Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

asked the Minister representing the Minister for Foreign Affairs, upon notice, on 29 June 2011:

With reference to finance provided by the Export Finance and Insurance Corporation (EFIC) to the Papua New Guinea Liquefied Natural Gas (PNG LNG) project and to two reports commissioned by EFIC relating to investor risk and security needs assessment, the answer to part D of question no. 23 taken on notice during the 2010-11 additional estimates hearings of the Foreign Affairs, Defence and Trade Legislation Committee suggests that EFIC may not have seen the security assessment:

(1) Was Control Risk Asia Pacific commissioned by EFIC to undertake a security and investor assessment of the PNG LNG project.

(2) Did Control Risk Asia Pacific accompany EFIC representatives to PNG to meet with project joint venture companies.

(3) Did EFIC provide Cabinet with the full Control Risk Asia Pacific assessments; if not, why not considering the vast proportion of finance came from the National Interest Account not the EFIC Commercial Account.

(4) Did EFIC provide the department with the Control Risk Asia Pacific PNG LNG assessments; if so, did the department provide any comments and to whom.

(5) Did EFIC provide AusAID with the Control Risk Asia Pacific PNG LNG assessments; if so, did AusAID provide any comments and to whom.

(6) Given that three out of the six Export Credit Agency financiers of the PNG LNG project (Australia, Japan and China) provide overseas development aid (ODA) to the PNG Government, to what degree will the nature and priorities of Australia's ODA to PNG change during the construction and production stages of PNG LNG.

(7) Are there any provisions in the project finance contract or associated contracts between the project joint venturers and EFIC/Australian Government relating to landowner benefit sharing; if so, can a general description be provided, while respecting commercial in confidence aspects of the contract.

(8) As a project financier is EFIC or the Australia Government concerned about the current level of conflict and landowner dissatisfaction arising from the distribution of business grants and contracts in the project areas.

(9) Has EFIC or the Australian Government communicated anything to the project joint venture companies or the PNG Government about this issue.

(10) Did the Australian Government directly or indirectly have representation at the Kokopo Umbrella Benefits Sharing Agreement development forum held in April and May 2009.

(11) Can a list be provided of all the meetings attended by the Australian High Commissioner in PNG in relation to the PNG LNG project.

(12) What does the Minister believe is the biggest security and investment risk to the PNG LNG project going ahead.

(13) What control does the Australian Government have over this risk.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

The Minister for Trade and the Minister for Foreign Affairs has provided the following answer to the honourable senator's question:

(1) No. EFIC did not commission any reports from the Control Risk Asia Pacific Group. However, the Control Risk Asia Pacific Group was separately engaged by Esso Australia to prepare two reports. The first report was for the lenders to the PNG LNG project with respect to security issues relating to the PNG LNG project. EFIC received the final version of this report in December 2009. The second was a report for the sponsors on security matters. EFIC has not received or reviewed the sponsors' report.

(2) No, Control Risk Pacific Asia staff have not accompanied EFIC representatives to any meetings in PNG.

(3) It is not appropriate to comment on Cabinet processes.

(4) EFIC has not provided DFAT with the lenders' report from Control Risk Asia Pacific Group. The lenders' report formed one part of EFIC's comprehensive due diligence process in which EFIC received independent advice on, or verification of, a number of key risk factors. The lenders' report, amongst other due diligence material, enabled EFIC to provide a detailed credit assessment to DFAT in respect of the proposed NIA transaction.

(5) No.

(6) The following answer has been provided by the Minister for Foreign Affairs:

The construction and production phases of the PNG LNG Project will not affect the nature and priorities of Australia's ODA to PNG. In accordance with jointly agreed priorities, the aid program to PNG will focus assistance on education and health, including HIV/AIDS, and maintain support for law and justice and transport. Australia is providing advice to the PNG Government on how it may manage the governance impacts of the LNG project and to establish mechanisms to manage anticipated revenues for the benefit of the people. This support is being managed separately from the aid program.

(7) PNG law governs which landowners, local and provincial governments are entitled to benefit from the PNG LNG project.

(8) Negotiations with local landowners are principally a matter for the PNG Government, landowner associations and LNG project partners.

(9) Negotiations with local landowners are principally a matter for the PNG Government, landowner associations and LNG project partners. Neither EFIC nor the Australian Government has had any communication with the PNG Government on those negotiations.

(10) No. The Kokopo Umbrella Benefits Sharing Agreement development forum participants comprised mainly PNG government representatives (at national, provincial and local levels) and PNG landowners. There were no Australian Government representatives at the forum.

(11) It would not be feasible to provide a list of meetings attended by the High Commissioner in relation to the PNG LNG Project because of the large number of meetings in which it was discussed. Given the significance of the project to PNG, the project is discussed regularly by the Australian High Commission.

(12) It is not appropriate for an opinion on security and investment risk to be provided.

(13) The Australian government cannot exert control over security risks in third countries.