(EnergyAsia, June 28 2012, Thursday) — A coalition of non-governmental organisations (NGOs) has issued a report outlining the challenges and negative impacts arising from an increasingly troubled US$16 billion dollar liquefied natural gas (LNG) project in Papua New Guinea’s Hela province.

ExxonMobil is leading a consortium to extract natural gas from the onshore Hela region for delivery to the coast for liquefaction and export as LNG to Asian markets. Work began in 2010, with completion targeted in 2014.

Local tribesmen and villagers have rioted and protested against the project in recent months causing work stoppages.

The report is a joint research project conducted by Oxfam, National Centre for Peace and Conflict Studies at the University of Otago, PNG Church Partnership Program, ChildFund Australia, Jubilee Australia, UnitingWorld and the Melanesian Institute.

The report, “The Community Good – Examining the Influence of the PNG LNG Project in the Hela Region of Papua New Guinea”, said the project is fuelling community tensions because of inadequate community awareness-raising, belief that the process of landowner identification is flawed and community concern about how project benefits will be shared.

While the project’s early investments have boosted the local economy through employment, the companies developing it must step up their work on “constructive stakeholder dialogue,” said the report.

Its key findings include:

• Inadequate awareness raising about the project and dissatisfaction with the information conveyed.

• Lack of comprehensive social mapping and landowner identification, meaning some legitimate landowners have not been identified and therefore will miss out on project benefits.

• Whilst there have been efforts to maximise opportunities for business and employment, a poor process for assigning business development grants has resulted in accusations of misappropriation and litigation in the courts.

• Cash ‘windfalls’ received by families are quickly spent. Some argue this is leading to increased family breakdowns and social problems, while others recognise the positive impact they were having on many people’s lives.

• Teachers and healthcare workers are leaving to work for the project, stretching resources in the local community.

• While the increased police presence has led to a reduction in serious crime, there is concern about increases in petty crime and other forms of criminality, with more people feeling unsafe since the start of the project.

• Issues regarding resettlement of people include unhappiness with their new locality, and problems with the distribution and management of large payments in the absence of proper financial guidance and banking facilities.

• While the project has brought optimism to the area, there is fear the situation will deteriorate into conflict, especially if landowner issues are not resolved satisfactorily

Oxfam New Zealand’s executive director, Barry Coates, said this report was an important reminder that while large-scale resource-extraction projects could deliver economic development benefits, it was vital that they also resulted in enduring improvements to human well-being.

He said: “Throughout this research, the voices of the people of Hela Province can be heard loud and clear. We hope that decision makers give proper consideration to this important study to ensure that benefits from the LNG project are maximised for all citizens of Papua New Guinea, particularly women and children in those communities where the impact of the project will be the greatest.”

“All stakeholders must take responsibility to ensure that the project does not cause harm to local people. The New Zealand government has an opportunity to help resolve some of the challenges fuelled by the LNG project by engaging in constructive dialogue with the Papua New Guinea government, and other agencies, including the Australian government that has supported the project to the tune of $350 million.“

Otago University National Centre for Peace and Conflict Studies Director, Kevin Clements, said the Hela region presented especially challenging circumstances, with the potential to increase social tensions.

He said: “While the company and government have made a considerable contribution, there are widespread concerns about transferable skills and the sustainability of business and employment in the absence of the heightened needs of the LNGP construction period.

“The billions of dollars of revenue from the PNG LNG project should guarantee that all Papua New Guineans can enjoy access to essential health services, decent education, sustainable livelihoods and safe communities. Sadly the history of resource development in PNG provides no such guarantee.”