It has been a turbulent year for politics in Papua New Guinea.
However, a new era began this afternoon with the election of Peter
O'Neill as Prime Minister. This article brings you up to date
with the latest developments and discusses how the change in the
political environment could affect investors in PNG going
In August 2011, Peter O'Neill replaced Sir Michael Somare as
Prime Minister and there were controversial court rulings and
animosity between the supporters of each side. This was damaging
not only to the growth of PNG but was also causing international
investors in Australia and elsewhere to think twice before they
moved forward with projects.
Fortunately, that political uncertainty looks to be over as
Peter O'Neill has today been elected as the next Prime
Minister. It is hoped that this will introduce a period of
stability in the government, its various agencies and the country
of PNG generally. The new government will be made up of around 75
MPs which is more than the 56 required to form a government.
What is significant about the appointment of Peter O'Neill
is that Sir Michael Somare and two other former prime ministers
(Sir Julius Chan and Paias Wingti) have agreed to support the
O'Neill led coalition government. This show of unity,
particularly between O'Neill and Somare, is a remarkable
turnaround from even a few weeks ago, and shows that there is
willingness among the politicians to provide a clear mandate for
the next government, and to work together in the national
Prior to the 2012 election, Peter O'Neill had been leading
some initiatives which were viewed positively within PNG and
welcomed by the international community in the areas of education,
health, infrastructure and the proposed establishment of a
sovereign wealth fund. These initiatives are likely to continue
with the new coalition government and will help provide a strong
platform for future business investment.
What it could mean for you
The election of Peter O'Neill and formation of a new
government could impact the private business sector in a number of
ways. Some general examples are discussed below.
PNG is a country with many natural resources and the
opportunities are well known. With the PNG LNG project due to begin
in 2014 and many other oil & gas and mining projects being
considered, the growth in the next few years is expected to provide
a significant turning point in PNG's economic development. This
should further enhance the country's role as an important
contributor to the global economy.
The results of this election and the political stability it
should bring in provide an opportune time for international
companies to consider again whether investing in PNG now may be
worth another look.
Certainty in Government policy and implementation
Since Peter O'Neill is the incumbent, the government's
position on key policy issues (e.g. with respect to ownership of
minerals) will likely continue. It is likely that there will also
be greater certainty going forward on how Ministerial discretion
under relevant laws will be exercised.
Tabling and enactment of legislation
With such a large majority it is likely that the tabling and/or
enactment of legislation relevant to the private business sector
will proceed without delay now that the politicial situation has
been made clear as a result of the election.
After a long period of political uncertainty it is promising to
see that a government with a clear majority has been sworn in and
that political rivals have agreed to work together. The future of
PNG looks brighter as a result of these developments and it may be
that this will herald a new era of investment into PNG.
Ensuring that new projects and the establishment of business
relationships are done after considering them from a legal point of
view will continue to be important. Norton Rose Australia is well
placed to assist you when doing business in PNG as we have a real
understanding of, and very current experience in, PNG projects and
transactions across a diverse range of sectors.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
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