Monthly Archive for August, 2009

“STATE OWNERSHIP OF MINERALS IS VITAL to the development of PNG as  a nation. State control of resources allows them to be developed for the benefits of all citizens as required by the Constitution”.  Bear in mind here that this is an argument that is coming from no one other than the President of the Papua New Guinea Chamber of Mines and Petroleum, Mr Greg Anderson (Post Courier 25th of August 2009).

Mr Anderson is concerned about proposed ammendments to the Mining Act which will divest the state of its ownership over mining and petroleum resources and transfer it to private ownership. It is not clear from the Post Courier article which category of people  who shall be entitled to ”private ownership” of resources but my hunch is that it would be landowners. If this assumption is in fact correct then, Mr Anderson is gravely concerned that

“the arguments presented for private ownership of resources were grossly misleading and simplistic and will stop any future resource development in PNG….The simple fact is that if a chance is made to mineral ownership, exploration will die, and there will be no new resource developments as the risk profile will be unacceptable to any potential developer. There will be a complete breakdown in the well established, internationally recognised system that underpins resource development in PNG. There will be no benefits for anyone.

The simple fact is that if a change is made to mineral ownership, exploration will die and there will be no new resource developments as the risk profile will be unacceptable to any potential developer. There will be a complete breakdown in the well established, internationally recognised system that underpins resource development in PNG. There will be no benefits for anyone. State ownerhip of minerals is vital to the development of PNG as a nation. State control of resources allows them to be developed for the benefit of all citizens as required by the Constitution. The resources are managed in an effective and orderly manner that is recognised internationally and accepted by the investor. Private ownership of minerals means that a few lucky individuals could expect to become rich at the expense of the rest. Papua New Guinea cannot develop as a nation under these conditions; it would splinter into groups driven by self-interest.

Again it is critical that the Post Courier should have specified who represents the class of private owners. But for the sake of argument, if these were landowners, then the argument Mr Anderson advocates is already in the interest of some private interest. In this regard the State should maintain its hold over such resources so that it could facilitate the exploitation and we know enough from Karl Marx about how the State institutions and bureaucrats serve in that regard.

If it were the landowners, why should we slavishly abide to a common law principle (the State ownership of resources) that doesnt comply with how Melanesians think and relate to land and questions of ownership? What are the philosophical assumptions that should now inform such an ammendment?

Mr Anderson makes a valid argument about the guarantee that a State should provide in such a scale of resource extraction. He also associates the State with orderliness, regulation redistribution of wealth and benefits. Is it not time enough to try out out alternative legislative frameworks that could achieve similar or better results than our present paradigm of State ownership. This is not the first time that this question has been debate. Two prominent Papua New Guinean legal thinkers, Bernard Narokobi and Peter Donigi, have wrestled with these questions in two separate books. It seems the question about State ownership versus a nation of landowners will never be resolved, and if paradigms are meant to be superceded then we live in an epochal moment where the possibility of initiating such a resolve begins with question of landownership in Melanesia

He said an exploration tenement gave the holder the right to explore for minerals or oil and gas which is an expensive and high risk activity.
The explorer’s only security is the tenement and the guarantee provided by the State that the explorer will have the right to develop any discoveries made on the tenement in accordance with requirements and obligations set by the State, Mr Anderson said.
“If any potential explorer believes that the State will not, or cannot, provide this guarantee with an acceptable risk profile then the explorer will not invest exploration dollars.”