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The evolution of Benefit Sharing Agreements in Papua  
New Guinea: What are the lessons learnt and what are  

the prospects for the future?   
A research presented in partial fulfillment of the requirements 

 
for the degree of Master of International Development 

 
in 

Development Studies  

 
 

 

At Massey University,  
Palmerston North,  New Zealand 

 
 
 
 
 

Killian Saulmai Anoser 
 
 

March, 2013 



i 
 

Table of Contents 
 

Table of Contents ..................................................................................................................................... i 

Figures and Tables ................................................................................................................................. iii 

Abstract .................................................................................................................................................. iv 

Acknowledgements ................................................................................................................................. v 

Abbreviations ......................................................................................................................................... vi 

Chapter 1 – INTRODUCTION ................................................................................................................... 1 

1.1 Introduction and overview............................................................................................................ 1 

1.2 Context of Report – Papua New Guinea ....................................................................................... 2 

1.1. The Issues and Rationale for the Study ........................................................................................ 4 

1.2. Research Aims and Objectives ..................................................................................................... 6 

1.3. Methodology ................................................................................................................................ 9 

1.4. Report Outline............................................................................................................................ 10 

Chapter 2 – LITERATURE REVIEW ......................................................................................................... 11 

2.1. Introduction ............................................................................................................................... 11 

2.1.1. The concept of Benefit Sharing Agreements in the context of PNG ................................... 11 

2.1.2. The origins of Benefit Sharing Agreements ........................................................................ 13 

2.1.3. The definition, application and use of Benefit Sharing Agreements .................................. 14 

2.1.4. Components of Benefit Sharing Agreements ..................................................................... 16 

2.1.5. Conclusion ........................................................................................................................... 21 

2.2. The Policy, Legal and Institutional Framework of Benefit Sharing Agreement ......................... 21 

2.2.1. International policies on BSA .............................................................................................. 21 

2.2.2. PNG policies on benefit sharing .......................................................................................... 24 

2.2.3. The Legal and Institutional Framework .............................................................................. 28 

2.2.4. Conclusion ........................................................................................................................... 30 

Chapter 3 – RESOURCE PROJECTSAND BENEFITSHARING AGREEMENTS ............................................. 32 

3.1. The Benefit Sharing Agreement in the PNG Resources sector. ................................................. 32 

3.1.1. Introduction ........................................................................................................................ 32 

3.1.2. Bougainville Copper Project ................................................................................................ 32 

3.1.3. Ok Tedi Mining Project ........................................................................................................ 34 

3.1.4. Porgera Gold Project ........................................................................................................... 36 

3.1.5. Misima Gold Project ............................................................................................................ 38 



ii 
 

3.1.6. Kutubu Oil Project ............................................................................................................... 39 

3.1.7. Lihir Gold Project ................................................................................................................. 41 

3.1.8. Ramu Nickel/Cobalt Project ................................................................................................ 42 

3.1.9. Liquefied Natural Gas Project (LNGP). ................................................................................ 44 

3.1.10. Fisheries Agreements ........................................................................................................ 46 

Chapter 4 – SUMMARY AND CONCLUSION .......................................................................................... 50 

4.1. Introduction ............................................................................................................................... 50 

4.2. Summary and results ................................................................................................................. 51 

4.3. PNG Benefit Sharing Agreements in the international context, its strengths and weaknesses 52 

4.4. Policy options and recommendation for the future .................................................................. 54 

4.5. The outlook for Benefit Sharing Agreements ............................................................................ 54 

References: ........................................................................................................................................... 56 

 

 
  



iii 
 

Figures and Tables 
 

Figure 1.1Resources Map of PNG ........................................................................................................... 3 
 
Table 3.2 Characteristics and Components of BSA ............................................................................... 48 
 
Table 4.3 Strengths and Weaknesses of BSA ........................................................................................ 53 
 
 
  



iv 
 

Abstract 
 
With an abundance of natural resources, the extractive and fishery exploitation at a developed 

stage, Papua New Guinea (PNG) should have been at the top end of the developing world, however, 

this has not materialised. PNG is going through the dilemmas of development through high rate of 

resource exploitation and unequal distribution of benefits that is having detrimental effect on the 

economy and general living standard. Many have questioned why this situation has existed without 

being addressed.  

 

It is also acknowledged here that there has been much literature that has been written on the   

environment and social impacts of resource project, however, there has been little written on the 

benefits flowing through to those people affected by resource developments. This report attempts 

to address those benefit sharing issues. 

  

A review of past and current projects and how they distributed benefits has provided a baseline 

from which the most important elements for future benefit sharing have been identified. These are 

that BSA are negotiated, legally binding agreements that recognise property rights, are 

internationally recognised, they allocate and demarcate responsibilities and ensure development 

coherence. Using these characteristics, a fair and equitable benefit sharing could then be developed 

for resource projects in Papua New Guinea. 

 
 
 
 
 
 
 
 

 

 

 

 

 

 

 



v 
 

Acknowledgements 
 
This research report, I am indebted to the following: First of all, Associate Professor, Glenn Banks my 

Supervisor for his invaluable direction and guidance on this Research Report because of his vast 

experience in the PNG resource sector. To Professor Regina Scheyvens, Head of school and staff of 

the Institute of Development Studies, Massey University for their support. Special mention must also 

go to the staff of the Pasifika Fale for their support, particularly Sunny Liuvaie for his time in proof 

reading, editing this report, its structure and grammar in many of the drafts that has been sent. I 

also acknowledge the contribution from Professor, Peter Cleave and Lorraine Anderson for their 

time in editing the final draft of this report.   

 

I wish to also thank the Government of Papua New Guinea, particularly, the Department of Prime 

Minister and NEC for allowing me 2 years study leave to pursue a Master’s Degree. Special mention 

has to go to the New Zealand government, through the New Zealand Aid program who provided the 

scholarship to undertake this study. Special mention must also go to the Massey University 

International Support Office for their assistance in making sure my stay here in New Zealand 

enjoyable.  

 

Finally, I will always be grateful to my God who is my provider and guidance and to my family 

particularly my partner Sharon Asu and my three girls, Angelina, Anne-Marie and Audrey for their 

companionship and love. They have been a blessing to have around as they have always made life 

and this education journey fruitful.  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  



vi 
 

Abbreviations 
 
 
ABS  Access Benefit Sharing 

ADB  Asian Development Bank 

AfDB  African Development Bank 

BCA  Bougainville Copper Agreement 

BCL  Bougainville Copper Limited 

BDG  Business Development Grants 

BHP  Broken Hill Propriety Limited 

BSA  Benefit Sharing Agreement 

CBD  Convention on Biological Diversity 

CMCA  Community Mine Continuation Agreement 

DFWN  Distant Water Fishing Nations 

DPMNEC Department of the Prime Minister and the National Executive Council 

EEZ  Exclusive Economic Zone 

EPG  Enga Provincial Government 

FFA  Forum Fisheries Agency 

FIFO  Fly In Fly Out 

IBP  Integrated Benefit Package 

IFC  International Finance Corporation 

ILG  Incorporated Land Group 

LNG  Liquefied Natural Gas 

LRC  Law Reform Committee 

MCA  Mine Continuation Agreement 

MCC  Mettalurgical Group Corporation 

MCCJV  Mettalurgical Group Corporation Joint Venture 

MDC  Mining Development Contract 

MOA  Memorandum of Agreement 

MRA  Mineral Resources Authority 

NCI  National Cancer Institute 

NFA  National Fisheries Authority 

NZ$  New Zealand Dollar 

OTML  Ok Tedi Mining Limited 

PDF  Project Development Fund 



vii 
 

PDL  Petroleum Development License  

PGK  Papua New Guinea Kina 

PJV  Porgera Joint Venture 

PNG  Papua New Guinea 

PNGDSP Papua New Guinea Development Strategy 

RMTL  Road Mining Tailings Lease 

SML  Special Mining Lease 

SSG  Special Support Grant 

TAs  Technical Assistance 

UNCLOS United Nations Convention on Law of the Sea 

UBSA  Umbrella Benefit Sharing Agreement 

US  United States 

WB  World Bank