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+--- Thread: IPBC disbanded and means PM and former PMs rule (/showthread.php?tid=3288)
IPBC disbanded and means PM and former PMs rule - Palm - 04-09-2013
Looks like O'Neill and NEC are taking things much further toward doing things right than we could have imagined. With the government enterprises being THE most important source for revenues for Treasury/SWF they are following through on their statements that the country cannot be dependent on taxes and royalties only; they must control the State's share of ownership in Enterprises and manage them like a business to bring in profits which supply dividends. This is the best thing that could happen for companies like IOC which want to be true partners with PNG. Having proven managers in place for these SOE's will minimize the ability of (for instance) super majors to call all of the shots and avoid/minimize things like cost blowouts. Couldn't happen at a better time. This process has likely contributed to the slowdown in IOC's SD process, but it likely puts the JKMs in the driver seat as far as preferred partners.
RE: IPBC disbanded and means PM and former PMs rule - efi426hemi - 04-09-2013
Sounds like this one of the platform concepts that O'Neill used to convince the former PM's Somare, Chan and Wingti to form his coalition last July. While it is hard to know what is going on at ground level, O'Neill appears to be a very impressive leader that is following through on promises designed to provide a bright future for his country.
RE: IPBC disbanded and means PM and former PMs rule - ArtM72 - 04-09-2013
It is said there is no better form of government than a benevolent dictatorship. O'Neil is building a throne within the PNG democracy. Kinda reminiscent of the legendary mayor of Chicago Richard J Daley (the original, not the son although the son learned the trade well). Daley, most agree, as powerful as he was, was very good for Chicago.
RE: IPBC disbanded and means PM and former PMs rule - CAC - 04-09-2013
[quote='Palm' pid='20356' dateline='1365481756']
Looks like O'Neill and NEC are taking things much further toward doing things right than we could have imagined. With the government enterprises being THE most important source for revenues for Treasury/SWF they are following through on their statements that the country cannot be dependent on taxes and royalties only; they must control the State's share of ownership in Enterprises and manage them like a business to bring in profits which supply dividends. This is the best thing that could happen for companies like IOC which want to be true partners with PNG. Having proven managers in place for these SOE's will minimize the ability of (for instance) super majors to call all of the shots and avoid/minimize things like cost blowouts. Couldn't happen at a better time. This process has likely contributed to the slowdown in IOC's SD process, but it likely puts the JKMs in the driver seat as far as preferred partners.
=============
I agree that this seems good, long term, for stability and for "fair-dealing" with IOC...but doesn't it also quite possibly mean we wait until the legislature creates the new entity before PNG is in a position to "sign off" on the deal? Could this mean September is now our new expectation? If so, we're going to need to hear "something" pretty soon from management about this.
RE: IPBC disbanded and means PM and former PMs rule - jft310 - 04-09-2013
In my opinion this has nothing to do with where the PNG govt holds the assets. Doesn't prevent the govt from agreeing to a deal just the entity that eventually holds the interest might be Sept. Look at the other entities they all hold assets today. Even in Japan Petromin signed the agreement and geez there is no more Josh Kalanoe but the agreement was signed anyway. More important the PNG govt is not involved in the first train anyway. They have decided to take a double slice on train 2. Plenty of time to align everything.
RE: IPBC disbanded and means PM and former PMs rule - Tree - 04-09-2013
..."but doesn't it also quite possibly mean we wait until the legislature creates the new entity before PNG is in a position to "sign off" on the deal?
No. Petromin is still functioning entity and will be until Septmber. Recently signed JAPEX MOU is with Petromin. Petromin can enter into Gulf LNG and then be reorganized into Kumul Petroleum as the legislation allows, and that is what will happen. Petromin has been slated for dismantling for many months and this just didn't happen in the last 2 weeks.
RE: IPBC disbanded and means PM and former PMs rule - CAC - 04-09-2013
[quote='Tree' pid='20367' dateline='1365510777']
..."but doesn't it also quite possibly mean we wait until the legislature creates the new entity before PNG is in a position to "sign off" on the deal?
No. Petromin is still functioning entity and will be until Septmber. Recently signed JAPEX MOU is with Petromin. Petromin can enter into Gulf LNG and then be reorganized into Kumul Petroleum as the legislation allows, and that is what will happen. Petromin has been slated for dismantling for many months and this just didn't happen in the last 2 weeks.
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I guess I was considering the comment by "Insiderr" which said the bidder required this restructuring as part of the deal. We obviously don't know if Inciderr is legitimate or not, but taking the post at face value, one could wonder...if it was important enough to the bidder that Petrominbe be eliminated (and they apparently acquired that concession from PNG), are they now going to sign the deal with Petromin...or be cautious and wait to sign it with the entity that they demanded be created?
RE: IPBC disbanded and means PM and former PMs rule - Palm - 04-09-2013
Agree Tree; everything mentioned so far states that until September entities now in place stay in place; it has to be that way because these entities hold interests in active businesses. The big difference for Petromin is that Kalinoe stepped aside wisely and willingly, possibly with the understanding that he either do that, or he is pubilcily humiliated and/or prosecuted. O'Neill as PM is the government's sole shareholderin PM, so things can move ahead, then be transferred to Kumul Petroleum. Nothing in this will further slow things down.
RE: IPBC disbanded and means PM and former PMs rule - Palm - 04-09-2013
'efi426hemi' pid='20357' datel Wrote:Sounds like this one of the platform concepts that O'Neill used to convince the former PM's Somare, Chan and Wingti to form his coalition last July. While it is hard to know what is going on at ground level, O'Neill appears to be a very impressive leader that is following through on promises designed to provide a bright future for his country.
Keep it on Ice,Hemi
Agree Hemi, O'Neill is a unique combination of a businessman and politician. He knows that he can't just run roughshod over those who were in power in the past and say all they did was wrong or worthless. The Accord the struck while forming the coalition is unfolding to have been brilliant, and they are now rolling it out. Somrae is much more a politician than businessman, but his support, wisdom and political ties are important. There seems to be enough checks and balances built in to get things done correctly. I read the Opposition response to this last night. For the most part they can only say they are wary this this is a power grab, but even they don't argue very strongly against it. Just say that they will watch to see what happens. In other words, "Not a bad idea".
RE: IPBC disbanded and means PM and former PMs rule - Palm - 04-10-2013
I got to thinking about this reorganization and how it has accelerated since O'Neill was elected and the coalition has formed and strengthened. It's obvious that PNG is taking direction from someone. I believe that someone is an entity which supplies them with a lot of aid; ADB. I pointed out last week that ADB had done a study of the Pacific Island SOEs and for the first time PNG elected to participate. This was welcomed by ADB and they have commended PNG for taking part. It appears PNG is taking the results of the study seriously and in it one can see the need for the reforms PNG is undertaking. The study mentions IPBC and states:
"When the IPBC Act was passed in 2002, the intention was that IPBC would operate entirely independent of the state; and not be subject to any direction or influence by the state, ministers, or the Parliament, except where explicitly set out in the IPBC Act, the SOE’s empowering legislation (where it exists), the GBT’s deed, or elsewhere in legislation.13 It is
understood that this high degree of separation was introduced in response to concerns over the endemic corruption within the PNG government."
The problem was:
"Indeed, the IPBC Act has both strengths and
weaknesses, and it would appear to a large extent
that since 2002 the weaknesses have been exploited
and the strengths ignored:
• Accountability and transparency. For most of
the period FY2002 to FY2010, the IPBC failed
to provide publicly available audited fi nancial
statements or annual plans. Similarly, the
SOEs failed to produce annual plans and
IPBC made no eff ort to publicly disclose the
audited accounts of the SOEs.
• IPBC governance. The 2002 IPBC Act
stipulated that the IPBC board should
comprise representatives from organizations
such as the PNG Trade Union Congress, PNG
Chamber of Commerce, a person nominated
by the National Council of Women, a person
appointed by Transparency International
(PNG), and others as listed in Section 11 of
the Act. This list had been carefully compiled
to ensure not only the independence of
IPBC, but also transparency, accountability,
and confi dence in the board’s decision
making. The requirements of Section 11 were
subsequently amended but on the whole have
been largely ignored.
• IPBC mandate. The original IPBC Act required
the board of IPBC, in exercising its powers
and functions, to act in accordance with
sound business principles; and the care, diligence, and skill that a prudent person
of business would adopt or exercise. This
provision was removed in 2007, leaving IPBC
with no overarching principle to guide the
board in its management of the SOEs.
• SOE governance. In the past, the government
has sanctioned political involvement in the
selection of SOE directors, contrary to the
requirements of the IPBC Act.15 While the Act
authorizes IPBC to select and appoint SOE
directors with the National Executive Council
(NEC) having veto powers only, in practice
the Minister of Public Enterprises appears
to have acted virtually alone in appointing
the directors.16
• Management of the GBT. The SOEs are owned
by the GBT. The IPBC is the trustee of the
GBT. However, since the establishment of the
GBT no trust deed has ever been formalized,
which would defi ne, among other matters,
the terms of the trust, the obligations of the
trustee,17 and the benefi cial owner of the
trust’s assets.
• SOE mandate. The 2002 IPBC Act and
subsequent amendments lack a statement
establishing the primary focus of the SOEs,
which should in turn guide all decisions
made by the board of directors and senior
managers. In most SOE legislation, this
statement—often called the “primary
objective”—requires the SOE to operate as a
successful business; and is then reinforced
by clear accountability statements that set
out the consequences for not meeting this
primary objective.
• Investment oversight. Section 46B of the
IPBC Act, introduced in the 2007 amendment,
states that no majority-owned SOE can enter
into any contract involving the payment or receipt of an amount, or of property to
a value exceeding K1 million without fi rst
seeking the approval of the minister of
public enterprises on the recommendation
of the IPBC managing director. The National
Development Bank—the poorest-performing
SOE over the period of this study—and
Telikom PNG (Telikom) have undertaken
projects with values over K100 million, in
breach of Section 46B."
So high corruption begat seperation from government, which begat high corruption because of lack of accountability. Now PNG is trying to get it right by having a balance of public and private governance and accoutability. This paper is worth a read as it gives insights to where PNG is headed, and ADB supports what they are doing. China is the champion of SOEs and they are not always done correctly. Petronas is one of the largest SOEs, but it is also considered one of the most corrupt by Amnesty International.
Here's a link to the PNG SOE study by ADB:
http://www.adb.org/sites/default/files/pub/2012/finding-balance-benchmarking-performance.pdf