Canberra, September 19661
Reference: attached Bills for an ordinance to amend the mining ordinances of Papua and New Guinea2 —proposed by Mr. Paul Lapun, M.H.A.3
It is considered that the attached Bills should be opposed for the following reasons:—
• it cuts across the basic principle contained in the mining laws that the Government owns the minerals and derives a royalty revenue from the exploitation of these minerals; and the private individual owns the land and is compensated by mining operators paying an ‘occupation fee’ and compensation for any damages to land or buildings
• this principle was re-affirmed in the Bill passed by the House of Assembly in June
• this principle operates today in most countries and money received from mineral royalties is an accepted part of Government revenue
• the effect would be to make a small group (already well recompensed by other charges on the mining company) rich at the expense of the remaining members of the community
• it is particularly important when the Territory is granted independence that the new nation has available adequate revenue resources
• the present bill was previously moved by Mr. Lapun as a new clause to the Bill introduced by the Government in June—the clause was then rejected by majority vote of the House
• subsequently the House accepted a further amendment to the effect that the minimum occupation fee payable by mining companies to land-owners be two dollars per acre instead of the Government’s proposal of one dollar per acre—this amendment was more-or-less an alternative to the rejected clause and Mr. Lapun is now trying to get both benefits for the land-owner.
• although 5% is not a large proportion it is obvious that this would be only the first step and that landowners would quickly press for this percentage to be raised.
2. While opposed to the Bill I do not consider we should seek to apply the rules of the House to have it deferred for 12 months. Rather, I think that every opportunity should be taken to win support for the Government view both before and at the next meeting of the House. For example it is proposed that reference be made to this matter in the Minister’s talk to the Chamber of Commerce, Port Moresby, next week.
3. If, in spite of our efforts, the Bill is passed then we must accept it as the democratic right of the House even though potential revenue to the Administration is thereby lost.4
[NAA: A452, 1966/2475]
1 Exact date unknown.
2 Not printed.
3 See paragraph 7, Document 69.
4 In a marginal note of 29 September, Ballard responded: ‘There are really two levels of possible preliminary objection. Section 50 of the PNG Act sets out a basic constitutional proposition that money bills may not be introduced without a message from the Administrator. We have asked for AG’s advice on whether this section applies to Paul Lapun’s Bill. If it does I think official members must take the point otherwise we can get into awful trouble with the Budget in future. The second level only applies if section 50 does not—and I am inclined to think it does not—apply. [This] relates to Standing Orders and in this area there is clearly room for a policy decision on whether, for example, official members should oppose a motion for suspension’. In contrast, Ahrens had earlier noted a discussion with Espie in which the latter had said that ‘he understood that the Administration’s proposal for the next meeting of the Assembly would be to try and muzzle the Bill by evoking the rules of the House … Espie thought that this would be a bad thing and that it would be much better to discuss the {matter} openly and for the Administration to try and obtain sufficient votes to have the Bill rejected. However he thought that it should be recognised that we were trying to set up a democratic Government and it was wrong to try and emphasise too strongly the Australian view on questions such as this if the local people had other ideas of their own’ (minute, Ahrens to Gutman, 26 September 1966, NAA: A452, 1966/2475).