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

Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
However, several issues have risen concerning the distribution of spin-off benefits, which either
apply currently, or potentially, to canneries in Madang, Lae and Wewak.
The first relates to inequitable distribution of spin-off benefits. For a number of years now, selected
members of traditional landholder groups in Madang (from Kananam and Rempi villages) have
raised concerns that the distribution of spin-off benefits associated with RD is inequitable. They
believe that benefits are not being accrued by the true ancestral landowners, but rather just a select
few. This issue has resulted in internal conflict within ancestral landowner groups, given spin-off
benefits have been allocated by RD based on submissions received from the groups themselves
identifying who the beneficiaries should be.
The sustainability of spin-off businesses is also a major issue. For example, each company
established spin-off businesses with passenger motor vehicle (PMV) operators for transporting
cannery workers to and from work. When then canneries withdrew the provision of transport in
association with the mandated increase in minimum wage in 2010, these businesses folded. In
Madang, complaints were also raised by transport operators about the unfavourable terms of the
spin-off businesses, as contractors were provided with second hand vehicles and the associated
bank loans were considered onerous to service. On the other hand, companies raise issues
concerning PMV operators taking advantage of the contracts by also transporting non-cannery
workers.
As mentioned earlier, it should be noted that all three companies are contemplating reinstating
transport services to alleviate worker’s concerns regarding the availability of alternative reliable
transport and security issues. Also, there is acknowledgement that the current public transport
system in Lae will not be sufficient to cater for large increases in cannery workers associated with
new processing investments which will potentially commence operations in the next 3-5 years. This
provides opportunities to potentially re-establish former transport spin-off businesses, as well as
establishing new ones.
The sustainability of spin-off businesses is also influenced by the level of business acumen of
beneficiaries. Awarding a contract and/or providing the necessary assets or working capital to
establish businesses is not always adequate in establishing successful spin-off businesses. Training is
also generally required in important facets of running small-business operations (e.g. management,
book-keeping, technical skills, equipment maintenance).
4.5.3 PMIZ development
The establishment of the Pacific Marine Industrial Zone in Vidar, Madang has generated a number of
concerns, on both social and environmental grounds. Some of these are extensions of existing
concerns, whereby people are worried that with the potential addition of new processing plants
these issues, if not adequately addressed, could potentially magnify up to ten-fold if all ten sites are
taken up within the PMIZ.
Longstanding issues with ancestral landowners concerning RD also now extend to PMIZ. The 216 ha
site, now owned by GoPNG, is part of an 880 ha parcel purchased by RD in 1997 from Zuanich ZZZ
Company (and prior to this was former Catholic Church land). However, these groups (Kananam and
Rempi) are demanding to be recognised as the rightful ancestral owners in efforts to facilitate more
equitable distribution of spin-off benefits, on the basis that their people have occupied the land for
three-five generations. Internal issues also exist within the clans between clan leaders and younger
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