Kua spells out reasons for energy Bill

ENERGY Minister Kerenga Kua has spelled out what he described as the “merits of the proposed 2020 Amending Law” when introducing the Bill to parliament this week.
Kua spells out reasons for energy Bill Kua spells out reasons for energy Bill Kua spells out reasons for energy Bill Kua spells out reasons for energy Bill Kua spells out reasons for energy Bill

Kerenga Kua

Staff Reporter

This is an edited version of what he said.
The proposed 2020 Amending Law is intended to alter key out-dated sections of the Oil and Gas Act, 1998. Those are sections of the Oil and Gas Act that inhibit or frustrate the state's ability to secure the best deal possible from Papua New Guinea's participation in oil and gas projects.
Papua New Guinea continues to be hamstrung by serious gaps or flaws in sections of the Oil and Gas Act, which weaken any push under Section 25 of the National Constitution for "national interest" against "commercial interest'.
It is our collective responsibility, as members of this "the people's house", to ensure that Papua New Guinea claws back on the disparity between "national interest" and "commercial interest", which the Oil and Gas Act encourages. Corrective measures must be taken at the basic or targeted level before having wholesale changes made.
Wholesale changes will be for another time soon, but for now, parliament must begin with a targeted approach that serves an immediate "national interest" agenda.
Today, two sets of targeted changes must be brought to bear. One set of those changes relates to gaps in sections of the Oil and Gas Act on applications for and grants of petroleum development licences.
These are gaps in Sections 54, 56 and 57 of the Act that weaken the state's bargaining position when negotiating petroleum agreements and gas agreements. Those sections, if not fixed, will continue to weaken the state's ability to negotiate such agreements in the "national interest".
For emphasis, it ought to be said that Sections 54, 56 and 57 collectively require that if the Petroleum Advisory Board recommends to the Minister to refuse to grant a petroleum development licence then the applicant can take the Minister's decision to arbitration.
Usually, such arbitration ends up as international arbitration, involving at least three foreign arbitrators, in foreign countries. The parties are represented by lawyers from foreign countries.
Neither the arbitrators nor the lawyers have any training or understanding of PNG's legal jurisprudence, politics, economy, culture, visions, and dreams. Our own courts, judges and lawyers are ruled out by force of our own legislation in the first instance.
The big question is: what kind of justice will be delivered in this kind of arrangement? Justice by whose definition? Foreign or PNG? The question by itself exposes a risk.
When it involves billions of kina, this is a risk the State cannot continue to take.
The other set of flaws relate to the Agreements to which the State is a party under Sections 183, 184 and 185 of the Oil and Gas Act. Of concern for the state is the fact that those agreements are given the status of law and given supremacy over the Act. Having any such agreement prevail over the Oil and Gas Act where there is conflict, places the State at great risk. One real risk is the State being forced to agree to a position that is not in the "national interest" and which would not otherwise have the force of law if not for those sections under the Act.
Agreements under Sections 183, 184 and 185 of the Act must have the status of agreements and nothing more. Giving them supremacy over the very Act that gives them supremacy is unacceptable for any responsible parliament. This house will never accept the idea that a mere contractual agreement will have the same status as or be superior to an Act of parliament. This would be the same as accepting that an Act of Parliament will have the same status as or be superior to the National Constitution where there is a conflict between the two.
The proposed 2020 Amending Law also has savings and transitional provisions, which are part of constitutional due process. There is, therefore, little need to provide any explanation beyond having them mentioned.
Finally, I put the house on notice that the government will be introducing a new Bill for a new Organic Law to move us away from our current "concession" based licencing system to a production sharing arrangement for both the mining and petroleum industries.
After the new Organic Law is passed into law by this parliament, the government also expects to introduce a number of new Bills for a number of Acts to provide details for the implementation of the new policies.