Papua New Guinea palm oil – the nation’s number one agricultural export

The member for Pomio and Minister for Public Service Elias Kapavore opened a new district office complex in Pomio East New Britain this week, to support development in the area.  Reinforcing the gains of this administrative upgrade is the development in Pomio of a major new palm oil project.

The Minister – accompanied by Australia’s High Commissioner to PNG Bruce Davis – also used the occasion to break ground on a new secondary school that will serve the children of Pomio, thanks to funding from the Australian government’s Incentive Fund (K3.5 million), and the District Development Authority (K1 million). The Prime Minister has also distributed K2 million to support development in the district, and the Department of National Planning and Monitoring contributed K300,000 to help supply the new office complex.

PNG’s most productive crop

Palm oil is PNG’s most successful agricultural crop. It has generated 39% of agricultural export earnings over the past decade.  It directly provides incomes for over 160,000 people living in rural households.

A vibrant palm oil industry is both economically and environmentally viable in PNG. It has the potential to foster economic growth and raise the living standards of PNG’s poorest communities.  PNG soil and climate offer the prospect of highest output per hectare from palm oil of any economy.

Yields from palm oil are far superior to any other oil crop. Water and pesticide use per tonne of oil produced is significantly lower than for alternative crops.  Compared to soy beans – the next biggest source of edible oil – oil palms produce ten times as much oil per hectare.

Use of less land, water and pesticides means a much lower environmental impact.

Supporting communities, and the nation

PNG’s major palm oil operations provide employment, rents and royalties to local communities, but this is just the beginning. The projects also provide significant infrastructure investments, and health and education services for the benefit of local families.

The Sigite Mukus project includes major investments in education and health initiatives for the benefit of local communities, including partnership in the cutting-edge PNG Industry Malaria Initiative (PIMI). More than 4,000 people are already directly employed by the project, earning more than K4 million per month – almost K50 million in wages has already been paid out. Many others have also benefited from the economic opportunities created by the project.

Living standards have improved markedly across the project area, with new homes, businesses and educational facilities being established at a rapid rate. New road and communications infrastructure is also helping provide livelihoods and boost standards of living.

Rimbunan Hijau subsidiary Gilford Limited manages the Sigite Mukus project. The company is committed to helping improve health and wellbeing for all stakeholders, not just employees of the project. The company has also entered into a public-private partnership (PPP) with the provincial government, in order to provide medical staff and supplies to local aid posts.

Thanks to the project, new trade stores flourish. Local people have more transportation options and shorter travel times. Upgraded health services mean shorter trips for people who need medical care. Disease prevention education and supplies mean that fewer people are getting sick.

Along with other major palm oil operations that are already operating or in development, the Sigite Mukus project promises to help PNG harness the powerful potential of palm oil as a source of export revenue. So far it has contributed over K100 million to the State, and K31 million to landowners.  An additional K1 Billion will flow directly to the State and local communities throughout the life of the project.

Sustainable operations

PNG’s palm oil industry has a global reputation for sustainability. Operations managed by New Britain Palm Oil Limited and Hargy Oil Palm accord with environmental best practice. The Sigite Mukus project continues this tradition of environmental and social stewardship.

In addition to the 30,000 hectares of palm plantations that will be established in the Sigite Mukus project area, over 10,000 hectares of land has been set aside for conservation, traditional uses and for the preservation of important cultural sites.

The Sigite Mukus project complies with or exceeds applicable national environmental and social requirements. Management is committed to closely tracking all social, environmental and economic impacts – positive and negative – and to following a process of continuous improvement.

Corporate social responsibility is integral to project planning and management. Rimbunan Hijau has applied world’s best practice to ensure that all stakeholders – from employees, to local communities, to all levels of government – benefit from this major agricultural investment.

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