Papua New Guinea’s new Prime Minister James Marape has given the first indications of the changes his government will be making to the country’s business environment. In a post to social media, he committed the new administration to amending resource laws, improving local participation in government contracts, and addressing corruption and law and order.

James Marape and his wife Rachael Marape. Source: PNG PM Media

‘We are here to protect our genuine foreign investors who can respect our laws,’ said Prime Minister Marape, ahead of an expected televised ‘State of the Nation’-style address today.

Using social media, PNG’s new Prime Minister foreshadowed the address by flagging significant changes to PNG’s resources laws.

New resource laws

‘I have a fresh team of PNG advisors looking into all our resource laws and I am putting you all on notice that laws will be tailored for implementation when our country moves past 50 years of independence in 2025,’ he said in a statement on his personal Facebook page.

‘Presently, all projects agreements that are in compliance and congruent to all our laws will be honoured.’

The announcement will be a relief to existing miners and the Exxon-Mobil-led PNG LNG project, as well as those involved in the Total-led Papua LNG project.

It is not yet clear what the impact will be on Wafi-Golpu gold project, the agreement for which is still under negotiation between government and developers.

Marape also flagged his intention to commence a productive dialogue with the minerals sector:

‘To multinational companies who operate in our resources sectors, I am not here to chase you away but to work with you so that we can add value to the benefits that emanates from the harvest of our natural endowment. I will be meeting with key resources sector and I request you all to assist me as to how we must grow my Papua New Guinea economy.’

Industry can expect to be put under pressure to share more of the benefits from resources projects with local interests.

In his maiden address as Prime Minister last week, Marape flagged a new direction for managing the country’s mineral resources, promising ‘we will look into maximising gain from what God has given this country from our natural resources.’

Corruption

Marape also gave a clear indication of his intention to combat graft and corruption in government.

‘To our contractors of State, you have now a Prime Minister who expects nothing in return for giving state contracts. All we expect is do your fair bidding with [the] right price and get your job done.

‘Don’t offer inducements to me or any ministers or public servants from procurement offers and any other officers in the chain of procurement and contract management.’

He also said he would be instructing the as-yet-unnamed new Justice Minister to introduce an Independent Commission Against Corruption.

Local content

The implementation of new government procurement guidelines, aimed at increasing local business’ access to government contracts, will also be a focus of the new government.

‘I will ask National Procurement Commission (NPC) to polish the contract ceilings where contracts under K10 million are strictly for citizen and local companies and contracts above that threshold to have local partnership involvement also,’ he said.

He also foreshadowed the introduction of subsidised loans to locally-owned businesses in return for improved tax compliance:

‘To local SME[s] and contractors, we have a special incentive plan for you … tidy your company books, pay your honest tax and, if you want to go the next phase of your business, we will inject very soft term loans (possibly 5 per cent repayment rate over 40-year period) … prepare to be part of our program to resuscitate our businessmen and women.’

Law and order

Marape also made a personal appeal to the country for an improved attitude to law and order. (The 2019 PNG 100 CEO Survey, drawn from PNG’s largest companies, this year nominated poor law and order as one of the three most significant impediments to doing business in PNG.)

‘Give me a good law and order environment, stop crime, stop tribal fights (my Hela please), stop torture of mothers and daughters, stop corruption at all levels, honour time by being punctual, do little things like stop littering and spitting the red stain of betel nuts,’ he said.