An agreement has been signed to ensure companies directly involved in the petroleum and mining sectors disclose information regarding their beneficial owners come 2020.
This comes into effect immediately following the signing of a contract between PNG Extractive Industries Transparency Initiative (PNGEITI) National Secretariat and auditing firm KPMG.
In a media statement, PNG EITI says the move is to identify the real owners of the companies who had acquired rights to extract oil, gas and minerals which, in many cases, were not known and often hidden behind a chain of corporate entities.
Under the agreement, KPMG will implement the Beneficial Ownership Roadmap that spells out how Papua New Guinea can develop a matrix to report the beneficial owners
Beneficial owner(s) of resource projects (mine, oil and gas companies) refers to the natural person(s) who directly or indirectly owns or controls a corporate entity or company.
The implementation of the roadmap will be rolled out until the final quarter of 2019 after which a matrix will have been developed for reporting through the EITI reporting process in 2020.
Head of the PNG EITI National Secretariat, Lucas Alkan, said it was the decision of the EITI international board to have all EITI implementing countries ensure that corporate entities that bid for, operate or invest in extractive assets, disclose the identities of their beneficial owners by January 1, 2020.
“The lack of transparency in this area often creates an environment for other illegal activities such as money laundering and transfer pricing. This affects other sectors of the economy and often creates a conducive environment for corruption and tax evasion,” Alkan said.
He said people living in resource-rich countries Like Papua New Guinea risked losing out as revenues generated from resources exploitation in the extractive industry were often misallocated and wasted.
“The EITI requirement will ensure that beneficial ownership information is made available through public registers such as those collected and stored at the Investment Promotion Authority, through company registration process,” Alkan said.
He expressed confidence working with KPMG to successfully implement the roadmap.
“On behalf of the Multi Stakeholder Group (MSG), I offer sincere gratitude to KPMG for giving us the assurance that they will give us the best.
“We will be with KPMG every step of the way and we hope to see better outcomes that will create the best possible platform to report the beneficial owners come 2020 and onwards.”
(Picture: KPMG Advisory Services Manager Shimar Saxena, left, and PNGETI Head of National Secretariat Lucas Alkan after the contract signing - Credit: PNG EITI).