Mr. Allan Roberts
Managing Director
Lihir Management Company
Ltd
P O Box 380
KAVIENG
New Ireland Province
Mr. Noel Foely
General Manager
Misima Mines Ltd
PO Box 38
BWAGAOIA
Misima Island
Milne Bay Province
Mr. Ed Anderson
General Manager
Ramu Nickel Project
PO Box 1229
MADANG
Madang Province
Mr. P. Nielans
General Manager
Porgera Joint Venture
PO Box 484
MT HAGEN
Western Highlands Province
Mr. Graeme Collins
Mine Manager
Tolukuma Gold Mines Ltd
PO Box 5043
BOROKO
National Capital District
Dr. Roger Higgins
Managing Director
OK Tedi Mining Limited
PO Box 1
TABUBIL
Western Province
Mr. Greg McNee
Community Relations Dept
Porgera Joint Venture
PO Box 484
MT HAGEN
Western Highlands Province
Mr. Kaddy Lamang
a/District Administrator
PDA
PO Box 56
PORGERA
Enga Province
KAINANTU GOLD MINE PROJECT
MEMORANDUM OF AGREEMENT
BETWEEN
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
AND
THE EASTERN HIGHLANDS PROVINCIAL GOVERNMENT
AND
THE KAINANTU RURAL LOCAL LEVEL GOVERNMENT
AND
THE HIGHLANDS KAINANTU LIMITED
AND
THE BILIMOIA LANDOWNERS’ ASSOCIATION
AND
THE ASSOCIATED LANDOWNERS
ISIKEL MESULAM
STATE SOLICITOR
OFFICE OF THE STATE SOLICITOR
DEPARTMENT OF ATTORNEY GENERAL
P.O. BOX 591
WAIGANI
NATIONAL CAPITAL DISTRICT
DATED:
2
11 – 11 – 2003
CONTENTS
Page No:
RECITALS
4
PART A – GENERAL
1.
2.
DEFINITIONS
INTERPRETATION
5
7
PART B – NATIONAL GOVERNMENT UNDERTAKINGS
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
ROYALTIES
SPECIAL SUPPORT GRANT
TAX CREDIT SCHEME
DEVELOPMENT PLANNING COMMUNITY
COMMUNITY PROJECTS OFFICE
COMMUNITY PROJECTS OFFICE EXPENDITURE
COMMUNITY PROJECTS OFFICE-AUTHORISATION
AND MONITORING MECHNISMS
MINE CLOSURE/REHABILITATION (SUSTAINABLE DEVELOPMENT)
ENVIRONMENT
BUSINESS DEVELOPMENT PLAN
SUPPLY AND PROCUREMENT
EMPLOYMENT AND TRAINING
FINANCIAL ASSISTANCE TO THE LANDOWNERS
LAW AND ORDER
LAND
VILLAGE COURT SYSTEM
FUTURE GENERATIONS TRUST FUNDS
NATIONAL GOVERNMENT TO CO-OPERATE AND ASSIST
7
9
9
9
11
12
12
13
13
14
14
15
15
16
16
16
16
17
PART C – EASTERN HIGHLANDS PROVINCIAL GOVERNMENT UNDERTAKINGS
21.
22.
23.
24.
25.
26.
27.
28.
SPECIAL SUPPORT GRANT
PROVINCIAL MINE LIAISON OFFICE
COMMUNITY PROJECTS OFFICE
AGRICULTURAL ACTIVITIES
FORESTRY ACTIVITIES
PROVINCIAL INFRASTRUCTURE MAINTENANCE
ROADS
PROVINCIAL GOVERNMENT TO CO-OPERATE AND ASSIST
17
17
18
18
18
18
18
19
PART D – THE KAINANTU RURAL LOCAL LEVEL GOVERNMENT UNDERTAKING
29.
30.
31.
GENDER DEVELOPMENT PROGRAM
COMMUNITY SUSTAINABLE DEVELOPMENT PROGRAM
KAINANTU RURAL LOCAL LEVEL GOVERNMENT TO CO-OPERATE
AND ASSIST
3
19
19
19
PART E – THE COMPANY’S UNDERTAKINGS
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
MINE AREA FACILITIES ESTABLISHMENT GRANT
COMMUNITY PROJECTS OFFICE
GENDER DEVELOPMENT PROGRAM
ENVIRONMENT
EMPLOYMENT AND TRAINING
BUSINESS DEVELOPMENT PLAN
SUPPLY AND PROCUREMENT
ELECTRICITY
ADMINISTRATION OFFICE
INSTITUTIONAL ESTABLISHMENT ASSISTANCE
THE COMPANY TO CO-OPERATE AND ASSIST
19
19
20
20
20
21
22
23
23
23
23
PART F – LANDOWNERS UNDERTAKING
43.
44.
45.
46.
LANDOWNERS TO CONSULT
UMBRELLA COMPANY
LANDOWNERS TO CO-OPERATE AND ASSIST
COMMUNITY SUSTAINABLE DEVELOPMENT PLAN PROJECTS
24
24
24
25
PART G – FORMAL CLAUSES
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
LAW APPLICABLE
FORCE MAJEURE
TERMINATION/REVIEW
RESOLUTION OF DISPUTES
ARBITRATION
WAIVER
SEVERABILITY
FURTHER ACTS
IMPLEMENTATON
REPRESENTATIONS AND WARRANTIES
NO DEVOLUTION
COMMUNICATIONS
CONSULTATIONS
EXECUTION
COMMENCEMENT DATE OF THIS AGREEMENT
25
25
25
26
26
26
26
26
26
26
26
27
27
28
28
SIGNATURE PAGES



By the representatives of the five respective parties to this MOA
Witnessed by the ten respective clan representatives of the Mining
Lease Area in Bilimoia
Attested to by the respective representatives from the villages comprising
the Associated Landowners
29
30
31
ATTACHMENTS




Annexure A
Annexure B
Annexure C
Annexure (1)
Local Business Development Policy
Community Sustainable Development Plan
Training and Localisation Policy
letter dated 2nd October 2004 per Clause 37.5
4
(8 pages)
(7 pages)
(4 pages)
(2 pages)
THIS AGREEMENT is made on the
day of
2003
BETWEEN:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
(hereinafter called the “State or the “National Government” interchangeably) of the
first part;
AND:
THE EASTERN HIGHLANDS PROVINCIAL GOVERNMENT
(hereinafter called the “Provincial Government”) of the Second part;
AND:
THE KAINANTU RURAL LOCAL LEVEL GOVERNMENT
(hereinafter called the “Local Level Government”) of the third part;
AND:
THE HIGHLANDS KAINANTU LIMITED,
A company duly incorporated in Papua New Guinea, 9th Floor, Pacific Place, corner
of Musgrave and Champion Parade, PORT MORESBY (hereinafter called the
“Company”) of the Fourth Part;
AND:
THE BILIMOIA LANDOWNERS ASSOCIATION from the Mining Lease Area of the
Fifth Part;
AND:
THE ASSOCIATED LANDOWNERS from the villages in the Eastern Block, the
Northern Block and the Western Block
WHEREAS
A.
The State has granted a Mining Lease to Highlands Kainantu Limited dated 14th June, 2002
pursuant to which a mining operation will be carried out at Irumafimpa in the Kainantu area
of Eastern Highlands Province.
B.
It is recognised that the Kainantu Gold Mine Project should proceed for the common benefit
of the people of Papua New Guinea, and in particular, the people of Eastern Highlands
Province and the Landowners.
C.
The National Government acknowledges and recognises the needs, aspirations and
desires of the Landowners to receive a fair and equitable share of benefits from mining
operations carried out on their traditional land.
D.
The National Government, the Provincial Government, the Local Level Government, the
Landowners and the Company have therefore conducted discussions and negotiations and
have agreed on a number of matters relating to the development of the Kainantu Gold
Mine Project.
E.
The Parties hereto have therefore resolved to have the agreed decisions emanating from
their discussions and negotiations made into an enduring Agreement.
5
IT IS HEREBY AGREED between the Parties as follows:PART A – GENERAL
1.
DEFINITIONS
In this Agreement, unless the context otherwise require:
“Associated Landowners” (AL) means citizens who are members of the Kafe Clan, and
other landowning clans in the Eastern Block villages of Unantu, Tuta, Asupuyia and
Anonantu, and the Northern Block villages of Musuwam, Marawasa and Waterais, and the
Western Block villages, of Pomasi No.1 and Pomasi No. 2 (Tinompi) being residents of land
areas impacted by Mining activities occurring in the Lease for Mining Purposes 78, Mining
Easement 80 and Mining Easement 81 as identified by their respective custom to be
verified by the Land Titles Commission.
“Associated Landowners Association” (ALA) means an incorporated association
representing the people in the three identified areas of the mine impact being the Eastern,
Western and the Northern Blocks.
“Bilimoia Landowners Association” (BLA) means an incorporated Association
representing the identified landowners in Mining Lease No. 150.
“Business Development Plan” means a plan containing a list of local business
opportunities in which the company will support the Mining Lease Landowners and the
Associated Landowners to undertake which is Annexure (A) hereto and forming part of this
Agreement.
“Community Sustainable Development Plan”(CSDP) means a plan, which is established
by the Development Planning Committee and consistent with the Kainantu District
Development Plan, containing a list of agreed identified infrastructure projects and social,
economic and environmental conservation programs and is supervised by the Development
Planning Committee. The preliminary CSDP with a project list is Annexure (B) hereto and
forming part of this Agreement. The funding for the CSDP is to be procured from the
Special Support Grant, the nominated Royalty grants, the Tax Credit Scheme and the Mine
Area Facilities Grant.
“Community Projects Office” (CPO) means an office established by the National
Government pursuant to Clause 7 of this Agreement for the purpose of implementing the
Community Sustainable Development Plan.
“Company” means Highlands Kainantu Limited and includes any permitted assigns or
successors of the rights and obligations of Highlands Kainantu Limited.
“Contract Consultative Group” means a group formed for the purposes of identifying
probable business opportunities arising out of the mine project and their approximate
values for participation by Landowners and their corporate identities.
“Department” means the Department of Mining, unless otherwise specifically indicated
herein.
“Development Planning Committee” (DPC) means a Committee established by the
National Government in accordance with Clause 6 of this Agreement, which shall identify
and nominate projects to be funded under the various Government schemes including the
Special Support Grant.
6
“Future Generations” means all children who are:
(a)
the living children of beneficiaries of the Mining Lease Landowners and the
Associated Landowners portions of the royalties; and
(b)
at the age of going to school and attending school either under the Papua New
Guinea National Education System or such other recognized systems.
“FOB Revenue” is as defined under Section 104 of the Mining Act (Chapter 195)
(repealed) pursuant to Section 173 of the Mining Act 1992.
“Infrastructure” shall include social and economic constructed facilities including but not
limited to roads, health, agriculture, electric power, water supplies, communications,
education projects and any other projects as specified in annexure (B) or are referred to
and planned by the DPC provided such specified projects are within cost.
“Landowners” means members of any landowning clan including their future generations
who own land within the Mining Lease, or who own land in or who are impacted by the
Lease for Mining Purposes and Mining Easements and other tenements related to the
Project, as recognised and whose ownership is verified in the Land Investigation Report or
by the National Land Titles Commission.
“Local Level Government” means the Kainantu Rural Local Level Government, which
also represents the Kainantu Urban Local Level Government, the Umi Atzera Local Level
Government Wards 3,5,6 and the Usino Local Level Government.
“Memorandum of Agreement” means the document, which sets out the agreement by all
stakeholders of the project and includes the annexures and amendments as well as
commitments and benefits to be completed and received from the project.
“Mine Area Facilities Grant” (MAFG) means a grant given by the Company to assist with
the implementation of the CSDP in the Landowner areas.
“Mining Lease” (ML) refers to Mining Lease No. 150 granted in accordance with the
Mining Act 1992 to Highlands Kainantu Limited for the Project.
“Mining Lease Landowners” means members of Landowning clans that are recognised
as owning land according to custom in the Bilimoia area of the Mining Lease No. 150 as
identified in the State Land Investigation Report and as verified by the State Land Titles
Commission.
“Monitoring & Review Committee” means a committee established by the National
Government to six monthly review mining components of the mine project.
“National Government” means the Independent State of Papua New Guinea.
“Parties” or “Party” means the Parties to this Agreement.
“Project Area” means the area covered by the Mining Lease (ML 150), the Lease for
Mining Purposes (LMP 78) and Mining Easements (ME 80 and ME 81).
“Project” means the Kainantu Gold Mine Project approved by the Minister for Mining over
which the Mining Lease, Lease for Mining Purposes and Mining Easements have been
granted.
“Provincial Government” means the Eastern Highlands Provincial Government.
7
Public Infrastructure Trust Fund” means the fund established for the maintenance of
public use infrastructures provided under the CSDP or as otherwise approved by the DPC.
Royalty” means the royalty paid pursuant to Section 173 (5) of the Mining Act 1992, or any
amendments to, or provisions succeeding or substituted for that provision.
“State” shall mean the Independent State of Papua New Guinea.
“Tenements” refers to Lease for Mining Purposes No.78, Mining Easements No.80 and 81,
and the Mining Lease No. 150 granted pursuant to the Mining Act 1992.
“Training and Localisation Plan” means the Training and Localisation Plan submitted to
the Department responsible for Labour and Employment matters as specified in Annexure
(C).
“Umbrella Company (UC)” means a company formed for the purposes of Clause 44.
2.
INTERPRETATION
In this Agreement, unless the context otherwise requires:
(a)
the headings herein do not affect the interpretation or the construction of this
Agreement;
(b)
a reference to any legislation includes the amendments to that legislation and also
covers any act passed in substitution thereof and any regulations, for the time being
in force thereunder;
(c)
words importing the singular include the plural and vice-versa;
(d)
words importing any gender include the other gender; and
(e)
the recitals form part of the Agreement.
(f)
a word denoting person includes a natural person as well as a corporate entity;
(g)
a reference to any party to this Agreement includes that party’s successors and
permitted assigns.
(h)
A reference to any department, of the National Government includes that
department or any successor department under whatever name it is so called at the
given time.
(i)
The commencement date for this Agreement will be the start of Construction on the
tenements.
8
PART B – NATIONAL GOVERNMENT UNDERTAKINGS
3.
ROYALTIES
3.1
The State, pursuant to the Mining Act, 1992, and, in line with current sustainable
development planning goals, will pay royalties from the Kainantu Mine Project to the
Provincial Government, Mining Lease Landowners, and the Associated Landowners
as follows:
(a)
(b)
(c)
3.2
Provincial Government
Mining Lease Landowners
Associated Landowners
-
30%
60%
10%
The State agrees that the distribution of the total royalties received by the recipients
of royalties in Clause 3.1 above shall be as follows:
a)
PROVINCIAL GOVERNMENT
(i)
(ii)
(iii)
(iv)
b)
-
15.0%
9.0%
4.5%
1.5%
MINING LEASE LANDOWNERS
(i)
(ii)
(iii)
(iv)
(v)
c)
EHPG - Five-Year Provincial Development Plan
Kainantu Rural LLG-5 year District Development Plan
Kainantu Urban Local Level Government
Public Infrastructure Trust Fund (Project Area)
Cash Distribution
Landowner Association
Incorporated
Bilimoia Comm. Sustain. Dev. Program Trust
Future Generation’s Trust for Min. Lease Landowners
Church Grant Trust Fund
- 30.0%
- 5.0%
- 10.0%
- 5.0%
- 10.0%
THE ASSOCIATED LANDOWNERS
(i)
(ii)
(iii)
Associated Landowners Association
Community Sustainable Development Program Trust Future Generation’s Trust for Associated Landowners -
1.5%
3.5%
5.0%
3.3
The State shall distribute the cash component of royalty under Clause 3.2b(i) to the
landholders in the same proportion as their area of land in the mining lease bears to
the area of land comprised in the mining lease.
3.4
The amount payable under Clause 3.3 to the landholders to be proportionate to their
interest in the land.
3.5
The State agrees;
a)
that the Bilimoia CSDP Trust Royalties will be spent in Bilimoia and
surrounding associate areas as identified by the Bilimoia Landowners
Association and upon advice from the Bilimoia Landowners Association to
the CPO and DPC.
b)
the Associated Landowners CSDP Trust Royalties will be spent in the
Eastern, Northern and Western Block Areas on advice being given from the
respective Landowner Associations to the CPO and DPC.
9
4.
5.
3.6
The State agrees to consult with the Bilimoia Landowners, the Provincial
Government and other relevant organizations to establish the instrument of trust for
the use of the royalties church grant trust fund monies for church provided Health
Services, Education Services, Social Services and Church Infrastructure under
Clause 3.2(b)(v).
3.7
The Provincial Government and Kainantu Rural and Urban Local Level
Governments shall receive direct payment of royalties into their Five (5) year
Development Plan project accounts.
SPECIAL SUPPORT GRANT (SSG)
4.1
The State shall use its best endeavours to appropriate to the CPO and make
available in each financial year a grant to be known as the “Special Support Grant”,
or such other alternative grant agreed and approved between the State and the
Parties.
4.2
Each annual SSG appropriation will be allocated by the DPC for use on mine
affected wards or District or Provincial projects in the Kainantu District and mining
affected areas resulting from the Company’s Mining operations.
4.3
The SSG will be paid from the commencement of production and will be calculated
as set out in Clause 4.4 herein.
4.4
The State will provide to the CPO a Special Support Grant or any other alternative
grant equivalent to 0.50% of the value of fob revenue for the sale of mine products
from the Project which will be utilized annually until such a time as Tax Credit
Scheme commences for this project.
4.5
For the purpose of this Clause, f.o.b revenue shall have the same meaning as
provided in Section 173 (5) of the Mining Act 1992.
4.6
The SSG will be calculated on the estimated annual f.o.b. revenue from the sale of
mine products, such of which shall be adjusted annually against the actual revenue
as stipulated in Clause 4.4 herein.
4.7
The SSG will only be released after the State has approved a list of projects and
programmes submitted by the DPC.
4.8
Progress and completion reports must also be provided six monthly.
4.9
An audit report must be carried out on annual basis.
4.10
The SSG will be expendable in the mining affected areas and other areas covered
by the Local Level Government and only in accordance with the approved
guidelines.
TAX CREDIT SCHEME (TCS)
5.1
The State through the Department of National Planning & Rural Development
undertakes to extend the Tax Credit Scheme in accordance with the approved
guidelines to the project as and when the Company is in a taxable position.
10
6.
DEVELOPMENT PLANNING COMMITTEE (DPC)
6.1
The State will establish a Development Planning Committee to;
a)
monitor and direct the Kainantu Mine Community Projects Office.
b)
plan all matters pertaining to the expenditure of Royalty funds under Clause
3.2(b) (iii) and 3.2(c) (ii).
c)
plan all matters in relation to SSG funds or any other alternative grant under
Clause 4, and TCS funds under Clause 5, as proposed under the CSDP.
6.2
The DPC shall take into account the various project infrastructure proposals listed in
Annexure (B) and will endeavour to implement these projects in their priority order
taking into account the District and Provincial Government Development plans and
criteria and the funds available.
6.3
The fifteen representatives on the DPC shall be the following persons or their
nominees;
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
The Secretary
- Department of Mining
The Secretary
- Department of National Planning & Rural Development
The Secretary
- Department of Trade and Industry
The Secretary
- Department of Environment & Conservation
The EHP Provincial Administrator,
- Eastern Highlands Provincial Government
The Kainantu District Administrator,
- Kainantu District Administration
The President,
- Kainantu Urban LLG
The President,
- Kainantu Rural LLG
The Chairman & Deputy Chairman,
- Bilimoia Landowners Association
The Chairman & Deputy Chairman,
- Associated Landowners Association
The President,
- Kainantu Mine Womens Association
A Ward Councillor,
- from Kainantu Rural LLG Wards 11,12,13 and 17
The Manager
- Highlands Kainantu Ltd
(x 1)
(x 1)
(x 1)
(x 1)
(x 1)
(x 1)
(x 1)
(x 1)
(x 2)
(x 2)
(x 1)
(x 1)
(x 1)
6.4
Only a member of the DPC can become a Chairperson and the Chairperson shall
be elected by an absolute majority of votes of the members of the committee, in
accordance with procedures determined by the DPC and maybe removed in the
same manner.
6.5
At a meeting of the DPC at which the Chairperson from the whole or part of the
business to be presented, the Manager of the CPO or, in his or her absence,
another member of the Committee appointed by the members, shall preside until
the Chairperson is elected.
11
7.
6.6
A review of the composition of DPC shall take place after three (3) years.
6.7
The DPC is obligated to produce an Annual Report and an Annual Audit Report to
the Secretary, Department of National Planning and Rural Development.
6.8
The DPC will hold at least four (4) meetings each year (quarterly).
6.9
The DPC will hold the various funds apart from TCS funds in various trust accounts
and establish Trust Deeds in accordance with the Public Finances (Management)
Act 1995 and the DPC may recommend to the Secretary, Department of Finance,
suitable persons to be the Trustees for the various trust accounts upon which the
Secretary of the Department of Finance will appoint the Trustees to the various trust
accounts.
6.10
DPC membership is ex officio and no remuneration is payable other than expenses
to attend the meetings, which will be met by the CPO.
COMMUNITY PROJECTS OFFICE (CPO)
7.1
The State will establish the Community Projects Office in Kainantu Town for the life
of the mine in accordance with the objectives set out to administer the CSDP, and
will provide an Administration Establishment Grant of K50,000 to the CPO, at the
commencement of construction.
7.2
The State will support the CPO operate with the following objectives:
a)
to prepare a Community Sustainable Development Plan (CSDP)
b)
to manage the expenditure of development and infrastructure funds provided
under this Agreement as (i)
(ii)
(iii)
(iv)
(v)
Royalties in Clause 3.2 (b)(iii) & 3.2 (c)(ii); and
Special Support Grants in Clause 4; and
Tax Credit Scheme funds in Clause 5; and
Mine Area Facilities Grant in Clause 32, or
Donated Grants from Donors,
as part of the CSDP applicable for Landowner areas and areas within the
designated Local Level Government and expanded out to other areas of
Kainantu District and then other areas in the Eastern Highlands Province.
c)
to manage the various trust accounts as required to be established by this
agreement to manage public monies.
d)
to solicit submissions for expenditure on development and infrastructure
projects in Clauses 3.2 (b)(iii), 3.2 (c)(ii), 4, 5, 32 and in so doing liaise with
the State, relevant validated Landowner Associations, Provincial
Government, Local Level Government, companies carrying on business in
Papua New Guinea, charitable operations operating in Papua New Guinea
and Papua New Guinea citizens.
e)
to collate all appropriate Operational and Development submissions and
submit same for consideration by the DPC.
f)
to formulate and provide advice and guidelines to the DPC.
12
8.
9.
g)
to formulate an appropriate Operational and Development Budget for the
Calender Year for approval by the DPC.
h)
to levy income for wages and operational expense purposes derived from a
ten per cent charge against the cost of projects undertaken.
i)
to ensure the establishment of a Tenders Committee and Tendering
guidelines are prepared and adhered to.
CPO EXPENDITURE
8.1
The State shall establish the CPO for the purposes of implementing approved
projects under the Tax Credit Scheme, Special Support Grant and Donor Funds to
be carried out for the public benefit.
8.2
The funds to be expended on development and infrastructure will be accounted for
as public monies (within the meaning of the Public Finances (Management) Act
1995), and shall be expended in accordance with authorisation, approval and
monitoring mechanisms approved in Clause 9.1.
CPO - AUTHORISATION AND MONITORING MECHANISMS
9.1
The State hereby establishes a mechanism where;
a)
the DPC shall by an absolute majority passes an Annual Budget and obtain
approval of the Tax Credit Scheme and Special Support Grant programs
within the Annual Budget from the Secretary for National Planning and Rural
Development.
b)
if the Secretary wishes to vary or amend the relevant objectives of the
Annual Budget or relevant Budget he shall do so with the DPC after
appropriate consultation and having due regard to the views of the DPC.
c)
The Secretary shall take into account the District Development Plan for the
Kainantu District in consideration of the Annual Budget.
9.2
Following the approval by the Secretary for the Department of National Planning
and Rural Development of the relevant objectives and the Annual Budget, the CPO
shall undertake or ensure that it undertakes the implementation of the relevant
objectives and projects as soon as practicable.
9.3
The CPO shall keep true and proper accounts and records, whether compiled,
recorded, or stored by microfilm or electronic process or otherwise relating to
activities carried out and expenditure incurred.
9.4
The CPO shall ensure that, as far as is practicable, the amounts for which it:
a)
purchases and disposes of goods or chattels; and
b)
supplies or receives works or services;
will be publicly tender and a minimum two quotations shall be obtained for the
purchase or disposal of goods or for the supply or receipt of works or services and
will prescribe a set of tender procedures for approval by the DPC.
13
10.
9.5
The CPO shall arrange for an audit of the accounts and records kept for the
purposes of Clause 9.1 as at 31 December, each year and prepare an appropriate
report accordingly.
9.6
The Auditor–General will upon the receipt of the Audit Report inspect and audit the
accounts and records of the CPO.
9.7
The CPO will circulate an Annual Audited Report to all parties to this Agreement.
MINE CLOSURE / REHABILITATION (SUSTAINABLE DEVELOPMENT)
10.1
The State undertakes to establish through the Department of Mining and the
Department of Environment and Conservation, a professionally led mine closure
task force, three years prior to the closure of the mining operations in order to have
consultation with the Company and review a plan prepared by the Company for
mine closure.
10.2
The State undertakes to ensure a mine closure plan is developed by the Company
to be focused on consolidating the use of the remaining benefits from the mining
operations and to develop a plan of action to maintain priority infrastructure and
services in the Project Area. The purpose of the Plan shall be:
10.3
11.
a)
where appropriate, to prepare a succession plan for handover/takeover of
infrastructure and facilities to the Provincial and Local Level Government,
and to Local Communities.
b)
to consider a succession plan for the CPO, which shall include funding
aspects for it in order to manage rehabilitation of land and social and
economic issues for a period of five years beyond mine life.
c)
to allow for the orderly sale of or handover of the assets.
The State undertakes to ensure the mine closure task force works in close
consultation with the Provincial Government and the DPC.
ENVIRONMENT
11.1
The State, through the Department of Environment and Conservation, shall ensure
that the Company develops the Project in a manner that minimises the
environmental impact of the project and ensures the Company fully complies with
the Environmental Plan Approval Conditions that have been approved by the State
for the development of the Project in accordance with the Environment Act 2000.
11.2
Pursuant to Clause 11.1 and consistent with the Company’s commitments under the
Environmental Plan Approval Conditions, the State undertakes to have the
Company provide regular briefs on all environmental aspects of the project during
the construction period and three (3) months following commencement of mine
production in accordance with the mine’s Environment Management and Monitoring
Programme.
11.3
The State undertakes to have:
a)
officers of the Department of Environment and Conservation make regular
inspections to review the environmental impact of the Project during and
after the mine life.
14
b)
11.4
12.
13.
The reports submitted from such inspections distributed to relevant
Government Departments and Agencies, the Bilimoia Landowners
Association, the Associated Landowners, the Kainantu District
Administration, the Provincial Government and the Company.
The State undertakes in carrying out 11.3:
a)
to assess impacts downstream of the mine.
b)
to provide an independent state sanctioned assessment of the impacts
whenever necessary.
11.5
The State through the National Forest Authority shall provide assistance and advice
on the establishment of an agro-forestry integrated conservation program to be
outlined in the CSDP for mine affected areas.
11.6
The State shall assess residual effects from previous mine workings at Kora Creek.
11.7
The State, through the Department of Environment and Conservation, undertakes to
consult with the Landowners on the Company’s plans for rehabilitation of the mine
site.
BUSINESS DEVELOPMENT PLAN
12.1
The State through the Department of Trade and Industry, shall use it’s best
endeavours to ensure the Local Business Development Plan submitted pursuant to
Annexure (A) is fully complied with and implemented.
12.2
The Department of Trade and Industry will establish and chair a committee to
monitor the implementation of the Business Development Plan.
12.3
The National Government undertakes to have the Business Development Plan
provide for meaningful participation by the Mining Lease Landowners and
Associated Landowners.
12.4
The State through the Department of Trade & Industry, undertakes to ensure that
the Business Development Plan includes provisions whereby preference is given by
the Company, on terms generally available and subject to proven expertise, firstly,
to businesses owned and operated by Landowners, secondly, to businesses owned
and operated by the people of the Kainantu Rural Local Level Government area
and, thirdly, to businesses owned and operated by people of Eastern Highlands
Province and fourthly to businesses owned and operated in Papua New Guinea.
SUPPLY AND PROCUREMENT
13.1
The State undertakes to use its best endeavours to have the Company identify and
invite registration of businesses in Papua New Guinea, particularly in the Eastern
Highlands Province and the surrounding areas of the project, which are capable of
supplying materials, equipment and services to the project in liaison with Bilimoia
Landowners Association Inc. or its nominee company but pre-qualification and
registration does not provide assurance to a business that they will be invited to
tender or be awarded any contracts.
15
13.2
The State, through the Department of Trade and Industry, shall ensure where goods
and services are procurable for the project, through PNG sources, the Company will
provide those pre-qualified PNG companies every opportunity to participate in the
tendering process and, if such tender:
(a)
(b)
(c)
meets the specifications of the invitation to tender; and
is competitive in cost with international services, taking full account of
landed costs; and
meets delivery requirements of the project.
the successful tenderer will be directed where appropriate to enter into a joint
venture arrangement with the Umbrella Company or other landowner corporate
identities to provide the contracted goods and services.
13.3
In accordance with Clause 13.2, the Company will procure from PNG sources with
preference given in the following order to those from the:
a)
b)
c)
14.
Project Area; and
Eastern Highlands Province; and
Other parts of PNG
EMPLOYMENT AND TRAINING
14.1
The State through the Department of Labour and Employment, shall use its best
endeavours to ensure that the Company and Company Contractors or subcontractors:
a)
develop, organize and facilitate suitable employee training plans for approval
by the Department of Labour & Employment.
b)
comply with the requirements and implement the approved Training and
Localization Plan.
c)
give preference as far as is reasonably possible in training and employment
opportunities during the construction and operation of the project, in the
following order of priority to the (i)
(ii)
(iii)
(iv)
d)
Provide a six-monthly report for tabling at a review of (i)
(ii)
15.
to the Mining Lease Landowners;
Associated Landowners;
people of the Eastern Highlands Province;
people of Papua New Guinea New Guinea.
the progress in the compliance and implementation of the approved
training and localization plan; and
the implementation of a career succession plan
FINANCIAL ASSISTANCE TO THE LANDOWNERS AND EASTERN HIGHLANDS
PROVINCIAL GOVERNMENT
15.1
The State shall extend financial assistance to the Landowners as follows:
a)
a once only establishment grant of K140,000 to the Umbrella Company
b)
a once only establishment grant of K20,000 to a formally nominated
corporate identities for the -
16
(i)
(ii)
(iii)
15.2
Eastern Block.
Western Block.
Northern Block.
c)
these grants are to be used to participate in business development
opportunities arising from the project.
d)
These grants are payable in 2004 and are conditional upon the
commencement of the mine construction.
The State shall, through the Department of Mining, provide a once only grant of:
a)
b)
K30,000.00 to a formally registered Mining Lease Landowner Association;
and
K25,000.00 to a formally registered Associated Landowner Association
payable at the commencement of the construction of the mine,
this being a total of K55,000.00.
15.3
16.
LAW AND ORDER
16.1
17.
The State will provide training and materials for Land Mediators and Land Mediator
allowances to attend to land disputes in the mine area in collaboration with the
Provincial Government.
VILLAGE COURT SYSTEM
18.1
19.
The State will provide support in manpower and logistics to the Kainantu Police
Station to support mine related requirements.
LAND
17.1
18.
The State will through the Department of Mining, provide to Kainantu Mine Liaison
Office a vehicle (no older than three years) during construction and annual
operational costs for the vehicle as well as stationery and telephone costs
amounting to K10,000 per annum.
The State will provide training and materials for Village Courts in the mine affected
communities contingent upon Landowners providing adequate venues to conduct
the training.
FUTURE GENERATIONS TRUST FUNDS
19.1
Upon execution and coming into effect of this Agreement the State shall establish
Trust Accounts:
a)
prior to the commencement of commercial production of the Project, in
consultation with each of the two Landowner Associations to be known as
the (i)
Mining Lease Landowners’ Future Generations Trust; and
(ii)
Associated Landowners’ Future Generations Trust.
17
b)
19.2
19.3
20.
The purposes of which are to provide for the education of the future
generations of the respective landowners.
The trust deeds shall among other things make provision for:
a)
the trustee or trustees as decided by the respective Landowner Associations
and the Provincial Government; and
b)
the persons to be the signatories to the trust account; and
c)
the circumstances under or the purpose for which any monies in the trust
fund may be utilised or expended; and
d)
the procedure for the accountability of the monies of the trust fund; and
e)
any other matters which are relevant or convenient for the proper and
efficient management of the trust fund.
The trustees to the Future Generation Trust Fund shall in accordance with Clause
19.2(a) be the persons or their nominees holding the following positions:
a)
Eastern Highlands Provincial Government (i)
Provincial Administrator; and
(ii)
Senior Provincial District Court Magistrate; and
(iii)
Provincial Treasurer
b)
Respective Landowners Associations (i)
Chairperson; and
(ii)
Deputy Chairperson; and
(iii)
Executive Officer
19.4
The monies to be paid into the trust funds are the royalties intended for the benefit
of the Future Generations and distributed by the National Government in
accordance with Clause 3.2(b)(iv) and 3.2(c)(iii) of this Agreement; and any other
monies that are lawfully intended for the purpose of the fund.
19.5
The eligibility period for the utilization or expenditure of the Trust Funds shall
commence after five (5) years from the date of the first payment of royalties to the
State.
NATIONAL GOVERNMENT TO CO-OPERATE AND ASSIST
20.1
The National Government shall work closely in consultation with the Landowners,
Local Level Government, Provincial Government and the company in the
implementation of the provisions of this Agreement.
PART C – EASTERN HIGHLANDS PROVINCIAL GOVERNMENT UNDERTAKINGS
21.
SPECIAL SUPPORT GRANT
21.1
The Provincial Government agrees to ensure the Special Support Grant or such
other alternative grant made available by the National Government is used on
Provincial projects and programs in the Kainantu Urban and Kainantu Rural Local
Level Governments with a priority to development of projects for Wards 11,12,13
and 17 of Kainantu Rural Local Level Government and other affected areas
18
resulting from the Company’s Mining operations and as identified in the CSDP by
the DPC.
22.
23.
24.
25.
26.
PROVINCIAL MINE LIAISON OFFICE
22.1
The Provincial Government agrees to appoint a Project Liaison Officer and a Project
Lands Officer to be based at the Kainantu Project site provided the State meets the
Liaison Office vehicle, stationery, telephone, operational costs and other contingent
costs amounting to K10,000.00 per annum.
22.2
The Provincial Government shall provide housing and office space for the officers
specified under Clause 22.1 above.
COMMUNITY PROJECTS OFFICE
23.1
Provincial Government agrees to the establishment of the CPO by the National
Government for the life of the mine and the objectives of the CPO as set out under
Clause 7.0 of this Agreement.
23.2
The Provincial Government agrees that administrative costs incurred in running the
Office will be recouped by an administrative charge on CSDP (CSDP Royalties
being exempted), TCS and SSG projects not exceeding ten percent (10%) of total
CSDP project costs.
23.3
The Provincial Government agrees at its cost to provide a Deputy Manager for the
CPO.
AGRICULTURAL ACTIVITIES
24.1
The Provincial Government shall use its best endeavours to promote cultivation and
create marketing of commercial agricultural in the mine affected areas.
24.2
The Provincial Government agrees to provide advice in the field of Agriculture,
Forestry and Business Development as maybe required for the project in a timely
manner.
FORESTRY ACTIVITIES
25.1
The Provincial Government agrees to provide advice on re-afforestation projects.
25.2
The Provincial Government shall undertake and provide a report to all parties on
forestry conservation best practice.
PROVINCIAL INFRASTRUCTURE MAINTENANCE
26.1
The Provincial Government recognises and acknowledges the fact that under the
Organic Law on Provincial and Local Level Government, it will be receiving various
administration grants from the State, therefore it agrees to provide and co-fund the
maintenance of public use infrastructure stipulated under this Agreement.
26.2
Upon approval by the DPC the Provincial Government may also draw on the funds
from the Public Infrastructure Trust Fund (PITF) pursuant to Clause 3.2(a)(iv) and
provide co-funding for the maintenance of public use infrastructure in the Project
area, however for the first ten years no funds can be drawn down from PITF and
thereafter the draw down shall not exceed the interest earned in that year.
19
27.
ROADS
27.1
28.
The Provincial Government agrees to provide annual maintenance for the Konkua
Road and to submit and include the Konkua Road upgrading project in the planning
of the Asian Development Bank, Eastern Highlands Province, Road Maintenance
and Upgrading Project and, to provide co-funding for the upgrading of the Konkua
road, along with Konkua Road project grants from the SSG and TCS programs and
a sum of K100,000 from the MAFG.
PROVINCIAL GOVERNMENT TO CO-OPERATE AND ASSIST
28.1
The Provincial Government will work closely in consultation with the Landowners,
the Local Level Government, the National Government and the Company through
the Provincial Mine Liaison Office in the implementation of the provisions of this
Agreement.
PART D – THE KAINANTU RURAL LOCAL LEVEL GOVERNMENT UNDERTAKING
29.
30.
31.
GENDER DEVELOPMENT PROGRAM
29.1
The Kainantu Rural Local Level Government undertakes to provide assistance in
cash and kind to establish a mine project area Women’s Association in the mine
affected areas to further advance the aims and aspirations of women through life
skills training programs, micro-credit programs, agriculture, health and literacy
programs.
29.2
The Gender Development Program will commence with the commencement of the
mine construction.
COMMUNITY SUSTAINABLE DEVELOPMENT PROGRAM
30.1
The Kainantu Rural Local Level Government agrees to assist with Sustainable
Community Development Planning. The Local Level Government will actively assist
wards 11, 12, 13 and 17 in improving their socio-economic conditions.
30.2
The Kainantu Rural Local Level Government agrees to assist other Council ward
areas with projects agreed with the DPC.
KAINANTU RURAL LLG TO CO-OPERATE AND ASSIST
31.1
The Kainantu Rural Local Level Government will work closely in consultation with
the Landowners, the National Government, the Provincial Government, the
Company, the DPC and the Provincial Mine Liaison Office in the implementation of
the provisions of this Agreement.
PART E – THE COMPANY’S UNDERTAKINGS
32.
MINE AREA FACILITIES (DEVELOPMENT LEVY) GRANT
32.1
The Company shall provide a once only funding at its own expense of K600,000
from mine construction costs, during the mine construction period in accordance
with the infrastructure items as identified in the CSDP in Annexure (B).
32.2
The funding commitment referred to in Clause 32.1 shall be deemed to be
“development levy” for the purposes of Section 98(2) of the Organic Law on
Provincial and Local Level Government 1995.
20
33.
34.
35.
36.
COMMUNITY PROJECTS OFFICE
33.1
The Company shall support the CPO in Kainantu Town for the life of the mine and
the objectives of the CPO as set out under Clause 7.0 of this Agreement.
33.2
The Company agrees to provide at its own operating expense the cost of supporting
the CPO and shall also provide a General Manager and Accounting functions
associated with the operations of the CPO which shall implement the CSDP.
GENDER DEVELOPMENT PROGRAM
34.1
The Company will provide technical assistance to establish a Kainantu Mine
Women’s Association for the mine affected areas to advance the aims and
aspirations of women through life skills training programs, micro credit programs,
agriculture, health and literacy programs.
34.2
The Gender Development program will commence with the commencement of the
mine production.
ENVIRONMENT
35.1
The Company will ensure the Project is developed in a manner that is in accordance
with the approved Environmental Plan conditions as governed by the Environment
Act 2000.
35.2
The Company agrees that in the event of any claims for environmental damages or
any other losses associated with the environment suffered as a result of the
Company’s mining operations, then these will be referred in the first instance to a
local dispute settlement mechanism.
35.3
The Company shall assist under the CSDP with the implementation of an agroforestry integrated conservation area in land areas not required for future mining.
35.4
The Company shall facilitate an independent assessment of the environmental
impact of the mine after three (3) years and at intervals of two (2) years thereafter.
EMPLOYMENT AND TRAINING
36.1
The Company shall develop, organize and facilitate suitable training plans for its
employees.
36.2
The Company shall comply with training requirements and implement the
Department of Labour and Employment approved Training and Localisation Plan as
per Annexure (C).
36.3
The Company shall give preference as far as is reasonably possible in training and
employment opportunities in the construction and operation of the project in the
following order of priority a)
to the Mining Lease Landowners and Associated Landowners,
b)
to the people of the Eastern Highlands Province, and
c)
to the people of Papua New Guinea.
21
36.4
37.
The Company shall provide a six-monthly report for tabling at a review of:
a)
the progress in the compliance and implementation of training and
localization plans; and
b)
the implementation of the career succession plan.
36.5
The Company will consult with the Landowners to develop a Secondary and Tertiary
scholarship Training Plan for the Mining Lease Landowners and Associated
Landowners.
36.6
The Company agrees during the Construction period to provide training for locally
based workers.
BUSINESS DEVELOPMENT PLAN
37.1
The Company shall encourage the development of businesses with spin off
opportunities from the Project and in doing so will give preference on terms
generally available and subject to proven expertise to businesses owned and
operated by firstly the immediate Landowners and secondly the people of the
Eastern Highlands Province and thirdly to the people of Papua New Guinea.
37.2
The Company will establish and ensure three (3) months prior to commencement of
construction that :
a)
There is a professionally staffed local Business Development Office (BDO)
located in Kainantu Town responsible for the implementation of the local
Business Development Plan in consultation with directors of the Umbrella
Company (UC), various Landowner corporate identities, the Kainantu District
Business Development Office and the Provincial Business Advisor.
b)
The BDO will:
c)
(i)
liaise with the project management for the provision of contracts for
the Umbrella Company and other Landowner corporate identities;
and
(ii)
ensure that, where feasible, contracts for the provision of goods and /
or services to the Project during the construction period are
structured so as to enable locally owned business ventures to be
positioned to bid for and undertake those contracts; and
(iii)
identify prospective Landowners corporate identities to establish joint
ventures with successful external contractors or suppliers to the
Project;
The BDO will provide independent auditing services at least annually for
other Landowner corporate identities and for the UC to ensure that the
financial accounts of Landowner corporate identities established under the
Business Development Plan, or their joint ventures, are transparent and fully
compliant with their constitution and the Companies Act 1997.
22
d)
Additionally, to protect the best interests of the Landowner shareholders, the
BDO will on approval being granted by company directors have access to
the operations and records of all Landowner corporate identities and their
subsidiaries as and when required.
37.3
Where an umbrella company is formed it will be entitled to receive seventy (70%)
percent of the total value of mine contracts set aside for business activities for the
Mining Lease Landowners and the UC will be the only business point of contact for
Mining Lease Landowner business activities.
37.4
The other corporate identities formed for Associated Landowners in the Eastern, the
Western and the Northern Blocks are entitled to receive thirty (30%) percent of the
total value of mine contracts set aside for business activities for the mine project for
Landowners.
37.5
The company will assist with the establishment of the UC and other Associated
Landowners Corporate identities through a grant in accordance with the Managing
Director’s letter of 2nd October 2003 attached hereto as Appendix (1) in the following
manner:
37.6
37.6
(a)
K140,000 to the Umbrella Company; and
(b)
K20,000 each to the respective corporate identities formed for the
Associated Landowners in the Eastern, the Western and the Northern
Blocks.
The Company will keep the Landowners and their corporate identities informed of:
a)
the probable types of business opportunities and the approximate values of
contracts through the contract consultative group to enable the landowners
and their companies to be prepared in advance.
b)
details of available contracts for the local business contract packaging plan
that will be developed and promoted by the Company -
c)
contracts that will qualify for Landowner business involvement through
the provision of goods and services (i)
during the construction period of the mine, the processing plant and
the supporting infrastructure; and
(ii)
during the operational phase of the Project.
d)
the estimated value of each local business contract; and
e)
the proposed award date and estimated duration of each local business
contract.
The Company will provide a six monthly report for a six monthly review on activities
undertaken in the implementation of the BDP.
23
38.
SUPPLY AND PROCUREMENT
38.1
The Company undertakes to use its best endeavours to identify and invite
registration of businesses in Papua New Guinea, particularly in the Eastern
Highlands Province and the surrounding areas of the project, which are capable of
supplying materials, equipment and services to the project in liaison with the
Bilimoia Landowners Association Inc or its nominee company but pre-qualification
and registration does not provide assurance to a business that they will be invited to
tender or be awarded any contracts
38.2
The Company will ensure that where goods and services are procurable for the
project through PNG sources the Company will provide those pre-qualified
companies every opportunity to participate in the tendering process and if such
tender:
(a)
meets the specifications of the invitation to tender, and
(b)
is competitive in cost with international services, taking full account of all
landed costs; and
(c)
meets delivery requirements of the project,
then the successful tenderer will be directed where appropriate to enter into a joint
venture arrangement with the UC or other Landowner corporate identities to provide
the contracted goods and services.
38.3
The Company will procure from PNG sources with preference given in the following
order to those from:
(a)
(b)
(c)
39.
40.
Project Area.
Eastern Highlands Province.
Other parts of PNG.
ELECTRICITY
39.1
The company agrees to undertake, implement and fund a feasibility study to
examine all options for the provision of power to the Mining Lease Landowners of
Bilimoia villages, villages along the Konkua Road and Associated Landowners of
other villages in the Eastern, Northern and Western Blocks within the first two years
from the commencement of the construction.
39.2
The report will make a preferred option recommendation based on the most
affordable and sustainable option for consumers.
39.3
The report will be presented to an all MOA party nominated committee for
consideration and determination of the best method of implementation taking into
account costs and maintenance involved.
ADMINISTRATION OFFICE
40.1
The company agrees to establish and have its external relations Administration
Office to be located in Kainantu Town.
40.2
This office will perform the functions of Human Resources Management,
Community Relations Management, Business Development Management,
Accounting and Payroll Management.
24
41.
INSTITUTIONAL ESTABLISHMENT ASSISTANCE
41.1
The company agrees to pay K10,000 each to the following Landowners institutions
to assist in their establishment:
a)
b)
c)
d)
the Bilimoia Landowners Association; and
the Associated Landowners Association; and
the Umbrella Company; and
the nominated corporate identity of the Associated Landowners in the i)
ii)
iii)
Eastern Block,
Western Block, and
Northern Block
K10,000 each to be shared equally amongst the three blocks.
42.
THE COMPANY TO CO-OPERATE AND ASSIST
42.1
The Company will work closely in consultation with the Landowners, the Local Level
Government, the Provincial Government and the National Government in the
implementation of the provisions of this Agreement.
PART F – LANDOWNERS UNDERTAKING
43.
LANDOWNERS TO CONSULT
The Landowners hereby undertake to:
44.
43.1
work in full consultation with the State, the Local level Government, the Provincial
Government, and the Company and associated entities to ensure the smooth and
efficient operation of the mine.
43.2
be responsible for all running costs of the Landowner Associations.
43.3
provide a six monthly report to a six monthly review of the mine operations covering
mine impacts and changes in their socio-economic conditions.
43.4
provide a mechanism of alternative dispute resolution which will attempt in the first
instance to solve disputes between themselves or disputes between themselves
and other parties to the Agreement that may impact on the mine operations.
UMBRELLA COMPANY
44.1
The Mining Lease Landowners hereby undertake to form an Umbrella Company to
be known as Bilimoia Development Company for the purposes of partaking in
business spin-offs created as a result of the project and furthering the long term
business interest of the Bilimoia people.
44.2
The Mining Lease Landowners undertake to raise K100,000 from shareholders in
share capital subscriptions for the purchase of shares in the UC immediately
following the incorporation of the company.
25
44.3
45.
The Mining Lease Landowners agree that the shareholding arrangement under the
UC shall be fairly distributed amongst Landowners’ Clans and shares will be nontransferable after issue except where such a transfer would not affect this fairness
of this arrangement.
LANDOWNERS TO CO-OPERATE AND ASSIST
The Landowners hereby give the following undertakings:
46.
45.1
To co-operate with and assist the State, the Provincial Government , the Local Level
Government and the Company to ensure the smooth and efficient operation of the
Project.
45.2
Not to disrupt the operation of the Project at any time during the lifetime of the
Project should any problems arise which are connected with the Project.
45.3
Not to interfere with or otherwise change any electrical or water installation made by
the Company without the prior consent of the Company.
45.4
Not to damage any new buildings, facilities or projects put up by the Company or
the CPO.
COMMUNITY SUSTAINABLE DEVELOPMENT PLAN PROJECTS
46.1
The Landowners undertake to identify and provide land by agreement with Parties
representatives for agreed community infrastructure and services provided under
the CSDP.
PART G – FORMAL CLAUSES
47.
LAW APPLICABLE
47.1
48.
This Agreement shall be governed by and construed in accordance with the laws of
the Independent State of Papua New Guinea.
FORCE MAJEURE
48.1
For the purposes of this Agreement, Force Majeure shall include war, insurrection,
civil disturbances, blockades, riot, embargoes, strikes, lock-outs and other labour
conflicts and disputes, epidemics, volcanic eruptions, earthquakes, cyclones, floods,
tidal waves, explosions, fires, lightning, governmental restrictions or unavailability of
material or equipment and any other event which the party claiming force majeure
could not reasonably be expected to prevent or control.
48.2
Any failure on the part of a Party to comply with any of the terms, conditions and
provisions of this Agreement (except any obligations of a Party to make payment of
money owed to the other Party) shall not constitute grounds for termination or shall
not give the other Party any claim for damages if such failure arises from Force
Majeure, and provided the first-mentioned Party:
(a)
has taken all appropriate precautions, due care and reasonable alternative
measures either with the objective of avoiding such failure and/or of carrying
out its obligations under this Agreement; and
26
(b)
48.3
49.
50.
49.1
This Agreement shall terminate on the expiration of the Mining Lease or upon its
earlier revocation or surrender.
49.2
The Parties shall hold a full review of this Agreement after 5 years from the date of
execution of the same and every two years thereafter, however, nothing herein shall
preclude any party in requesting a review of a provision herein within 2 years from
the signing of this Agreement.
RESOLUTION OF DISPUTES
The failure of any Party to implement at any time, any of the provisions of this
Agreement shall in no way be construed to be a waiver of the provisions or any part
thereof of this Agreement or the right of any Party thereafter to enforce each and
every part of the provision in respect of any subsequent default or breach.
SEVERABILITY
53.1
54.
Where a dispute referred to in Clause 50 is not resolved within sixty (60) days from
the day on which the Parties first formally meet for the purpose, the Parties shall
submit the dispute to a single arbitrator in Papua New Guinea as agreed to by the
Parties for resolution of disputes in accordance with the provisions of the
Arbitration Act (Chapter 46)
WAIVER
52.1
53.
Where a dispute arises between the Parties as to the interpretation or
implementation of this Agreement, they shall genuinely consult with each other with
a view to resolving same.
ARBITRATION
51.1
52.
The first-mentioned Party shall take all reasonable measures to overcome the Force
Majeure and to fulfil the terms and conditions of this Agreement with the minimum of
delay (except that no Party has an obligation to settle a labour dispute or to test the
validity of any legislation) and shall give notice to the other Party upon the
restoration of normal conditions.
TERMINATION/REVIEW
50.1
51.
has given notice to the other Party of the occurrence of Force Majeure upon
becoming aware of same.
The provisions of this Agreement shall be separate and severable each from the
other to the extent that if any portion or any one provision or portion is deemed to be
inoperative then the remainder of the Agreement shall remain binding upon and
enforceable by the Parties hereto.
FURTHER ACTS
54.1
The Parties shall execute such documents and do and perform such acts that lie
within their power and are necessary to give full effect to this Agreement.
27
55.
IMPLEMENTATION
55.1
56.
REPRESENTATIONS AND WARRANTIES
56.1
57.
All undertakings given by any one party under the MOA shall not be devolved or
transferred to another party except as reasonably agreed to by all parties to this
MOA.
COMMUNICATIONS
58.1
59.
Except as expressly stated in this Agreement, no representation, inducement or
warranty given or made by one of the Parties hereto with the intention of inducing
the other Party to enter into this Agreement, and any representation which maybe
construed as inducements or warranties that may have been so given are hereby
denied and negated.
NO DEVOLUTION
57.1
58.
Each Party undertakes to endeavour to use all legal and administrative powers it
reasonably has at its disposal from time to time to ensure that the provisions of this
Agreement are effectively and expediently implemented.
Any formal communication by the Parties concerning this Agreement shall be
deemed to have been made:
a)
in the case of the National Government, if signed by the Minister or the
Secretary of the Department of Mining, as their responsibilities require; and
b)
in the case of the Landowners, if signed by the Chairman of the respective
Landowner’s Associations; and
c)
in the case of the Provincial Government if signed by the Governor, or the
Provincial Administrator; and
d)
in the case of Highlands Kainantu Limited if signed by the Managing Director
of Highlands Kainantu Limited, or his authorised deputy.
58.2
Any formal communication shall be in writing and may be delivered either
personally, or transmitted by facsimile to the person, or persons referred to in
Clause 58.1 herein.
58.3
Any formal communication shall be deemed to have reached the other Party:
a)
in the case of personal delivery, when received by the relevant person
referred to in Clause 58.1 herein; and
b)
in the case of facsimile or email as soon as the transmission is confirmed.
CONSULTATION
59.1
The Parties agree to meet on a regular basis to review activities of the mine
operations and obligations under this Agreement.
59.2
A project review will be held every six (6) months from the signing of this
Agreement, or as determined by the Parties to this Agreement.
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60.
61.
EXECUTION
60.1
This document is legally binding on all parties to the MOA upon its execution by the
duly authorized representative or representatives for each stakeholder who is a
party to this MOA.
60.2
The execution shall not be affected by any future land ownership title determination.
60.3
Any such new determination of landownership shall be deemed to have been fairly
represented by the signatories to this MOA.
60.4
Any aggrieved party to this MOA may execute the MOA in counterpart
retrospectively.
COMMENCEMENT DATE OF THIS AGREEMENT
61.1
The commencement date for this Agreement will be the start of construction on the
tenements.
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