The Agriculture Minister Tommy Tomscoll says the proponents were seeking a rice monopoly, but did not seem to have the finance to start the project.
Firmin Nanol reports:
Presenter: Firmin Nanol
Speaker: Agriculture Minister Tommy Tomscoll
NANOL: Minister Tomscoll says the developer Naima Investments did not have the capital nor followed the proper legal processes to acquire certain licenses and government approval.
He says it was also seeking a twenty year tax concessions as PNG's rice grower, an eighty per cent tariff or-tax on all other rice importers, and asked the government not to tax all its imports for two years.
Minister Tommy Tomscoll says if these were granted, Naima would create a monopoly on the importation, sale and distribution of rice in PNG, which would cause hardships for other rice distributors and affect consumers.
TOMSCOLL: A monopoly it's not good for an open economy like Papua New Guinea where we are encouraging free trade, we are deregulating many of our industries and laws to allow the market to function in terms of supply and demand and the price. Also in that way we have our consumers who have some utility also to affect cost of price and any other prices. And I would not encourage any company to deliver a monopoly in the rice. Rice is a big staple diet for our people and that's the last thing I want to do. I have not seen any evidence of any money committed by the company to progress this project.
NANOL: He says the Department of Agriculture and Livestock did not know who the project proponents or potential investors were even though negotiations were managed by the Department Secretary.
Minister Tomscoll says the project has been stopped and certain consultants who were engaged have been terminated.
TOMSCOLL: So I have said it's stopped and that's my position and that's exactly what has happened. Whilst it's been running under the Office of the Secretary, they've engaged consultants, own the project to run the project, I have also issued directions to terminate and they have been terminated. So there are no consultants operating in these projects anymore, and the project has come to a stop. The fact that I have never met the proponents of the project and I don't know who is behind the project, all I have to know that there is a company called Naima, and Naima has been pushing a project, and that's what I know. I don't know the faces behind the project.
NANOL: He says the project cannot get the government's approval as it did not apply for certain licenses for the project before it was even implemented or constructed, rendering it illegal and non-existent at the first place.
TOMSCOLL: I made my decision based on the fact that procedures were not followed, and that the company if it still desires to pursue the project must go back and follow the laws that are applicable to doing such a project. It is all on that basis that I have stopped the project. Of course they have to comply with the environmental act, the forestry act, incorporated land group act, they have to comply with the customary land act. So until they comply with all the provisions of this act we can sit down and consider. But otherwise do the first thing first, which is doing the right thing first.
NANOL: The Minister's directions follow debates against the proposed rice project in parliament and within the business community.
One of PNG's major rice suppliers, Trukai Industries also raised similar concerns when the project was first mooted, saying that it would kill the rice industry in the country.
It claimed that had the project gone ahead it would have created a monopoly where other suppliers and distributors would be outpriced because the Naima project would not have paid any tariffs on its imports and distribution sales.
PNG's Agriculture Minister Tommy Tomscoll says all investors should comply with, forestry, customary and environmental laws before they can acquire the licenses and land to start their projects or businesses.
Firmin Nanol-Port Moresby.