If Papua New Guinea lawmakers don't muster the guts to stand up to multinational corporations and safeguard the country's God-given inheritance in this way, they will condemn the country to perpetual poverty for generations to come. - Tiri Kuimbakul
Papua New Guinea UBS Loan and The Law
Writes: Tiri Kuimbakul.
The UBS loan was supposedly taken to enable PNG to continue its part ownership of Oil Search after the country lost its existing shares to International Petroleum Investment Company (IPIC) of Saudi Arabia.
PNG borrowed from IPIC in order to purchase shares in the PNG LNG project using its Oil Search shares as security.
The crux of the matter, which the Commission of Inquiry has hopefully addressed in its report, is the legal necessity for PNG to purchase shares in the companies that develop its mineral, oil and gas natural resources.
As the law stands, PNG is not obliged to but has the option of purchasing up to 30% of mining companies and 22.5% of oil and gas companies. The country usually exercises the option by borrowing to purchase shares in the companies.
What happens is this: PNG transfers legal ownership of its resources to the developers, who then turn around and sell shares back to the country!
This is essentially a scam perpetrated by agents of foreign multinationals with the support of national lawmakers and bureaucrats aimed at suppressing PNG with handouts while siphoning off its non-renewable and highly valuable resources! As long as the laws remain, PNG will continue to borrow to buy shares.
The incoming Parliament MUST correct this costly anomaly by amending the laws to say, firstly, that ownership of natural resources are vested with the owners of the land, not the State. The second option is for the laws to state that PNG will be given shares in mining, oil and gas companied free of charge.
If our lawmakers don't muster the guts to stand up to multinational corporations and safeguard the country's God-given inheritance in this way, they will condemn the country to perpetual poverty for generations to come.