Report on the Implementation of the derogation to ... - Trade Websites

Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
for business from the project that may be open for local participation. The following general
criterion will apply – local contractors/groups/entities will have capacity to utilise their
potential, craftsmanship or trade in all categories of business. Preference will be given to
immediate and indigenous people of Madang. Where there is no capacity within the
province, the next level of preference should go to local businesses outside of Madang
Province. Unless all national capacities are exhausted, there shall be no consideration of any
international contracting interest.
A provision has also been incorporated into Project Agreements for Madang-based operations
regarding dispute settlement:
• Local community dispute settlement – The State and the Madang Provincial Government
and the company will form a committee to consult with the Project Impact Area
Communities to address any dispute that may arise relating to provincial and local
participation in the project (Clause 11).
In addition to provincial and local benefits requirements as specified in the Project Agreement, RD
Group of Companies established a Memorandum of Understanding (MOU) with government and
Incorporated Landowner Group (ILG) leaders in 1997, which specified the benefits for coastal
residents. RD agreed to a extend a number of benefits to Madang residents including: 1) a
concession to manage and operate a canteen in the cannery area; 2) permission to sell fresh
vegetables to the cannery canteen and the company’s fishing fleet; 3) employment for six to eight
men as security personnel at the cannery site; 4) positions for ‘one and later on at least two local
landowners for cleaning and maintenance of the cannery yard’; 5) construction of one health clinic
‘with maximum area of 30 square metres’; 6) contract transport services to customary landowners
‘who own a suitable vehicle’; 7) an option to purchase up to 25 tonnes/day of raw tuna from locals
for cannery operations; and, 8) priority status for RD sponsorship of ‘qualified’ local students to
tertiary institutions and technical colleges in Papua New Guinea ‘if and when the company initiates
the said scholarship program’. 93
In short, in meeting their corporate social responsibilities, tuna processing companies are required
to ensure that broader social-economic benefits stem to local communities in the form of spin-off
businesses (e.g. catering, transport, security, worker’s accommodation etc.) and other associated
benefits (e.g. local purchases, sponsorship/donations, traineeships, Christian outreach etc.).
Existing companies have established dedicated positions within the company (generally titled
‘Community Relations Officer’ (CRO)), which are filled by PNG nationals, to specifically handle liaison
among the company, local communities and Government concerning spin-off benefits and other
social issues. RD Group of Companies (covering RD Tuna Canners and RD Fishing) has established a
dedicated subsidiary company, RD Foundation, to carry out its corporate social responsibility-related
activities.
4.5.2 Spin-off businesses
Table 4.9 summarises spin-off businesses and other socio-economic benefits generated to date by
PNG’s tuna processing companies. 94 The socio-economic contribution made by PNG’s tuna
processing operations to local communities is highly significant.
93 MOU as cited by Havice and Reed 2011.
94 This list is compiled on the basis of information gathered during interviews with cannery representatives
(September 2011) and may not be exhaustive.
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