Degree Name

Master of Laws (Hons.)


Centre for Natural Resources Law and Policy


Just after 20 years of independence, Papua New Guinea is undergoing a rapid exploitation of its rich natural resources in minerals, petroleum, forestry and fisheries. These resources are exploited by foreign capital and technology. Some of the mineral projects are world class, particularly the now-closed Bougainville copper mine, Ok Tedi gold and copper mine, Porgera gold mine and the Lihir gold mine. Two petroleum projects - Kutubu and Hides - have been established in the early 1990s. Another two - Gobe and Paua - are expected to be developed in the late 1990s.

The financial benefits generated or expected to be generated by these resource developments are quite substantial compared to PNG's small population of about four million. Generally, Papua New Guineans have high expectations of the PNG economy growing as a result of the revenue generated or expected to be generated by these resources developments. PNG , however, has a weak economy exemplified by the cashflow crisis which began in late 1994. This contrast has engendered a number of legal and socio-economic problems. Many Papua New Guineans argue that PNG has a weak economy because the natural resources laws allow foreign companies to transfer most of the financial benefits generated from the resources developments out of PNG . They argue that the laws are alien, pro-foreign investors and do not make adequate provisions for national interests. Thus, the laws need to be changed. The aim of this thesis is to examine the veracity of this hypothesis. Because it is difficult and beyond the scope of this thesis to examine all the legal frameworks for every natural resource, this thesis isolates and examines only the legal framework for petroleum.

The thesis concludes that, generally, PNG has a good petroleum framework, and substantial benefits are accruing to the country from resources exploitation. However, because of gross mismanagement of these benefits, PNG faces financial and economic problems. Sound and sustainable management of benefits from resources exploitation is suggested as a solution to PNG's economic problems.