Report on LNG Project in PNG Warns of Major Challenges
A new report on the impacts of the multi-billion dollar Liquefied Natural Gas (LNG) Project in Papua New Guinea
highlights the industry’s achievements in addressing social change but warns of continuing major concerns that need to
be addressed, a coalition of NGOs said today.
The report, “The Community Good – Examining the Influence of the PNG LNG Project in the Hela Region of Papua New
Guinea”, finds that, although the project has boosted the local economy through employment, the project is fuelling
community tensions because of inadequate community awareness-raising, belief that the process of landowner
identification is flawed and community concern about how project benefits will be shared. At the same time, the report
notes the potential for resolution through constructive stakeholder dialogue.
The Liquefied Natural Gas Project (LNGP) will extract natural gas from the Hela region in the Highlands, condition and
send it to the coast for liquefaction before exporting the gas to overseas markets. The initial construction phase of
the LNGP began in 2010, with its completion expected in 2014.
Oxfam New Zealand’s Executive Director, Barry Coates said this report was an important reminder that while large-scale
resource-extraction projects could deliver economic development benefits, it was vital that they also resulted in
enduring improvements to human well-being. This was not always an easy task, but it certainly was possible.
“Throughout this research, the voices of the people of Hela Province can be heard – loud and clear,” Mr Coates said. “We
hope that decision makers give proper consideration to this important study to ensure that benefits from the LNG project
are maximised for all citizens of Papua New Guinea, particularly women and children in those communities where the
impact of the project will be the greatest.”
“All stakeholders must take responsibility to ensure that the project does not cause harm to local people. The New
Zealand Government has an opportunity to help resolve some of the challenges fuelled by the LNG project by engaging in
constructive dialogue with the Papua New Guinea Government, and other agencies, including the Australian Government that
has supported the project to the tune of $350 million.“
Key findings include:
• Inadequate awareness raising about the project and dissatisfaction with the information conveyed
• Lack of comprehensive social mapping and landowner identification, meaning some legitimate landowners have not been
identified and therefore will miss out on project benefits
• Whilst there have been efforts to maximise opportunities for business and employment, a poor process for assigning
business development grants has resulted in accusations of misappropriation and litigation in the courts
• Cash ‘windfalls’ received by families are quickly spent. Some argue this is leading to increased family breakdowns and
social problems, while others recognise the positive impact they were having on many people’s lives
• Teachers and healthcare workers are leaving to work for the LNGP, stretching resources in the community
• While the contribution of the LNGP and increased police presence has led to a reduction in serious crime, there is
concern about increases in petty crime and other forms of criminality, with more people feeling unsafe since the LNGP
arrived
• Issues regarding resettlement of people include unhappiness with their new locality, and problems with the
distribution and management of large payments in the absence of proper financial guidance and banking facilities
• While the LNGP has brought optimism to the area, there is fear the situation will deteriorate into conflict,
especially if landowner issues are not resolved satisfactorily
Otago University National Centre for Peace and Conflict Studies Director, Professor Kevin Clements, said the Hela region
presented especially challenging circumstances, with the potential to increase social tensions.
“While the company and government have made a considerable contribution, there are widespread concerns about
transferable skills and the sustainability of business and employment in the absence of the heightened needs of the LNGP
construction period,” Mr Clements said. “We need to keep working together to resolve these.”
“The billions of dollars of revenue from the PNG LNG project should guarantee that all Papua New Guineans can enjoy
access to essential health services, decent education, sustainable livelihoods and safe communities,” Mr Clements said.
“Sadly the history of resource development in PNG provides no such guarantee.”
The report is a joint research project conducted by Oxfam, National Centre for Peace and Conflict Studies at the
University of Otago, PNG Church Partnership Program, ChildFund Australia, Jubilee Australia, UnitingWorld and the
Melanesian Institute.
ENDS