Western Province Sustainable Development Program
The Company is mindful of its special responsibility to the people of Western Province, especially to support strategic investments that will provide the province with alternative economic, income-earning and employment opportunities after the Ok Tedi mine closes. During the period, the Company continued its investigations into sustainable development opportunities at community level, in micro-financial services, rubber production, oil palm, forestry, environment, fisheries, tourism, communications and power, as well as shipping and port development.
The Company sought the views of Western Province stakeholders through continuous dialogue and regular visits throughout the Province. It consulted with National Government Ministers and Officials, Western Province Members of Parliament, the Provincial Administration and community leaders, as well as with OTML.
The Western Province Administration and OTML continued to provide valuable operational support and advice during field visits to the province for project studies.
Supporting Community Sustainable Development Programs (CSDP) in Western Province.
In 2004, the first two CSDP Projects were signed off and funded in the Western Province. The first project, with funding support of US$71,920 (K232,000), is for Rumginae Rural Hospital Equipment Support Project in the North Fly District, and is managed by the Evangelical Church of PNG. This project involved the provision of much needed medical equipment for the Rumginae Hospital. The second project involved support for Australian Doctors International to procure and distribute 13,400 units of malaria bed-nets and 5,600 units of filariasis drugs for the remote Nomad area of Western Province, with the Company providing US$76,570 (K247,000).
Another four CSDP projects in Western Province were approved by the Company in November 2004. Two projects consisted of health and capacity-building projects in the South Fly District with the United Church as the project partner. The third involves promotion of agricultural education and agriculture-related capacity building with the Evangelical Church of PNG-operated Awaba Secondary School in the Middle Fly District, and will be implemented with technical assistance from Trukai Rice Ltd. The fourth is a pilot village barramundi fish farming project at Parama Village in the South Fly District, with a Western Province business enterprise, Maru Marine, providing management and marketing support and Bismarck Fisheries providing technical expertise. These projects have been designed to provide institutional capacity-building and support, skills training, promotion of self-reliance and health-care support.
The total funding provided for the Western Province CSDP projects up to the end of 2004 was US$400,000 (K1.3 million). The cost of administering the CSDP program will be additional. The Company is developing other community-based projects for implementation in 2005.
Western Province Rubber Rehabilitation and Expansion Program
The Company's support in Western Province focused on supporting rubber production at the North and Upper Middle Fly, working with North Fly Rubber Ltd (NRFL), and at the South and Lower Middle Fly areas in cooperation with Sipef's Galley Reach Holdings Limited.
The Company signed a Project Funding Agreement with NRFL (the Project Partner) and the Lake Murray Village Rubber Grower Representatives on 31 May 2004 at Lake Murray. The Company will provide funding support of US$3.7 million (K11.8 million) for the development of a village-based rubber project in the Lake Murray area with NRFL as the technical partner responsible for implementation. The funding consisted of US$2.2 million (K7 million) as a development grant US$1.5 million (K4.8 million) in soft loans for village growers. The loan is provided specifically to village households participating in the rubber project as a support and sustenance during the land clearing and planting period, estimated to be four years. PNG Microfinance Ltd will manage the loans scheme under an agency agreement, in accordance with a separate agreement signed with the Company on 3 September 2004.
Commencement of the project was significantly delayed, which resulted in re-examination of the project management structure and arrangements.
The Company also engaged with Galley Reach Holdings Limited to investigate estate and village out-grower rubber production at Oriomo in the South Fly District. The study confirmed the suitability of land for commercial rubber; adequate land availability for nucleus and out-grower operations and a processing factory; and the adequacy of river transport for the export of the product.
Western Province Sustainable Forestry Development Project
Discussions have taken place between the National Forest Authority and PNGSDP for the development of a sustainable forestry development project in the Wipim Tapila Forest Management Area (FMA) as an international model. The project would aim to demonstrate best-practice planning and management of forestry operations. A pre-feasibility study was conducted in 2004, finding prospects for a commercially viable project with capacity to produce 30,000m3 of logs per annum. The saw milling operation will involve value adding in the manufacturing of various furniture and other timber products and the seasoning operation which involves air and kiln drying. The study suggested, however, that a detailed resource inventory will be needed to confirm the log species distribution, the size distribution and an estimate of the true economic value of the resource. The National Forest Authority and the Company are committed to working in partnership with the landowners and the Western Provincial Government, in collaboration with a proven technical partner, to develop the model forestry project.
7th Floor, Pacific Place,
P.O. Box 1786, Port Moresby 121
Papua New Guinea