1. Topic: Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 1 “Promises And Undertaking”: Challenges Of Benefit Sharing In The PNG Kutubu Oil And Gas Development Licence Area Map of PNG’s Petroleum Projects

2. Background: Resources of PNG Current arrangements for benefit sharing Case Studies: Kutubu Oil Project Landowners Oil Search Limited Papua New Guinea Sustainable Development Program Challenges for communities Governance and Institutional Frameworks Recommendations Overview Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 2

3. Background Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 3 Map of Papua New Guinea

4. Resources of Papua New Guinea Figure 3 – Map of PNG’s Petroleum Projects Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 4

5. Resources of Papua New Guinea (continued…) Figure 4 – Map of PNG Mining Projects Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 5

6. Current Arrangement for Benefit Sharing Chart 1:Legal Framework: Customary Law Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 6

7. Current Arrangement for Benefit Sharing (Cont.…) Chart 2 – Legal Framework: Western (Introduced) Law – Oil and Gas Act 1998 Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 7

8. Case Studies Three principles used to share benefits: Land area covered by Petroleum Development Licence (PDL) and Pipeline Licence(PL); Equal proportion of benefit flows amongst clan members; Size of population Landowners:Fasu, Lower and Upper Foi Fasu own 90% of land Foi own 10% of land (1)Kutubu Oil Project: Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 8

9. Case studies Current Equity Benefit Distributions: Fasu landowners (10%); Lower and Upper Foi Landowners (3%); Southern Highlands (Hela) Provincial Government and Local-level Governments (12%); (1).Kutubu Landowners (cont.…) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 9

10. Case Studies (Cont….) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 (1)Kutubu Oil Project (cont….) 10

11. Case Studies: (1).Kutubu Oil Project (Cont.…) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 11

12. Case Studies (Cont….) Community Engagement Investing in successful relationships; Building Deep Cultural Understanding; Open And Collaborative Development Efforts; Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 (2).Oil Search Limited 12

13. Case Studies (Cont….) Cultural expectations; Face of Oil Search Limited; Human Rights (2).Oil Search Limited (cont.….) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 13

14. Community Engagement: Village Liaison Officer (VLOs) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 (2).Oil Search Limited (cont.….) Case Studies (Cont….) 14

15. Case Studies: (Cont.….) (2). Oil Search Limited (Cont…) Stakeholder management Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 15

16. Case Studies: (Cont.….) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 Health and Community (2). Oil Search Limited (cont.….) 16

17. Case Studies: (Cont.….) Trust Fund: Funding Social And Economic Development Projects Particularly Along The Fly River Area And Other Parts Of PNG Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 (3). Papua New Guinea Sustainable Development Program: 17

18. Case Studies: (Cont.….) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 Mainohana School Clinic Kairuku, Central Province. (3). Papua New Guinea Sustainable Development Program (Cont….) 18

19. Case Studies (cont.….) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 19 Daru Airport Project, Western Province (3). Papua New Guinea Sustainable Development Program:

20. Case Studies (cont.….) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 20 Community Climate Change And Reforestation Project, Kompri, Eastern Highlands (3). Papua New Guinea Sustainable Development Program

21. Case Studies (cont.….) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 21 HIV & AIDS Community Conversation, Kefamo, Eastern Highlands Province (3). Papua New Guinea Sustainable Development Program

22. Case Studies (cont...) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 22 Rural Electrification, Western Province. (3). Papua New Guinea Sustainable Development Program

23. Case Studies (Cont….) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 23 Daru Water Supply Inspection, Western Province (3). Papua New Guinea Sustainable Development Program

24. Challenges For Communities The Equity Sharing Arrangement Has Served As A Catalyst For Conflict: Tussle Over Decision-making Involving Intra- clan Arguments Over Control Of Clan Resources; Disputes over Landownership Rights And Entitlements To Benefits And Equity ; Increase In Number Of Registered Incorporated Land Groups (ILGs) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 24

25. Challenges For Communities (cont...) Expectations Of Landowners; Consultation, Collaboration And Cooperation Between Government, Investor And Landowner (Important); Empower The Landowners To Invest Their Benefits Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 25

26. Challenges For Communities (cont.…) Governance And Mismanagement Issues; Instability Within Government; Inconsistency In Government Policy On Mineral And Hydrocarbon Industry Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 26

27. Challenges For Communities (cont.…) In An Environment Such As These, It Is The Operator Or Developers Who Are Mediating Relationships And Conflicts Involving Landowners Due To The Absence Of The State On The Ground Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 27

28. Governance And Institutional Frameworks Consultation, Collaboration And Cooperation Between Government, Investor And Landowner – Important; Empower The Landowners To Invest Their Benefits; Eliminate Any Issues Of Governance And Avoid Conflict Of Interests Issues Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 28

29. Governance And Institutional Frameworks Review Of The Current Legislation (Flow Of Benefits Such As Royalties, Development Grants, And Project Funding); Transform The Delivery Of Essential Services; Ownership Structure - In Project Equity And Ensures A Sense Of Project Control And Ownership By The Clan; Processes Of The Methodology Of Identification Of Beneficiaries And Distribution Of Benefits; Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 29

30. Governance And Institutional Frameworks (Cont.…) Participation - Landowners Want More Influence On The Decision-making Process That Shapes The Aspects Of The Equity Not Just The Distribution Of Benefits; Financial Risks Associated With The Funding; Implementation Of Government Policies Regarding Natural Resources - Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 30

31. Recommendations Review: Institutional Frameworks - (Methodology Of Identification Of Landowners/Beneficiaries) Participation By Landowners; Processes Of Responsibilities - Transparent And Equitable Distribution Of Benefits To All Affected Landowners And PNG Citizens Generally). Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 31

32. Wealth and Benefit Distribution (Kutubu Landowners) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 32

33. Rice Farming (Kutubu) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 33

34. Mbuke Island Agricultural Technologies Project, Manus Island Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 34

35. Papua New Guinea LNG Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 35

36. ‘ Meaningful Accountability’: Eliminate Conflicts Of Interests And Impediments; Empower The Landowners To Invest Their Benefits And Direct These Benefits Towards The Improvement Of Their Lives. Recommendations (Continued…) Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 36

37. THANK YOU Hitelai D Polume-Kiele IUCN Conference, Tarragona, Spain 30 June-5 July 2014 37