Toksave - Allens PNG Monthly Regulatory Update - September 2020

Extractive industries

Organic law on PNG's ownership and development of hydrocarbons and minerals and the consolidation and commercialisation of PNG's business law 2020

The proposed organic law signals the PNG Government's intention to move away from the current concessional or royalty regime being applied in both the mining and oil and gas industries in PNG, to production sharing regimes.

In the recent September 2020 parliament seating, the Clerk of Parliament announced that the Minister for Mining and Petroleum, Hon. Kerenga Kua, had given notice that he would be introducing the proposed organic law on the floor of parliament in the coming months.
Our Allens team in Port Moresby will soon be releasing a client update on the proposed organic law, discussing its key provisions and how it will impact businesses.

Agriculture and livestock

PNG agriculture exports experience drastic fall

PNG's primary agriculture exports continue to fall despite undertakings by the PNG Government to revitalise the agriculture industry. Cocoa, coffee, copra and tea have all shown significant losses in production exports, with coffee experiencing its lowest export in seven years. The only PNG agriculture export that continues to increase is palm oil.

ICT and telecommunications

Telikom and Bemobile merger pending

Despite being announced earlier this year by the PNG Government, the merger between Telikom PNG Limited and Bemobile Limited has still not been implemented. 

The proposed merger of the two state-owned entities is an attempt by the PNG Government to save costs and create an effective competitor in the telecommunications industry.

Competition and consumer protection

Motor Vehicle Insurance Limited obtains clearance to acquire Pacific Re Limited

On 4 August 2020, the Independent Consumer and Competition Commission (ICCC) granted clearance to Motor Vehicle Insurance Limited (MVIL) to acquire all the shares in Pacific Re Limited (Pac Re).

MVIL is a state owned entity and currently has a statutory monopoly in the compulsory third party insurance market for all motor vehicle owners in PNG. And with the acquisition of Pac Re, PNG's sole reinsurance provider, MVIL, also assumes a monopoly in the reinsurance market.

In granting clearance for the share acquisition, the ICCC advised that it would not result in a substantial lessening of competition, noting that the current market structure of the insurance industry in PNG still allowed for competition in the reinsurance market.

Certification and commencement of new legislations

National Executive Council approves National Competition Policy

PNG's first ever National Competition Policy has been approved for implementation by the National Executive Council.

Since the passing of the Independent Consumer and Competition Commission Act in 2002, the approval of the National Competition Policy marks a significant milestone in the development and advancement of competition and consumer law in PNG.

News & other developments

Twinza Oil signs MoU with Gulf Provincial Government

On 7 September 2020, Twinza Oil Limited (Twinza) signed a Memorandum of Understanding (MoU) with the Gulf Provincial Government to supply gas to the provincial township.

Although this MoU is separate from the gas agreement currently being negotiated between Twinza and the PNG Government, the MoU is a step closer in furthering Twinza's compliance with the PNG Government's push to have mining companies engaging in more domestic market obligations and national content activities.

For more information please contact our team below or visit our PNG page on the Allens website.