Papua New Guinea's Performance on the Resource Governance Index
Papua New Guinea received a "weak" score of 43, ranking 39th out of 58 countries, a reflection of critical gaps in government oversight across most aspects of the extractive sector.
(out of 58)
(out of 100)
|31||Institutional & Legal Setting||59|
|36||Safeguards & Quality Controls||50|
Institutional and Legal Setting (Rank: 31st/58, Score: 59/100) learn more
While Papua New Guinea has detailed mining legislation, it lacks clear revenue collection mechanisms, leading to a "partial" score of 59.
Papua New Guinea's legal framework includes clear principles and specific requirements that govern the mining industry. The Mineral Resources Authority represents the state's interests and acts as a regulator; it is subject to reporting and auditing requirements. The minister of mining grants licenses to companies on a first-come, first-served basis in exchange for royalties and taxes.
The Mineral Resources Authority collects royalties and the Internal Revenue Commission collects taxes; some revenues appear to bypass the treasury and are not reported to parliament. Environmental impact assessments are required prior to granting mineral rights but are rarely published. There is no effective freedom of information law. The government has expressed interest in implementing the Extractive Industries Transparency Initiative, but is not yet a signatory.
Reporting Practices (Rank: 44th/58, Score: 34/100) learn more
With a lack of official data on most aspects of the extractive industries, Papua New Guinea received a "failing" score of 34.
The 1992 Mining Act requires that limited information about the licensing process be disseminated publicly, but mining contracts are not published and the details of negotiations are not disclosed. Neither the Mineral Resources Authority nor the Internal Revenue Commission publishes information on resource revenues. The central bank provides information on prices, the value of resource exports, and production stream values; the Treasury Department publishes some information on dividends.
Safeguards and Quality Controls (Rank: 36th/58, Score: 50/100) learn more
Papua New Guinea's "partial" score of 50 reflects limited government checks on the licensing process and revenue collection system, but also accounts for substantial audit requirements for state-owned companies.
The legislature does not review contracts or play a significant oversight role. Licensing decisions are discretionary, with the minister of mining often participating in contract negotiations. However, government officials involved in regulating the extractive sector must report their financial interests.
The Auditor General's Office reviews resource revenues and publishes annual reports. The findings are presented to Parliament, but its Public Accounts Committee does not actively scrutinize revenues.
Enabling Environment (Rank: 28th/58, Score: 38/100) learn more
Papua New Guinea's "failing" score of 38 is due in part to especially poor performance on measurements of corruption control and the rule of law.
State-Owned Companies (Rank: 14th/45, Score: 69/100) learn more
Petromin is one of several state-owned extractive companies. It manages the government's equity in mineral and petroleum projects and is fairly transparent; it publishes annual reports with information on reserves, estimates of investment in exploration, production costs, the names of subsidiaries, information on quasi-fiscal activities, royalties, special taxes, dividends, and license fees. Petromin is subject to annual audits by an independent external auditor.
Natural Resource Funds learn more
Papua New Guinea is in the process of creating a sovereign wealth fund to receive revenues from several massive natural gas projects that are underway. The fund will also manage government surpluses from mineral exports. Though the details are still unclear, the fund is expected to begin operations in the next few years.
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INSTITUTIONAL & LEGAL SETTING
SAFEGUARDS & QUALITY CONTROLS
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Key Economic Indicators
|GDP (constant 2011 international $ billion)||4.5||5.6||12.9|
|GDP per capita, PPP (constant 2005 international $)||1,951||1,866||2,363|
|Oil and gas revenues (% total government revenue)||24||23|
|Extractive exports (% total exports)||80||60||..|
|Sources: Oil and gas revenue as share of total government revenue from the Economist Intelligence Unit and the International Monetary Fund. All other data form the World Bank. Oil and gas revenues 2011 data frm 2010; Extractive exports 2005 data from 2004.|