Information relating to payments and transfers made by mining and petroleum companies at the provincial and local government level is difficult to obtain.
This is according to the PNG Extractive Industries Transparency Initiative (PNGEITI) Report 2014.
Such payments include royalties, development levy and compensation arrangement with the exception of Special Support Grant (SSG), which is published within the National Budget.
“Some relevant information is to be found in the National Economic and Fiscal Commission (NEFC) 2013 Budget and Fiscal Report, but does not always align to the EITI reporting requirements,” states the report.
“Some benefits to regions impacted by extractives are set out in law via royalties, equity stakes, dividends and compensation arrangements. Others are included in memoranda of understanding on a case-by-case basis. However, these agreements are in most cases not public, and accountability mechanisms vary significantly.”
The report said royalties and levies, particularly those received for oil and gas, were held in trust.
“The category, number and balance of trust accounts in use could not be reliably identified, even by the auditor general. Additionally, trust account spending has not been incorporated into state budget expenditure.
“Again, this situation leaves significant scope for abuse.
“Auditing of government accounts is challenging due to under-resourcing and lack of capacity both of the Auditor-General’s office itself and the entities reporting to it,” highlighted the report.
PNGEITI Head of National Secretariat, Lucas Alkan, said: “These are the same issues that were identified in the first PNGEITI Report (2013) from which we based our first request to the national government, to effect policy undertakings aimed at addressing issues of similar nature which impinge on the accuracy of information from the extractive sector that needs to be made public.
“We are grateful that the national government acted positively with a recent National Executive Council (NEC) decision directing relevant government entities to take action (s).
“For example, one of NEC recommendations directed the Minister for Finance to undertake assessments of all monies received from mining and petroleum projects that are held in trust accounts – which include future generation trust and set up data base to effectively monitor the trust accounts in accordance with Section 15 of the Public Finance Management Act, 1995,” Alkan said.
“We hope to do more to promote transparency and accountability in way things are managed at the mining and petroleum sectors of the economy.”
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