members trained to implement the LDP Kaviananga program Ƹ Eaglewood training and demonstration for planting conducted at Samagos Ƹ Rubber tapping training at Bosset

Number of CMCA co-funded Ƹ Partnered with the National Youth Development partnerships with government and non- Authority staff to develop the 5-year Youth Action Plan government organisations

62 WOMEN AND CHILDREN’S PROGRAM

The OTDF Community Development (CD) These elections also laid the groundwork for the Team within the Program Services Sustainable South Fly Women Association Executives elections, Development Department supports the 8 CMCA enabling them to re-commence project planning Women’s Associations and the Star Mountains and implementation. Women’s Association (representing the 6 mine villages) to manage their funds. The 10-year A total of 10 Women Directors from Tutuwe, Nima Women & Children Action Plans (2009-2019) have Ara, Nupmo and Middle Fly attended a 2-day guided priorities for allocation of funds to projects. “Essential Skills for Directors” course in Kiunga In 2017, the Trusts and mine villages expended conducted by the PNG Institute of Banking and PGK4.79 million for Women and Children projects, Business Management to enable them to better with 49% allocated to economic development understand their roles and responsibilities. Thirty- initiatives, followed by 27% directed to education, one (31) women participated in the 1st Phase mainly through scholarships managed by the of the Adult Literacy Training Program for the OTDF Community Education team. Following the North & Middle Fly Regions, which focused on an outcome of the long-running court case, a release introduction on the importance of being literate, of the South Fly Trust Funds allowed the four South and also provided guidance on selection of the Fly Women Associations to plan and implement a right people to be trained as trainers for the number of activities during the year. The slower regions. Adult literacy was a clear priority emerging start-up after a significant hiatus is reflected in a from the review of Action Plans. comparatively small rate of expenditure in 2017.

The highest priority for the Program in 2017 was to undertake a review and re-prioritise Action Plan goals for the North, Middle and South Fly Trust Regions.

The priorities which emerged from the review will form the basis of the roll-out of revised action plans prepared through activity planning and budget workshops planned for the first quarter of 2018. The Komovai village WSICG Chairlady discusses See a profile of the Review on page 65. Women & Children’s Action Plan priorities with fellow women as part of the Action Plan Review In 2017, the North & Middle Fly Regional Women’s process to determine new priorities for the Middle Associations recruited Public Officers to administer Fly region their Associations from offices set up in Kiunga. This move towards Association self sustainability has resulted in demonstrable progress in mobilising and Tutuwe and Nima Ara Women’s Associations in implementing priority projects, and improvements the North Fly Region have approved PGK714,300 in Association governance. They have facilitated each from their funds for the construction of Executive and Regional Meetings, coordinated 3 Community Friendly Centres per Region. To patrols within budget, and provided operational facilitate capacity building & life skills training, and reports to the OTDF CD Team in support of activity for accommodation for youths and women from acquittals made to Trusts. nearby villages.

Elections were held for South Fly Women Social From 2018, capacity building activities will include Issue Concern Group Executives. The election of awareness on women and children’s rights and office bearers was very important to strengthen issues including family and sexual violence, and these local-level Institutions that focus on issues law and order. specific to women and children in those areas. 63 YOUTH DEVELOPMENT PROGRAM

The CMCA Youth Development Plan is officially handed over to North Fly youths at Matkomnai village, North Fly

The principal goal for the Youth Development in the Tutuwe region. More than 1,400 people Program is the promotion of economic gathered to witness the historic event. development to enable delivery of improved social change. Previously, youth programs in the Institutional Capacity Building under Priority Area Province and in CMCA regions were initiated and 6 was kicked off with Leadership and Governance coordinated by faith based organisations. For the training. Facilitated by ADRA PNG, the training first time, OTDF, in partnership with the National was conducted for 68 chairmen of village youth Youth Development Authority (NYDA), developed clubs from the North and Middle Fly Trust regions and launched the 5 year Youth Action Plan which and Mine villages in July. Similar training will be focuses on integrated human development. This delivered to South Fly youth leaders in 2018. enabled OTDF to deliver a program of activities Aligning to Priority Area 7 – Youth and Identity: that align with national priorities, which in 2017 Catholic youths from Tutuwe, Wai Tri and Middle Fly focused on institutional capacity building programs attended a PNG/Solomon Islands Youth gathering (Priority Area 6). The overall 2017 program budget to celebrate their identity in July. appropriation was PGK1,093,500 of which 41% (PGK443,500) was allocated from the Trust Youth Guided by the National Youth Legal framework, funds, and 59% (PGK650,000) from the Women & the CMCA & mine villages Youth Network was Children 10% funds. The NYDA was instrumental in established. The NYDA facilitated the establishment pulling the action plans together. of three Regional Youth Associations in the North, Middle and South Fly including election of executives. All 8 CMCA Trust Regional Youth “NYDA will use this as a model Groups and Mine Villages Regional Youth Groups for other resource developers were also established. A Western Province CMCA Youth Federation will be established in 2018. in PNG to do the same and engage youths to be part of The programs in 2018 will focus on 4 of the 9 Priority Areas in the Youth Action Plan with specific the development process in the activities under those areas: nation,” No. 2- Nurturing Sustainable Development: Mr Kia Dama, Deputy Director General, NYDA. Youths participating in the LDP program No. 3- Law, Order & Justice Child Development & The CMCA youth leaders were also given the Protection opportunity to review the draft Action Plan before No. 4- Accessing Integrated Education: the final launch during meetings conducted in the Promoting FODE and Adult Matriculation 8 Trust regions and 6 mine villages. This provided Interdenominational Rallies and Convention youth leaders with the opportunity to have a direct No. 7- Youth and Identity: input before the Youth Action Plan was officially Organising and supporting sports launched on 21st April 2017 at Matkomnai village

64 PROFILE: WOMEN & CHILDREN PROGRAM REVIEW

The Women & Children Program Review was is also strongly linked to low levels of women’s conducted from September to November 2017 as literacy in almost all communities, resulting in an evaluation of the outcomes from implementation mis-communication of information between the of the 10-year Women and Children Action Plans Women Leaders in the communities and Association 2009-2019 which were prepared by the 8 Trusts Executives and Officers. and mine villages. Women have identified and The aims of the Review were to: (a) reflect and capture the lessons learnt after the 9 years of prioritised the needs that will have activities supported under the 10% CMCA Women a substantial impact in the lives & Children Funds allocated by the Trusts and mine of their communities and not just villages; and (b) identify priority needs of the women & children in all the 158 CMCA villages. those of women. The outcome of the process was to develop a Women and Children Plan 2018-22 that is simple, Priorities which emerged in the Women’s measurable, achievable, and realistic and time Associations’ Revised Action Plans for 2018- bound, and can be implemented within the funding 2022 are in line with OTDF Strategic Direction available. Lead Consultant Spartan Manpower and include: Education infrastructure (Elementary Limited (SML) completed and submitted the review classrooms and Classroom Maintenance); Water to OTDF. Supply; Community infrastructure (Multi-Purpose Learning and Resource Centres) that will be venues Officers from the OTDF Community Development for Life Skills Training (including literacy); Aid Posts; Section joined Executives from 9 Women and Solar Panels (rural electrification). Associations from North, Middle and South Fly, and Public Officers for the Middle & North Fly Regions to visit all 158 villages. Spartan Manpower Ltd was contracted to conduct a bottom up planning approach by engaging with Women’s Social Issues Concern Groups discussions, surveys and interviews. The total cost of the Review was PGK532,261.

Initial findings of the Review have shown that a coordinated approach under the Program was only applied to Capacity Building which was facilitated by OTDF for all regions. The remaining activities implemented through the Women’s Associations have been somewhat fragmented Women agreeing to address water problems when across the regions, with smaller SME projects Action Plan priority setting during the Review such as Poultry, Trade Stores, and Transportation being funded. OTDF also conducted awareness sessions to encourage women entrepreneurs to The Review Report recommended a coordinated access the NDB credit program through their approach for priority projects to be implemented respective Women’s Associations. This approach in the next 5 years, which will aim to benefit the will address lessons learned from fragmentation majority of people. OTDF will continue to provide and governance challenges created in the past technical guidance for implementation of those by funding of multiple small income generating projects. Monitoring & Evaluation activities will projects within the Program. be integrated into project designs, throughout the Project Cycle and will enable greater focus on A related issue which emerged was the limited outcomes with realistic and measurable impacts knowledge of women within the communities that contribute to OTDF’s headline indicators for about the processes for accessing funds. This issue the relevant development sectors.

65 More than 3,000 CMCA Middle Fly community members, mostly women, gathered at Kaviananga village to celebrate the launching of the Credit Scheme with the NDB

66 67 CORPORATE SERVICES

OTDF Corporate Services include a range of key PROFILE: LOCAL CONTRACT SERVICES support mechanisms for operational and field activities, including community engagement and project implementation by all other teams across the Foundation.

Functions include: Information Services (see page 69), Occupational Health and Safety (see page 70), Finance Administration (see page 72), Human Resources (see page 73), Procurement and Logistics (see page 74), and Contracts Administration (see the Nanai Brothers Contractor profile on this page). These functions primarily contribute to the Strategic Direction principle of “appropriate John Pakao (L) & Ligogo Wawa at the Cassowary and accountable financial and operations support systems”, and related Development Targets for the period 2016-2020 (see page 5). Nanai Brothers Limited (NBL) is a local PNG company owned by Mr John Pakao, of mixed parentage from Most of the systems underpinning reporting Sonai Village in Western and Wabag. He currently necessary to sustain OTDF’s results-based resides at Sonai Village, Seven Kona in Kiunga, monitoring and evaluation policies and procedures North Fly District. are the responsibility of the teams handling Corporate Service functions. In addition to the NBL has been providing ‘Minor Building “business as usual” elements of these services, Constructions and Maintenance Works’ such as supporting monthly reporting, Board and Trust Eaglewood Nursery Projects and the Cassowary meeting cycles, and ongoing sector programs; a Hotel glazing to Ok Tedi Development Foundation number of internal projects were undertaken in since 2016. OTDF has now recognised Nanai 2017. These included further integration of data Brothers Ltd as one of its 28 preferred contractors and processes that were previously “stand alone”. for implementing Community Infrastructure The team has worked with the software provider Projects. to upgrade the Attaché Financial Management software to include report writing functions, and NBL employs a total of 21 employees on a project commence integration of leave accruals into by project basis, including 18 locals, of whom 11 the payroll module to facilitate more efficient have trade certificates, and 7 casual employees from monitoring of leave entitlements. OTDF contracted CMCA Trust Region Villages such as Mepu, Moian, an external finance consultant, who was on site four Kokonda, Alice, Hongas, Tapila and Samagos. times during the year to support implementation of a number of these changes. NBL was awarded one of OTDF’s key LDP projects worth almost PGK560,000 for the ‘Construction and To standardise documentation of Maintenance of Eaglewood Nursery Sheds’ at all the OTDF Field Bases in the North Fly (Samagos), procedures & policies, support Middle Fly (Aiambak) and South Fly (Tapila & M&E, and improve staff access, Nakaku) Regions of Western Province. OTDF IS has created an Intranet site. Nanai Brothers has been a dependable local A performance Monitoring and Evaluation system contractor to OTDF with proven standards of was also established to manage employees’ workmanship and a commitment to safety standards. accountability for assigned tasks against related NBL has not recorded any workplace incidents, in performance objectives, addressing the key part due to the good working relationship with Development Target to “consolidate performance OTDF and the communities in which they have based HR systems and KPI’s to align with M&E”. operated. All NBL contracted projects have been delivered on schedule and within project scope.

68 INFORMATION SERVICES

The Information Services Department projects, including; scanning and electronically provides computer networking and software, archiving of all company files; training on use of telecommunications and Geographic Information the DMS; and relocating all user network folders Systems (GIS) services to OTDF to support cost- located on the OTML server in Tabubil. effective and efficient delivery of planned targets and facilitate reporting of projects and programs. The IS Team has also supported the need to present data spatially for project planning, and Business continuity is the biggest M&E purposes, including ongoing development of interactive maps to meet specific sector and priority for the organisation and project data requirements. In 2018, the IS Team the OTDF IS Team plays a key role has planned a GIS upgrade to include more in supporting various Departments advanced data processing features. The IS Team also plans to develop a Socio Economic Database to achieve this. in collaboration with the Program Services- Sustainable Development Department to enable More than 60% of the workload supported staff to access data needed at project feasibility installation and maintenance of hardware and stages over the OTDF Intranet site. software, assisting other OTDF Departments with the data collection and analysis components of Phase 3 of the IS Personal Computer (PC) Refresh their projects in various sectors, and mapping using project was completed with the installation of 10 GIS software. new PCs in 2017. This brings the total installed under Phase 3 to 60 between 2014-2017. The IS Service Provision by IS in 2017: 933 Tasks Team collaborated with Management, OTML, and a contracted website designer to develop the 7% new website. Following its July 2017 launch, IS 4% investigated alternative options for future website 9% 37% hosting, and in 2018 will make the switch to a PNG based provider, and enable full administrator access for loading documents and making changes as required. 26% OTDF is continuing to improve communication 13% access by field base staff to enable timely reporting 3% on safety issues and other operational matters. In

Purchases Community & Partner support Hardware & Software 2017 Tapila was the second field base to benefit

GIS support Media & Publication from installation of a LAN, and in the first half of

OTML Service Request Network/ Telephone 2018, a third installation is planned for Nakaku.

In 2017, the roll-out of monitoring and evaluation systems significantly increased the demand for project data, and need for access to manuals, templates and policy documents. This has resulted in progress with three initiatives in 2017: (a) establishment of an Intranet site to provide staff with a “one-stop shop” access to key internal OTDF documents; (b) installation of software to support a Document Management System (DMS) for electronic archiving of files; and (c) installation of hardware to upgrade the file storage capacity of the Local Area Network (LAN) in Kiunga. Further IS Officer, Nasame Nonofa installing a network work will be required in 2018 to support these IS cable at CMCA Village Estate, Kiunga

69 OCCUPATIONAL HEALTH & SAFETY OVERVIEW

Safety is always the highest priority of OTDF on all The Foundation’s Safety Committee is chaired operational areas along the CMCA corridor. by the OH&S Coordinator and is responsible for deliberating on new and emerging safety issues This year OTDF is proud to report and procedures for continuous improvement. The its seventh successive year without Committee met 4 times this year, and maintained a Lost Time Injury (LTI) despite visibility through members’ regular presence in completing high risk tasks. field bases and project sites. This year several strategies have contributed to a OTDF recorded 14 incidents in 2017, an increase sound safety performance around project sites and of 2 from 2016. Of these, 9 (64%) were significant, field bases: which was comparable with last year. A light vehicle Ƹ 8 Visits were made by the OH&S Coordinator rollover at Aiambak was the most significant incident to field bases and project construction sites. for the year, thankfully there were no injuries as Improved contractor safety performance the driver and passengers were wearing seatbelts. resulted in zero LTI . As part of the ongoing Occupational Health and Ƹ Safety Audits were conducted at the field bases Safety (OH&S) awareness programs conducted which showed a reduction in the number of throughout the year, staff are encouraged to report instances of non-compliance, making the areas all incidents including those occurring outside of safer for staff to stay and work. Kiunga. This enables preventive measures to be put Ƹ A total of 177 permanent staff attended various in place and staff to learn from mistakes. Statutory Training programs through the OTML Training centre, up from 104 in 2016 (refer to the SAFETY INCIDENTS 2017 Safety Training table below). These programs Incident Type Total Minor Significant provide OTDF staff with the knowledge and Incidents skills they need to work safely. Lost Time 000 Following the success of the inaugural inter- Injury(LTI) Departmental basketball competition in 2016, Staff 303 OTDF staff expanded their commitment to health Compliance and wellbeing in 2017 by increasing the number Security Safety 101 of sports played. Tournament winners were: Breach Corporate Services (basketball & volleyball) and Program Services - Operations (futsal). In 2018, Theft 2 0 2 taking lessons learned from running multiple Equipment/ 541 sports, organisers will schedule all games to be Property played at the same time to enable more sustained Damage participation, improving fitness and team-work Light vehicle 3 1 2 outside the office. Total 14 5 9 In 2018 the Safety Committee will meet quarterly to align with members’ attendance on field trips, OTDF continues to utilise the OTML Risk and allow them to give feedback on what risks management systems which generate health and have been identified and recommend mitigation safety resources that provide an effective framework processes. The OHS Coordinator will maintain for managing health and safety in the workplace. the same schedule of planned field base trips to monitor implementation of the Safety Policy.

STAFF SAFETY TRAINING 2017 GSI Light Vehicle Permit Work at Heights Hazard ID JSO & JSA First Aid Total 47 16 9 47 47 11 177

70 OTDF staff from Program Services - Sustainable (Diwai) verse Corporate Services (Makau in yellow) enjoying a game of futsal during an inter-department competition

...1,250,000 Hours LTI Free... Delivering Safely

71 FINANCE ADMINISTRATION

The OTDF Finance Administration Department is Ƹ Utilising Attaché instead of Excel worksheets responsible for providing financial services through to report on the financial position of 8 donor transactions supporting development projects and accounts: Mine Villages, WPPDTF, Education programs funded by CMCA Trusts, Mine Village Trust Fund, Donations, FODE Program, Fly Trusts and the State. Finance Administration is Rubber Ltd, Resource Centre, Mt. Fubilan Agro also accountable for managing and reporting Industries. on operational funding provided by OTML and Ƹ Reduction of all backlogs and compliance ensures that OTDF financial and reporting systems queries, and meeting regular deadlines for and processes are relevant and comply with specific statutory IRC and Nasfund superannuation policies and procedures for managing and reporting lodgements on project funds under specific agreements. Ƹ Finalising all Tax Credit Scheme invoices to OTML, some of which had been outstanding Planned activities were aimed at accomplishing the since 2015 due to incomplete accompanying related targets in the 2016-2020 Yam Chart. These documentation include improved Attaché utilisation, incorporating Ƹ Performance improvements in meeting accountabilities, Trust support and maintaining deadlines for regular OTDF accounting functions audit & statutory compliance. During 2017 the included: closure of 2016 management accounts Finance Administration Department set out to by 6 January 2017; closure of end of month implement strategies outlined in its 2017 Annual management accounts within 100% of target work plan, especially using Attaché more effectively dates; and reconciliation of 65 General Ledger for reporting key management information. A accounts within 83% of target dates. focus on staff development in 2017 also included improvements in multi-skilling of staff for the ..end of month Management critical functions of accounts payable, purchasing and end of month reporting. accounts closed within 100% of target dates.. Highlights in 2017 included the following internal projects: The Finance Administration Department will Ƹ Commissioning of an upgrade of the Attaché continue to build on the achievements of 2017, software payroll module to enable leave further integrating OTDF’s finance and project entitlement accruals and reporting management systems. Key internal projects for Ƹ Implementation of creditors payment 2018 will include: fully operationalising the Finance processing through Kundu Pei as compared to Policies and Procedures Manual; capturing program manual cheque payment processing officers’ work time on programs for input in Attaché Ƹ Implementation of an accruals monitoring Payroll for job costing purposes, and; completing a system on a monthly basis which provides more checklist of financial and operational records ready accurate closure of expenditure for each month for inclusion in the OTDF shared filing system.

FINANCE ADMINISTRATION DATA Transactions 2016 2017 YOY % Events Operating only 10 months due to Full year operations return the El Nino forced stand down to more typical levels Total Expenditure Including 44,713,009 61,112,699 27% Projects (PGK) Savings Against Budget 12% 3% NA # Invoices Processed 5,274 6,833 23% # Cheques Processed 1,958 2,441 20% Total Cheques Value (PGK) 42,379,612 56,897,965 26% # T/T's Processed 107 124 14% Total T/T's Value (PGK) 2,333,397 4,214,734 45%

72 HUMAN RESOURCES

The Human Resources (HR) Department plays an annual medical examination. HR also organised important role in the administration, development, counselling services as needed. remuneration and rewarding of staff so that they can contribute effectively to OTDF’s goals and The HR Department’s staff training and objectives. OTDF is committed to providing a safe development activities included support for 4 male and dynamic work environment and to assisting and 1 female staff to undertake external courses. staff to develop both personally and professionally These included 2 staff to undertake in-country within the framework of the OTDF Code of Conduct Masters’ programs, and 1 officer studying for a and relevant OTML safety regulations. The HR team project management qualification. In 2017, 3 staff participates as members of the Housing, Risk and completed overseas professional development Disciplinary Committees, and the Occupational workshops and training, 2 of whom were sponsored Health and Safety Coordinator chairs the Safety by international development agencies. A Total Committee (see page 70). Of the 57 permanent Quality Management course conducted at Kiunga OTDF staff, 19 (33%) were female, of whom 2 in December was attended by a total of 33 staff, (21 occupied management positions. Current staff male and 12 female). levels are in line with the OTDF Strategic Direction as the 2018 mid-point is approached. ”.. I can use situational leadership KEY HUMAN RESOURCE DATA 2017 style at my workplace to solve a Male Female Total Total 2016 problem and … apply the elements Staff on December Payroll of ethical leadership in my personal Permanent 38 19 57 64 and professional life.” Ms Bala Karepa, OTDF Community Development Casual/Body 62 2 64 42 Officer, PNG delegate to Global Women in Hire Management: Advancing Women’s Economic GDS & 60 6 8 Development Workshop; USA July/August 2017. Industrial Trainees One key role of HR is to coordinate on-site support Permanent Staff Turnover for trainees hosted by various OTDF Departments New Hires 5 2 7 13 through a formal agreement. In 2017, OTDF Redundancies 3 0 3 1 hosted 6 Graduate Development Scheme and Terminations 4 1 5 2 industrial trainees, as well as 2 students on short term attachments. Resignations 5 1 6 6 Death 1 0 1 0 Vale Edmund Kaisimnak The roll out of the OTDF HR Policy and Procedures Colleagues and friends of OTDF Middle Fly Manual in 2017 resulted in more effective and Field Base Coordinator Edmund Kaisimnak were efficient administrative support in the Department saddened by his sudden passing on July 30 at through improved processes and compliance, and the age of 42. Edmund held a Diploma in Tropical ease of policy communications with members of Agriculture from the Highlands Agriculture College staff. and joined OTDF in 2010 as a rubber extension officer. Two awareness sessions were conducted in 2017: Edmund was highly one on the Staff Health Insurance Medical Scheme respected by his peers (AON Insurance); and another on Casual Hire and the communities for Employment Contracting to assist Managers and his willingness to share Team Leaders to better understand their roles and his technical expertise responsibilities. Employee welfare and health is of and thereby contributed paramount importance and in 2017, 38 permanent to their development. employees were cleared for work following their The late Edmund is greatly missed.

73 PROCUREMENT AND LOGISTICS

The Purchasing and Logistics Team located within Trust and Women and Children’s funds due to the OTDF Program Services- Operations Department conclusion of the court case. provides support in purchasing, transport and freight logistics, and assets maintenance support Logistics: There were 93% more materials for delivery of the Foundation’s CMCA projects, deliveries in 2017 than in 2016 , which is a direct Trust-funded programs and OTML Tax Credit flow-on from the increased number of orders. The Scheme projects. significant decrease in third party materials delivery compared to 2016 reflects a return to normal OTDF continues to overcome logistics challenges business following the completion of assistance and ensure much needed programs and projects are provided for the dry weather disaster relief. Third delivered to the remote communities. Some notable party reimbursable deliveries for 2017 amounting programs supported were the Communications to more than 570 tonnes, (28 sea containers) were Patrol to all CMCA and mine villages; South Fly for the Cassowary Hotel, Tabubil Poultry Farm and Water Catchment project material delivery; and the Oksapmin High School projects. Fly Rubber Ltd Rubber Factory ground breaking ceremony, including delivery of new equipment at Asset Maintenance: The OTDF transport fleet Aiambak. accounted for the greatest input to repairs and maintenance in 2017. The fleet comprises 17 light PURCHASING, LOGISTICS AND vehicles, 13 active outboard motor & dinghy units, MAINTENANCE STATISTICS: 2017 and 6 generators. All asset maintenance standards Purchasing 2017 2016 were incorporated into a planned schedule of Purchase Orders processed 3,184 2,428 maintenance. OTDF building maintenance included defective components and occasional minor Delivery Logistics renovations or improvements to existing buildings. CMCA project materials 244 93 In 2017 OTDF utilised PGK200,323 of capital funding moved to recipient to purchase and install 4 dual 5Kw solar systems OTDF internally funded 448 173 and 6 solar street lights in each of the Aiambak project materials moved to and Tapila Field Bases thereby halving the annual project locations diesel consumption cost for power generation, and Third party reimbursable 99 143 improving security. project materials moved to recipients TOTALS 791 409 Asset Repairs and Maintenance Repair or Maintenance to 58 70 Houses and Office Buildings Repair or Maintenance to 127 134 Support Machinery TOTALS 185 204

Purchasing: OTDF purchase orders for CMCA projects, OTDF operational and reimbursable Fencing for material storage at Sturt Island third parties for 2017 increased by 31% over the 2016 period. Of these orders, 57% were OTDF In line with OTDF’s focus on the LDP Program in internally funded purchases much of which was for 2018, logistics activity around the field base jetties materials and consumables to support Livelihood will be increased for cargo offloading, safe storage Development Packages implementation. The 62% and direct delivery to recipients. These jetties will be increase in purchases for CMCA was as a result of properly secured for cargo work and local villages funds being mobilised under the South Fly CMCA will be engaged to act as cargo agents.

74 Mil 8 heavylifting helicopter takes off from Sawmill Flats, Tabubil carrying a load of building materials to Oksapmin High School

75

 ,QGHSHQGHQWDXGLWRU¶VUHSRUW To the shareholders of Ok Tedi Development Foundation Limited Report on the audit of the financial statements Our opinion We have audited the financial statements of Ok Tedi Development Foundation Limited (the Company), which comprise the statement of financial position as at 31 December 2017, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory information. In our opinion, the accompanying financial statements:

x comply with International Financial Reporting Standards and other generally accepted accounting practice in Papua New Guinea; and

x give a true and fair view of the financial position of the Company as at 31 December 2017, and its financial performance and cash flows for the year then ended.

Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Other than in our capacity as auditor we have no relationship with, or interests in, the Company.

Information other than the financial statements and auditor’s report The directors are responsible for the annual report which includes other information. Our opinion on the financial statements does not cover the other information included in the annual report and we do not and will not express any form of assurance conclusion on the other information.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

PULFHZDWHUKRXVH&RRSHUV PwC Haus, Level 6, Harbour City, Konedobu. PO Box 484, PORT MORESBY, PAPUA NEW GUINEA T: (675) 321 1500 / (675) 305 3100, F: (675) 321 1428, www.pwc.com.pg

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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal and regulatory requirements The Companies Act 1997 requires that in carrying out our audit we consider and report on the following matters. We confirm in relation to our audit of the financial statements for the year ended 31 December 2017:

x We have obtained all the information and explanations that we have required;

x In our opinion, proper accounting records have been kept by the Company as far as appears from an examination of those records.

Who we report to This report is made solely to the Company’s shareholders, as a body, in accordance with the Companies Act 1997. Our audit work has been undertaken so that we might state to the Company’s shareholders those matters which we are required to state to them in an auditor’s report and for no other purpose. We do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our audit work, for this report or for the opinions we have formed.

PricewaterhouseCoopers

Christopher Hansor Partner Registered under the Accountants Act 1996

Port Moresby 22 February 2018

77 78 79 80 81 82 83 84 85 ABBREVIATIONS, ACRONYMS & ACKNOWLEDGEMENTS Abt Associates - North, and Middle & South Fly MTDS - Medium Term Development Strategy #2 Health Development Program Contractor NDB - National Development Bank AP - Accounts Payable NDoE - National Department of Education B4D - Business for Development NDoH - National Department of Health CA - Cultivated Agarwood NFHSDP - North Fly Health Services CD - Community Development Development Program CES - Community Education Services NGO - Non-Government Organisation CMCA - Community Mine Continuation NYDA - National Youth Development Authority Agreement NFWA - North Fly Women’s Association CMSFHP - CMCA Middle & South Fly Health NHIS - National Health Information System Program OH&S - Occupational Health and Safety CR- OTML Community Relations Department OLAM - Largest agricultural commodity trader in CRMF - Christian Radio Missionary Fellowship the world CSH - Coral Sea Hotels OTDF - Ok Tedi Development Foundation DEC - Department of Environment and OTML - Ok Tedi Mining Limited Conservation OTPL - Ok Tedi Power Limited DMS - Document Management System PBN - Private Branch Network DNPM - Department of National Planning and PEC - Provincial Executive Council Monitoring PGK - Papua New Guinea Kina (national ED - Economic Development currency) ECPNG - Evangelical Church of PNG PNG - Papua New Guinea EOC - Essential Obstetric & Newborn Care PNGSDP - PNG Sustainable Development FRPG - Fly River Provincial Government Program Ltd FIFO - Fly In Fly Out PAD - Preferred Area Development FLT - Financial Literacy Training PFA - Pacific Forest Alliance FRL - Fly Rubber Limited SD - Strategic Direction FODE - Flexible Open Distance Education PwC - Pricewaterhouse Coopers GDS - Graduate Development Scheme SFWCP - South Fly Water Catchment Project GIS - Geographic Information System SME - Small and Medium Enterprise GL - General Ledger SPA - Seed Production Area GPA - Grade Point Average SPAR - Sector Performance Annual Review GPS - Global Positioning System STC - Steamships Trading Company HBS - Hausman Building Solutions STP - Sewerage Treatment Plant HC - Health Center TB - Tuberculosis HEO - Health Extension Officer TCS - OTML Tax Credit Scheme HR - Human Resource TKI - Tawap Kamen Investments IAI - Innovative Agro Industry TUC - Tabubil Urban Clinic IDD - Infrastructure Development Department ULOTL - Upper Lower Ok Tedi Ltd INA - Institute of National Affairs UPNG - University of Papua New Guinea IPA - Investment Promotion Authority USA - United States of America IRC - Internal Revenue Commission VHV - Village Health Volunteer IS - Information Services VPC - Village Planning Committee KPI - Key Performance Indicator W&C - Women and Children LAN - Local Area Network WA - Women’s Association LBL - Lotic Bige Limited Welkam Olgeta - Tok Pidgin meaning Welcome LDP - Livelihood Development Packages All LTI - Lost Time Injury WPPDTF - Western Province People’s Dividend MCH - Maternal and Child Health Trust Fund MFIL - Middle Fly Investments Ltd WSICG - Women’s Social Issue Concern Group MFWA - Middle Fly Women’s Association M&E - Monitoring and Evaluation Acknowledgements: MRA - Mineral Resources Authority Hevilift - Mil 8 helicopter picture on page 75 MRDC - Mineral Resources Development Abt Associates - health associated pictures on Corporation pages 31, 32, 34 & 35 Annual Report printed by LOTSA Printing, Cairns, Australia

86 GENERAL INFORMATION POPULATION Total Western 201,351 CMCA 147,700 Province (Source (Source CMCA 2011 National Census 2017) Census) GOVERNMENT Fly River Provincial Districts - 3 LLGs –14 Wards – 283 ADMINISTRATIVE Government (North Fly; Middle STRUCTURES Administrative Centre Fly; South Fly) - Kiunga VILLAGES CMCA 152 Mine 6 Total 158 CMCA TRUST REGIONS Total - 8 North Fly - 3 Middle Fly - 1 South Fly - 4 (see also map) CMCA MODEL North Fly - 14 Middle Fly - 9 South Fly - 16 VILLAGES (Dec 2016) BASELINE DATA PNG National 2011 CMCA Village PNG National PNG National SOURCES FOR RESULTS Statistics Office (2011 Profiles (OTDF) Department of Department of MONITORING AND National Census and OTDF project specific Health Education EVALUATION other intercensal Feasibility Studies data) and Evaluations OTDF GIS (spatial data) OTDF HEADQUARTERS Headquarters – Kiunga & FIELD BASES Field Bases - Tabubil; Samagos Agriculture Centre & Research Station; Aiambak, Obo, Sturt (see also map) Island jetty site; Nakaku; Tapila PROVINCIAL Nomad; Lake Murray; Aiambak; Balimo; Tapila; Koabu; Wipim GOVERNMENT GROWTH CENTRES (see also map) BASIS OF THE Western Province - 5 Year Provincial Development Plan: 2013-2017 ECONOMY OTDF SECTORS Health; Education; Local and Regional Economic Development; Infrastructure; Social and Community Development GOVT ELECTIONS National - 2017 Local Level - 2018 CORPORATE INFORMATION DIRECTORS Number allowed – 8 OTDF FORMATION 1 April 2002 Investment (Dec 2017) Number - 4 Promotion Authority INDEPENDENT 1 March 2010 FROM OTML COMPANY REVIEW 2013 Deloitte Touche Tohmatsu OTDF SHARES Number Issued – 4 CONSTITUTION Number - Not for profit OTML - 3 vabyA0407204486v1 PNGSDP - 1 665088743 Date - 19 July 2012 ADVISORY Members - 13 TAX STATUS Payments or Tax deductible COMMITTEE Contributions to the Foundation PERMANENT STAFF Total 57 Value Added Tax Zero percent (Dec 2017) Female 19 Male 38 2017 ANNUAL PGK22.6 million from OK TEDI MINE LIFE 2025 EXPENDITURE OTML EXTENSION DATE

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