PNG EXTRACTIVE INDUSTRIES TRANSPARENCY ......The outcome of this sub-objective is to increase...

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PNG EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (PNGEITI) 2017 WORK PLAN

OBJECTIVE 1: ENSURING A WELL ESTABLISHED AND FULLY FUNCTIONAL NATIONAL SECRETARIAT OFFICE AND THE MULTI-STAKEHOLDER GROUP (MSG) RATIONALE: The PNGEITI National Secretariat now has full capacity of staff on strength to perform the tasks outlined in this work-plan. However, there is a need for capacity building and training on EITI Standard and Requirements of staff and MSG. Capacity building in relation to assisting staff and the MSG to understand the process, issues, strategies, and alignment of a shared vision to implement EITI Standard in the country. There is also a need to upskill and build technical knowledge of current membership of the MSG to enhance their capacity to provide an effective oversight, direction and management of EITI implementation in the country. GOVERNANCE RELATED CHALLENGES: 1. Lack of commitment and involvement in EITI activities, including attendance at MSG meetings by some key government agencies. 2. Lack of capacity by CSOs to understand technically complex issues and effectively contribute to the discussions at the MSG level. 3. Since EITI implementation is a voluntary activity, it has been difficult to get MSG members to remain committed to attend MSG meetings, Technical Working Group (TWG) meetings and other activities because of lack of incentives. 4. There has been some difficulties in extending MSG membership to cover other key State entities like the Mineral Resources Development Company (MRDC) and Petromin. 5. There is still a need to achieve some balance in the decision making process at the MSG level. Many times critical decisions on key issues affecting the extractive sector are not often debated or discussed by all stakeholders but left to one or two individuals to dominate discussions and get the agendas endorsed. 6. Lack of knowledge on EITI Requirements and Standards and general understanding on the performance of the extractive industry sector. There is also the lack of adequate understanding on the Fiscal and Taxation regime covering this sector by staff of the National Secretariat and some members of the MSG which is a challenge. ACTIVITIES VERSUS CHALLENGES: Activities outlined below relating to capacity building of the National Secretariat are intended to address point 6 above. All other activities under Objective 1 are intended to address points 1 to 5 above.

ACTIVITIES TARGETED OUTCOME RESPONSIBLE ENTITY TIMELINE ESTIMATED COST (PNGK)

FUNDING SOURCE

1.1 CAPACITY BUILDING ACTIVITIES FOR NATIONAL SECRETARIAT OFFICE AND THE MSG The outcome of this sub-objective is to achieve a fully functional and independent entity that is capable of supporting the MSG in carrying out its functions and responsibilities in an effective and efficient manner. Also to have a MSG that is experienced and knowledgeable on global EITI Standards and Requirements and its applicability in the context of PNG’s extractive sector.

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1. Provide training and skills development for National Secretariat staff

Fulfil skills and knowledge gaps through internal and external training programs for Secretariat staff for a fully functional office

National Secretariat On-going

K50,000 GoPNG

2. Maintenance of PNGEITI National Secretariat Website

Maintain and upgrade PNGEITI website and upgrade where necessary

National Secretariat On-going

K10,000 GoPNG

3. Engagement of a Short Term Consultant/resource person (External Consultant) for MSG and National Secretariat capacity building

Consultant undertakes capacity building programs for the MSG and staff of the National Secretariat. Also to assist Secretariat’s efforts in engaging with SOEs and government departments

National Secretariat, MSG

January to June 2017

K300,000 GoPNG

4. Engagement of Short-Term consultant (local) on EITI Policy Development and address barriers to full implementation of EITI.

Consultant undertakes a study and provides a discussion paper on EITI Policy and legislative framework for improved administrative and legislative systems and process and public policies governing the management and exploitation of resources from the extractive sector.

National Secretariat, MSG, TWG

February, 2017 K500,000 GoPNG

5. Engagement of a short-term consultant on Beneficial Ownership (BO) project

Consultant undertakes a scoping study on Beneficial Ownership (BO) and develops a Roadmap for BO disclosure in 2020


Procurement commenced in August 2016 and project ends in January 2017

K500,000 GoPNG

6. Implementation of Beneficial Ownership Roadmap

Specific actions/programs of activities outlined in the Roadmap will have to be implemented over the 3 years in preparation for BO reporting in 2020 (Refer to Roadmap attached as Annex 2)

National Secretariat, MSG TWG

February 2017 to December 2019

K150,000 (K450,000 for 3 years)

GoPNG

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7. International Meetings, Conferences, Workshops and events

Fulfil PNG EITI requirements as a candidate country in attending to international obligations. Also, ensure PNG is represented at these events as an EITI implementing country to learn from and share experiences with other EITI countries.


On-going and including International Conferences

K100,000.00 GoPNG

9. EITI Annual Membership Subscription

PNG is required to pay subscription fee of USD10,000 as an EITI member country

National Secretariat K320,000.00 GoPNG

10. National Secretariat Operations/Administration

An efficient and independent functioning entity (purchase of computers, equipment, support vehicle, office rental, utilities, etc)

National Secretariat On-going K680,000,000 GoPNG

OBJECTIVE 2: SHOW EXTRACTIVE INDUSTRIES CONTRIBUTION (BOTH DIRECT AND INDIRECT) TO THE PNG ECONOMY RATIONALE: PNG is one of the leading producers of minerals and ranks among the top 20 world gold and copper producers. Revenues from the extractive sector forms significant proportion of Government’s national budgets every year. For instance, in 2014, it was estimated that extractive industries contributed 84% of PNG’s exports and 18% of total GDP (PNGEITI Scoping Study Report, 2015, p.35). However, available data and details are not accurate and in many instances do not reflect in totality what is being generated from the extractive sector and how much is contributed to the national economy. Data disaggregation is limited, there is non-existence of a central data storage system for data analysis and there is no mechanism to record data on social expenditures apart from that mandated through legislations and project agreements. PNG does not publish usable data on extractive industries due to lack of readily available data, awareness, capacity and legislative restrictions. One of the biggest challenges is lack of transparency in information relating to financial transactions and accountability. The EITI process is a tool that is intended to facilitate data collection, processing and documentation that can minimise some of these information gaps. GOVERNANCE RELATED CHALLENGES: 1. Determination of data disaggregation from the national down to sub-national levels of governments and to the landowner groups. 2. Determining an appropriate taxation and fiscal regime for the extractive sector. 3. Achieving transparency in tax information which is currently being protected by secrecy provisions of the PNG Income Tax Act administered by the IRC. 4. Determining government’s policy decision on granting tax holidays, exemptions and provision of such other fiscal incentives to the extractive sector. Also taking account of the fiscal incentives that have already been provided and are currently being utilised. 5. Determining and quantifying the amount of revenue forgone through the Infrastructure Tax Credit Scheme (ITCS) and the expenditure. 6. Lack of capacity at the sub-national levels of governments that is a significant challenge to extracting data at these levels.

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ACTIVITIES VERSUS CHALLENGES: All activities relating to the publication of PNGEITI First Report and improvement of data collection, addressing legislative and fiscal regime and providing tax incentives and ITC are intended to address points 1 to 6 as outlined above.


FUNDING SOURCE

2.1 PUBLISH THIRD PNGEITI REPORT The outcome of this sub-objective is to increase transparency in the extractive industry in the country through a credible and comprehensive EITI Report that can be available to all stakeholders for consideration in policy formulation, legislative reforms and streamlining government systems and processes.

1. Produce summary of the findings and recommendations from the PNGEITI Second Report and an over view of the issues to be focused in the Third PNGEITI Report

Highlight of key policy issues from the First Report in increasing transparency and accountability that is credible and comprehensible by all stakeholders and the public and that can contribute to further reforms in the sector (refer to NEC Policy Submission attached as Annex 1)


February 2017 K20,000 GoPNG

2. Awareness, Publicity and Outreach Programs for PNGEITI Second Report through social media – print media, advertisements, pamphlets, brochures, conferences, press releases and visits to regional centres through-out the country

Increased transparency through awareness and public understanding on the outcome/findings of PNGEITI Second Report and the recommendations put forward for future actions

National Secretariat, CSOs

January 2017 and onwards

K250,000 GoPNG

3. Commence procurement (call for Expression of Interest) of tendering process for the Third PNGEITI Report

Engage an Independent Administrator (IA) through GoPNG public tendering process (CSTB) or alternatively through the Selective Tender Process consistent with


June 2017

K15,000 GoPNG

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EITI Requirements and GoPNG procurement guidelines

4. Hiring of an IA to analyse Government and Industry data for the Third EITI Report

IA engaged through an open tender or selective tender process.


June 2016

K500,000 GoPNG

5. MSG to approve the scope (level of disaggregation, materiality threshold, etc) of the Third EITI Report

To maximise transparency in the extractive sector as much as possible, building on from what was covered in the Second PNGEITI Report

National Secretariat, MSG, IA

July, 2017

National Secretariat operational Budget

GoPNG

6. Inception Report - IA to develop

Reporting Templates, Review Scoping Report to understand PNG Context, governance arrangements, tax policies and legal framework.

To maximise transparency and accountability in the extractive industry, building on from what was covered in the Second PNGEITI Report

IA, MSG, National Secretariat

August 2017

National Secretariat operational budget

GoPNG

7. IA to conduct training on reporting templates for reporting entities (government entities and companies)


IA, MSG and National Secretariat

September 2017

IA project budget

GoPNG

8. Submission of reporting templates


Government agencies and companies

September 2017

IA Project budget

GoPNG

9. Release of draft PNGEITI Third Report to MSG

To maximise transparency and accountability in the extractive industry as much as possible, building on from what was covered in the first and second Reports

IA December 2017

IA Project budget

GoPNG

10. PNGEITI Final Report released to MSG

To maximise transparency and accountability in the extractive industry, building on from what was covered in the First and Second PNGEITI Reports

IA December 2017

IA Project budget

GoPNG

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11. PNGEITI Second Report Launch

To maximise transparency and accountability in the extractive industry, building on from what was covered in the First and Second PNGEITI Reports

IA, MSG and National Secretariat

December 2017

K100,000 GoPNG

12. Implementation of Recommendations from First and Second EITI Reports

Ensure actions are taken to recommendations from these reports to fulfil EITI objectives


On-going K120,000

2.2 VALIDATION OF PNGEITI SECOND REPORT The outcome of this sub-objective is to achieve increased transparency in the extractive industry in the country and a credible and comprehensive EITI Report that can easily be validated and that meets global EITI Standards and Requirements for PNG to be admitted as an EITI compliant country (full membership status).

12. Validation of PNG’s membership to EITI

To ensure EITI implementation in PNG meets global EITI Standards and Requirements to realise its potential for becoming fully compliant country

International Secretariat, PNGEITI National Secretariat

March 2017 K100,000 International Secretariat, National Secretariat

13. Publication of Third PNGEITI Report

To maximise transparency and accountability in the extractive industry, building on from what was covered in the first and second Reports

MSG & National Secretariat

December 2017 K100,000 GoPNG

OBJECTIVE 3: IMPROVE PUBLIC UNDERSTANDING IN THE MANAGEMENT OF EXTRACTIVE INDUSTRIES RATIONALE: Provincial Governments, Local Level Governments, landowners and people in the communities where natural resources are being extracted are not informed and are not able to debate and have their say on issues of concern. Necessary data and other contextual information relating to the extractive sector through EITI Reports should be made available in easily accessible methods that could be understood by ordinary people at community levels. The Reports should empower the public to use them to engage in constructive debates, public forums and through other avenues to have their say in the management and use of these resources. Transparency and accountability can be enhanced to a greater extent and good governance can prevail as a result of Government adopting good public policies in the extractive sector. This can build trust and confidence among different stakeholders and create a better environment for further investments. Ensuring that funds generated from the extractive industries are spent in an accountable and transparent manner and

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are used for the purposes as mandated by law (through the budget process). If monies are to be paid to landowners in the affected communities, these should go straight to the intended beneficiaries. The EITI reporting process provides an avenue for stimulating debates and discussions on these issues. GOVERNANCE RELATED CHALLENGES: 1. Ensuring continued political ownership and commitment is key to addressing issues concerning the extractive sector. 2. Creating and maintaining public support and involvement would demand a lot of consultation, public awareness, outreach activities, information dissemination, networking and other activities to build capacity at the community levels for greater public involvement. 3. Limited financial data at sub-national levels of governments to support this initiative. 4. Lack of reliable telecommunication infrastructure (access to internet, newspapers, smart phones, computers, etc.) in many remote communities and the fact that over 80% of PNG’s population is still illiterate is a real constraint to enabling the public at large to be fully engaged in debates and discussions. ACTIVITIES VERSUS CHALLENGES: Activities listed below under this objective are intended to create awareness in the extractive sector by ensuring that information are disseminated regularly through various forms (forums, conferences, publications, radio talk back shows and other social medias). It is hoped that through these activities, the challenges highlighted above will be addressed and many more people will ensure that Government and industry manage these natural resources well and according to the law.

ACTIVITIES TARGET OUTCOME RESPONSIBLE ENTITY TIMELINE ESTIMATED COST

FUNDING SOURCE

3.1 ENGAGE IN CARRYING OUT PROMOTIONAL AND EDUCATIONAL AWARENESS THROUGH VARIOUS MEDIUMS

The outcome of this sub-objective is to maximise public understanding in the management of extractive industries

1. Release of statements and press briefings on PNGEITI activities, including workshops with media groups on EITI implementation

Increased public awareness and understanding on the management of extractive industries in PNG

MSG, National Secretariat, CSOs, Industry

On-going K70,000 GoPNG

2. In liaison with CSO, conduct outreach/roadshows /dialogue/training with relevant sectors: sub-national


MSG, National Secretariat, CSOs, Industry


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governments; churches; landowners groups; academics and industries on EITI implementation and report release

3. Publication of reference materials, primers, articles on EITI and EITI implementation, online trainings and digital presentations


MSG, National Secretariat, CSOs and relevant government agencies


4. Develop PNGEITI Communications Strategy

Increased public awareness and understanding on the management of extractive industries in PNG and delivery of consistent message to the public

MSG, National Secretariat, CSO. (A Communications Sub-Group was formed in June, 2016)

July 2017


GoPNG

5. PNGEITI and Queensland University joint workshop on Extractive Sector

Delivery of specifically designed workshop under Pricent Leadership Development Program by the Australian Queensland University on the PNG Extractive sector and data storage

National Secretariat, MSG TWG

March 2017 Donor funded Australian Government

6. Engage short-term media consultant for EITI Awareness

A media consultant, freelance journalist to prepare regular media releases and reports on EITI report findings

National Secretariat February 2017 K50,000 GoPNG

OBJECTIVE 4: STRENGTHEN REVENUE GENERATION AND COLLECTION THAT IS CONSISTENT WITH POLICY SETTING RATIONALE: Ensure constant monitoring of the systems and processes of revenue collection so that revenues and other benefits are received by the Government as mandated by law. Any activities done by the government and industries that are inconsistent with the taxation laws and fiscal regime and not in the best interest of the country will constitute unsound management. This will result in government and industry officials held liable against their actions. To ensure this outcome, the First EITI Report will review the existing laws, regulations, systems and process governing the sector and recommend areas that require further reforms and amendments of current legislative frameworks to ensure greater accountability.

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For revenue collection, key government agencies like the Internal Revenue Commission, the PNG Customs, the Department of Petroleum and Energy and the Department of Minerals and Geo-hazards Management and the Mineral Resources Authority should be assisted to strengthen their capacity to perform better. These agencies should monitor and ensure that companies involved in the extractive sector comply with existing laws, project agreements or other contractual obligations. The current practice in investments in this sector lacks transparency as details on project agreements, fiscal arrangements and such contractual details are not publicly available. Therefore, activities undertaken in the sector lack transparency and the public are not in a position to monitor these activities. Through release of the First EITI Report, it is intended that some of these areas will be addressed in so far as strengthening systems and processes of revenue collection and capacity building in key government agencies. GOVERNANCE RELATED CHALLENGES: 1. Improving government systems and process and capacity building will require reforms and amendments to existing laws and legislations governing the extractive sector. 2. Some of these reforms may require consensus building at the political level and the willingness to take ownership of these reforms by the Government. This would mean that certain reforms could be undertaken in the short term, but some may be undertaken in the longer term. 3. Past experiences from public sector reforms in PNG demonstrates that there has been no consistent efforts to build on the reforms made to progress further. There is the problem of sustainability and continuation of reforms due to political instability – when new government comes in there is no guarantee that reform agendas would be sustained and this is the real challenge. 4. Reforming and building institutional capacity requires resourcing and strong political leadership. ACTIVITIES VERSUS CHALLENGES: All activities listed below are intended to address the above challenges and these are key actions.

ACTIVITIES TARGETED OUTCOME RESPONSIBILITY TIMELINE ESTIMATED COST

FUNDING SOURCE

4.1 ENSURE GOVERNMENT RECEIVES ALL REVENUES FROM THE EXTRACTIVE INDUSTRIES IT IS SUPPOSED TO RECEIVE The outcome of this sub-objective is to ensure maximum benefits are derived from resources extraction in PNG

1. Act on recommendations from the Third PNGEITI Report

Improved administrative and legislative systems and process and public policies governing the management and extraction of resources from the extractive sector. Also enhance understanding and trust

MSG, relevant government agencies, National Parliament

December 2017 National Secretariat operational budget

GoPNG

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building among stakeholders (Government, Industry and civil society) to creating a conducive environment for further investment

2. Engage a consultant to undertake scoping study on implementing EITI Standard to sub-national governments (provincial governments) and landowner associations.

To increase transparency and accountability of benefits flowing to sub-national governments and landowners and, empowering people at community level to address issues that directly affect them


September, 2017

K500,000 GoPNG

3. Adoption of policies for continuous improvement and refinement in the data collection process

Improved administrative and legislative systems and process and public policies governing the management and extraction of resources from the extractive sector. Also enhance understanding and trust building among stakeholders (Government, Industry and civil society) create a conducive environment for further investment

MSG, Relevant government agencies, National Secretariat

On-going National Secretariat operational budget

GoPNG

4.2 ENHANCE STAKEHOLDER ACCOUNTABILITY (GOVERNMENT, CIVIL SOCIETY ORGANISATIONS AND INDUSTRIES) The outcome of this sub-objective is to ensure stakeholders account for all the revenues and benefits derived from the extractive sector


FUNDING SOURCE

1. Monitoring and strengthening the accountability of CSOs in the Multi-Stakeholder Group (MSG)

To empower and ensure CSOs play an active role in the MSG process and be accountable to its wider CSOs operating in the country

National Secretariat, MSG, CSO


GoPNG

2. Monitoring and strengthening the accountability of industries

Ensure industries have an effective and efficient payment systems in place to record all payments to the government,

National Secretariat, MSG, industry

On-going National Secretariat

GoPNG

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in reporting of payments to the Government

including sub-national levels of government and landowner groups, companies and associations.

operational budget

3. Monitoring and strengthening the accountability of government agencies in reporting of revenues and benefits received.

Ensure relevant government agencies have an effective and efficient recording systems in place to store data and to report on all payments received. Also to ensure there is capacity in key agencies to support EITI implementation and to enable them to address public policy and administrative issues in a systematic manner for the extractive sector

National Secretariat, MSG, relevant government agencies


GoPNG

4. Improve monitoring mechanisms for transfer of revenues from the industry and government to sub-national levels of governments and landowner groups on Special Support Grants (SSGs), Infrastructure Development Grants (IDGs) and Business Development Grants (BDGs)

Ensure relevant government agencies have an effective and efficient method of transferring funds and to store data and report on all revenues paid out and ensure there is capacity in key agencies to support EITI implementation. Also for government agencies effectively address public policy and administrative issues in the extractive sector.

National Secretariat, MSG, relevant government agencies


GoPNG

OBJECTIVE 5: ENGAGEMENT OF STAKEHOLDERS TO EFFECTIVELY ADDRESS ISSUES AFFECTING PNG’S EXTRACTIVE INDUSTRIES RATIONALE: Stakeholders understanding on issues affecting the extractive sector is critical in enabling them to be fully engaged in public debates and discussions on matters of their interest and in bringing these into the domain of public policy making process. A consultative approach to public sector reforms and taxation and policy reforms in the extractive sector is the way to go in building confidence and trust among stakeholders that can have positive impact on public policy development and implementation. This approach creates a better environment for further investments in the sector. A participatory approach to decision making process in resources extraction and the use of revenues and other benefits derived from this sector to enhance transparency and accountability is critical in addressing the negative perception the public has on the management of the sector by the government and industry.

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GOVERNANCE RELATED CHALLENGES: 1. Management of different interests from different stakeholder groups poses a challenge in this approach. 2. Extensive consultations among different stakeholders can be problematic and can derail or sabotage efforts to achieve good public policy reforms and amendments to laws and legislations governing the sector. 3. Some reform initiatives and policy changes could take a long while to achieve and would require resources to achieve. 4. Persistent lack of institutional capacity in key state agencies to take a lead role in facilitating and driving stakeholder engagements. ACTIVITIES VERSUS CHALLENGES: All the activities listed below are intended to address the above governance related challenges. In situations where any unforeseen challenges arise, these may require specific actions to deal with these challenges.


FUNDING SOURCE

5.1 CREATING AN AVENUE FOR CONSULTATIVE APPROACH TO PUBLIC POLICY DEBATES IN THE EXTRACTIVE SECTOR The outcome of this sub-objective is to adopt public policies that could culminate from consultative approach to policy making and policies that could be implemented successfully to address issues affecting the extractive sector. Furthermore, to ensure that PNG has a vibrant taxation and fiscal regime governing the extractive sector that is fair, transparent and able to attract further investments.

1. Conduct quarterly and monthly meetings with the MSG, the TWG, constituency members or as and when required consistent with the PNGEITI MSG’s existing MoU

Achieve a transparent and sound environment for public policy development and reforms in the extractive sector

MSG, National Secretariat

Quarterly K100,000 GoPNG

2. Forum with Members of Parliament

Bring about awareness of EITI implementation and gain support at the political level


As and when required

National Secretariat operational budget

GoPNG

3. Quarterly talk back shows with local radio stations

Bring about awareness of EITI implementation and gain support from the public and at the political level



National Secretariat

GoPNG

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operational budget

4. Attendance at in-country conferences, seminars and workshops

Bring about awareness of EITI implementation and gain support from the public and at the political level

MSG, National Secretariat, external consultants



GoPNG

5. Regular Newspaper articles and forums

Providing updates on EITI implementation activities and bring out issues in the extractive sector for public consumption

National Secretariat Monthly National Secretariat operational budget

GoPNG

OBJECTIVE 6: MONITORING AND EVALUATION (M&E) RATIONALE: Though the Work Plan will continually be updated to delete what has been accomplished as planned and to include new activities to be undertaken as determined by MSG from time to time, an evaluation on the Work Plan implementation will still be required. An effective monitoring and evaluation system is critical to assisting the MSG to determine the achievement and non-achievement of the program of activities of the above 5 Objectives. This kind of evaluation provides a useful feedback for MSG to determine their success rate in the overall EITI implementation in PNG and to address any areas of weakness or failures and take measures early for future success. Adopting a well- designed Work Plan without a mechanism to monitor and evaluate its performance will not be effective. Therefore, thought the actual work plan will be reviewed and updated throughout the year, the original plan will be used as a basis to evaluate the progress. GOVERNANCE RELATED CHALLENGES: 1. Management of differing interests from different stakeholder groups poses a challenge in executing an evaluation in an objective way. 2. Extensive consultations among different stakeholders can be problematic and can hinder effective monitoring and evaluation. 3. Monitoring and evaluation of some activities would not be possible in a given year or over the medium term as these would take a long while to achieve and would require resources to achieve them. 4. Persistent lack of institutional capacity in key state agencies to take a lead role in facilitating and driving stakeholder engagements can contribute to poor performance outcome in evaluation. ACTIVITIES VERSUS CHALLENGES: There are no activities listed under this objective because M&E is a tool that will be used to assess the performance of the activities listed in Objectives 1 to 4 above.

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TOTAL FUNDING REQUIRED FOR 2017 IS K4,905,000.00

ANNEX 1:

Key Findings and recommendations to be included for actioning in the 2017 Work Plan. No actioning in these key and priority recommendations in the

short term may materially affect the integrity and robustness of the EITI Report and may impact negatively on the outcome of the validation process for

PNG’s 2014 EITI Report (second report).

FINDING RECOMMENDATION

IMMEDIATE ACTIONS RECOMMENDED FOR MSG ENDORSMENT

1. Petroleum licence allocation and registration

DPE maintains licence registry for the petroleum industry. The official register for oil and gas licences are maintained by DPE in hand written ledgers and the storage facilities represent a fire hazard and a risk of loss of data within the register.

DPE to urgently implement a reliable electronic registry system to replace the current paper ledger system.

National Secretariat proposes that MSG endorses the following actions to be taken:

MSG to request Minister for Petroleum through the

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Also, the DPE does not have a website and there is currently no publicly available information on the technical and financial criteria used to award licences.

DPE to establish a website and make public the process for allocating and transferring licences. To enable above, DPE should be moved to a new modern office facilities and to be adequately funded by the Government to build up administrative and staffing capacity.

Treasurer/Chairman on the status of the NEC Submission that is before Cabinet to transform DPE into an authority. Also, request DPE to include recommendations from the Report concerning capacity issues.

MSG to request the Government through the Chairman/Minister for Treasury to fast track the Submission for NEC approval.

MSG to officially request Treasurer/Chairman to seek external assistance, particularly a TA from donors and development partners to transform DPE to an authority. To be actioned by: DPE

2. State Owned Enterprises (SOEs)

The IA faced considerable difficulties in preparing the contextual information for SOEs because obtaining up to date and complete material from some entities was not forthcoming. SOEs showed varied levels of capacity and transparency. Some SOEs provided plentiful information online and were responsive to the IAs queries while some demonstrated systematic lack of transparency and the IA had struggled to obtain

To improve the quality, accuracy and timeliness of information provided by SOEs, it is recommended that measures be undertaken to engage them in the EITI reporting process. This should include inviting SOE representatives to participate in the MSG process.

National Secretariat proposes that MSG endorses the following measures to be taken:

Invite SOEs to be on the MSG or other alternative arrangement for them to engage at MSG level; and

MSG/EITI National Secretariat or an external resource person or a

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outdated data. Given the significant public funds managed by some of these entities (MRDC and KCH), this is of particular concern. It denies the government and people of PNG adequate information about their interests and leaves considerable scope for misappropriation. This has left some relevant contextual data being out of date, conflicting with other sources of information, or unavailable to include in the report.

Further, it is recommended that the MSG conducts EITI training for SOEs that specifically address the following:

The importance of EITI reporting as a tool for improving governance and transparency;

The information required to be reported under the EITI on an annual basis, including trust funds and beneficiaries;

The provision of contextual data templates, with detailed explanation of each revenue stream; and

Quality assurance of contextual information

consultant is engaged to conduct EITI training on the areas as recommended prior to these SOEs filing out reporting templates for the second report. To be actioned by: National Secretariat in liaison with EITI IS.

3. Mining production data

Mining companies provide production data to the MRA on a monthly basis as part of the monthly royalty return lodgement process. The production data provided for the reporting period was both incomplete and inconsistent. Materially different data sets were provided by the MRA at different times, and both sets showed information gaps. These gaps were acknowledged by the MRA and indicated that the MRA was updating their records and working with companies to address the issue. The IA noted that production data is now captured directly into the MRA’s digital cadastre. Future EITI reports will show whether the cadastre system addresses these shortcomings.

To address the inconsistencies in the production data, it was recommended that the MRA:

Adopts standard units of measurement for reporting of each mineral commodity;

Requests mining companies to provide data to them in consistent units of measurement to mitigate any need for conversions to be applied;

Conducts a detailed review of data within the digital cadastre prior to the next EITI reporting process to identify and address risk areas;

Considers implementing regular independent audits of production data and related payments, to ensure that regulatory compliance is being maintained


The MSG through the Chairman/Treasurer writes to the Minister for Mining to secure a technical assistance (TA) from a donor or a development partner to conduct detailed review of the production data and related payments and other inconsistencies as recommended. The TA to be engaged should be able to address the shortcomings and inconsistencies.

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To be actioned by: MRA

4. Implementation of DPE compliance review

DPE has been conducting a compliance review over the past year. Early findings from this review revealed a 50% rate of failure to comply with requirements including:

Adherence to reporting requirements;

Validity of work programs being implemented; and

Payment of licence fees. It is not clear whether the compliance review has been finalised and whether the DPE is in the process of implementing the recommendations provided.

It was strongly recommended that DPE finalises its compliance reviews and commences implementing the recommendations as soon as possible, as the findings relate to key elements of a compliant EITI Report.


The MSG through the Treasurer/Chairman of MSG writes to Minister for Petroleum and Energy, highlighting the importance of implementing the recommendations from the compliance review as this would be critical for PNG EITI report that will be validated against.

National Secretariat also makes effort to engage with DPE on the status of this review and its recommendations. To be actioned by: DPE

5. Adequate controls to monitor movement of funds

Cash and cheque payments remain in use and it was noted that some agencies had few or absent controls over receipts from extractive industries. It was noted by the IA during the reporting period that payments were still being made via cash or cheque with manual processes for issuing receipts.

It was recommended that government entities engage in a project to modernise payment system. This should include for example:

Payments being made by EFTPOS for all transactions;


The MSG through the Treasurer/Chairman of MSG writes to the Minister for Finance pointing

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The absence of a robust system for managing payments leaves the system vulnerable to fraud, corruption and human error.

Implementing segregation of duties, and management oversight of cash processes; and

Implementing a rigorous audit program to regularly assess fraud risks.

out the EITI recommendation in this area and for the Department of Finance to take action to address this issue. Possible option is to engage a consultant through a TA from donors and development partners. To be actioned by: Department of Finance

6. Inter-agency collaboration and standardisation

Reliable reporting on EITI requirements depends in turn on robust systems for collecting and sharing data on production and export data as well as revenue streams. Data reported from different agencies or in some cases, from the same agency at different times did not match, which obscures whether correct payments have been made.

It was recommended that systems should be established to enable productive sharing of information between agencies. This should include establishing common units for measure, conversion factors and foreign exchange rates.


That this action be taken up as part of the measures to be undertaken in recommendation #3 above.

To be actioned by: MRA

7. Sub-national transfers

Information relating to sub-national transfers and payments was difficult to obtain. Some benefits to regions impacted by extractives are set out in law via royalties, equity stakes, dividends and compensation arrangements. Others are included in MOUs on a case by case basis. However, these agreements are in most cases not public and accountability mechanisms vary significantly.

It was recommended that the MSG engages the Department of Finance in a detailed review of sub-national payments and transfers prior to the next EITI reporting process. The review should specifically identify all recipients of payments, account details, nature of payments or transfers being received, and payer (whether national government or extractive industry company) should be noted.

National Secretariat recommends that MSG endorses the following measures to be taken:

The MSG through the Treasurer/Chairman of MSG to write to Minister for Finance recommending detailed review of sub-national payments and transfers. This task can be

19

Royalties and levies, particularly those received for oil and gas are 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 the National Budget expenditure. Again, this situation leaves significant scope for abuse. In collecting the information the IA referred to the NEFC 2013 Budget and Fiscal Report. However, the information collected by the NEFC does not currently align to the EITI reporting requirements, such as differentiating between payments and transfers. Auditing of government accounts is challenging due to under-resourcing and lack of capacity, both at the Auditor General’s office itself and the entities reporting to it. Recent audit reports indicate serious gaps and inconsistencies, particularly with respect to provincial and local level governments.

Further, it was recommended that the NEFC considers amending future Budget and Fiscal Reports to collect information on sub-national payments and transfers in line with the EITI requirements.

undertaken through a TA from donors and development partners.

Treasurer/Chairman also writes to NEFC to amend Budget and Fiscal Reports to collect information on sub-national payments and transfers consistent with EITI requirements.

To be actioned by: National Secretariat and Department of Finance

8. Quality Assurance

Requirement 5.2 of the EITI standard specifies that reporting entities should provide quality assurances in relation to the data, where required by the MSG and the Independent Administrator

It was recommended that reporting entities be required to obtain independent assurance or review of the reported amounts. It was also recommended that the MSG considers a staged approach to increasing the level of quality assurance over the data. The MSG could consider

National Secretariat proposes that MSG considers a staged approach to increasing the level of quality assurance of data as recommended. To be actioned by: National Secretariat/MSG

20

aligning this approach to the three levels of assurance outlined in EITI standard requirement 5.2 (c) including:

Sign off from a senior official of the reporting entity;

Confirmation letter from the entity’s external auditor to confirm that the reported amounts are consistent with their audited financial statements; and

A letter of certification as to the accuracy of the disclosures from the entity’s external auditors.

Furthermore, it was recommended that the MSG consider moving to a more rigorous audit program to enhance the quality and completeness of data, through adoption of a staged approach such as:

First reporting period: Agreed upon procedures over the reported amounts, conducted by the reporting entity’s independent auditor;

Second reporting period: Independent limited assurance statement in relation to the reported amounts, conducted by the reporting entity’s independent auditor; and

Third reporting period: Independent reasonable assurance over the reported amounts.

21

Annex 2:

22

Papua New Guinea Roadmap for

Beneficial Ownership Disclosure In compliance with Guidance note 22 – Requirement 2.5

30 December 2016

23

Table of Contents

Introduction 3

Papua New Guinea EITI Beneficial Ownership Roadmap 4

Consideration of the links between Beneficial Ownership and

National Reform priorities

4

Consideration of the Institutional Framework for Beneficial

Ownership disclosure

8

Determine a definition of Beneficial Ownership in the PNG context 13

Reporting obligation for Politically Exposed Persons (PEPs) 15

Consideration of level of detail to be disclosed 19

Data collection procedures 23

Assuring the accuracy of the data 27

Data timeliness 30

Data accessibility 33

Appendix A – Draft Beneficial Ownership Roadmap Schedule Q1 2017 to

Q4 2019

37

24

Introduction

The EITI Standard states that “By 1 January 2017, the multi-stakeholder group

publishes a roadmap for disclosing beneficial ownership information…... The MSG

will determine all milestones and deadlines in the roadmap, and the MSG will

evaluate implementation of the roadmap as part of the MSG’s annual activity report”

(Requirement 2.5.b.ii).

This draft Papua New Guinea (‘PNG’) Roadmap is designed to meet the stated EITI

requirements, and it is expected that the final version of the Roadmap will be

determined shortly. The Roadmap acknowledges that more detailed thoughts around

costing and sources of funding will be refined over the coming months, in terms of

each Activity.

This document is considered to be a working document.

25

Papua New Guinea EITI Beneficial Ownership Roadmap

Consideration of the links between Beneficial Ownership

and National Reform priorities

Findings as of 23 Dec 2016 post preliminary consultations and questionnaires

1. Beneficial Ownership (BO) is not specifically contained in PNG's national priorities;

however, there are development goals in the resource extractive industry that

indirectly relate to BO (stakeholders). These development goals are integrated through

the development strategies1;

2. Ownership of legal entities is enshrined in law through the Companies Act 2014 as

regulated and governed by the Investment Promotion Authority (IPA); and

1 Vision 2050, National Strategy for Responsible Sustainable Development for PNG, Medium Term Development Plan 2 (2016-17), Alotau Accord

26

3. Ownership of mining and petroleum licenses is enshrined in law through the Mining Act

1992 and Oil and Gas Act 1998 as regulated by Mineral Resources Authority (MRA) and

Department of Petroleum & Energy (DPE) respectively.

Objectives

1. To develop National Priorities which contain a clear link with EITI principles and

beneficial ownership disclosure;

2. To mitigate the risk of financial misconduct (e.g. transfer pricing and tax evasion);

and

3. To improve PNG’s investment climate.

Activity (capacity Building

Needs, Technical Assistance)

Responsible Time

Frame

Financial Assistance

Costing Funding

1. Increased awareness regarding

the benefits of enhanced BO

disclosure to improve public

and investor confidence.

Awareness may be undertaken

by way of:

PNGEITI

National

Secretariat,

PNGEITI MSG,

Government,

Companies

and CSOs

Q1-2017

and

onwards.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

27



Responsible Time

Frame


Costing Funding

Public road shows in

provincial locations; and

Industry briefings with

sector participants (state

agencies, corporate

entities that bid for,

operate and/or invest in

extractive industries in

PNG, community service

organizations and

landowners).

It is suggested that this

activity is undertaken

collaboratively and with the

cooperation of all key sector

participants.

Donor

funding

PNG

Government

through its

2018-2020

Budgets

28



Responsible Time

Frame


Costing Funding

2. Continued dialogue with state

agencies in the extractive

industry to harness the

necessary political will to

support and sustain EITI

principles and initiatives.

PNGEITI

National

Secretariat,

PNGEITI MSG

and

Government.

Q3-2017

and

onwards.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

3. Agree and develop a national

priority framework that

encapsulates and mainstreams

PNGEITI

National

Secretariat,

PNGEITI MSG

Q3-2017

to Q2-

2018.

To be

determined

Private sector

through EITI

participants

29



Responsible Time

Frame


Costing Funding

the principles of EITI into

day-to-day industry practice.

and

Government.

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

4. Agree and advocate EITI

principles that should either

be embedded and/or enshrined

into the legislative,

regulatory and policy

framework of PNG including

determining if the there are

PNGEITI MSG. Q1-2017

to Q4-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

30



Responsible Time

Frame


Costing Funding

any legislative impediments

that may counter/impede BO

reporting requirements.

Donor

funding

PNG

Government

through its

2018-2020

Budgets

31

Consideration of the Institutional Framework for Beneficial

Ownership disclosure


1. Currently, the Mining Act 1992 and Oil and Gas Act 1998 does not provide for BO to be

disclosed as a requirement under law;

2. The Companies Act 2014 provides for disclosure as a company law requirement (Directors

Duties);

3. Income Tax Act 1959 provides for disclosure for tax purposes but not specific BO;

4. Ombudsman Commission PNG re Leadership Code (Alternative Penalties) Act 1976;

5. Constitution of PNG (section 27); and

6. Anti-Money Laundering and Counter Terrorist Financing Act 2015 provides for BO

disclosure and politically exposed person (PEP) reporting, albeit high level detail.

Objectives

32

1. To identify an agency to oversee, collate and maintain BO information that may readily

integrate the BO disclosure process into the public filing process. Should it be

established on meritorious/credible grounds that a new office is established, it will

be sufficiently resourced to operate with authority, independence and sustainability;

and

2. To reform legislation and regulation in order to enshrine EITI principles and

beneficial ownership disclosure into law.



Responsible Time

Frame


Costing Funding

1. Agree a final list of

agencies most suitable to

oversee, collate and maintain

BO information, including

determining the feasibility

of establishing a new office

to integrate existing

information and systems for

PNGEITI

National

Secretariat

and PNGEITI

MSG.

Q3 and

Q4,

2017.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

33



Responsible Time

Frame


Costing Funding

the benefit of improved

transparency and

accountability.

It is suggested that this

process is undertaken through

workshops with key

representative of the

resource extractive

industries sector.

PNG

Government

through its

2018-2020

Budgets

2. Industry players to agree the

extent participating

companies that bid for,

operate or invest in the

resource extractive industry

disclose:

The Identity of their

beneficial owners;

PNGEITI MSG Q1-2018

to Q4-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

34



Responsible Time

Frame


Costing Funding

The ownership threshold for

companies to report their

shareholders including a

separate threshold for

politically exposed

persons; and

Detail pertaining to the

ownership including how the

ownership (or control) may

be exerted.

PNG

Government

through its

2018-2020

Budgets

3. Undertake a comprehensive

review of the existing

company filing process

relevant to BO disclosure in

the bidding process and

license registries for

resource extractive projects.

PNGEITI

National

Secretariat,

PNGEITI MSG

IPA, MRA and

DPE.

Q3-2017

to Q4-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

35



Responsible Time

Frame


Costing Funding

Donor

funding

PNG

Government

through its

2018-2020

Budgets

4. Identifying opportunities to

streamline processes and

procedures internally and

inter-department/inter-agency

based on processes that may

have already been mapped.

PNGEITI

National

Secretariat,

PNGEITI MSG

IPA, MRA and

DPE.

Q3 and

Q4,

2017.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

36



Responsible Time

Frame


Costing Funding

through its

2018-2020

Budgets

5. Identify, discuss and agree

opportunities to reform

relevant legislation and

regulation to embed EITI and

beneficial ownership

principles noting that the

basis in which the PNGEITI

National Secretariat operates

is an NEC decision i.e.

unguaranteed permanency.

If there is to be an EITI

Act, sufficient consultation

must be undertaken to ensure

that such legislation

PNGEITI

National

Secretariat,

PNGEITI MSG

and

Government

Q1-2017

and

onwards.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

37



Responsible Time

Frame


Costing Funding

compliments (as compared to

overlap and possibly

conflicting) the Companies

Act 2014, Mining Act 1992 and

Oil & Gas Act 1998.

6. Legislative reform where

required and identified

PNGEITI

National

Secretariat,

PNGEITI MSG,

Government,

MRA and DPE.

Q2-2018

and

onwards.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

38



Responsible Time

Frame


Costing Funding

2018-2020

Budgets

39

Determine a definition of Beneficial Ownership in the PNG

context


1. Existing definition under the PNG Anti-Money Laundering and Counter Terrorist Financing

Act 2015; and

2. Consulting parties content with existing definition by EITI International and 4th EU

Anti Money Laundering Directive’s definition.

Objectives

1. Agree an appropriate definition of the term beneficial owner. The definition should be

aligned to… #2.5.f.i... and consider international norms and relevant national laws.

The definition should also specify reporting obligations for politically exposed

persons; and

40

2. Discuss and agree on the different types of control (ownership, control, rights,

personal connections etc) and the respective thresholds.

41



Responsible Time

Frame


Costing Funding

1. PNGEITI MSG to agree on a

specific definition of

“Beneficial Owner” noting the

following expressed by select

consulting parties:

The definition should

prescribe the ownership

threshold including the type

of control and influence;

The definition should

specify the reporting

obligations for politically

exposed persons; and

Sensitivities surrounding


structures of Landowner

Companies.

PNGEITI

National

Secretariat,

PNGEITI MSG

and

Companies

including

Landowner

Companies.

Q1 to

Q3,

2017.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor funding

PNG

Government

through its

2018-2020

Budgets

42



Responsible Time

Frame


Costing Funding

In light of the number of

responses received by

consulting parties, it is

suggested that feedback is

sought from the various

respective corporate

structures (including

Landowner Companies)

operating, bidding and

investing in the resource

extractive industry in PNG.

Reporting obligations for Politically Exposed Persons (PEPs)


43

1. Existing definition under the PNG Anti-Money Laundering and Counter Terrorist Financing

Act 2015;

2. Consulting parties have indicated that there are no policies, regulations or laws for

PEPs to release information on their personal interest in the extractive industry. The

Leadership Code under the Organic Law requires leaders to furnish their report to

Ombudsmen Commission but these reports are not made public; and

3. It is noted that the Kumul Petroleum Holdings Limited Authorisation Act 2015 is

exempted from the Leadership Code.

Objectives

1. Agree on a definition for Politically Exposed Persons (PEP); and

2. Agree on the reporting obligations for PEPs in line with the leadership code/Ombudsmen

Commission and Organic Law: Leadership including the level of disclosure.

44



Responsible Time

Frame


Costing Funding

1. PNGEITI MSG to agree on a

specific definition of PEPs

within the PNG context.

PNGEITI

National

Secretariat,

PNGEITI MSG.

Q3 and

Q4,

2017.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG Government

through its

2018-2020

Budgets

2. Generate public discourse

regarding the PEP reporting

requirements in the resource

extractive industry and the

PNGEITI

National

Secretariat,

PNGEITI MSG,

Q3 and

Q4,

2017.

To be

determined

Private sector

through EITI

participants

Public sector:

45



Responsible Time

Frame


Costing Funding

positive impact such practice

may have on public confidence.

Government

and CSOs.

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

3. Engage with state agencies and

civil society organizations to

advocate developing policies

for PEPs to disclose personal

interests in resource

extractive assets including

advocating that this

information is readily

available to the public.

PNGEITI

National

Secretariat,

PNGEITI MSG,

Government

and CSOs.

Q4-

2017

to Q3-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

46



Responsible Time

Frame


Costing Funding

PNG

Government

through its

2018-2020

Budgets

4. Determine the extent of

integrating such policies into

the relevant resource

extractive legislation.

PNGEITI

National

Secretariat,

PNGEITI MSG,

Government

and CSOs.

Q2 and

Q3,

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

47



Responsible Time

Frame


Costing Funding

2018-2020

Budgets

48

Consideration of level of detail to be disclosed


1. All consulting entities indicated a willingness to disclose details pertaining to

beneficial owners to various levels;

2. Not unexpectedly, select key central agencies and CSOs are advocating full disclosure

of beneficial ownership, which should not be limited to BO name, date of birth,

national identification number, nationality, country of residence and addresses.

Interestingly, many of these fields are required by IPA as per online company forms;

3. Publicly listed multi-nationals comfortable with disclosing beneficial owners to level

required by listing rules of stock exchange in which equity is traded, regardless of

corporate/non-natural or natural person owner;

4. Concerns expressed about unlisted entities who are not subjected to the same standards

of governance as per listing rules of the major exchanges; and

5. Certain consulting entities note the sensitivity of landowner-company and SOE

beneficial ownership disclosure and the reality/pragmatics of enforcing such practice.

Objectives

49

1. To determine the precise level and avenues of detail companies and BOs must include

when disclosing beneficial ownership; and

2. To be in a position to Gazette the level of detail companies must include when

disclosing beneficial ownership by 1 January 2020.



Responsible Time

Frame


Costing Funding

1. The PNGEITI MSG to agree the

level of beneficial ownership

detail participating companies

are required to disclose. The

PNGEITI MSG will consider the

following:

The pragmatics of adopting

EITI International's

recommendations of

participating entities

disclosing a national

identity number, date of

birth, residential or

PNGEITI

National

Secretariat,

PNGEITI MSG,

Government,

CSOs.

Q1-

2017

to Q2-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

50



Responsible Time

Frame


Costing Funding

service address, and means

of contact noting:

− The inherent challenges of

verifying identification

and other such information

in-country, particularly

in the case of PNG

domiciled/landowner

companies; and

− The inherent cultural

sensitivity of “imposing”

such standards on

clan/landowner leaders in

light of the often complex

social structures in place

with landowner companies.

2018-2020

Budgets

51



Responsible Time

Frame


Costing Funding

The potentially significant

scope of work to determine

the natural persons/ultimate

beneficial owners noting the

non-uniform nature of

information disclosure

requirements across

international jurisdictions.

Adopting the use of the

EITI’s model beneficial

ownership declaration form

or developing its own form

subsequent to extensive

consultation with

government, civil society

and companies bidding,

investing and operating in

52



Responsible Time

Frame


Costing Funding

the resource extractive

sector.

2. PNGEITI MSG to agree on the

thresholds of ownership and/or

control (e.g. owns and/or

controls more than 5 - 10% or

the 5 biggest owners of the

participating company) as well

as clearly articulate what

constitutes ownership, control

and/or influence.

PNGEITI

National

Secretariat

and PNGEITI

MSG.

Q1-

2017

to Q2-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

53



Responsible Time

Frame


Costing Funding

3. Embed and enshrine the agreed

level of beneficial ownership

disclosure into relevant PNG

regulation and law.

PNGEITI

National

Secretariat

and PNGEITI

MSG.

Q1 to

Q4,

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

54

Data collection procedures


1. No clearly defined beneficial ownership data collection process at present;

2. PNGEITI MSG to consider integrating the provision of such data in the relevant

legislation governing industry (Mining Act 1992 and Oil and Gas Act 1998);

3. Suggestion made that beneficial ownership data collection process could leverage/ride

on the back of the standard EITI reporting process when reporting templates are

disseminated by the Independent Administrator for completion. Other entities that fall

outside of the reporting entity category could be requested by the regulator (MRA or

DPE) to complete a template requiring such information; and

4. Strong suggestion that social mapping/identification of authentic landowners must be

undertaken prior to granting of license.

Objectives

1. As of 1 January 2020, companies disclose beneficial ownership information for inclusion

into the EITI report upon request. This applies to entities that bid for, operate

and/or invest in resource extractive projects in PNG; and

55

2. By 1 January 2020, a publicly available register of the beneficial owners of the

corporate entities that bid for, operate and/or invest in the resource extractive

industries in PNG.



Responsible Time

Frame


Costing Funding

1. Identify the companies that

are required to participate in

beneficial ownership reporting

noting that it includes all

entities that bid for, operate

and/or invest in the

extractive industries in PNG.

PNGEITI

National

Secretariat,

PNGEITI MSG

and IPA.

Q2-

2017

to Q1-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

56



Responsible Time

Frame


Costing Funding

2. Extensive consultations with

government, companies and

civil society to determine the

most efficient and sustainable

data collection approach which

could as an example include

the following:

Distributing beneficial

ownership forms to all

eligible companies

Incorporating beneficial

ownership disclosure

requirements into:

− Existing license

application process with

the MRA and DPE;

PNGEITI

National

Secretariat,

PNGEITI MSG,

Government,

Companies,

CSOs, IPA,

MRA and DPE.

Q3-

2017

to Q4-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

57



Responsible Time

Frame


Costing Funding

− The company registration

process with the IPA; and

− Annual reporting process

with the IPA;

3. Develop a register that is

easily available to the public

containing beneficial

ownership disclosures of

entities that bid for, operate

and/or operate in the

extractive industry in PNG

noting the potential scale and

complexity of the task to

determine the beneficial

owners (i.e. the natural

persons) sitting behind each

PNGEITI

National

Secretariat,

PNGEITI MSG

and

Government.

Q1 to

Q4,

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

58



Responsible Time

Frame


Costing Funding

entity at each layer of

ownership/control.

2018-2020

Budgets

4. PNGEITI MSG to agree the

extent of embedding the agreed

BO data collection procedures

into PNG regulations and law

and the course to be taken

subsequent to such extensive

consultation/debate.

PNGEITI

National

Secretariat

and PNGEITI

MSG

Q1 to

Q4,

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

59

60

Assuring the accuracy of the data


1. Beneficial ownership disclosure covered broadly in Anti-Money Laundering and Counter

Terrorism Financing Act 2015;

2. Consulting parties suggest self-reporting entities could sign a standard (statutory)

declaration form or issue a guarantee/assurance letter attesting the accuracy of

beneficial ownership data provided;

3. Alternatively seek a beneficial ownership list certified by a securities exchange

certifying the accuracy of such information, however, this is limited to publicly

listed companies only. In the instance of private companies, it is suggested the

Company Secretary certifies the list of beneficial owners; and

4. Extensive discussion by the PNGEITI MSG to determine both the incentives of providing

accurate data as well as the disincentives (punitive measures) for not supplying

accurate beneficial ownership data and the process of introducing this such practices

and measures.

61

Objectives

1. To agree an approach for participating companies to assure the accuracy of the

beneficial ownership information; and

2. To, as and where practicable, embed the data assurance procedures into existing

regulations and legislation.



Responsible Time

Frame


Costing Funding

1. PNGEITI MSG to agree a

pragmatic approach in which

participating companies that

bid for, operate and/or invest

in the resource extractive

sector in PNG are able to

assure the accuracy,

completeness and currency of


disclosures. The assurance

procedure must be agreed by

PNGEITI

National

Secretariat,

PNGEITI MSG

and

Companies.

Q1-

2017

to Q4-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

62



Responsible Time

Frame


Costing Funding

the PNGEITI MSG prior to the

collection of data. Key

considerations may include:

Adopting the use of the

EITI’s model beneficial

ownership declaration form

or developing its own form

and requiring the form to be

signed off by a member of

the senior management team

or senior legal counsel;

Where deemed necessary,

requiring companies to

submit supporting

documentation such as

2018-2020

Budgets

63



Responsible Time

Frame


Costing Funding

articles of association,

powers of attorney etc.

2. PNGEITI MSG to consult

government, companies and

civil society to determine the

extent in which the agreed

accuracy assurance procedures

are integrated into existing

legislation

PNGEITI

National

Secretariat,

PNGEITI MSG

and

Government.

Q1 to

Q4,

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

64

Data timeliness


1. All consulting entities indicated reporting should at minimum be undertaken at regular

fixed intervals (either annually or bi-annually). Some entities indicated ad hoc

reporting based on trigger events e.g. change in companies’ beneficial ownership,

change in participation within license, introduction of law reforms; and

2. It would appear companies seek consistency of timing with other/existing corporate

reporting requirements.

Objectives

1. To determine the timeline and reporting schedule as per agreed reporting period

to collect current data from companies and disclose this information on a public

register.

65



Responsible Time

Frame


Costing Funding

1. PNGEITI MSG to discuss and

explore the opportunities to

disclose data as soon as

practicably possible having

carefully considered the

following:

agreed level of data to be

collected;

the method in which data is

collected;

the capacity of the

office/agency responsible to

collect, collate and manage

data ; and

whether disclosure is

provided based on a trigger

event (e.g. change in

PNGEITI

National

Secretariat

and PNGEITI

MSG.

Q2-

2017

to Q1-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

66



Responsible Time

Frame


Costing Funding

beneficial owner) or regular

fixed intervals, or a

combination of both.

An ideal outcome of timely

disclosure may include

continuous online disclosures,

however, this is subject to the

above.

2. PNGEITI MSG to agree the

frequency in which beneficial

ownership information is

collected i.e. fixed internal

or trigger events or a

combination of either. The

PNGEITI will consider how

pragmatic it is to frequently

collect data noting the

PNGEITI

National

Secretariat

and PNGEITI

MSG.

Q2-

2017

to Q1-

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

67



Responsible Time

Frame


Costing Funding

fluidity of ownership change

with listed organisations.

PNG

Government

through its

2018-2020

Budgets

3. PNGEITI MSG to agree extent in

which time limits to disclose


information is embedded into

existing legislation.

PNGEITI

National

Secretariat

and PNGEITI

MSG.

Q1 to

Q4,

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

68



Responsible Time

Frame


Costing Funding

2018-2020

Budgets

Data accessibility


1. Most consulting entities indicated IPA the logical agency to manage beneficial

ownership register. However, some entities indicated responsibility should fall with

licensing agencies/regulators.

Objectives

1. Data pertaining to beneficial ownership is available to the public in a reader and

user-friendly format to enable meaningful use e.g. comparative analysis; and

2. Subsequent to developing a portal whereby the data will be made publicly available for

broader consumption, awareness to be generated to provinces.

69

70



Responsible Time

Frame


Costing Funding

1. As a starting point to

establish a public beneficial

ownership register,

understand the legal

requirements and information

contained in the existing IPA

company register and MRA and

DPE license registers, in

order to optimize

streamlining and

mainstreaming objectives.

PNGEITI

National

Secretariat,

PNGEITI MSG,

IPA, MRA and

DPE.

Q3 and

Q4,

2017.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

2. Consider and determine the

possibility to merge

beneficial ownership data

into existing corporate

PNGEITI

National

Secretariat,

PNGEITI MSG,

Q3 and

Q4,

2017.

To be

determined

Private sector

through EITI

participants

71



Responsible Time

Frame


Costing Funding

register at IPA and license

registers at MRA and/or DPE.

Further determine the

feasibility of establishing a

discrete, independent

agency/office to undertake

such responsibilities noting

the resourcing constraints

faced by the government.

IPA, MRA and

DPE.

Public sector:

World Bank

Donor

funding

PNG

Government

through its

2018-2020

Budgets

3. Agree and articulate specific

requirements to ensure the

beneficial ownership data is

machine readable and user-

friendly for third party

consumption and analysis.

PNGEITI MSG. Q4-2017. To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

72



Responsible Time

Frame


Costing Funding

Donor

funding

PNG

Government

through its

2018-2020

Budgets

4. Subsequent to the above

activities, PNGEITI National

Secretariat to develop a

communication

strategy/roadshow schedule to

generate awareness of the

publicly available user-

friendly data.

PNGEITI

National

Secretariat

and PNGEITI

MSG

Q1 and

Q2,

2018.

To be

determined

Private sector

through EITI

participants

Public sector:

World Bank

Donor

funding

73



Responsible Time

Frame


Costing Funding

PNG

Government

through its

2018-2020

Budgets

5. Undertake BO awareness

roadshows in the provinces.

PNGEITI

National

Secretariat

Q3-2018

and

onwards.

To be

determined

As above

74

Appendix A – Draft Beneficial Ownership Roadmap Schedule Q1 2017 to Q4 2019 Draft schedule to implement activities relating to considerations 1 to 5. The grey bars

relate to the scheduling for each consideration. The green bars relate to the scheduling

of non-legislative activities and the rose coloured bars relate to scheduling of

legislative related activities.

Draft Beneficial Ownership Roadmap Schedule - Q1 2017 to Q4 2019

Consideration Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Activity NS MSG Govt Cos CSO IPA MRA DPE

1. Links between Beneficial Ownership and National Reform priorities Q1-2017 Onwards

Increased awareness re benefits of enhancing BO disclosures x x x x x Q1-2017 Onwards

Ongoing dialogue with state agencies to harness necessary political will x x x Q3-2017 Onwards

Agree and develop national priority framework x x x Q3-2017 Q2-2018

Agree and advocate EITI principles to be embedded into legislation x Q1-2017 Q4-2018

2. Institutional Framework for BO disclosure Q1-2017 Onwards

Agree final list of agencies most suitable to oversee, collate and maintain BO info x x Q3-2017 Q4-2017

Agree the extent companies disclose BO information x Q1-2018 Q4-2018

Undertake comprehensive review of existing company filing process relevant to BO disclosure x x x x x Q3-2017 Q4-2018

Identify opportunities to streamline mapped processes and procedures (internal, inter-agency and

inter-departmental).x x x x x Q3-2017 Q4-2017

Identify, discuss and agree opportunities to reform relevant legislation and regulation to embed EITI

and BO principles.x x x Q1-2017 Onwards

Legislative reform, where required and identified x x x x x Q2-2018 Onwards

3. Defintion of BO in the PNG context Q1-2017 Q3-2017

Agree on specific definition of BO within PNG context x x x Q1-2017 Q3-2017

4. Reporting obligations for PEPs Q3-2017 Q3-2018

Agree on specific definition of PEP within PNG context x x Q3-2017 Q4-2017

Generate public discourse re PEP reporting requirements x x x x Q3-2017 Q4-2017

Engage with state agencies and CSOs to advocate developing policies for PEPs to disclose

personal interests in extractive industries assetsx x x x Q4-2017 Q3-2018

Determine extent of integrating above policies into relevent legislation x x x x Q2-2018 Q3-2018

5. Level of detail to be disclosed Q1-2017 Q4-2018

Agree the level of BO detail participating companies are required to disclose x x x x Q1-2017 Q2-2018

Agree the thresholds of ownership and/or control x x Q1-2017 Q2-2018

Enshrine agreed level of BO disclosure into relevant legislation x x Q1-2018 Q4-2018

2017 2018 2019

Responsible Parties Starting

Quarter

Ending

Quarter

75

76

Draft schedule to implement activities relating to considerations 6 to 9.

Legend to Responsible Parties columns:

NS = PNGEITI National Secretariat; MSG = PNGEITI Multi-stakeholder Group; Govt = Government of PNG; Cos =

Participating Companies; CSO = Civil Society Organisation; IPA = Investment Promotion Authority; MRA =

Mineral Resources Authority.

Draft Beneficial Ownership Roadmap Schedule - Q1 2017 to Q4 2019

Consideration Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Activity NS MSG Govt Cos CSO IPA MRA DPE

6. Data collection procedures Q2-2017 Q4-2018

Identify companies required to participate in BO reporting x x x Q2-2017 Q1-2018

Extensive consultations with govt, companies and CSOs to identify opportunities for efficient and

sustainable data collectionx x x x x x x x Q3-2017 Q4-2018

Develop a public register containing BO information x x x Q1-2018 Q4-2018

Agree extent of embedding agreed BO data collection procedures into PNG regulations and law x x Q1-2018 Q4-2018

7. Assuring accuracy of data Q1-2017 Q4-2018

Agree pragmatic approach in which participating companies can assure the accuracy,

completeness and currency of BO disclosures.x x x Q1-2017 Q4-2018

Determine extent in which agreed assurance procedures are embedded into legislation x x x Q1-2018 Q4-2018

8. Data timeliness Q2-2017 Q4-2018

Discuss and explore opportunities to disclose data as soon as practicably possible x x Q2-2017 Q1-2018

Agree frequency in which BO information is collected/disclosed by participating companies x x Q2-2017 Q1-2018

Agree extent in which time limits to disclose BO information is embedded in legislation x x Q1-2018 Q4-2018

9. Data accessibility Q3-2017 Onwards

Understand the legal requirement and information contained in existing registers (company and

licenses)x x x x x Q3-2017 Q4-2017

Determine the possibility of merging BO data into existing information systems (corporate and

license registersx x x x x Q3-2017 Q4-2017

Agree specific requirement to ensure BO data is machine readable and user-friendly x Q4-2017 Q4-2017

Develop communication strategy/roadshow schedule to generate awareness x x Q1-2018 Q2-2018

Undertake awareness roadshows x Q3-2018 Onwards

2017 2018 2019

Responsible Parties Starting

Quarter

Ending

Quarter

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