Like any law it comes down to the "letter" of the law versus the application. The hardest letter of the law is meant for situations where it must be applied due to intentional violation/non-compliance. The other side of that is built in leniancy where law/procedures are by and large being met, and then situations where the law is almost a non-issue because for all intents and purposes all is being performed/fulfilled. By far in a situation like we have like PNG the latter two are the "norm". PNG is developing and needs investment and development. To this point in time strict enforcement of laws has been pretty much non-existent; in fact extreme liberal application of the laws has been the norm, and that's why corruption has run rampant. I believe PNG is now (under O'Neill) moving the right way; toward leniency in situations like we have with IOC. IOC has been in PNG for a long time, is basically considered a local company and has invested hundreds of millions. People may forget O'Neill's speech 38 days into this administration which contained these words:
"The most-important agenda of my government, with respect to the mining and petroleum industries, is to create an enabling environment within which projects can be developed peacefully and benefits and multiplier business opportunities derived thereof are shared fairly among all stakeholders. There is no need at the present time to destabilise mining and petroleum industry developers and investors with a law designed to compromise or reduce their present respective equity position.
The applicable laws have not changed. Changes may and will occur in the future but they will have to be driven by a win-win formula for all stakeholders in a predicable manner.
These changes – when they are desired and when they do occur – will take place with and after comprehensive dialogue and discussion with you and with all other affected parties including landowners in Papua New Guinea.
Let me also reassure you that my government is about being inclusive right across the board on all matters of national affairs. And that includes all aspects of the foreign investment and natural resource extraction industries sectors in PNG.
My government is not about creating sovereign risks for my nation’s foreign investment and development potential. My government is not about making life difficult for foreign investors, especially those that have invested millions of dollars in speculative exploration and later to develop and underpin emerging world class mining and hydrocarbon industries in PNG.
My government respects the principle of finders keep and finders share. That is the spirit within which we will, and we shall all operate under my watch. I have cautioned, and will caution again, my ministers and State-owned corporations, involved in the mining and hydrocarbon industry, to desist promptly from giving misleading signals to the foreign investment sector.
It is not my government’s position to create insecurity, political risk or threaten foreign investment with expropriation. Some of these negative signals have been made since my government took office. I will vigorously investigate this deception targeted at the progress of the two multibillion dollar LNG projects and take corrective action in the coming days.
Let me reiterate in the strongest terms that I lead an inclusive and consultative government that will not fall back on the bad habits of governments that have been in power previously in PNG.
I am serious about the bigger interests of the nation – not corruption and vindictive personalised agenda of my ministers or persons who seek to actively use my ministers to further their deceptive agenda in the mining and petroleum industries in particular."
And this:
"On August 9, I stated in my initial policy statement that every effort will be made by my government to assist these two projects to meet their initial production timelines in 2014.
My position has not changed. I will ensure there are no political and bureaucratic interference in their progress. All dealings with regard to these two projects shall be transparent and predictable. The importance of these two projects can neither be overstated nor understated."
His whole speech is worth re-reading as it shows the new "working WITH investors" attitude as long as those investors follow the rules. This is the same speech where he says investors must "come in through the front door.
http://www.highlandspacific.com/pdf/PNG-PM-Peter-ONeill-speech.pdf
PNG is a Commonwealth nation and that means a lot. We have seen once in the last couple of years (Horizon I believe) where under Somare a request for license extention was requested and an attempt was made by PNG to deny. The developer protested, took the matter to court, and PNG backed off and extended because proof was provided that commitments were being fulfilled. IOC is not new to PNG and they have a good history of development. PNG has been working with the company and IMHO they will continue to do what it takes as long as IOC continues to hold up its end of the deal. They've done that and indications are that the ball is in PNG's side of the court.
