annual report 2017 · 2018-05-29 · daru lake murray wipim koabu a: our footprint....

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ANNUAL REPORT

11111111111Delivering with Innovation www.otdfpng.org

2017

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!A OTDF Field Base

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[i OK TEDI Mine

Aiambak - Kiunga RoadTabubil to Kiunga HighwayWest Papua - IndonesiaWestern Province

CMCA Trust Regions

Dudi-South Bank

Kiwaba

Manawete-North Bank

Middle Fly

Mine Villages

Nupmo

Suki Fly Gogo

Tutuwe

WaiTri and Alice River Trust

Western Province

0 40 8020

Kilometers

Ok Tedi Development FoundationGeographic Information Systems

Ok Tedi Development Foundation 2017W

Gulf Province

Province

West Sepik

Southern Highlands

NOMAD

Nakaku

Tabubil

SamagosAgriculture Centre

Tapila

Sturt Island

Aiambak

TABUBIL

KIUNGA

BALIMO

DARU

LAKE MURRAY

WIPIM

KOABU

IND

ON

ESIA

:

OUR FOOTPRINT

ContentsCCCCCCCCCCCCCCCoooooooooooonnnnnnnntttttttttttttttttttttteeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeennnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnttttttttttttttttttttttttttttttttttttssssssssssssssssssssssssssssss

ContentsOTDF EVOLUTION AND DEVELOPMENT TARGETS

2017 AT A GLANCE

MESSAGE FROM THE CHAIRMAN

BOARD MEMBERS

MESSAGE FROM THE CHIEF EXECUTIVE OFFICER

OTDF ORGANISATION STRUCTURE AND COMMITTEES

COMMUNICATIONS

DEVELOPMENT SECTORS, INDICATORS AND PARTNERSHIPS

BASELINE SURVEY - LIVELIHOOD DEVELOPMENT PACKAGES

OTDF EXPENDITURE AND PROJECT LIFE CYCLE

TRUST ADMINISTRATION

HEALTH SECTOR OVERVIEW

EDUCATION SECTOR OVERVIEW

INFRASTRUCTURE SECTOR OVERVIEW

LOCAL & REGIONAL ECONOMIC DEVELOPMENT SECTOR OVERVIEW

COMMUNITY & SOCIAL DEVELOPMENT SECTOR OVERVIEW

CORPORATE SERVICES

2017 AUDITED FINANCIAL STATEMENTS

ABBREVIATIONS, ACRONYMS AND ACKNOWLEDGEMENTS

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Picture This Page: Aerial view of Tank 5, TCS water upgradeproject, KiungaBack Cover: Aerial view of the Tapila Field Base, South Fly

Front Cover: Mine village women proudly show off the first eggs produced from the Tabubil poultry project

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OTDF EVOLUTION AND VISION

Ok Tedi Development Foundation (OTDF) was established under Clause 6 of the Mining [Ok Tedi Mine Continuation (Ninth Supplemental) Agreement] Act 2001 with its tax-free status enshrined in the same legislation.

OTDF’s long term Vision is to ensure the self-sustainability of and to improve the quality of life of Western Province communities with consideration for the people of the Telefomin District of the Sandaun Province.

The four key Principles of the OTDF Strategic Direction 2016-2020 underpinning all OTDF’s strategic engagement with stakeholders, and guiding day to day operations are:

Effective and efficient implementation of development programs in priority sectorsStrengthened partnerships Open and transparent communicationsAppropriate and accountable financial and operations support systems

2009 - 2015

2016- 2020

2001 - 2008

OTDF incorporated as required by the 9th Supplemental Mining Agreement as a not for profit Foundation

OTDF sets out new Strategic Direction 2010-2015

New package signed to extend mining operations to 2013

OTDF engages with CMCA communities and establishes a sound platform for project delivery

OTDF engages with communities to support the Livelihood Development Package concept

Promoting a transition to more commercial production through improved market access

Delivery

Acceptance

Establishment

VISION: To improve self-sustainability and quality of life of Western Province communities

Appropriate & accountable financial and operations

support systems

Open and transparent communication

Strengthened Partnership

2016 - 2020 Targets

Effective and efficient implementation of

development programs2016 - 2020 Targets

2016 - 2020 THEME: Community financial self-reliance through socio-economic initiatives and improved infrastructure

2016 - 2020 Targets 2016 - 2020 Targets

Strategic oversight and alignment of OTDF results and sector headline indicators with Provincial and National policies and plans

Evaluate Village Development Fund projects and incorporate lessons into new designs

Evaluate all TCS and high impact projects with a focus on sustainability and lessons learned, then incorporate those lessons into new designs

Advocate and collaborate with the DNP&M and FRPG for sustainability of Provincial infrastructure including options to prioritise TCS programs, and allocate PNGSDP long term funds for repairs and maintenance of existing and planned assets

Promote developments that position Western Province as an agriculture and forestry focal Province

Promote utilisation of all Fly River jetties as access points to Fly Warrior, Fly Zamby and Fly Hope

Target Trust education sponsorships towards development needs in the health, education and agriculture sectors

Incorporate OTDF internal and external communications channels and key messages, including the role of Radio Fly, into the Communications Policy

Focus Communications Policy key messages on:(a) Advocacy for the 2016 Strategic Plan(b) Engagement with relevant National and Provincial government agencies to support the 5 key sectors of engagement

Use appropriate mobile and internet technologies for Communications Policy implementation, data collection and results reporting

Implement the OTDF Communications Policy, including annual joint communication patrols by Associate Directors and Advisory Committee members, Village Planning Committee and Trust Chairmen, Women's Association Presidents, OTDF and OTML Community Relations

Focus on FRPG Provincial Growth Centres for programs, including infrastructure development and service links

Advocate with FRPG for formal PEC recognition of OTDF as a preferred implementing partner

Support the Provincial Administrator to establish a Provincial Roads Authority

Access funding from other sources including:(a) DFAT Business Partnerships Program;(b) PNG Incentive Fund; and(c) LNG Projects for Province-wide priorities

Explore options for accessing Trust funding for development priorities after the current Mine Life Extension period of 2025, including using accrued interest from Trust investments

Establish appropriate mechanisms for engaging non-CMCA communities

Increase community, private sector, government and non-government participation in program design and M&E

Provide business advisory services to support SMEs, Regional Women's and Youth Associations transition to full operational independence

Work with development partners to actively manage risks associated with program and project implementation

Enhance OTDF staff and stakeholders' skills and knowledge of M&E

Consolidate and fully integrate M&E systems, headline indicators and baselines for reporting results

Consolidate performance-based HR systems and KPI's to align with M&E

Incorporate OTDF staff 'work time' into Attache job costing and expenditure reporting

Utilise Attache to generate timely financial reports

Consolidate and maintain shared filing systems and data repositories using appropriate technologies and controls

Provide access to OTDF policies and procedures in up-to-date manuals, including Finance, HR and M&E

Evaluate and enhance management and staff capacity to manage outsourced project implementation services

Incorporate accountabilities and KPI's into Terms of Reference for all OTDF Committees (Risk, Safety, Disciplinary, Housing, Tender Evaluation and M&E)

Support Trusts' management of investment portfolios and ensure that the Trust Investment Guidelines remain relevant to the operating environment

Maintain audit and statutory compliances for OTDF, and all CMCA Trusts, Trust Investment Syndicates and Companies

Transition to a fully independent OTDF IT system with related policies and procedures

DEVELOPMENT TARGETS 2016-2020

MISSION: Wise management of funds and programs to realise the development aspirations of community partners by delivering with innovation

Target achieved5/32(16%)

Target mostly achieved18/32 (56%)

Target not achieved8/32(25%)

Target changed1/32 (3%)

Key:

* This shows development target progress in the first 2 years of the 2016 - 2020 Strategic Direction

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2017 AT A GLANCE

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Commercial scale Rice trials successfully completed, read more on p. 59

Middle Fly women launch the NDB credit scheme, read more on p. 51

Western Province Youth Development Plan launched, read more on p. 64

OTDF website refreshed and launched, read more on p. 16

JAN

JUN

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Board Directors open the Eaglewood nursery at Tapila, read more on p. 54

Poultry project groundbreaking ceremony, read more on p. 52

South Fly singsing group at the inaugural Madiri cultural show

Annual Communications patrol awareness in the Middle Fly

JUL

DEC

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MESSAGE FROM THE CHAIRMANWith political will reaching new heights following the 2017 General Elections, OTDF hosted a brief but extremely important visit to Kiunga by the Mining Minister, Hon. Johnson Tuke and Secretary of the Department of Mineral Policy and Geo-Hazard Management, Harry Kore in

October. The Minister and Secretary visted some of the Community Mine Continuation Agreement (CMCA) communities and Tax Credit Scheme (TCS) projects implemented by OTDF in the North Fly and Middle Fly Regions. Minister Tuke was impressed with the work of OTDF, stating:

“Ok Tedi Development Foundation is a very dynamic organisation with a unique operational structure supported by OTML and is a good model for other mines in PNG to adopt. I have heard a lot about OTDF and I am amazed by what I have seen during this short trip. As they say ‘seeing is believing’ and I did.”

The Minister’s remarks confirm the significant commitment and efforts of OTDF to work in partnership with the communities, Government, NGOs and other stakeholders to bring tangible development to the Western Province, especially the 158 mine associated communities.

With the mid-term review of the 2016 – 2020 Strategic Direction (SD) due in 2018 I am also pleased with the progress on the programs identified in the five key sectors. The achievements of the last two years, particularly in 2017 would not have been possible without the ongoing support of OTML, our communities, our development partners and the Provincial and National Governments. We have continued to establish a solid platform that will enable the transformation of Western Province into a vibrant economy that is less reliant on benefits derived from the Ok Tedi Mine. The programs identified in the economic sector when fully established will enable the communities to earn extra income, and be less dependant on

annual cash compensation payments from the mine. This year there was no progress on mobilising the three major impact projects approved by the former Minister of Mines, Hon. Byron Chan for funding under the CMCA portion of the Western Province People’s Dividend Trust Fund (WPPDTF). We expect these funds to be released in 2018 to support improvements in Education, the Livelihood Development Package programs and Delta Village Relocation project.

The election of the new and vibrant Members of Parliament for the Western Province in the recent National Elections brings hope and a new way forward for the people. OTDF is keen to align its Strategic Direction with the new Provincial Development Plan, and several meetings have already been conducted between OTDF and the Members. There is support for greater cooperation between the Provincial Government and OTDF to extend the sectoral programs to other parts of the Province. With this understanding OTDF will be working closely with the Provincial Government to host a Development Forum in Kiunga in March 2018.

The 33% shareholding in OTML to the three Western Province entities – Mineral Resources Star Mountains (9%), Mineral Resources Ok Tedi #2 (12%) and Mineral Resources CMCA Holdings (12%) will bring additional benefits in projects and investment opportunities to the Province. OTDF is keen to work with these shareholders, and the Mineral Resources Development Company (MRDC) to fund the sectoral programs that have been identified.

The professionalism of the management and staff of OTDF has contributed to another successful and safe year and I commend their efforts and commitment. Towards the end of the year the OTDF Board approved a restructure in the Executive Leadership Team with the appointment of two Executive Managers replacing the vacant Chief Operating Officer position, reporting to the CEO. These appointments were necessary to further improve internal efficiencies, plan for succession, and prepare for increased donor funded projects in the Province.

OTDF appreciates the ongoing budgetary support from its major shareholder OTML who has so far

OTDF Board Chairman, Musje Werror shares a light hearted moment with the Hon. Johnson Tuke, the Minister for Mines and fellow Director, Harry Kore while meeting Eaglewood nursery workers at Samagos Field Base and Research Station, Kiunga

contributed over PGK250M since 2008 to fund the Foundation’s annual operating costs. This contribution is in addition to the compensation payments made to the CMCA communities.

On behalf of the OTDF Board I thank you for the support this year and look forward to an exciting 2018 ahead as we continue to implement our sectoral programs in partnership with all our valued stakeholders.

OTML continues to set an example for the extractive industry where the social licence to operate extends beyond the normal compensation package.

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BOARD MEMBERS - DIRECTORS

Harry KoreDirector since 2017Mr Kore is the Secretary for the Department of Mineral Policy and Geohazards Management. A career professional, he has been involved in mining for over 18 years. Mr Kore holds a law degree from UPNG and is the Chairman of the CMCA and Non CMCA Trust Funds, and the Chairman of the State Negotiation Team for all State commercial interests in mining projects in PNG. He is a member of the Mining Advisory Council (MAC), the Mineral Resources Authority (MRA) Board and the Heduru Trust Ltd. Mr Kore is an ex-officio Director on the boards of MRDC, Mineral Resources Ok Tedi No. 2 Ltd (MROT#2), Mineral Resources Star Mountain Ltd (MRSM), Star Mountain Plaza Ltd (SMP), and Mineral Resources CMCA Holdings Ltd (MRCMCAH). Mr Kore has a mixed parentage of Gulf and Eastern Highlands Province.

Musje WerrorChairman since 2015 and Director since 2009Mr Werror is the Deputy CEO and General Manager Employees & External Relations with OTML. Mr Werror was formerly the Executive Manager of OTDF. He holds a Master of Business Administration and a Master of Professional Accounting from the Divine Word University and a Bachelor of Science Degree in Chemistry from the University of Papua New Guinea. He has held various roles with OTML over the last 25 years. Mr Werror is also the Director of Ok Tedi Australia Pty Ltd, Director of Ok Tedi Power Ltd and Director of the Heduru Trust Ltd.

David SodeDirector since 2013Mr Sode is the Chief Executive Officer of the PNG Sustainable Development Program Limited (PNGSDP). He has a Law Degree from the University of Papua New Guinea. From 1989 to 1993 he served as Legal Counsel to the PNG Bureau of Customs and Excise. He was subsequently appointed as Commissioner of PNG Customs in 1994, then in 1998 he was appointed Commissioner of Taxation and a year later promoted to the Commissioner General of the PNG Internal Revenue Commission serving in this post for a period of 7 years.

Kuam SanewaiDirector since 2016Mr Sanewai is currently the Community Relations Manager with OTML; he was formerly attached to OTDF, then a Department of OTML from 2005 to 2009, and became Team Leader of Socio-Economic Research with Community Relations in 2012. He was an external Trustee in the Kiwaba Development Trust. He holds a Diploma in Education from the University of Goroka in Papua New Guinea. Mr Sanewai is from Baluan Island, Manus Province.

Annual Report 2017

Richard ZumoiAssociate Director since 2009 (Observer in 2013)Mr Zumoi represents the CMCA people of the Middle Fly Trust region. He is a former primary school teacher and was instrumental in the CMCA negotiations between 1999 and 2001 and then again during the 2006/2007 CMCA review. Mr Zumoi was also involved in the initial creation of the Foundation and throughout the transition period in 2010 which saw OTDF begin operating as an independent entity from OTML. He was further involved in the 2009 to 2012 MLE Community Consultation process and is the CMCA people’s representative regarding consultation and negotiations with the State for a direct share in OTML.He comes from Wangawanga village in the Middle Fly Trust region of the Middle Fly District.

Clara Fred DangkimAssociate Director since 2014An OTDF Associate Director since 2014, Clara Fred Dangkim represents the Women and Children in the 8 CMCA Trust Regions and the 6 Mine Villages. Clara was a woman’s representative at the CMCA Review negotiations in 2006 and 2007, representing the Mine Villages. A Secretary by profession, she holds a Certificate in Secretarial Studies from Goroka Technical College and 3 Certificates in Business Management and Computing from Kumul Trainers. She is currently the Director/Secretary of Bugum Investments Limited. She comes from Kavorabip village, one of the 6 Mine Villages in the North Fly District.

Maino LucasAssociate Director since 2014Mr Lucas represents the CMCA people of the 3 North Fly Trust regions and 6 Mine villages. He holds a Bachelor Degree in Management from the Divine Word University in Madang and is currently employed by OTML as a Superintendent of the Mine Production D Crew. He is an influential young leader determined to drive positive development changes amongst the Mine village people. He is also the Chairman of the Bultem Village Planning Committee (VPC) and Chairman of the OTML Local Program.He comes from Bultem village, one of the 6 Mine villages in the North Fly District.

Aniba SamoAssociate Director since 2014Mr Samo represents the CMCA people of the 4 South Fly Trust regions. He was a CMCA Regional Delegate during the 2001 CMCA negotiations and then again during the 2006/2007 CMCA review. He has been the VPC Deputy Chairman for Kenedibi village since 2001. Mr Samo has a secondary school education level and is currently doing a Science course with the Institute of Distance College Education in Daru. He comes from Kenedibi village on the North bank of the Fly River in the Manawete Trust region of the South Fly District.

BOARD MEMBERS - ASSOCIATE DIRECTORS

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Welkam olgeta to our seventh annual report, highlighting the many achievements in 2017. Throughout this year OTDF has continued to plan operations around the current Strategic Direction 2016-2020 aspirations, associated Yam Chart key principles, strategies and targets; and headline indicators across five key

development sectors. The achievements outlined in this Annual Report demonstrate how OTDF has set a solid platform to enable achievement of the Strategic Direction by the end of 2020. (See Development Targets page 5). Furthermore, I am very proud of the continued commitment of our staff who work tirelessly to help others, doing so in the safest possible manner as OTDF surpassed 1.25 million man-hours free of Lost Time Injury (LTI) since 2010.

In keeping with the Strategic Direction Theme of “Community financial self-reliance through socio-economic initiatives and improved infrastructure”, 2017 was the final year in which OTDF directly funded operating expenditure for sector programs. This milestone was enabled by the successful conclusion of Livelihood Development Package (LDP) Program trials that have generated income from seed funding provided by OTDF; an education focus through the self-funding FODE program; and approval of three major impact projects.

Following a welcome conclusion to court proceedings, OTDF is expecting a third tranche of PGK145 million from the CMCA portion of the WPPDTF for the delivery of the Western Province Education Strategy (PGK119 million); Livelihood Development Package program (PGK9.9 million to support Rubber, Rice, Eaglewood & other agribusiness opportunities); and South Fly Village Relocation (PGK13 million).

A key OTDF strategy has been to access program and related operational funding from sources outside those generated from OTML mining operations.

In 2017, OTDF submitted a Concept Proposal for PGK4.26 million from Australian Government funding, through the PNG Incentive Fund, to implement the Rice component of the LDP (see more on page 59). Accessing these opportunities has been made possible through the substantial progress which communities have made in acknowledging the importance of self-sustainability. This shift in attitude has allowed OTDF to maintain momentum and continue targeting model villages and model farmers across the corridor.

From 2018, the transition to self-sustainability to complement this funding is expected to include targeting Village Development Funds, Women’s Association and Regional Trust funds to support LDP infrastructure packages. OTDF’s contribution as a partner, following the SD principle of ensuring effective and efficient implementation of development programs, includes building on its extension services capacity across the Rubber, Rice and Eaglewood LDP packages; and using data from monitoring and evaluation to improve implementation and outcomes across all five sectors. OTDF’s strategy of developing appropriate and accountable financial and operations support systems has included an increased focus on results based management of staff, committees and programs. With the current prospects of external funding, the Foundation has prioritised key areas in finance and operations support to ensure systems and procedures can be benchmarked against similar organisations.

This year, to reinforce our ongoing commitment to monitoring OTDF’s performance against targets we have summarised the contributions that the Foundation has made to achieving longer term headline indicators for the five priority sectors. These can be found on sector overview pages for Health (p. 28), Education (p. 36), Infrastructure (p. 40), Local and Regional Economic Development (p. 50) and Community and Social Development (p. 62).

I would like to highlight the Board’s agreement to strengthen the Local and Regional Economic Development Sectors by supporting Innovative Agro Industries (IAI) to develop an agri-business Master Plan for Western Province. The Master Plan Concept was presented at the inaugural Agriculture

Message from the CEO

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Summit in November and attracted the interest of the International Finance Corporation, Market Development Facility, MiBank and the Pacific Balanced Fund. This Plan will be presented to the Board in June 2018.

OTDF will continue its commitment to the SD Principles of Strengthened Partnership and Open and Transparent Communications in 2018. OTDF implements priority initiatives in infrastructure across the whole Province through the OTML Tax Credit Scheme, and health and education programs that also impact on communities outside the CMCA corridor. OTDF will work closely with the FRPG and the Provincial Administration, and sub-national sector committees to ensure ongoing alignment of programs with Government priorities; and engagement on on key messages outlined in the the Communications Manual completed in 2017.

I remain optimistic about the near future given the continued support for the LDP Program and progress in achieving the 2016-2020 Strategic Direction. This was apparent from support by CMCA communities during the the annual Communications Patrol, along with the political will that has been demonstrated b y by the Hon. Governor and t h e new members of Parliament. A l l They have pledged to work closely with the the Foundation, this being reinforced by OTDF being named a s the FRPG’s development partner i n in their latest 5 year development strategy (Tonda Declaration 2017-2022). The Tonda Declaration enables direct partnership options with OTDF to implement socioeconomic projects and programs.

The most rewarding part of my role continues to be the ongoing, village by village engagement with our community partners within the CMCA corridor.

This year I was humbled by the Middle Fly CMCA people making me an honorary Chief, an occasion that was witnessed by my family during the Rubber factory groundbreaking ceremony at Aiambak.

In concluding, I am continuously grateful for the guidance of our Board Chairman and his fellow Directors and Associate Directors, all of whom share a passion to strive to improve the lives of our CMCA communities. I look forward to working with our partners to deliver beyond the coming years development targets as the Foundation reaches the mid-point of its Strategic Directon in 2018.

OTDF CEO, Ian Middleton, is inducted as an honorary Middle Fly Chief by Edward Kokore, Principal Landowner & Chief, Middle Fly

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OTDF COMMITTEES

Committee Details 2017 OutcomesDisciplinary The Disciplinary Committee deliberates on staff disciplinary

incidents, ensuring staff grievances are heard and judged fairly:

The Committee met once and upheld the Executive Management Team’s decision to terminate a staff member.

Formed: 2014 Meeting Frequency: as needed

No Members: 7 Meetings Held 2017: 1

Events The Events Committee plans and coordinates OTDF resources and engagement in special events:

The Committee organised groundbreaking for the Tabubil poultry project, and Aiambak Rubber factory; and launching of Middle Fly Women’s NDB loans, and the Youth Development Plan.



Housing The Housing Committee administers the OTDF Housing Policy to ensure safety of residents, monitor properties, and coordinate repairs and maintenance:

The Committee secured accommodation for all FIFO and residential staff, concluded all reported safety issues, arranged OTDF assistance to complete maintenance of 3rd party houses using Trust funding, and ensured all Occupancy Agreements were signed and upheld.



Monitoring and Evaluation The Monitoring and Evaluation Committee supports design, implementation monitoring and evaluation throughout the project cycle for projects over PGK100,000 across all 5 OTDF sectors:

The M&E Representatives endorsed the Nupmo Footbridge Evaluation Project, Project Review Committee Guidelines/TOR, a Standard Annual Work Plan Template; and reviewed a range of processes and templates.



Risk Management The Risk Management Committee reviews the OTDF Risk Management framework and reports changes to the OTDF Board:

The Committee determined there were no changes to the top 5 risks for OTDF. Risk ratings were reduced for 8 risk events.

Formed: 2015 Meeting Frequency: bi-annually


Safety The Safety Committee identifies health and safety issues and develops procedures for safe systems of work:

The Committee endorsed field base safety inductions and feedback to improve compliance, and used existing systems and processes to secure reputable contractors for construction works.

Formed: 2015 Meeting Frequency: at least quarterly


Tender Evaluation The Tender Evaluation Committee ensures compliance with OTDF Tender Guidelines to achieve ‘value for money’:

The Committee conducted a comprehensive review of the Ten-der Guidelines and Tender Process flow diagram, maintained the contract data base, created and tested a Contractor Performance Evaluation form, created a Contractor Profile template and reviewed all suppliers.

Formed: 2014 Meeting Frequency: at least quarterly


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In 2017 OTDF continued to disseminate its news and information through the mainstream print and electronic media, social media and through its revamped website, as well as face to face meetings and during field patrols. OTDF is grateful to the media organisations that continue to publish its positive development stories for the CMCA people.

Communications ManualA draft Communications Manual was finalised in December 2017, bringing together in one document the key Strategic Direction 2016-2020 principle of Open and Transparent Communication and related targets, outlining how key messages are disseminated through OTDF’s various communications channels. The Manual guides OTDF’s communications protocols with internal and external stakeholders, and identifies appropriate communications channels, including mainstream and social media, community and Trust meetings, and the annual Communications Patrol. The Manual also covers Radio Fly, pending re-establishment of coverage in the future.

Annual Communications PatrolFace-to-face engagement with communities remains a highly valued means of communication, however the high cost in duration and operational funding led to some changes in the way the 2017 Communications Patrol was conducted. OTDF improved efficiency and effectiveness by committing to undertake significant preparatory work to ensure teams had key messages at their fingertips when engaging with communities; and were able to document feedback into templates. The data collected formed the basis of a comprehensive report finalised at the end

of 2017. Key recommendations arising from the Patrol included (a) a possible two-yearly frequency, or more time spent in each location (b) inclusion of development partners and sectoral stakeholders (c) targeted presentations including results and statistics that are relevant to specific villages. These and other recommendations will be incorporated into planning the 2018 patrol.

Website and FacebookThe OTDF website was re-launched in July 2017, it is easier to navigate and has a fresh new look with updated information, pictures, and news. OTDF publications including newsletters, and annual reports can be downloaded from the site. Since the re-launch the site has had a total of 10,287 visits; the OTDF Facebook page has 3,172 followers; and OTDF made 13 posts during 2017.

Fly Breeze NewsletterThroughout 2017, 7 editions of the electronic newsletter Fly Breeze were circulated by email to all OTML and OTDF staff, the media, and stakeholders. The Fly Breeze has provided valuable insights into what OTDF is doing within communities, as acknowledged by Markson Yarrao, from the OTML Environment Department:

“OTDF is doing a great job mostly unheard of by outsiders including OTML employees, and the Fly Breeze now gives us a better idea of what is being achieved.”

Markson further acknowledged that they no longer have any theft of sampling equipment thanks to changes in local leadership and OTDF support.

Mainstream MediaOTDF issued 3 media releases and 4 separate news articles in 2017 resulting in publishing of a total of 10 newspaper and 15 online articles; 1 social media re-post; and 2 television segments. Other associated news and current affairs coverage of OTML and OTDF resulted in 5 newspaper articles, 3 online articles, and 1 television news segment.

OTDF is looking forward to implementing the Communications Manual from 2018, developing a Communications Policy, and improving on social media coverage.

COMMUNICATIONS

Paul Barker from the INA takes time out to read the 2016 OTDF Annual Report

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Dewara youth have taken the lead with farming rice in the South Fly, here one of the young men inspects his crop before harvesting the equivalent of 4 tonnes per hectare, the highest recorded across the CMCA

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OTDF SECTORS AND RELATED PROGRAMS

INFRASTRUCTURE

Commercial Real Estate

Power & Communications

Community Water Supply & Sanitation

Community Housing

Transportation WaterRoad R&M

LOCAL & REGIONAL ECONOMIC DEVELOPMENT

Forestry

Animal Production

Agriculture

EaglewoodRubber

RiceRoot Crops

PoultryFisheriesAquaculture

Women & Children’s Program

Youth Development Program

COMMUNITY & SOCIAL DEVELOPMENT

Community InfrastructureCommunity Capacity BuildingCommunity Institutional Support

CMCA Middle & South Fly Health Services Development Program

North Fly Health Services Development Program

HEALTH

Community Based Health Initiatives Health Facility InfrastructureHealth Institutional Development

EDUCATION

Education Facility InfrastructureEducation SponsorshipEducation Institutional Development

Community Education Service ProgramsFODE

CMCA Women’s Loan Scheme with the NDB

Small & Medium Enterprises

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RESULTS INDICATORSLOCAL AND REGIONAL ECONOMIC DEVELOPMENT SECTORIncreased income earning and employment opportunities, and reliable subsistence consumption for CMCA communities

Percentage increase in non-OTML cash income perhouseholdPercentage of CMCA population in paid employment Number of SMEs owned and operated by CMCA communities

EDUCATION SECTORCMCA access, quality of curriculum, quality of teacher education & training, and management improved in line with the Western Province and National Education Plans

Net enrolment ratio (%) in primary education (grade 1-8)Percentage increase in FODE students completing Year 10& Year 12Number of girls per 100 boys in primary educationPupil-teacher ratioNumber of elementary schoolsNumber of primary schoolsProportion (%) of elementary and primary schools with access to safe water Proportion (%) of elementary and primary schools with hand washing facilities

HEALTH SECTORCMCA primary health care service delivery strengthened in line with the Western Province and National Health Plans

Proportion (%) of one year old children immunized against measlesProportion (%) of births attended by trained health personnelProportion (%) of pregnant women who had at least one antenatal care visitNumber of outreach clinics conducted per 1000 children under 5 yearsNumber of aid posts open Proportion (%) of health facilities with access to waterProportion (%) of health facilities with hand washing facilities

INFRASTRUCTURE SECTORIncreased access to markets, basic services and village facilities that contribute to improved local and regional economic development opportunities, education & health status, and social development of CMCA communities

Estimated length of provincial and district roads Number of jetties upgraded for domestic vessel trafficIncreased number of scheduled shipping routesIncreased number of scheduled air routes Proportion (%) of rural population using an improved drinking water sourceProportion (%) of rural population using improved sanitation facilitiesHousehold electrification rate (% of households)Proportion (%) of population covered by at least a 3G network (proxy internet coverage)Number of affordable houses constructed

COMMUNITY AND SOCIAL DEVELOPMENT SECTOR Increased participation by CMCA community members (including women and youth) in planning, decision-making and implementation of community development priorities

Number of Regional Women’s and Youth Associations complying with corporate governance obligationsNumber of Women’s and Youth group members trained to implement the LDP programNumber of CMCA co-funded partnerships with government and non-government agencies

OTDF RESULTS FRAMEWORK HEADLINE INDICATORS

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OTDF PARTNERSHIPSAs a community based development organisation, OTDF values partnerships as an integral part of achieving its vision for fulfilling the development aspirations of the CMCA communities. OTDF’s partnership with these communities and their formal structures, including Village Planning Committees, CMCA Trust Boards,

Women’s Associations, CMCA Advisory Committee, and Board Associate Directors are focused on efficient and effective implementation of high quality sustainable projects. Complementing the CMCA partnerships are the technical, managerial and funding partnerships to support project implementation and augment funding.

Partner Sector 2017 Activities

Abt AssociatesHealth Contracted to implement CMCA North, Middle

& South Fly Health Services, including Kiunga Hospital and Tabubil Urban Clinic

University of Technology

Education Affiliation with the Department of Distance Learning for FODE programs in the North, Middle & South Fly

Business for Development, Innovative Agro Industry, Trukai & LBL

Local & Regional Economic Development: Rubber & Rice

Provide an inclusive market alternative for rubber farmers, collect and export cup lump rubber and support commercial rice trials. Develop the Mt Fubilan Agri-business poultry project and write an agribusiness master plan

Pacific Forest Alliance

Local & Regional Economic Development: Eaglewood

Develop the eaglewood industry and promote Forest Conservation programs

PNG Rubber BoardLocal & Regional Economic Development: Rubber

Support the Fly Rubber Ltd model to buy, process and export cup lump and develop TSR or RSS rubber products

National Development Bank

Community & Social Development

Loan facilities for women & youth

National Youth Development Authority


Facilitating the CMCA & Mine Village youths to develop a 5 year Youth Action Plan

Ok Tedi Mining Ltd Infrastructure OTDF operations funding support.Shipping and aviation lease agreements.Tax Credit Scheme funding and impact project approval

Fly River Provincial Government

Infrastructure TCS project approval and Provincial growth centre program support

National Government Department of National Planning & Monitoring - assessing and approving TCS funded projects in line with the MTDS#2.Department of Mineral Policy & Geohazard Management - custodian of the CMCA portion of the WPPDTF

Kramer Ausenco Technical project engineering services

Steamships Trading Company Group Infrastructure: Commercial Real Estate

A Trust Investment & Women’s Association joint venture with Coral Sea Hotels and Pacific Palms Properties for the Cassowary Hotel

Starwest Constructions Limited

Infrastructure Road and bridge construction.Kiunga water supply & sewerage upgrade

Tawap Kamen Investments

Infrastructure School and housing construction

Nanai Brothers Limited Infrastructure: Commercial Real Estate

Contracted to undertake Cassowary Hotel glazing and construct eaglewood nurseries

Hevilift Infrastructure Heavy lifting helicopter & twin otter support

21

Recently elected North Fly Member and Shadow Minister for Agriculture, the Hon. James Donald visits the OTDF Head Office to pledge his support to work closely with OTDF, symbolised by a hand shake with the CEO

22

The objective of the Baseline Survey was to establish a permanent baseline database to support implementation of the Livelihood Development Packages. The database will provide relevant information on existing farmers growing the priority LDP crops (Eaglewood, Rubber, Rice and others). Access to the data will facilitate preparation of realistic annual program implementation schedules and targets; and over time, support monitoring of changes to farmers’ income and operations. Data comparisons year on year will allow OTDF to document outcomes and assess impacts of the LDP program, and feed into future planning.

The total survey cost was PGK537,295 funded by OTDF, covering the recruitment of 17 casuals, and hire of vehicles, dinghies and aircraft. PGK417,262 was spent in the CMCA regions and PGK120,032 in the non-CMCA Lake Murray region.

A total of 12 OTDF staff (dedicating an estimated 2,048 person hours) were directly involved over the survey period, along with 19,560 person hours of inputs by the 17 casuals over 13 months.

The baseline survey for CMCA regions was concluded in December 2017. The survey collected data from CMCA farmers and interested householders covering 149 of the 152 villages in the 8 CMCA Trust regions but excluded the 6 mine villages. A separate survey was conducted from February to July in 18 Non-CMCA Lake Murray villages covering 90% of farmers growing Rubber.

Data was collected through spatial tracking using hand-held GPS devices to map boundaries and location of farmer blocks; one-on-one interviews; questionnaires and group discussions. Participation of the VPC Chairmen, local Trustees, community leaders and dinghy operators was a pleasing indicator of community support. Data collected included the number of farmers growing Rubber, Eaglewood and Rice; area in hectares and the average annual income earned from their production. The socioeconomic component of the survey focused on the status of health and education services and infrastructure, community projects, economic activities and accessibility for each village.

The initial survey findings confirm that there are more farmers (1,745) growing Rubber, than Eaglewood (828) or Rice (160), which is unsurprising since Rubber has been grown in Western Province for the last 40 years. From a spatial perspective, the highest concentration of Rubber farmers is in the North Fly, whereas the Middle Fly leads the way with Eaglewood production. Conversely, 90% of Rice growers were from the South Fly. Rice production is still in a trial phase, reflected in the relatively small numbers of farmers.

These are all important statistics that support planning and resource allocation for each of the three priority LDPs, and provide justification for the addition of poultry and fisheries LDPs to accommodate different land capability in the mine villages and selected areas of the South Fly respectively.

0

200

400

600

800

1000

Rice

Eagelwood

Rubber

South FlyMiddle FlyNorth Fly

CMCA Trust Region

No.

of F

arm

ers

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Eaglewood

Rubber

South FlyMiddle FlyNorth Fly

No.

of T

rees

CMCA Trust Region

PROFILE: LIVELIHOOD DEVELOPMENT PACKAGES PROGRAM BASELINE SURVEY

LDP Farmers by Region: 2,733 Trees by Region: 651,971

23

Total number of Mature Trees: 59,561

2424

CMCA

Mine Villages

Others

OTML

WPPDTF

20%

10%

18%

28%24%

Mine Villages (6x)

4x South Fly Trust

Middle Fly Trust

Wai Tri Trust

Tutuwe Trust

Nupmo Trust

19%

16%8%

39%

5%

13%

Mine Villages (6x)

4x South Fly Trust

Middle Fly Trust

Wai Tri Trust

Tutuwe Trust

Nupmo Trust

13%

18%

15%

21%

4%

29%

Local & Regional Economic Development

Infrastructure

Health

Education


20%

32%20%

25%

3%


Infrastructure

Health

Education


26%

5%

16%

47%

6%


Infrastructure

Health

Education


5%

27%

4%

15%

49%

TOTAL TRUST FUNDS EXPENDED PGK18,677,465

TOTAL WOMEN & CHILDREN TRUST FUNDS EXPENDED PGK4,799,549

TOTAL WOMEN & CHILDREN TRUST FUNDS BY SECTOR

TOTAL TRUST FUNDS BY SECTOR

TOTAL OTDF PROGRAM EXPENDITURE PGK44,180,540 PROGRAM EXPENDITURE BY SECTOR

OTDF EXPENDITURE GRAPHS

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26

The primary responsibility of OTDF Trust Administration is to manage the development and investments funds for the eight CMCA Trusts and their subsidiary companies consistent with the 2001 Community Mine Continuation Agreements. The reduced CMCA Benefits under the 2015-2025 CMCA Mine Life Extension Agreement will impact the ongoing programs across all 5 OTDF sectors. In 2017, CMCA Trusts and mine villages expended PGK18,667,465 of their funds across the 5 priority sectors. This is an increase of 75% on expenditure reported in 2016. Contributing to the increased activity was the release of funds for South Fly Trusts, and a return to more usual levels of project funding following the dry weather period. The highest level of expenditure in 2017 (47%) was directed to Local and Regional Economic Development, including an investment by Mine Villages and the Star Mountains Women’s Association in the Mt Fubilan Agro-Industries egg and poultry operation (see page 52).

This reflects communities’ commitment to investment in activities that lead to self-sufficiency beyond CMCA compensation payments derived from mining operations.

The second highest expenditure was in education (26%), mainly through scholarships (see more on page 38). This demonstrates the importance placed on investing in human development, particularly of young people, to complement economic development initiatives. (See details of Trust and Mine Village expenditure on page 24).

In 2017, 110 new CMCA Trust projects totalling PGK7,585,032 were approved by Trusts and Village Planning Committees, comprising 20 regional initiatives and 90 Village Development Projects, varying in budget from PGK2,000 to more than PGK1.6 million.

The four South Fly Trusts were once again able to approve projects after a 3 year hiatus, and they accounted for 13% of the total PGK11,372,039 of CMCA Trust funds expended in 2017.

The OTDF Trust Team assisted with the management of two subsidiary companies, Middle Fly Investment Limited (MFIL) & Upper Lower Ok Tedi Limited (ULOTL). This support for both operational and governance functions will continue into 2018 and onwards, as the companies’ Executive and Directors transition to a stage in the future where they can operate independently.

In 2017, OTDF supported compliance with Trust governance obligations by facilitation of annual financial audits of the 8 CMCA Trust accounts for the period 2011-2016. Audits had been significantly delayed by a merger of the contracted auditor, and subsequent changes in the audit representatives. Audits for the previous 3 years of accounts for MFIL were also undertaken after a delay relating to administration of the former Flood Plains Ltd, and a first audit was successfully completed for ULOTL. All audits will be completed early in 2018.

The role of the Trust Team in the CMCA Investment portfolio is to review the quarterly financials of the investment companies whose accounts are managed by Sinton Spence Chartered Accountants. This process ensures that Trust investments are properly recorded, and that the interests of the Trusts are safeguarded. A diagram on page 27 shows the current investment processes and flow of funds. In 2018, the Trust Administration team will take over responsibility for accounting and financial reporting of the investment companies.

TRUST ADMINISTRATION

CMCA Trustees are updated on assets within the Trust Investment portfolio

28

HEALTH SECTOR

The OTDF Strategic 5-year goal for the Health Sector is CMCA primary health care service delivery strengthened in line with the Western Province and National Health Plans. OTDF has prioritised health projects funded from a range of sources including OTML, Tax Credit Scheme, Western Province People’s Dividend Trust Fund and CMCA Trusts. These projects have contributed to the achievement of indicators of success in line with national and provincial sector policies and plans, and in response to demand from communities. OTDF expended PGK13,043,117 on health sector projects, accounting for 30% of all OTDF sector expenditure during the year.

The major proportion (93%) of health sector expenditure in 2017 comprised a total of PGK12.1 million on projects implemented under contracts with Abt Associates. These were the CMCA Middle and South Fly Health Program (CMSFHP) (PGK5.69 million) and North Fly Health Services Development

Program (NFHSDP) (PGK6.42 million), which were integrated into one Program in 2016. Results of CMSFHP and NFHDP are described in more detail on pages 29-32. The Program’s contributions to health indicator improvements for Western Province published in the 2016 National Department of Health Sector Performance Annual Review (SPAR) are summarised on page 33.

The remaining 7% of health expenditure was funded by CMCA Trusts and Mine Villages this included a PGK170,000 upgrade to Senamrai Village Health Centre (Wai Tri Trust), which is under way (see more on page 47). Some communities also allocated Village Planning Committee funds to assistance for individuals to access medical services. Community health initiatives following the healthy villages concept also featured purchase of brush cutters to improve the environment around houses and reduce incidence of diseases caused by pests and insects.

Headline Indicator OTDF Contribution 2017Proportion (%) of one year old children immunised against measles

463 measles vaccinations to babies 6-8 months old513 measles vaccinations to babies 9-12 months old

Proportion (%) of births attended by trained health personnel

Health promotion sessions to encourage supervised deliveries and safe motherhood to over 800 males and 1,200 females VHVs trained to encourage pregnant women to deliver in a facility

Proportion (%) of pregnant women who had at least one antenatal care visit

Antenatal care provided to 789 pregnant women On the job training provided in antenatal care and supervision and female reproductive physiology

Number of outreach clinics conducted per 1000 children under 5 years

7,600 children assessed for nutritional status during attachment and outreach 171 outpatient clinics conducted during outreach 244 outreach clinics conducted

Number of aid posts open Supported quarterly supervisory visits by district health managersSupplied essential medical equipment as required 95% radio functionality at 22 health facilities in the Middle & South Fly97% radio functionality at 33 health facilities in the North FlyOn the job communication skills training provided to 8 health facilities

29

Improvements in the individual indicators suggest the Program has contributed to the positive outcomes for health service delivery in Western Province. These improvements are displayed below from prior to baseline year of each program to 2016.

ANTENATAL 1ST VISIT COVERAGE

OUTPATIENT VISITS PER PERSON PER YEAR

COUPLE YEARS PROTECTION FOR CONTRACEPTION

PENTAVALENT THIRD DOSE VACCINATION COVERAGE

MALARIA INCIDENCE PER 1000 POPULATION

The Sector Performance Annual Review (SPAR) is compiled annually by the National Department of Health. It summarises performance at a provincial and district level across core health sector indicators, providing a monitoring tool to measure annual progress, as well as compare trends over the previous five years.

In the 2016 SPAR, Western Province was ranked fourth out of 22 for best performing provinces across 16 indicators. To take into account the varying level of disadvantage in each province, a constraints index is used. The score is similar to that of 2015, when Western Province also ranked fourth.

Overall performance is based on a score calculated across 16 indicators, relative to the best provincial level performance for each indicator. Western Province performance compared to other top performing provinces and the national average is displayed. Performance clearly exceeded the national average in 2016.

ANTENATAL 1ST VISIT COVERAGE57%

2007

81%

2016

OUTREACH CLINICS PER 1000 CHILDREN <5YRS

MEASLES VACCINATION COVERAGE

NFHSDP North Fly District Performance from the 2016 SPAR

CMSFHP Performance across the 8 program supported facilities in Middle and South Fly Districts from district-level 2016 SPAR

479

2007

367

2016

17

2007

33

2016

45%

2007

57%

2016

55%

2007

63%

2016

1.3

2012

1.6

2016

29%

2012

31%

2016

726

2012

2235

2016

4

2012

16

2016

7%

2012

30%

2016

126

2012

71

2016

HELA

NATIONAL AVERAGE 182 199

258

258

270

287

322

357MILNE BAY

WESTERN HIGHLANDS

ENGA

WESTERN

GULF

CENTRAL

NATIONAL AVERAGE

TOP 5 PERFORMING PROVINCES IN 2016, OVERALL SCORE WITH

CONSTRAINTS INDEX APPLIED

OUTPATIENT VISITS PER PERSON PER YEAR3.27

2007

4.6

2016

MEASLES VACCINATION COVERAGE35%

2012

28%

2016

COUPLE YEARS PROTECTION FOR CONTRACEPTION

381

2007

342

2016

PENTAVALENT THIRD DOSE VACCINATION COVERAGE

MALARIA INCIDENCE PER 1000 POPULATION

OUTREACH CLINICS PER 1000 CHILDREN <5YRS

COMPARATIVE HEALTH PROGRAM AND SECTOR PERFORMANCE NFHSDP and CMSFHP HEALTH INDICATOR IMPROVEMENTS

30

The North Fly Health Services Development Program and the Community Mine Continuation Agreement Middle and South Fly Health Program continued to support health services in Western Province. NFHSDP is an initiative of and funded by Ok Tedi Mining Limited and managed through OTDF. NFHSDP commenced in 2009 for an initial five years and was extended for a further five years; the total value of the 10-year program is PGK58 million. CMSFHP is an initiative of and managed by OTDF and funded through the CMCA portion of the Western Province People’s Dividend Trust Fund. CMSFHP is a PGK43 million program that commenced in 2013. Both programs are implemented by Abt Associates in partnership with existing health service providers and will end in 2018. In 2016, NFHSDP and CMSFHP were

integrated into one Program with the aim to create greater efficiency by maximising service delivery whilst minimising overhead costs.

The Program is aligned with the PNG National Health Plan 2011-2020 and the goal is to strengthen primary health care for all, and to improve service delivery.

Fly Helt Nius newsletters and Program websites are updated regularly and communities receive bi-annual poster updates. Key activities in 2017 included implementation of the Transition Plan and are detailed below:

1. Support to Provincial and District health services and partnerships

2. Strengthening fundamental enablers of health care

3. Support tailored to community needs

Component Description

Strengthen partnerships and coordination with stakeholders

Strengthen health infrastructure; logistics and medical supplies; and formal and on-the-job training

Support clinical service delivery and implement community based initiatives

2017 Key Updates

Supported facilitation of District Health Management meetings in North, Middle and South Fly

Construction of 8 staff houses completed at Bosset, Obo, Tapila (x 2), Wasua (x 2), Teapopo and Rumginae CHW School

Health information sessions in the communities on family planning, cancer, immunisations and other health topics

Supported District Health Managers to action issues identified in health facility assessments during quarterly supervisory visits

Development of Asset Registers and Preventive Maintenance Plans to support transition of responsibility to partners

Reduction in direct clinical services as per Transition Plan and strengthened supervision, training and indirect support

Transferred responsibility for organising and chairing Stakeholder meetings to the Provincial Health Office

Prepared to hand over management of health sector scholarships to OTDF Western Province Education Program in 2018

Targeted health clinics in Tabubil, Kiunga and Daru during CMCA Compensation Payment weeks to capture people from remote locations

Supported the convening of the inaugural South Fly District Health Management Committee and facilitated supervisory patrols with District Health Managers

Coordinated Integrated Management of Childhood Illnesses Training for 22 participants (10 female and 12 males) across Western Province

Supported Village Health Volunteers in over 15 villages with their goal to reach Healthy Village Setting status

Facilitated use of data for decision making among partners and developed on-the-job training materials for NHIS reporting

31 health workers (27 female and 4 male) trained in family planning methods certified competent to practice

Facilitated two-week basic emergency obstetric care practice/observation for VHVs

NORTH FLY HEALTH SERVICES DEVELOPMENT PROGRAM and CMCA MIDDLE AND SOUTH FLY HEALTH PROGRAM: KEY COMPONENT ACTIVITIES 2017

31

CMCA MIDDLE AND SOUTH FLY HEALTH PROGRAM

The CMSFHP Essential Obstetric & Newborn Care (EOC) Health Extension Officer conducted a supervisory visit at Wasua Health SubCentre in Manawete CMCA Trust region in February, to monitor and provide clinical EOC support to health workers. However, it was through community

engagement activites advocating safe motherhood where a real difference was seen.

The women’s leader organised a meeting, bringing together 104 women and children with students from the primary schools to advocate for safe motherhood. Women were given the opportunity to identify and discuss some of the challenges they face in accessing health services. Information was provided on antenatal and maternal health, including the importance of delivering in a health facility supervised by a trained health worker. In the two weeks following the ‘Safe Motherhood’ advocacy meeting, 8 women came to have their births supervised at the health centre, one of the highest figures recorded in any month.

“This was a great response by women with the support of their families, recognising the importance of having a supervised birth at the health facility. This was the beginning of a change when information could be transformed into achievements,” Maria Rumints, EOC HEO

CMSFHP PROGRAM RESULTS 2013-2017

Safe Motherhood training conducted at Wasua

43,375VACCINATIONS ADMINISTERED TO CHILDREN UNDER 5 YEARS OLD

SCHOOLS IMPLEMENTING THE HEALTH PROMOTING SCHOOL CONCEPT

10 5IN-DEPTH REVIEWS OF THE EXPANDED PROGRAM

ON IMMUNISATION CONDUCTED IN HEALTH FACILITIES AND SUPPORTED BY THE PROGRAM IN

2017

ON THE JOB TRAINING SESSIONS CONDUCTED WITH HEALTH WORKERS

VILLAGES SUPPORTED TO REACH HEALTHY VILLAGE STATUS

650

10

HEALTH RADIOS INSTALLED

22

14

VACCINE FRIDGES INSTALLED

VACCINE ICE PACK FREEZERS INSTALLED

1,455CONTRACEPTIVE IMPLANTS ADMINISTERED TO DATE

NEW STAFF HOUSES COMPLETED IN 2017, BRINGING THE TOTAL BUILT BY THE PROGRAM TO 12.

7

15EXAMINATION COUCHES DISTRIBUTED TO AID POSTS

SAMARI, MAIPANI AND AIAMBAK HEALTH FACILITIES COMPLETELY RENOVATED AND RE-OPENED

24CLINICAL ATTACHMENTS CONDUCTED ACROSS THE 5 CMCA REGIONS IN 2017

13

6HEALTH FACILITIES IN ALL DISTRICTS RECEIVED OTJ TRAINING IN COMMUNICATION SKILLS

687OUTREACH CLINICS CONDUCTED IN REMOTE VILLAGES IN THE 5 CMCA REGIONS

3IN-LINE POSITIONS FILLED AT MOIAN AID POST, AND SAMARI AND TAPILA HEALTH CENTRES IN 2017

5HEALTH WORKERS SPONSORED TO ATTEND HEALTH RADIO AND SOLAR MAINTENANCE TRAINING

43,800+OUTPATIENT PRESENTATIONS DURING OUTREACH CLINICS AND CLINICAL ATTACHMENTS

1,350+CONTRACEPTIVE IMPLANTS ADMINISTERED IN MIDDLE AND SOUTH FLY DISTRICTS SINCE INTRODUCED BY THE PROGRAM IN 2015

25,711CHILDREN UNDER 5 YEARS OLD ASSESSED FOR NUTRITIONAL STATUS

ATTENDANCES AT COMMUNITY AWARENESS SESSIONS ON IMPORTANT HEALTH TOPICS

204,000+

HEALTH PROFILE : SAFE MOTHERHOOD TRAINING

32

A 2-week health radio and solar maintenance training was conducted by the Christian Radio Missionary Fellowship (CRMF) in Goroka, Eastern Highlands Province. The training was funded through NFHSDP and CMSFHP to train 7 health workers from Western Province to help maintain the integrity of the health facility radio network in various locations.

NORTH FLY HEALTH SERVICES DEVELOPMENT PROGRAM

The health radio network is crucial for health workers in remote areas, to stay connected with other facilities and supervisors, especially where mobile phone coverage is poor. The radios are used for clinical consultations, administrative purposes, and health promotion. The overall participant performance and cooperation with the trainers was very good.

“There were a lot of new things that I learnt during the training that I never knew” said Wanai Hari Infrastructure Officer, NFHSDP/CMSFHP.

Mr. Hari went on to explain that in the past he had relied on his own experience and know-how whenever he was attending to installation and maintenance of equipment. All participants were given a certificate that authorises them to do repairs, maintenance and installation of both HF radios and solar power. Each participant was also presented a toolbox with tools such as pliers, a multimeter, a screwdriver set, soldering equipment and accessories that will assist them when carrying out installation and maintenance works.

NFHSDP PROGRAM RESULTS 2013-2017

Seven Health Workers from various organisations within Western Province were successfully trained by the CRMF in Goroka

47,000+VACCINATIONS ADMINISTERED TO CHILDREN UNDER 5 YEARS OLD

106,364OUTPATIENT ATTENDANCES AT TABUBIL URBAN CLINIC SINCE OPENING IN 2011

MEETINGS HELD AMONG THE 5 PROGRAM ACTIVITY GROUPS SINCE ESTABLISHED IN 2009

114

3STAFF SPONSORED TO ATTEND SNAKE BITE TRAINING PROGRAM

1,855ON THE JOB TRAINING SESSIONS CONDUCTED WITH HEALTH WORKERS

22HEALTH WORKERS RECIEVED INTEGRATED MANAGEMENT OF CHILDHOOD ILLNESSES TRAINING

19 VACCINE FRIDGES INSTALLED

10STAFF HOUSES BUILT

8 VACCINE ICE-PACK FREEZERS INSTALLED

COLD-CHAIN AND HEALTH RADIO FUNCTIONALITY CONTINUOUSLY MONITORED

97,000+LONG LASTING INSECTICIDE TREATED BEDNETS DISTRIBUTED IN PARTNERSHIP WITH ROTARIANS AGAINST MALARIA

26COMMUNITY MEMBERS TRAINED AS VILLAGE HEALTH VOLUNTEERS

AREA WIDE SERVICES TEAM CONTINUE TO WORK ACROSS MATERNAL AND CHILD HEALTH, HIV AND TB, MALARIA, AND ENVIRONMENTAL HEALTH

CHILDREN UNDER 5 ASSESSED FOR NUTRITIONAL STATUS

191,370+CONDOMS DISTRIBUTED

34CLINICAL ATTACHMENTS CONDUCTED IN 2017 ACROSS NORTH FLY

5VILLAGES RECIEVED TARGETTED HIV/TB CLINICAL SERVICES DURING OUTREACH WITH PARTNERS IN 2017

135,500

1,642CONTRACEPTIVE IMPLANTS ADMINISTERED IN NORTH FLY DISTRICT SINCE INTRODUCED BY THE PROGRAM IN 2015

130,000+ATTENDANCES AT COMMUNITY AWARENESS SESSIONS ON VARIOUS HEALTH TOPICS

HEALTH RADIOS INSTALLED

22 8NEW SPONSORED STUDENTS IN 2017

HEALTH PROFILE : ESSENTIAL HEALTH RADIO AND SOLAR INSTALLATION TRAINING

33

NORTH FLY HEALTH SERVICES DEVELOPMENT PROGRAM: KIUNGA HOSPITAL AND TABUBIL URBAN CLINIC

KIUNGA HOSPITAL The NFHSDP continues to support Kiunga Hospital through management and administrative inputs, so that ongoing medical care can be provided to the community. Kiunga Hospital is a Level 4 facility, providing services for communities across North Fly District and increasingly from other districts and provinces.

Key 2017 updates:

Provided medical assistance over 2016/2017 Christmas Period and New Year due to staff shortagesMedical and allied health coverage was provided for every day in 2017Fourth-year medical students from Griffith University, Queensland, Australia in partnership with North Fly Area Wide Services, provided clinical services during 6 outreach clinics and at 11 highway village schools Donations were received from Repsol, Queensland Rural Medical Education and Griffith University, Castlemaine Rotary Club, Tabubil Hospital Auxiliary, and OTDF Visit from the Tabubil Hospital Obstetrician-Gynaecologist to provide clinical services Consultation clinic constructed and now being used by doctorsNFHSDP health workers participated in 5 clinical attachments at the hospital from May to July

The NFHSDP continues to support development of and operations at Tabubil Urban Clinic, (TUC) since it was built in 2011. During the second half of 2017, staff at TUC reported a 14% increase in outpatients, which could be related to the extension of settlements around Tabubil and the efficiency and quality of services provided.

Key 2017 updates:

Provided community awareness sessions including diarrhoeal disease control, personal hygiene, TB, and non-communicable diseases Conducted health radio consultations with Olsobip, Ningerum, Golgobip, Matkomnai and NomadImplemented TUC and Ningerum Health Center (HC) patrols in accordance with 2017 NF District Integrated Outreach Patrol Plan, and clinical attachment to Ningerum HC

“The (NFHSDP and CMSFHP) staff members did not only see patients, but health education was given and mosquito nets were provided… I want to say the timing of the assistance at the time of need during the festive period needs to be noted and appreciated greatly.” Mark Gena, Kiunga Hospital Senior Health Extension Officer

TABUBIL URBAN CLINIC

35

Abt Associates health program officers do whatever it takes to ensure health services and health facility maintenence was completed in Serki, the CMCA’s most remote South Fly village

36

EDUCATION SECTOR

The OTDF Strategic 5-year goal for the Education Sector is CMCA access to quality of curriculum, quality of teacher education and training, and management improved in line with the Western Province and National Education Plans. OTDF has prioritised education projects and programs funded from a range of sources including OTML Tax Credit Scheme, and CMCA Trusts which contribute to the achievement of indicators of success in line with national and provincial sector policies and plans. These contributions will broaden in scope if Western Province People’s Dividend Trust Fund funding becomes available for the Western Province Education Support Program (WPESP).

Program and project expenditure in the education sector of PGK7,977,204 accounted for 20% of all OTDF sector expenditure during the year. Of the total, 59% of expenditure was funded by CMCA

Headline Indicator OTDF Contribution 2017Net enrolment ratio (%) in primary education (grade 1-8)

Pending funding of WPESP

Percentage increase in FODE students completing Year 10 and Year 12

499 continuing Grade 12 students with transcripts enrolled in 2017 and completed adult matriculation subjects studied 17 full time Grade 12 students awarded certificates

Number of girls per 100 boys in primary education

Establish baseline from the NDoE to further support CMCA schools in 2018

Pupil-teacher ratio Establish baseline from the NDoE to further support CMCA schools in 2018

Number of elementary schools 1 x double classroom at Tapila Number of primary schools Pending funding of WPESPProportion (%) of elementary and primary schools with access to safe water

1 x 9,000 litre water tank to a community constructed elementary classroom at Karemgo village (Middle Fly)

Proportion (%) of elementary and primary schools with hand washing facilities

Establish baseline from the NDoE to further support CMCA schools in 2018

Trusts and mine villages, primarily in the form of scholarships (further details on pages 37 & 38). OTML funded 20% of sector expenditure for Preferred Area Development scholarships and maritime cadets, and the Ok Tedi Community Education Trust funded 16% of sector expenditure on scholarships for mine village students to undertake secondary studies in Australia.

The OTML TCS-funded Montfort Primary School and Oksapmin High School projects, when completed, will improve access to education for students (more details on these projects are on pages 45 and 46).

OTDF also supported logistics from its operational funds for a PGK70,000 Liklik Skul Foundation project to construct an elementary double classroom at Tapila.

37

FLEXIBLE AND OPEN DISTANCE EDUCATION PROGRAM

Following on from the establishment of 6 new FODE satellite study centres in 2016, a new centre was opened in Daru in 2017, bringing the total number of centres to 9, including Samagos and Tabubil. There has been overwhelming stakeholder support for the new centres established in the North, Middle and South Fly regions. To help support and sustain the interest of students, the Women and Children’s funds from each Trust region have contributed a total of PGK555,000 to sponsor students in the FODE and Adult Matriculation programs, and some university and college students.

OTDF now manages 9 FODE centres located in 3 Secondary Schools, 2 High Schools and 4 Primary Schools in Western Province, with a total of 30 teachers from these schools recruited as part time-tutors. The most in PNG.

To ensure effective running of the program, OTDF Community Education Support (CES) officers conduct quarterly visits to each centre. The Fly River Provincial Government, Division of Education and School Boards are supporting the FODE program on an annual basis by providing the school facilities and releasing their teachers to work as tutors. Additionally, the 8 CMCA Trusts shared the PGK56,000 cost of purchasing a printing machine to be installed at the FODE head office at Samagos.

In 2017, the National Department of Education’s FODE Program converted to a new e-learning curriculum for Grades 8-10, and this impacted significantly on the rural students who have little or no access to internet. OTDF therefore deferred the Grade 8-10 FODE enrolments for 2017, and arranged an order for printed materials in preparation for 2018. The 707 Adult Matriculation enrolments in 2017, more than doubled the 2016 number. Female students numbered 242 (averaging 34% between the 3 Districts), up from 25% in 2016. The increase in student numbers was due in part to catch-up from the low enrolments in 2016 following the dry weather period, but also as a result of active promotion by the CES team. During the 2017 Communications Patrol, CES officers promoted the importance of education in

all CMCA villages, and distributed brochures on the FODE and Adult matriculation program. They also conducted a road show at 4 secondary schools in Tabubil, Kiunga (2) and Daru.

All 499 Grade 12 students enrolled in 2017 completed the subjects they studied, however about 60% did not achieve grades to enable entry to college or university. Adult Matriculation certificates were awarded to 17 students. There was a high demand from Grade 12 students requesting 488 subject transcripts needed for their applications to tertiary institutions or for employment.

In 2018, 116 (56%) of Grade 11 students will be eligible to continue into Grade 12. Of those who were not eligible, due to low subject scores, not all students sponsored for one subject were able to finance the remaining subjects to complete their grade during the year.

The CES Team plans to increase tutors’ presence in the study centres in 2018, and improve their role in contributing to student outcomes. Tutors will be encouraged to prepare worksheets and handouts to enhance student learning, and to meet regularly with CES officers to discuss ongoing improvements.

ADULT MATRICULATION ENROLMENTS: 2017

2017 Total

2016 Total

North Fly

Middle Fly

South Fly

Grade Total Total Total11 130 61 17 208 13112 373 57 69 499 157Total 503 118 86 707 288

New FODE Center opened in Ningerum with the Ningerum High School Deputy Principal

38

Communities have recognised the importance that education plays in improving economic and social conditions in the Western Province. The Scholarships Program, funded by CMCA Trust, mine villages and OTML Preferred Area Development (PAD) aims to improve access to secondary and post-secondary education opportunities for children and youth from those communities. The OTDF Strategic Direction 2016-2020 has committed to targeting new post-secondary scholarships to support priority human resource development needs in the Western Province for teachers, health workers, and skilled agriculture workers.

The commitment which CMCA communities and mine villages have shown to education is reflected in their contribution of 84% towards the overall scholarship funding.

In 2017 through CMCA, Mine Village and OTML PAD scholarship funding, PGK3,442,772 was committed to ongoing scholarships for the 546 full-time students studying from secondary to tertiary level, both in PNG and overseas.

These students are young people from the CMCA, mine villages and PAD including Telefomin in Sandaun Province. This represents an 11% increase in the number of students compared with 2016, for a similar level of funding.

The increase in number of places for students was the result of savings made by the OTDF Community Education Support Team to: (a) incorporate performance-based financial support with levels linked to Grade Point Averages (GPA); and (b) to recover fees owing in a timely manner for students who have withdrawn or been terminated from institutions. Further savings also occurred because of reduced student applications in 2017 for OTDF priority courses in Health and Agriculture. This released funds for an increased number of applicants to be accepted into other courses.

A total of 83 scholarship students studying in tertiary institutions and 42 in other post-secondary training institutions graduated in 2017.

PAD Maritime

PAD

Mine villages

CMCA Trust

33%

51%

4%

12%

Of the tertiary students, 68 (82%) studied in the OTDF priority sectors of Education, Health and Agriculture, up from 42% in 2016. This increase is a direct reflection of the focus to which OTDF and sponsoring Trusts have shown by channelling scholarship students to those sectors.

183 students are scheduled to continue their studies under the OTDF scholarship program in 2018, and a further 299 new scholarships are on offer, bringing the total scholarship ceiling to 482.As a result of the awareness sessions conducted during the Communications Patrol and school road shows during the year, a total of 338 candidates applied for the 299 new scholarships. The OTDF CES team conducted a thorough merit-based screening of applicants, ensuring that only the best students who met the scholarship guidelines were selected.

2017 SCHOLARSHIP GRADUATESTertiary (83) Post Secondary

Technical Training (42)

49 Diplomas and Bachelors in Teaching10 Diplomas in Nursing9 Diplomas and Bachelors in Agriculture15 various other Bachelor degrees

36 in Diplomas in Technical Trade3 Mate & 3 Maritime Certificates of Compliance from National Maritime Authority

COMMUNITY EDUCATION SUPPORT

Funding sources for all Secondary and Post- Secondary Scholarships 2017: PGK3,442,772

39

FODE students sit their adult matriculation exam at the Kaviananga FODE Center, Middle Fly

40

INFRASTRUCTURE SECTOR

The OTDF Strategic 5-year goal for the Infrastructure Sector is increased access to markets, basic services and village facilities that contribute to improved local and regional economic development opportunities, education & health status, and social development of CMCA communities. OTDF has prioritised infrastructure projects funded from a range of sources including OTML Tax Credit Scheme, Western Province People’s Dividend Trust Fund and CMCA Trusts. These projects have contributed to the achievement of indicators of success in line with national and provincial sector policies and plans, and in response to demand from communities.

Headline Indicator OTDF Contribution 2017Estimated length of provincial and district roads 2km road access provided by construction of the

Obo/Kaviananga bridge.Nupmo footbridge safe crossing - survey in preparation for impact evaluation

Number of jetties upgraded for domestic vessel traffic

Nil since the recent TCS funded jetty upgrade project completed in 2016

Percentage increase in number of scheduled shipping routes

Agreement to return the MV Fly Hope to scheduled Fly River passenger and freight services in 2018

Percentage increase in number of scheduled air routes

Return to downriver Twin Otter services every Friday

Proportion (%) of rural population using an improved drinking water source

26 new water catchment units in villages of 3 South Fly Trust Regions under the SFWCP

Proportion (%) of rural population using improved sanitation facilities

Water tanks installed at 2 primary schools, 11 health facilities, and 1 health staff house.Promoting the importance of safe drinking water resulted in the Kaurtru village community purchasing 12 water purifying buckets

Household electrification rate (% of households) No contributionProportion (%) of population covered by at least a 3G network (proxy to internet coverage)

OTDF field offices in Aiambak & Tapila have been connected with plans for 2018 to connect Nakaku.PNGSDP are planning to upgrade Provincial telecommunication towers to 4G

Number of affordable houses constructed 3 houses - Atkamba Village8 health centre staff houses- Bosset, Obo, Tapila, Wasua, Teapopo & Rumginae CHW School7 staff houses – Balimo Hospital

The Infrastructure Development Department (IDD) expended PGK7.84 million on infrastructure sector projects, accounting for 18% of all OTDF sector expenditure during the year. CMCA Trusts and mine villages contributed 40% of total expenditure on infrastructure projects. WPPDTF expenditure of PGK2.66 million was made on the final payment to Starwest for Aiambak to Lake Murray and Kasa Road and the Obo/Kaviananga Bridge. Also brought into the 2017 accounts was PGK2.15 million of expenditure made in 2015/2016 on the South Fly Water Catchment Project (SFWCP). This represents 28% of total sector expenditure reported this year, however the work was completed in those earlier phases of the project.

41

0

0.5

1

1.5

2

2.5

3 mil

Year2013 2014 2015 2016 2017

Cumulative Annual Billing

Cumulative Actuals Recieved

Cumulative Returned to Trust

Year2013 2014 2015 2016 20170

5

10

15

20 mil




0

0.5

1

1.5

2

2.5

3

Return to Trust

Actuals Recieved

Annual Billing

Housing Cummulative Return to Trust

Housing Cummulative Actuals Recieved

Housing Cummulative Annual Billing

Year

2013 2014 2015 2016 2017

PGK

Am

ount

in m

illio

ns

0

2

4

6

8

10

12 mil

Year2013 2014 2015 2016 2017




Asset Investment Cost (PGK)

Investment START DATE Per Lease

Payback END DATE Realising Original Capital Cost

Payback Period To Realise Capital Cost (In Years)

Current Annual Payback (PGK)

Total Capital Cost Recovered Following Payback Period (PGK)

Years of Current Lease Agreements

NET Return Value As at 31/12/2017 (PGK)

SHIPSPassenger Ferry 6,448,805 - - - - - 15Cargo Ship 18,869,377 1/01/2013 1/08/2022 9.6 1,965,986 18,869,377 15 9,829,930 Research Vessel 5,337,674 1/07/2012 1/10/2021 9.4 569,028 5,337,674 15 3,129,654

30,655,856 Total Capital Cost - Vessels 24,207,051 12,959,585 AIRCRAFTTwin Otter P2-IRM 17,382,881 1/01/2013 1/04/2023 10.3 1,692,274 17,382,881 15 8,741,195 Twin Otter P2-IRN 16,511,655 1/01/2013 1/04/2023 10.3 1,609,232 16,511,655 15 8,332,151

33,894,536 Total Capital Cost - Aircraft 33,894,536 17,073,346 PROPERTIESOffice Complex 7,724,635 1/01/2014 1/01/2023 9.1 852,754 7,724,635 10 2,558,262 Housing Estate 6,169,135 1/02/2015 1/05/2023 8.3 743,311 6,169,135 10 2,229,933 Cassowary Hotel 33,000,000 1/02/2018 1/11/2030 12.3 2,680,000 33,000,000 20 -

46,893,770 Total Capital Cost - Properties 46,893,770 4,788,195

TOTAL CAPITAL COST OF MAJOR TRUST INVESTMENTS 104,995,357 34,821,126

MAJOR TRUST INVESTMENT SUMMARY

RESEARCH VESSEL: FLY EXPLORER

SERIES 400 TWIN OTTER AIRCRAFT: P2-IRM & P2-IRN REAL ESTATE: OTDF OFFICE & CMCA VILLAGE

CARGO VESSEL: FLY WARRIOR

42

Series 400 Twin OttersThe two aircraft (P2-IRM and P2-IRN) are servicing regional airstrips within Western Province and the Telefomin District of Sandaun Province. They are being used to transport OTML and contractor personnel to and from their homes; OTDF staff to regional field bases; and to conduct urgent medivac requirements within our community partner regions.

Total investment value: PGK33.9 millionProjected return on investment to the CMCA communities over the current 15 year contract: PGK49.51 million or 46%

Passengers flown in 2017: 6,701Freight flown in 2017: 54,953 kilograms

Return to CMCA communities in 2017: PGK3,301,266Cumulative return since January 2013: PGK16,781,435

Series 400 Twin Otter (P2-IRM)

Kiunga Office Complex and Housing Estate

After benefitting from extensive maintenence works in 2016 ‘CMCA Village’ has required only minor R&M throughout 2017. An upgrade of the sports courts is planned for 2018 to cater for the growing interest in the Foundations sporting events.


Return to CMCA communities in 2017: PGK743,310Cumulative return since January 2015: PGK2,229,930

Capacity: 7 houses and 12 units

The OTDF Head office continues to be upgraded, undergoing extensive concrete works to cover the entire front of office carpark. The office continues to be shared with OTML Community Relations (OTML CR) and a sub-lease to Ok Tedi Power Limited (OTPL).


Return to CMCA communities in 2017: PGK852,754Cumulative return since January 2014: PGK3,553,141

Capacity: 52 workstations and 15 officesOTDF Office complex (carpark upgrade), Kiunga

OTDF Housing Estate (aerial), Kiunga

CMCA TRUST INVESTMENT ASSETS

Kiunga Housing Estate (CMCA Village)

43

MV FLY EXPLORERThe FLY EXPLORER is a 30 metre custom built research vessel being used by the OTML Environment Department, primarily to conduct environmental monitoring, riverine biota, levee bank and hydrological sampling, navigability studies and DEC inspections along the Fly River and its tributaries, and Fairfax Harbour in Port Moresby.


Number of scientific trips conducted in 2017: 11Scientific trips conducted since July 2012: 47

Return to CMCA communities in 2017: PGK569,028Cumulative return since July 2012: PGK3,177,073

MV FLY WARRIORThe FLY WARRIOR is a 65 metre bulk diesel fuel and container carrier that can ship up to 72 containers and or 1.2 million litres of fuel out of Port Moresby and is registered to call into Australian ports if required.


Freight shipped in 2017:Fuel: 7,318,608 litres of dieselCargo: 1,958 containers and 93 break bulk pieces

Return to CMCA communities in 2017: PGK1,965,986Cumulative return since January 2013: PGK9,993,762

MV FLY EXPLORER

MV FLY WARRIOR

MV FLY HOPE

As foreshadowed in the 2016 Annual Report, the solution to restart operations in partnership with OTML Shipping and their new vessel manager has stalled. While OTML has contracted P&O to take on their fleet, vessels are still in transition from V’Ships and this remains a priority. Additionally the cost to refit the Fly Hope with added freezer capacity and to complete docking and all consequent survey requirements given her extended period at anchor is estimated to be near PGK2 million.

OTDF is exploring funding options, negotiating with OTML Shipping to provide the fuel requirements at no cost and for P&O to provide ships management at cost for a trial 12 month return to operations from mid 2018 to determine the future viability of this community shipping service.

MV FLY HOPE

44

The highly anticipated 40-room, Cassowary Hotel in Kiunga is expected to officially open in March 2018. Substantive completion of internal works by year end enabled staff from Coral Sea Hotels (CSH), the hotel management partner owned by the Steamships Trading Company (STC), to test systems, and commence furnishing and stocking in preparation for the opening. CSH began recruitment of staff in November. Where possible, Management will give priority to filling the various positions with experienced and qualified applicants from CMCA areas, and those from within Western Province. The investment will not only provide a guaranteed return of more than PGK2.5 million per year to the 8 CMCA Trusts for 20 years and 4 North and Middle Fly Women’s Associations for 10 years, but will also increase paid employment for locals; and create opportunities for sale of local produce and provision of hotel operating services.

The investment will provide a guaranteed return of over PGK2.5 million per year.

Practical completion was delayed by 8 months due to significant performance issues resulting in the termination of the initial construction contractor in May. OTDF agreed to partner with Pacific Palms Properties (PPP), also part of the STC group, to take on the responsibility of completing the building. The anticipated completion cost of PGK34.8 million is PGK4.8 million (14%) over the original projection of PGK30 million, due to costs incurred as a result of the contract termination and replacement

of module components damaged in 2016. The additional cost has been financed in accordance with existing CMCA Trust Investment Guidelines from investment funds that were released to the 4 South Fly Trusts following the court ruling in February 2017, enabling them to join the other CMCA Trusts as project partners and increase their Trust Investment portfolios. OTDF is pursuing the recovery of cost from associated contractors.

OTDF is also negotiating revised terms with STC to extend the Cassowary lease agreement from 10 to 20 years: at 6.9% over the first 10 years; and 8% over the second 10 years, yielding a gross return in excess of PGK55 million.

The Cassowary is the eighth and final major investment project to be delivered by OTDF under the current CMCA Trust investment processes, completing a real estate, aviation and shipping portfolio worth in excess of PGK100 million.

CASSOWARY HOTEL

Interior room view

Ground floor plastering nears completion

45

Multi Purpose Hall nears completion at Montfort Primary School, Kiunga

The OTDF Infrastructure Development Department (IDD) 2017 implementation strategy as agreed with OTML Tax Credit Scheme Administration focused on completing existing projects in the IDD TCS portfolio before commencing any new project investigations.

A milestone for the IDD in 2017 was completion of the PGK6.55 million Balimo Hospital Stage 2 Staff Housing Project with no safety incidents.

In May 2017 the houses were officially handed over by Department of National Planning & Monitoring (DNPM) officials to Evangelical Church of PNG (ECPNG) who administer the hospital.

In addition to the Balimo project, which was almost complete at the end of 2016, the IDD TCS Team continued working on six approved projects: Oksapmin High School (see profile of the Oksapmin High School project on page 46); Montfort Primary School New Build; and the Kiunga Town Water Supply project. This project included finishing works at Tank 4 and pressure testing of the new reticulation lines, and a plan to begin construction of Tank 5 at Pivini Hill, which has been delayed due to land issues. The Kiunga Sewerage Treatment Plant (STP), was further delayed following a review of the costs of the re-designed project. OTML requested further investigation of scope, and value for money alternative systems such as containerised plant. Other than completing mains water & sewerage reticulation lines, the Kiunga Sub-Division project, which was 30% complete when handed over to IDD in 2016, was shelved by OTML.

TCS REGISTERED PROJECTS No. Projects Amount

(PGK million)

% Complete

1 Balimo Hospital Stage 2 Staff Housing

6.55 100

2 Oksapmin High School

36.27 40

3 Kiunga Town Water Supply

18.60 88

4 Kiunga Sewerage Treatment Plant

25.69 0

5 Montfort Primary School - New Build

3.36 45

6 Telefomin District Hospital Equipment

1.00 90

TOTAL 91.47

The IDD TCS Team took on one additional project in 2017 to procure medical equipment for the Telefomin District Hospital. The equipment has been procured from Meddent and is in Port Moresby awaiting final shipment to Telefomin in 2018. The IDD team also handed over the Tabubil footbridge project for the Lower Ok Tedi to OTML Special Projects (due to its location). The design was subsequently completed and submitted to the DNPM for approval.

The IDD TCS Team continues to respond to the challenges associated with delivery of large scale infrastructure projects in Western Province, and consults with all stakeholders to monitor and manage risks to improve project delivery. One example is the unexpected rainfall in Kiunga in July and August 2017 which resulted in the proposed STP and new pump station sites being submerged by floodwaters. This event resulted in a review of the project design to mitigate the impact of future flooding.

With a morotorium placed by the National Government on all new TCS projects throughout Papua New Guinea, the IDD Team will focus on completing the current projects in its portfolio within approved budget allocations and planned timeframes in 2018.

OTML Tax Credit Scheme (TCS) Projects

46

The OTML Tax Credit Scheme funded PGK36.27 million Oksapmin High School located in Tekin, in Oksapmin sub-district of Telefomin District, Sandaun Province will improve access for young people living in the 21 wards of the sub district to secondary education facilities. The OTDF Infrastructure Development Department is managing the construction of the new High School, which will include: an Administration Building, Library, Science Laboratory, Mess Building, Recreation Hall and Workshop. Two x 2-level Double Classrooms will be constructed along with a 2-level Girls’ dormitory, 2 x 2-level Boys’ dormitories, 3 Ablution Blocks, 2 Day Toilet blocks, and 7 x 3-Bedroom Staff Houses.

Following the termination of the original contractor’s services, project work-in-progress was rated at 30% complete at the project site. Re-activation of the Oksapmin High School Project in early 2017 required re-scoping to ensure timely completion and delivery of this long awaited project within the approved TCS budget. The strategy to mitigate the risk and speed up work was to engage two contractors for two discrete project components. Tawap Kamen Investment (TKI) Ltd was contracted to complete the unfinished buildings, and Hausman Building Solution (HBS) Ltd was contracted to construct the new buildings that had not been commenced. TKI mobilised in late November and commenced site establishment works. HBS will mobilise in the 2nd Quarter of 2018.

A site visit by OTML and OTDF representatives to address issues raised by locals concluded with communities giving consent for the airlifting operations to commence in November. The re-activation work included replacement material supply by Badili Hardware, aviation fuel supply by Puma Energy Ltd, and airlifting by Hevilift Ltd.

During November and December, 33 loads of project materials weighing more than 118 tonnes were airlifted to the project site by Mil 8 helicopter.

Two “Igloo” storage facilities are being constructed to store project materials which will be progressively airlifted from Sawmill Flats in Tabubil to the project site.

The communities have committed to working with the new contractors who have been engaged to complete the project, and overcame significant challenges associated with poor contractor performance, weather conditions hindering transportation & storage of materials, and building in a remote location. Additionally, the Member for Telefomin has been working closely with his people to ensure community support for OTDF to enable improved education within his District.

On behalf of my people from Telefomin District, particularly in Oksapmin, I convey my highest gratitude to OTDF for restarting and managing the delivery of this very important education infrastructure project. I also convey a special thank you to the Management of OTML for continuing to provide funds from the Tax Credit Scheme to now complete this very important project that I wish to open over Independence in September, 2018.Minister for Defense and Member for Telefomin, Hon. Solan Mirisim

TCS PROFILE: OKSAPMIN HIGH SCHOOL RESTARTED

One of 2 ‘Igloo’ shelters erected at the Oksapmin High School site to protect all materials airlifted in by heavy lifting helicopter

47

The Infrastructure Development Department team responsible for CMCA and other non - TCS projects managed a portfolio of 49 infrastructure projects totalling PGK21 million in various stages of implementation. Projects that contribute to achieving the OTDF 5-year Strategic Direction were funded by the 8 CMCA Trusts and their entities, 6 Mine Villages and OTDF; including housing, water supply, church buildings, women’s learning centres, and community health centre upgrades.

The non-TCS Team worked closely with other OTDF Departments to provide engineering services to Trusts and Mine Villages, including technical advice, appraisals, feasibility studies, and contract documentation to facilitate infrastructure project approvals and implementation.

Twenty projects were carried forward from 2016, and 29 new infrastructure projects were approved for inclusion in the IDD portfolio and workplan. Of these 49 projects, 21 (43%) were funded, of which 6 were completed in 2017. The IDD undertook feasibility work on 17 projects that are now pending funding approval. The non-TCS Team carried forward 26 projects into 2018.

Highlights for 2017 included handing over 3 houses in Kiunga for Atkamba Village (Wai Tri Trust), with a 4th and final house under construction to complete the project. A PGK170,000 upgrade to Senamrai Village Health Centre (Wai Tri Trust), is under way with works including a 4-bed maternity ward renovation, water supply and sanitation, ambulance shed and security fencing. Additionally, OTDF funded a PGK150,000 project to install a water tank and piping to supply the entire Samagos Field Base in the North Fly and continued to support the South Fly Water Catchment Project.

IDD REGISTERED NON-TCS PROJECTS: 2017Funding Source Carried Fwd New Projects Total Funded 2017 Amount

(PGK mil)Completed

CMCA Trusts 11 21 32 11 7.3 1Mine Villages 5 4 9 3 1.5 0OTDF 4 1 5 4 11.6 3MFIL 0 3 3 3 0.6 2Total 20 29 49 21 21 6

Community demand for clean water sources is very high, compounded by rising water levels in the delta regions of the Fly River. The SFWCP, has been funded by OTDF since 2013, commencing with 17 Dudi villages, and progressively implemented across 34 villages in the Kiwaba and Manawate Trust regions. In Kiwaba, 82% of target units have been constructed, with 46% completed in Manawete. To enable greater efficiency in delivery of project materials, OTDF relocated material storage from Aiambak to sites closer to the delta Trusts regions.

Meeting expectations about the delivery of water supply infrastructure in the villages was a challenge, with officers addressing concerns recorded in the 2017 Communications Patrol feedback from each of the three Trusts. The SFWCP project is scheduled to be completed in 2018.

CMCA AND OTDF FUNDED PROJECTS

Gravity fed header tank and site water reticulation upgrade project constructed at the Samagos Field Base & Research Station, North Fly

49

OTML Tax Credit Scheme project, Oksapmin High School site aerial: OTDF facilitated the return to construction in late 2017 following termination of the previous contractor and a revised scope of works, see further details on p. 46

50

LOCAL AND REGIONAL ECONOMIC DEVELOPMENT SECTORThe OTDF Strategic 5-year goal for the Local and Regional Economic Development Sector is increased income earning and employment opportunities and reliable subsistence consumption for Western Province communities. OTDF has prioritised economic development projects funded from a range of sources, including the Western Province People’s Dividend Trust Fund, CMCA Trusts and Mine Villages. These projects have contributed to the achievement of indicators of success in line with national and provincial sector policies and plans, and in response to demand from communities. The PGK10,147,029 expended on projects and programs implemented in this sector accounted for

Headline Indicator OTDF Contribution 2017Percentage of non-CMCA cash income per household

Rubber - PGK221,638 paid to 745 Rubber growersRice – field trials concluded in preparation for LDP funding of Kaviananga commercial trialEaglewood – preparation/training for the inoculation of 5,000 trees in 2018, due for harvest in early 2019

Percentage of CMCA population in paid employment

New local employees (casual and full-time):2 - North and Middle Fly Women’s Association Public Officers6 - OTDF extension officers/didiman graduates from Highlands Agricultural College - LDP program support3 - LBL – Rubber purchase and logistics20 - Mt Fubilan Agro-Industries egg and poultry18 (11 with trade qualifications) - Nanai Brothers Eaglewood nursery contract76 - Cassowary Hotel construction

Number of SMEs owned and operated by CMCA communities

2 SMEs (Middle Fly Investments Ltd & Upper Lower Ok Tedi Ltd) supported by Trust Team4 North & Middle Fly Women’s Association Investment Companies & 4 North and Middle Fly Regional Women’s Associations supported by Economic Development Team4 new South Fly Women’s Regional Associations Mt Fubilan Agro-Industries - operating Poultry projectFly Rubber Ltd – contracted with LBL and OLAM to buy and export cup lump rubber WestAgro Ltd formed to enable delivery of Province wide agribusiness aspirations

25% of all OTDF sector expenditure during 2017, second only to the major health sector expenditure.

Over half of all 2017 expenditure in the sector was the investment made by 6 mine villages and the Star Mountains Women’s Association. They pooled their funds to invest PGK5.6 million (80%) of the PGK7 million capital required to start up the Mt Fubilan Agro-Industries poultry project (for more details see page 52). PGK1.3 million of residual WPPDTF funding enabled LDP program activities and trials to continue pending full funding becoming available in the near future.

51

OTDF’s overall objective for Small and Medium Enterprises (SME) is increased income and employment in the Western Province from sustainable small and medium enterprises. A key strategy in the OTDF 2016-2020 Strategic Direction is to provide business advisory services to support SMEs, and Regional Women’s & Youth Associations transition to full operational independence. Aligning their work with the Government’s National SME Policy 2016, the OTDF Economic Development (ED) Team is supporting the establishment of new local SMEs in CMCA regions; and assisting existing enterprises operating in the non-formal sector to transition to the formal sector. The ED Team has developed a business services advisory capacity for SMEs, and also coordinates the Financial Literacy Training (FLT) conducted in partnership with the Bank of South Pacific (BSP), partly funded under PNG’s National Financial Inclusion Strategy.

In 2017 the ED Team’s client base included ongoing work with a total of four (4) Women’s Investment Companies.

To meet the objective of transitioning to operational independence in a period of 2-4 years, the ED Team has assisted with the appointment of Public Officers, and then supported their capacity to take on all operating functions.

Support focused on accounting and compliance services to ensure the women’s investments are well coordinated, demonstrating good financial growth, and regularly reporting on profitability.

National Development Bank (NDB) Credit Scheme Program for CMCA Women’s Associations: A total of PGK1.5 million was deposited with the NDB as security for loan applications under Memoranda of Agreement between the NDB, Middle Fly Women’s Association (MFWA) and the 3 North Fly Women’s Associations (NFWA’s). The first loans are expected to be approved before the 31st of March 2018. Eligible applicants must be registered with the IPA, and provide 10% of the total loan value as equity in the proposed business. Interest of 6.5% will be paid on loans of PGK500-PGK10,000 to be repaid over a maximum 2-year period.

Application forms were distributed to the village Womens’ Social Issue Concern Groups as part of a combined awareness program involving the ED and Community Development teams and the respective Women’s Association executives. A Client Registry database is being established to enable the ED Team to track progress of loan applications, and identify candidates for FLT and business planning support. The database will assist the ED Team to quantify the OTDF headline indicator measuring the increase in number of SMEs owned and operated by CMCA communities.

South Fly Delta Fisheries Livelihood Development Program: The ED Team took the lead in 2017 to prepare a business case for a new Delta Fisheries Livelihood Development Program initiative for the South Fly in the Dudi, Kiwaba and Manawete Trust Regions. These areas are not well suited to Rice, Rubber and Eaglewood, but fishing is the primary subsistence activity for most families.

This initiative aims to support communities to sustainably target key species such as barramundi and tilapia, and add value by processing fish fillets which will generate cash income. Data was collected during a 3-week baseline survey in February and March, including number and species of fish caught, equipment used, access to markets via existing jetties, and fuel costs. Constraints to establishing a viable business were also reviewed, including the need for sustainable management of the wild fisheries, collaboration with existing operators in the delta, and compliance with processing standards under the National Fisheries Authority (NFA) regulatory frameworks.

SMALL AND MEDIUM ENTERPRISE DEVELOPMENT PROGRAM

North Fly ladies celebrate at the signing of the MOU with the NDB in the OTDF Office, Kiunga

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MOUNT FUBILAN AGRO-INDUSTRIES POULTRY PROJECT

Six Ok Tedi mine landowner villages (Atemkit, Finalbin, Bultem, Kavorabip, Migalsimbip, and Wangbin) will soon supply Tabubil, Bige and Kiunga with over 3.5 million eggs, and 33,000 broiler chickens a year through a project initiated by OTDF. The Foundation has engaged Israeli agro-business company, Innovative Agro Industries (IAI), as a technical and financial partner to implement the project. After 18 months of planning, the project commenced in May at the OTDF Agriculture Centre in Tabubil with construction of chicken sheds, a feed mill and other associated facilities to be fully completed by February 2018. With the first shed constructed, production commenced in early October 2017, when the initial flock of 3,900 day-old chicks (layers) arrived on site from New Zealand and are now settled into the first laying shed. A second flock of 2,600 chicks was delivered to the pullet shed in mid-December (by year end, 97% of the total number of chicks delivered were thriving on-site).

3.5 million eggs, and 33,000 broiler chicken capacity per annum

The project has generated keen interest with 60% of the PGK7 million start-up funding committed by the six representative Mine Village Planning Committees; and by the Star Mountain Women’s Association (SMWA) who have committed 20%. This is the first time that mine VPCs and the SMWA have pooled their funds for a common benefit. IAI has committed the remaining 20% of the required start-up funding. The project is currently being steered by the Mt Fubilan Agro-Industries Committee, acting as an interim governing structure pending a final corporate holding structure to be decided by OTDF in consultation with the mine village VPC’s. The Committee met 6 times in 2017.

There is an existing market in Tabubil driven by OTML operations. Local landowner company Fubilan Catering Services, which has the catering contract with OTML, has become the project’s first customer, committing to buy 4,000 eggs per day (1.4 million per year), which is 40% of planned annual production. There are also significant retailer markets in Tabubil and Kiunga. The live broilers will be sold at the farm gate, mainly to the Mine villages. The first eggs and broilers will be produced and sold by March 2018. The project payback period is expected to be within 5 years.

OTDF has also committed to encouraging use of locally-grown and processed feed for animal production, both to reduce input costs, and also to provide a reliable and integrated value chain within the Western Province that will also generate additional jobs for locals. A trial was commenced on reclaimed land at Bige during November 2017 to grow 1ha of maize which will be milled at Tabubil. The aim of the trial is to evaluate the commercial prospects for poultry feed production, which would then be taken over by local company Lotic Bige Ltd (LBL). This enterprise would generate additional employment opportunities, and also provide cost effective access to poultry feed by smallholder poultry producers in Western Province.

OTDF Associate Director Maino Lucas representing the North Fly and mine villages, encouraged his people to make use of opportunities the project will generate, and focus on using income from the project to support future education needs for mine village children.

“We mine villages have enjoyed the last 30 years of receiving direct benefits from OTML, yet have little to show for what has been received … the important element to sustain our futures is education, and we can realise that through returns from agro-industries.”

Initial flock of layer birds spread their wings in the new pullet shed, Tabubil

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Aerial picture of the three Mt Fubilan Agro-industries poultry project layer sheds footprint

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EAGLEWOOD PROGRAM

OTDF has identified Eaglewood as one of three Livelihood Development Package programs for CMCA communities in all 8 Trust Regions. The aim of the Eaglewood Program is to establish a fully sustainable and integrated model from seed production to processing resin, or agar, into a value-added product such as high value chips, fragrant oils and incense sticks, ready for export.

OTDF has been directly supporting preparatory work for the Eaglewood LDP, including establishment of 4 nurseries, with a capacity for producing over 300,000 seedlings, and providing field extension services for growers. OTDF also purchased a 25-year patent license agreement for PNG for the Cultivated Agarwood (CA) Kit technology in 2016; and entered into a partnership with Pacific Forest Alliance (PFA) for technical and advisory services along the Eaglewood value chain.

In 2017, OTDF expended PGK798,362 on the Eaglewood program and propagated over 240,000 seedlings that will be distributed in 2018 to 4,773 growers, up from a distribution of 70,000 seedlings to 1,060 growers in 2016 (including 4 women’s groups in the Middle Fly).

The Eaglewood team is also investigating further value adding, by assessing the processing of the whole tree for extraction of resin, to grinding of the residual agar into incense sticks. This was an outcome of a study trip to Vietnam conducted in late 2016 to evaluate Eaglewood inoculating, harvesting, and seed raising processes. Information gained during the trip also enabled completion of the relevant sections in the Eaglewood Management and Grower Guide. Relevant modules were laminated and provided to growers by extension officers during seedling deliveries.

Region Seedling Production

% IncreaseYear on Year

2016 2017North Fly 23,650 71,000 200%Middle Fly

26,251 61,950 136%

South Fly 20,054 107,824 438%Total 69,955 240,774

Nursery Production and Seedling DistributionTotal nursery capacity was increased in 2017 to 300,000 seedlings as a result of upgrades at Aiambak and Nakaku (50,000 each); adding to the construction in 2016 of two new nursery sheds at Tapila and Samagos (100,000 each). The additional capacity of the nurseries allowed OTDF to order 80kg of seed from Vietnam in 2017. In response to the high demand for seedlings, an additional 50kg of seeds were later procured in June 2017. Refinement of nursery practices and improvements in the growing media have also allowed seedlings to develop quicker and be ready for distribution earlier.

A total of 240,774 seedlings currently growing in all 4 nurseries will be distributed in 2018.

Local Seed Production areas (SPA), (locations which have been set aside for the exclusive purpose of seed production) are now reaching maturity, and starting to produce small amounts of seed. OTDF plans to have all future seed requirements sourced from local SPA’s that creates an additional income opportunity for these farmers and reduces the program’s dependence on external seed procurement.

The seedling on the left has developed more vibrant growth and a stronger root system in the new medium

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Inoculation Program Six field extension officers engaged in 2017 conducted a measurement program, identifying an initial 500 trees from all three regions, with a breast height diameter of 14cm or more, suitable for the 2017/2018 inoculation program.

Prior to commencing the program, PFA conducted a 4-day training course on inoculation techniques for the field officers undertaking the CA Kit application in the field. Training for the inoculation teams commenced in November, with applications made to selected trees in the Samagos field base. Trees were also inoculated at the Catholic Mission, Emmaus Farm. The inoculation of 5,000 trees in all three regions is scheduled to commence in February 2018.

All trees require a field inspection and follow up booster application 6 months from the initial application, so it is important to stagger the inoculations to allow effective field management of the trees. This staged approach will also complement harvesting and processing as the trees mature and produce agar. Trees will be ready for harvest some 12 to 15 months after the first application of the CA Kits.

During the application of the CA Kits all trees will be GPS located to allow analysis of the different micro climates that may potentially influence yield and agar development and to model the production and processing of the inoculated trees.

Prior to the application of the CA Kit OTDF will enter into an agreement with the individual growers setting out the roles and responsibilities of each party. This agreement is designed to ensure growers are aware of their obligations, and this includes OTDF processing the harvested agar-producing tree to ensure the sustainability of the program.

Agar Processing PilotTo identify the quality and potential variations in oil production that may be present in trees from the different regions, a pilot distillation unit was ordered from China with a delivery scheduled in mid-2018. The unit will be located at Samagos and will allow OTDF to sample the oil quality from the 2017 crop of inoculated trees.

Agreement was also reached with the University of PNG to replicate these distillation tests under laboratory conditions to ensure OTDF can produce similar results from the field based unit.

Following the production of oil, OTDF will provide growers with purchasers’ feedback on the quality of oil produced and expected pricing. This critical information will enable refinement of a model of returns to growers and the project as well as quantification of the industry potential, allowing decisions to be made on expansion.

Inoculation training using the CA Kits at Samagos Field Base, Kiunga. The team drills a series of holes into the tree and applies a chemical agent to assist establishment of a natural fungus that will infect the tree and produce the agarwood from which resin is extracted

Stainless steel Eaglewood distillation unit manufactured by ‘Shanghai Better Industries’, China

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Middle Fly long canoes continue to be utilised by the Kasa community, on this occassion to deliver 31,127 Eaglewood seedlings from the Aiambak nursery

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OTDF has worked closely with communities growing Rubber to drive their own social development (inclusive of women and youth) with expected outcomes of: (a) increasing farmer incomes and livelihood opportunities from tapping and adding value to latex rubber; and (b) deriving benefits from a company owned by growers.

Fly Rubber LimitedIn 2016 OTDF facilitated the formation of Fly Rubber Limited (FRL) to help secure these outcomes for Rubber growers. The inaugural meeting of the FRL Board was held in March 2017 with representatives appointed from OTDF, Business for Development (B4D) and grower representatives from Lake Murray, Kasa Village, and Highway villages in the North Fly.

FRL signed a contract with marketing partner OLAM based in Singapore in late 2016 to initially supply 60 tonnes of cup lump Rubber for export with the approval of the PNG Rubber Board. Local company Lotic Bige Ltd (LBL) was contracted to purchase the cup lump from growers; and since December 2016 has purchased 178.7 tonnes and paid PGK221,638 into the bank accounts of 745 Rubber growers.

.. purchased 178.7 tonnes and paid PGK221,638 into the bank accounts of 745 Rubber growers.

In the 1st Quarter of 2018, OTDF, LBL and key stakeholders will conduct meetings in the Suki area to increase awareness among growers about arrangements for cup lump Rubber buying. In 2018 OTDF will be providing technical assistance (didiman services) and tapping tools (funded by the WPPDTF) to growers.

In November, the Middle Fly Trust Board approved a submission for a new 5-year hybrid Rubber seedling nursery project to commence in 2018.

Similar submissions to fund additional nurseries in North and South Fly Regions will be made in the 1st Quarter (2018) Trust Board meetings. These nurseries will supply planting materials for growers under the LDP Program.

A single Provincial Rubber Development Strategy for Western Province will be incorporated into the WestAgro master plan (see page 13), and will focus on reaching more isolated farmers, collaboration with North Fly Rubber Ltd, and planning for the return of PNGSDP as a development partner.

This 5-year project, which concluded in 2017 under current funding arrangements, initially covered 16 villages from Fly Gogo, Manawete and Dudi in South Fly, and was to be jointly funded by PNGSDP and Village Development Funds. From 2014 onwards, OTDF operational funds were used when PNGSDP funding did not eventuate, and the geographical scope increased to include Suki villages and the Lower Middle Fly region. Three seedling nurseries established from 2013-2015 were the source of Rubber planting material that was extracted and distributed from 2014 onwards. In the final year, 2017, field plantings of bare budded stumps included: (a) new growers, (b) growers extending planted Rubber blocks, and (c) growers replacing dead points in their Rubber blocks. By the end of September, seedlings had been distributed to 654 growers in 29 participating villages in a collaborative effort involving the village leaders. These farmers will benefit in the near future from tapping of Rubber from approximately 142,000 trees (allowing for field losses).

South Fly Rubber Project Summary of Field Plantings 2014 – 2017Year Points Ha Growers Villages2014 36,776 81.72 203 92015 No planting due to dry weather2016 44,496 98.88 60 112017 76,306 169.57 654 29

RUBBER PROGRAM

PROFILE: SOUTH FLY RUBBER PROJECT

Bare Budded Rubber Stumps from the Sturt Island nursery are harvested for distribution to South Fly farmers

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Ok Tedi Development Foundation will soon have a Rubber processing factory in Aiambak, Middle Fly District to benefit Rubber farmers within the Community Mine Continuation Agreement areas. The location is in line with the OTDF Strategic Direction 2016-2020 target to focus on developments that position Western Province as an agriculture and forestry province, and to concentrate infrastructure and services in Fly River Provincial Government nominated growth centres. Aiambak is a strategically located growth centre, enabling farmers in the remote Middle and upper South Fly areas of the Province to access a ready market for their Rubber. Accessibility has been greatly improved following the construction of the Aiambak to Lake Murray Road which enables reliable production volumes to reach the factory from Lake Murray and Kasa Village farmers.

Adding value by processing within the Province places more money in farmers’ pockets for the same volume of harvested Rubber.

The factory is intended to produce Ribbed Smoked Sheet (RSS) Rubber. Farmers will prepare rolled sheets from their cup lump rubber with simple hand rollers in their villages. The RSS will be transported to the factory within 10 days where they will be smoked, graded, packed and exported in containers, initially to South East Asian markets.

RSS has a higher value on the international market than the cup lump which is currently being sold by farmers. Sheets are used by tyre re-treading factories and RSS production is being heavily promoted by the PNG Rubber Board to increase volumes. In the future a domestic market could be established in which a factory in PNG would service the growing light vehicle market.

A ground breaking ceremony was held at Aiambak, on September 22, 2017 and the final factory design has been completed. The contract will be tendered in mid-2018 and subsequent construction is expected by year end.

RUBBER PROFILE : AIAMBAK RUBBER PROCESSING FACTORY

More than 1,000 CMCA Middle Fly and Lake Murray rubber farmers gathered to celebrate the groundbreaking of the Aiambak rubber factory

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Rice has been grown commercially throughout Asia in environments similar to those found in PNG. This production has been achieved over centuries of growing rice, with high labour inputs and low mechanisation being the key elements of these farming systems.

The PNG Government is committed to supporting the development of PNG grown, milled and packaged rice, thereby reducing a reliance on current imports.

Under the OTDF Strategic Direction 2016-2020 rice is one of the crops identified under the Livelihood Development Package program that has potential to increase income earning and employment opportunities, and reliable subsistence consumption for CMCA communities after the mine closure.

A partnership was established with Trukai Industries Ltd and CMCA communities in January 2017 to trial 4 improved rice varieties for commercial production. The trial was rolled out in 4 selected villages in North, Middle and South Fly regions to evaluate the performance of the dryland rice varieties grown under rain-fed conditions. The trials assessed performance and adaptability of varieties; evaluated the grain qualities, and made an economic assessment of rice production systems

from small to large scale, including prospects for a centralised, fully mechanised trial in the Middle Fly. Preliminary findings from the trial showed that there were significant differences in yield per plot per site among the 4 varieties tested, and the results will be available early in 2018.

While waiting on LDP program funding availability from the WPPDTF, OTDF submitted a concept proposal to the PNG Incentive Fund (IF) to develop a 50ha commercial rice farm at Kaviananga village in the Middle Fly region as a way forward for scaling up to a nucleus estate model. OTDF has progressed to Stage 3: Organisational Assessment which will be conducted early in 2018 prior to IF approval to proceed with a detailed proposal and the final stage of funding approval. OTDF continues to encourage smallholder farmer units from CMCA villages to provide production support for the planned commercial scale farm.

With the cooperation of all stakeholders including the CMCA communities, OTDF believes this nucleus estate model has the potential to bring the benefits of a new rice industry across the Province. The model will facilitate development of a sustainable industry by establishing farms in different locations across Western Province based on achieving appropriate economies of scale.

RiRiRiRiRicecececece hhhhhasasas bbbbbbeeeeeeenn ggrgrgrgrowowowowownn cocococommmmmmmerer iiiiiicicialallalalallylylyly ttttthhhrrhrhrouououghhhhghghghouuuuoutttttt fffffrfrfromomom sssmamamammallllllllll ttttttoooo lalaalalargrgee scscscalalalaleeeee, iiiiincncncllulululudiddidididingngngng ppprororosppspecectstttsts fffffforororor aaaa

Rice Program

The Kaviananga Village community enthusiastically came together to harvest their semi-commercial trial rice field

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Masola AbiloMiddle Fly LandownerMiddle Fly Trust ChairKaviananga VPC ChairA proactive leader of the Kavianange people who is leading by example.

The realisation for self-sustainability is evident in the Middle Fly village of Kaviananga, where the community has joined hands to successfully conduct Rice trials in their area. Four Rice varieties from Trukai were trialled over two hectares of open grass land nearby Kaviananga village: planting of Rice seeds began in February and the harvest of 1.6 tonnes took place throughout August.

Kaviananga Village Planning Committee Chairman and Middle Fly Trustee, Masola Abilo, is happy that people from his village have committed their time to make the Rice trial successful. They are now looking forward to the next stage of rice farming based on Trukai Industries’ and IAI recommendations on suitable varieties to grow on a larger commercial scale (refer to p 59 for further details).

173 people from Obo and Kaviananga villages took part in planting, harvesting and threshing, and PGK100,000 of Kaviananga Village Development Funds was approved to pay all on site costs for this project.

“With OTDF’s approach of putting money into people’s pockets, we want to do it in a bigger picture and have given up our land to be used commercially,” Masola said. The optimistic VPC Chairman confirmed that there are more than 500 hectares of land available to expand into rice growing. In the past the Kaviananga people used to burn this grassland for hunting wallabies and bandicoots but now they want to turn that into productive farming land.

“Personally, I feel attitudes are shifting, especially in the Middle Fly communities, from Sago-making to Rice and this is a good thing.”

In the future, the Sago swamps will be dying out, and we want to shift into Rice farming. I’m very supportive and I want all 18 of my Middle Fly villages that have land available to participate in Rice growing.

This year, OTDF contracted construction of a permanent bridge linking Kaviananga to Obo station, providing transport access to move rice from the fields to the shipping point at Obo station. The bridge was built as a variation from the Aiambak to Lake Murray Road construction, funded from the Western Province People’s Dividend Trust Fund.

“The bridge was completed very well and can accommodate 12 plus tonnes. I’m very happy with the bridge. It’s the first of its kind and I don’t think I’ve seen a bridge like that anywhere in the Western Province. It’s a good picture for me as a leader and for my community, and also for OTDF.”

The Kaviananga Village landowners have separately declared their verbal and written support for utilisation of up to 500 hectares of land for the LDP program. A portion of this land will be surveyed and incorporated into a broader agri-business plan for the CMCA corridor in 2018.

RICE PROFILE : KAVIANAGA RICE TRIAL SITE

Completed footbridge enabling easy access between Obo Station & Kaviananga Village

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Model rubber farmer at Kasa Village. Kasa Village farmers made the biggest contribution of all CMCA Middle Fly villages to cup lump rubber sales in 2017

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SOCIAL DEVELOPMENT SECTOR

The OTDF Strategic 5-year goal for the Community and Social Development Sector is increased participation by CMCA community members (including women and youth) in planning, decision-making and implementation of community development priorities. OTDF has prioritised community and social development projects and programs funded mainly from Women and Children 10% funds and CMCA Trusts which contribute to the achievement of indicators of success in line with national and provincial sector policies and plans. Expenditure of PGK1,169,062 on projects and programs implemented in the sector accounted for 3% of all OTDF sector expenditure during 2017, with a similar percentage in 2016. This percentage was down from 10% in 2015, demonstrating good progress in achieving headline indicators.

Headline Indicator OTDF Contribution 2017

Number of Regional Women's and Youth Associations complying with corporate governance obligations

Public Officers recruited and office lease agreements set up for North and Middle Fly Regional Women’s AssociationsSouth Fly Women’s Associations elections conducted3 Regional Youth Associations in the North, Middle and South Fly established and executives elected 8 CMCA Trust and mine village Regional Youth Groups established68 Youth Association chairs from North & Middle Fly, and Mine Villages attended Leadership & Governance training 10 Women Directors attended a 2-day “Essential Skills for Directors” course

Number of Women's and Youth Group members trained to implement the LDP program

Rice harvesting and milling training conducted at Kaviananga Eaglewood training and demonstration for planting conducted at SamagosRubber tapping training at Bosset

Number of CMCA co-funded partnerships with government and non-government organisations

Partnered with the National Youth Development Authority staff to develop the 5-year Youth Action Plan

The first two Community and Social Development indicators reflect pre-conditions that facilitate engagement in economic activity, and participation in formal political and social structures. Since 2009, OTDF, CMCA and mine village communities have invested significant resources in staff and operational funds to support the establishment of local structures for women, as well as supporting village development initiatives, all of which are now transitioning to more independent operations. The development of Youth Associations will build on that experience from 2018 onwards.

The third indicator reflects recognition of CMCA community structures as credible and competent development partners and counterpart funders for new projects.

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The OTDF Community Development (CD) Team within the Program Services Sustainable Development Department supports the 8 CMCA Women’s Associations and the Star Mountains Women’s Association (representing the 6 mine villages) to manage their funds. The 10-year Women & Children Action Plans (2009-2019) have guided priorities for allocation of funds to projects. In 2017, the Trusts and mine villages expended PGK4.79 million for Women and Children projects, with 49% allocated to economic development initiatives, followed by 27% directed to education, mainly through scholarships managed by the OTDF Community Education team. Following the outcome of the long-running court case, a release of the South Fly Trust Funds allowed the four South Fly Women Associations to plan and implement a number of activities during the year. The slower start-up after a significant hiatus is reflected in a comparatively small rate of expenditure in 2017.

The highest priority for the Program in 2017 was to undertake a review and re-prioritise Action Plan goals for the North, Middle and South Fly Trust Regions.

The priorities which emerged from the review will form the basis of the roll-out of revised action plans prepared through activity planning and budget workshops planned for the first quarter of 2018. See a profile of the Review on page 65.

In 2017, the North & Middle Fly Regional Women’s Associations recruited Public Officers to administer their Associations from offices set up in Kiunga. This move towards Association self sustainability has resulted in demonstrable progress in mobilising and implementing priority projects, and improvements in Association governance. They have facilitated Executive and Regional Meetings, coordinated patrols within budget, and provided operational reports to the OTDF CD Team in support of activity acquittals made to Trusts.

Elections were held for South Fly Women Social Issue Concern Group Executives. The election of office bearers was very important to strengthen these local-level Institutions that focus on issues specific to women and children in those areas.

These elections also laid the groundwork for the South Fly Women Association Executives elections, enabling them to re-commence project planning and implementation.

A total of 10 Women Directors from Tutuwe, Nima Ara, Nupmo and Middle Fly attended a 2-day “Essential Skills for Directors” course in Kiunga conducted by the PNG Institute of Banking and Business Management to enable them to better understand their roles and responsibilities. Thirty-one (31) women participated in the 1st Phase of the Adult Literacy Training Program for the North & Middle Fly Regions, which focused on an introduction on the importance of being literate, and also provided guidance on selection of the right people to be trained as trainers for the regions. Adult literacy was a clear priority emerging from the review of Action Plans.

Tutuwe and Nima Ara Women’s Associations in the North Fly Region have approved PGK714,300 each from their funds for the construction of 3 Community Friendly Centres per Region. To facilitate capacity building & life skills training, and for accommodation for youths and women from nearby villages.

From 2018, capacity building activities will include awareness on women and children’s rights and issues including family and sexual violence, and law and order.

WOMEN AND CHILDREN’S PROGRAM

The Komovai village WSICG Chairlady discusses Women & Children’s Action Plan priorities with fellow women as part of the Action Plan Review process to determine new priorities for the Middle Fly region

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The principal goal for the Youth Development Program is the promotion of economic development to enable delivery of improved social change. Previously, youth programs in the Province and in CMCA regions were initiated and coordinated by faith based organisations. For the first time, OTDF, in partnership with the National Youth Development Authority (NYDA), developed and launched the 5 year Youth Action Plan which focuses on integrated human development. This enabled OTDF to deliver a program of activities that align with national priorities, which in 2017 focused on institutional capacity building programs (Priority Area 6). The overall 2017 program budget appropriation was PGK1,093,500 of which 41% (PGK443,500) was allocated from the Trust Youth funds, and 59% (PGK650,000) from the Women & Children 10% funds. The NYDA was instrumental in pulling the action plans together.

“NYDA will use this as a model for other resource developers in PNG to do the same and engage youths to be part of the development process in the nation,” Mr Kia Dama, Deputy Director General, NYDA.

The CMCA youth leaders were also given the opportunity to review the draft Action Plan before the final launch during meetings conducted in the 8 Trust regions and 6 mine villages. This provided youth leaders with the opportunity to have a direct input before the Youth Action Plan was officially launched on 21st April 2017 at Matkomnai village

in the Tutuwe region. More than 1,400 people gathered to witness the historic event.

Institutional Capacity Building under Priority Area 6 was kicked off with Leadership and Governance training. Facilitated by ADRA PNG, the training was conducted for 68 chairmen of village youth clubs from the North and Middle Fly Trust regions and Mine villages in July. Similar training will be delivered to South Fly youth leaders in 2018. Aligning to Priority Area 7 – Youth and Identity: Catholic youths from Tutuwe, Wai Tri and Middle Fly attended a PNG/Solomon Islands Youth gathering to celebrate their identity in July.

Guided by the National Youth Legal framework, the CMCA & mine villages Youth Network was established. The NYDA facilitated the establishment of three Regional Youth Associations in the North, Middle and South Fly including election of executives. All 8 CMCA Trust Regional Youth Groups and Mine Villages Regional Youth Groups were also established. A Western Province CMCA Youth Federation will be established in 2018.

The programs in 2018 will focus on 4 of the 9 Priority Areas in the Youth Action Plan with specific activities under those areas:No. 2- Nurturing Sustainable Development: Youths participating in the LDP programNo. 3- Law, Order & Justice Child Development & ProtectionNo. 4- Accessing Integrated Education: Promoting FODE and Adult MatriculationInterdenominational Rallies and ConventionNo. 7- Youth and Identity: Organising and supporting sports

The CMCA Youth Development Plan is officially handed over to North Fly youths at Matkomnai village, North Fly

YOUTH DEVELOPMENT PROGRAM

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PROFILE: WOMEN & CHILDREN PROGRAM REVIEW

The Women & Children Program Review was conducted from September to November 2017 as an evaluation of the outcomes from implementation of the 10-year Women and Children Action Plans 2009-2019 which were prepared by the 8 Trusts and mine villages.

The aims of the Review were to: (a) reflect and capture the lessons learnt after the 9 years of activities supported under the 10% CMCA Women & Children Funds allocated by the Trusts and mine villages; and (b) identify priority needs of the women & children in all the 158 CMCA villages. The outcome of the process was to develop a Women and Children Plan 2018-22 that is simple, measurable, achievable, and realistic and time bound, and can be implemented within the funding available. Lead Consultant Spartan Manpower Limited (SML) completed and submitted the review to OTDF.

Officers from the OTDF Community Development Section joined Executives from 9 Women Associations from North, Middle and South Fly, and Public Officers for the Middle & North Fly Regions to visit all 158 villages. Spartan Manpower Ltd was contracted to conduct a bottom up planning approach by engaging with Women’s Social Issues Concern Groups discussions, surveys and interviews. The total cost of the Review was PGK532,261.

Initial findings of the Review have shown that a coordinated approach under the Program was only applied to Capacity Building which was facilitated by OTDF for all regions. The remaining activities implemented through the Women’s Associations have been somewhat fragmented across the regions, with smaller SME projects such as Poultry, Trade Stores, and Transportation being funded. OTDF also conducted awareness sessions to encourage women entrepreneurs to access the NDB credit program through their respective Women’s Associations. This approach will address lessons learned from fragmentation and governance challenges created in the past by funding of multiple small income generating projects within the Program.

A related issue which emerged was the limited knowledge of women within the communities about the processes for accessing funds. This issue

is also strongly linked to low levels of women’s literacy in almost all communities, resulting in mis-communication of information between the Women Leaders in the communities and Association Executives and Officers.

Women have identified and prioritised the needs that will have a substantial impact in the lives of their communities and not just those of women.

Priorities which emerged in the Women’s Associations’ Revised Action Plans for 2018-2022 are in line with OTDF Strategic Direction and include: Education infrastructure (Elementary classrooms and Classroom Maintenance); Water Supply; Community infrastructure (Multi-Purpose Learning and Resource Centres) that will be venues for Life Skills Training (including literacy); Aid Posts; and Solar Panels (rural electrification).

The Review Report recommended a coordinated approach for priority projects to be implemented in the next 5 years, which will aim to benefit the majority of people. OTDF will continue to provide technical guidance for implementation of those projects. Monitoring & Evaluation activities will be integrated into project designs, throughout the Project Cycle and will enable greater focus on outcomes with realistic and measurable impacts that contribute to OTDF’s headline indicators for the relevant development sectors.

Women agreeing to address water problems when Action Plan priority setting during the Review

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More than 3,000 CMCA Middle Fly community members, mostly women, gathered at Kaviananga village to celebrate the launching of the Credit Scheme with the NDB

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CORPORATE SERVICES

OTDF Corporate Services include a range of key support mechanisms for operational and field activities, including community engagement and project implementation by all other teams across the Foundation.

Functions include: Information Services (see page 69), Occupational Health and Safety (see page 70), Finance Administration (see page 72), Human Resources (see page 73), Procurement and Logistics (see page 74), and Contracts Administration (see the Nanai Brothers Contractor profile on this page). These functions primarily contribute to the Strategic Direction principle of “appropriate and accountable financial and operations support systems”, and related Development Targets for the period 2016-2020 (see page 5).

Most of the systems underpinning reporting necessary to sustain OTDF’s results-based monitoring and evaluation policies and procedures are the responsibility of the teams handling Corporate Service functions. In addition to the “business as usual” elements of these services, supporting monthly reporting, Board and Trust meeting cycles, and ongoing sector programs; a number of internal projects were undertaken in 2017. These included further integration of data and processes that were previously “stand alone”. The team has worked with the software provider to upgrade the Attaché Financial Management software to include report writing functions, and commence integration of leave accruals into the payroll module to facilitate more efficient monitoring of leave entitlements. OTDF contracted an external finance consultant, who was on site four times during the year to support implementation of a number of these changes.

To standardise documentation of procedures & policies, support M&E, and improve staff access, OTDF IS has created an Intranet site.

A performance Monitoring and Evaluation system was also established to manage employees’ accountability for assigned tasks against related performance objectives, addressing the key Development Target to “consolidate performance based HR systems and KPI’s to align with M&E”.

Nanai Brothers Limited (NBL) is a local PNG company owned by Mr John Pakao, of mixed parentage from Sonai Village in Western and Wabag. He currently resides at Sonai Village, Seven Kona in Kiunga, North Fly District.

NBL has been providing ‘Minor Building Constructions and Maintenance Works’ such as Eaglewood Nursery Projects and the Cassowary Hotel glazing to Ok Tedi Development Foundation since 2016. OTDF has now recognised Nanai Brothers Ltd as one of its 28 preferred contractors for implementing Community Infrastructure Projects.

NBL employs a total of 21 employees on a project by project basis, including 18 locals, of whom 11 have trade certificates, and 7 casual employees from CMCA Trust Region Villages such as Mepu, Moian, Kokonda, Alice, Hongas, Tapila and Samagos.

NBL was awarded one of OTDF’s key LDP projects worth almost PGK560,000 for the ‘Construction and Maintenance of Eaglewood Nursery Sheds’ at all the OTDF Field Bases in the North Fly (Samagos), Middle Fly (Aiambak) and South Fly (Tapila & Nakaku) Regions of Western Province.

Nanai Brothers has been a dependable local contractor to OTDF with proven standards of workmanship and a commitment to safety standards. NBL has not recorded any workplace incidents, in part due to the good working relationship with OTDF and the communities in which they have operated. All NBL contracted projects have been delivered on schedule and within project scope.

PROFILE: LOCAL CONTRACT SERVICES

John Pakao (L) & Ligogo Wawa at the Cassowary

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The Information Services Department provides computer networking and software, telecommunications and Geographic Information Systems (GIS) services to OTDF to support cost- effective and efficient delivery of planned targets and facilitate reporting of projects and programs.

Business continuity is the biggest priority for the organisation and the OTDF IS Team plays a key role in supporting various Departments to achieve this.

More than 60% of the workload supported installation and maintenance of hardware and software, assisting other OTDF Departments with the data collection and analysis components of their projects in various sectors, and mapping using GIS software.

Service Provision by IS in 2017: 933 Tasks

In 2017, the roll-out of monitoring and evaluation systems significantly increased the demand for project data, and need for access to manuals, templates and policy documents. This has resulted in progress with three initiatives in 2017: (a) establishment of an Intranet site to provide staff with a “one-stop shop” access to key internal OTDF documents; (b) installation of software to support a Document Management System (DMS) for electronic archiving of files; and (c) installation of hardware to upgrade the file storage capacity of the Local Area Network (LAN) in Kiunga. Further work will be required in 2018 to support these IS

INFORMATION SERVICES

projects, including; scanning and electronically archiving of all company files; training on use of the DMS; and relocating all user network folders located on the OTML server in Tabubil.

The IS Team has also supported the need to present data spatially for project planning, and M&E purposes, including ongoing development of interactive maps to meet specific sector and project data requirements. In 2018, the IS Team has planned a GIS upgrade to include more advanced data processing features. The IS Team also plans to develop a Socio Economic Database in collaboration with the Program Services- Sustainable Development Department to enable staff to access data needed at project feasibility stages over the OTDF Intranet site.

Phase 3 of the IS Personal Computer (PC) Refresh project was completed with the installation of 10 new PCs in 2017. This brings the total installed under Phase 3 to 60 between 2014-2017. The IS Team collaborated with Management, OTML, and a contracted website designer to develop the new website. Following its July 2017 launch, IS investigated alternative options for future website hosting, and in 2018 will make the switch to a PNG based provider, and enable full administrator access for loading documents and making changes as required.

OTDF is continuing to improve communication access by field base staff to enable timely reporting on safety issues and other operational matters. In 2017 Tapila was the second field base to benefit from installation of a LAN, and in the first half of 2018, a third installation is planned for Nakaku.

Media & PublicationGIS support

OTML Service Request

Community & Partner supportPurchases

Network/ Telephone

Hardware & Software

7%4%

9%

26%

3%13%

37%

IS Officer, Nasame Nonofa installing a network cable at CMCA Village Estate, Kiunga

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Safety is always the highest priority of OTDF on all operational areas along the CMCA corridor.

This year OTDF is proud to report its seventh successive year without a Lost Time Injury (LTI) despite completing high risk tasks.

OTDF recorded 14 incidents in 2017, an increase of 2 from 2016. Of these, 9 (64%) were significant, which was comparable with last year. A light vehicle rollover at Aiambak was the most significant incident for the year, thankfully there were no injuries as the driver and passengers were wearing seatbelts. As part of the ongoing Occupational Health and Safety (OH&S) awareness programs conducted throughout the year, staff are encouraged to report all incidents including those occurring outside of Kiunga. This enables preventive measures to be put in place and staff to learn from mistakes.

OTDF continues to utilise the OTML Risk management systems which generate health and safety resources that provide an effective framework for managing health and safety in the workplace.

OCCUPATIONAL HEALTH & SAFETY OVERVIEW

The Foundation’s Safety Committee is chaired by the OH&S Coordinator and is responsible for deliberating on new and emerging safety issues and procedures for continuous improvement. The Committee met 4 times this year, and maintained visibility through members’ regular presence in field bases and project sites.

This year several strategies have contributed to a sound safety performance around project sites and field bases:

8 Visits were made by the OH&S Coordinator to field bases and project construction sites. Improved contractor safety performance resulted in zero LTI .Safety Audits were conducted at the field bases which showed a reduction in the number of instances of non-compliance, making the areas safer for staff to stay and work.A total of 177 permanent staff attended various Statutory Training programs through the OTML Training centre, up from 104 in 2016 (refer to the Safety Training table below). These programs provide OTDF staff with the knowledge and skills they need to work safely.

Following the success of the inaugural inter-Departmental basketball competition in 2016, OTDF staff expanded their commitment to health and wellbeing in 2017 by increasing the number of sports played. Tournament winners were: Corporate Services (basketball & volleyball) and Program Services - Operations (futsal). In 2018, taking lessons learned from running multiple sports, organisers will schedule all games to be played at the same time to enable more sustained participation, improving fitness and team-work outside the office.

In 2018 the Safety Committee will meet quarterly to align with members’ attendance on field trips, and allow them to give feedback on what risks have been identified and recommend mitigation processes. The OHS Coordinator will maintain the same schedule of planned field base trips to monitor implementation of the Safety Policy.

SAFETY INCIDENTS 2017Incident Type Total

IncidentsMinor Significant

Lost Time Injury(LTI)

0 0 0

Staff Compliance

3 0 3

Security Safety Breach

1 0 1

Theft 2 0 2Equipment/Property Damage

5 4 1

Light vehicle 3 1 2Total 14 5 9

STAFF SAFETY TRAINING 2017GSI Light Vehicle Permit Work at Heights Hazard ID JSO & JSA First Aid Total47 16 9 47 47 11 177

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...1,250,000 Hours LTI Free...Delivering Safely

OTDF staff from Program Services - Sustainable (Diwai) verse Corporate Services (Makau in yellow) enjoying a game of futsal during an inter-department competition

72

The OTDF Finance Administration Department is responsible for providing financial services through transactions supporting development projects and programs funded by CMCA Trusts, Mine Village Trusts and the State. Finance Administration is also accountable for managing and reporting on operational funding provided by OTML and ensures that OTDF financial and reporting systems and processes are relevant and comply with specific policies and procedures for managing and reporting on project funds under specific agreements.

Planned activities were aimed at accomplishing the related targets in the 2016-2020 Yam Chart. These include improved Attaché utilisation, incorporating accountabilities, Trust support and maintaining audit & statutory compliance. During 2017 the Finance Administration Department set out to implement strategies outlined in its 2017 Annual work plan, especially using Attaché more effectively for reporting key management information. A focus on staff development in 2017 also included improvements in multi-skilling of staff for the critical functions of accounts payable, purchasing and end of month reporting.

Highlights in 2017 included the following internal projects:

Commissioning of an upgrade of the Attaché software payroll module to enable leave entitlement accruals and reportingImplementation of creditors payment processing through Kundu Pei as compared to manual cheque payment processingImplementation of an accruals monitoring system on a monthly basis which provides more accurate closure of expenditure for each month

Utilising Attaché instead of Excel worksheets to report on the financial position of 8 donor accounts: Mine Villages, WPPDTF, Education Trust Fund, Donations, FODE Program, Fly Rubber Ltd, Resource Centre, Mt. Fubilan Agro Industries.Reduction of all backlogs and compliance queries, and meeting regular deadlines for statutory IRC and Nasfund superannuation lodgementsFinalising all Tax Credit Scheme invoices to OTML, some of which had been outstanding since 2015 due to incomplete accompanying documentationPerformance improvements in meeting deadlines for regular OTDF accounting functions included: closure of 2016 management accounts by 6 January 2017; closure of end of month management accounts within 100% of target dates; and reconciliation of 65 General Ledger accounts within 83% of target dates.

..end of month Management accounts closed within 100% of target dates..

The Finance Administration Department will continue to build on the achievements of 2017, further integrating OTDF’s finance and project management systems. Key internal projects for 2018 will include: fully operationalising the Finance Policies and Procedures Manual; capturing program officers’ work time on programs for input in Attaché Payroll for job costing purposes, and; completing a checklist of financial and operational records ready for inclusion in the OTDF shared filing system.

FINANCE ADMINISTRATION

FINANCE ADMINISTRATION DATATransactions 2016 2017 YOY %Events Operating only 10 months due to

the El Nino forced stand downFull year operations return to more typical levels

Total Expenditure Including Projects (PGK)

44,713,009 61,112,699 27%

Savings Against Budget 12% 3% NA# Invoices Processed 5,274 6,833 23%# Cheques Processed 1,958 2,441 20%Total Cheques Value (PGK) 42,379,612 56,897,965 26%# T/T's Processed 107 124 14%Total T/T's Value (PGK) 2,333,397 4,214,734 45%

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HUMAN RESOURCES

The Human Resources (HR) Department plays an important role in the administration, development, remuneration and rewarding of staff so that they can contribute effectively to OTDF’s goals and objectives. OTDF is committed to providing a safe and dynamic work environment and to assisting staff to develop both personally and professionally within the framework of the OTDF Code of Conduct and relevant OTML safety regulations. The HR team participates as members of the Housing, Risk and Disciplinary Committees, and the Occupational Health and Safety Coordinator chairs the Safety Committee (see page 70). Of the 57 permanent OTDF staff, 19 (33%) were female, of whom 2 occupied management positions. Current staff levels are in line with the OTDF Strategic Direction as the 2018 mid-point is approached.

The roll out of the OTDF HR Policy and Procedures Manual in 2017 resulted in more effective and efficient administrative support in the Department through improved processes and compliance, and ease of policy communications with members of staff.

Two awareness sessions were conducted in 2017: one on the Staff Health Insurance Medical Scheme (AON Insurance); and another on Casual Hire Employment Contracting to assist Managers and Team Leaders to better understand their roles and responsibilities. Employee welfare and health is of paramount importance and in 2017, 38 permanent employees were cleared for work following their

annual medical examination. HR also organised counselling services as needed.

The HR Department’s staff training and development activities included support for 4 male and 1 female staff to undertake external courses. These included 2 staff to undertake in-country Masters’ programs, and 1 officer studying for a project management qualification. In 2017, 3 staff completed overseas professional development workshops and training, 2 of whom were sponsored by international development agencies. A Total Quality Management course conducted at Kiunga in December was attended by a total of 33 staff, (21 male and 12 female).

”.. I can use situational leadership style at my workplace to solve a problem and … apply the elements of ethical leadership in my personal and professional life.” Ms Bala Karepa, OTDF Community Development Officer, PNG delegate to Global Women in Management: Advancing Women’s Economic Development Workshop; USA July/August 2017.

One key role of HR is to coordinate on-site support for trainees hosted by various OTDF Departments through a formal agreement. In 2017, OTDF hosted 6 Graduate Development Scheme and industrial trainees, as well as 2 students on short term attachments.

Vale Edmund KaisimnakColleagues and friends of OTDF Middle Fly Field Base Coordinator Edmund Kaisimnak were saddened by his sudden passing on July 30 at the age of 42. Edmund held a Diploma in Tropical Agriculture from the Highlands Agriculture College and joined OTDF in 2010 as a rubber extension officer. Edmund was highly respected by his peers and the communities for his willingness to share his technical expertise and thereby contributed to their development. The late Edmund is greatly missed.

KEY HUMAN RESOURCE DATA 2017 Male Female Total Total

2016Staff on December Payroll Permanent 38 19 57 64Casual/Body Hire

62 2 64 42

GDS & Industrial Trainees

6 0 6 8

Permanent Staff Turnover New Hires 5 2 7 13Redundancies 3 0 3 1Terminations 4 1 5 2Resignations 5 1 6 6Death 1 0 1 0

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The Purchasing and Logistics Team located within the OTDF Program Services- Operations Department provides support in purchasing, transport and freight logistics, and assets maintenance support for delivery of the Foundation’s CMCA projects, Trust-funded programs and OTML Tax Credit Scheme projects.

OTDF continues to overcome logistics challenges and ensure much needed programs and projects are delivered to the remote communities. Some notable programs supported were the Communications Patrol to all CMCA and mine villages; South Fly Water Catchment project material delivery; and the Fly Rubber Ltd Rubber Factory ground breaking ceremony, including delivery of new equipment at Aiambak.

Purchasing: OTDF purchase orders for CMCA projects, OTDF operational and reimbursable third parties for 2017 increased by 31% over the 2016 period. Of these orders, 57% were OTDF internally funded purchases much of which was for materials and consumables to support Livelihood Development Packages implementation. The 62% increase in purchases for CMCA was as a result of funds being mobilised under the South Fly CMCA

Trust and Women and Children’s funds due to conclusion of the court case.

Logistics: There were 93% more materials deliveries in 2017 than in 2016 , which is a direct flow-on from the increased number of orders. The significant decrease in third party materials delivery compared to 2016 reflects a return to normal business following the completion of assistance provided for the dry weather disaster relief. Third party reimbursable deliveries for 2017 amounting to more than 570 tonnes, (28 sea containers) were for the Cassowary Hotel, Tabubil Poultry Farm and Oksapmin High School projects.

Asset Maintenance: The OTDF transport fleet accounted for the greatest input to repairs and maintenance in 2017. The fleet comprises 17 light vehicles, 13 active outboard motor & dinghy units, and 6 generators. All asset maintenance standards were incorporated into a planned schedule of maintenance. OTDF building maintenance included defective components and occasional minor renovations or improvements to existing buildings. In 2017 OTDF utilised PGK200,323 of capital funding to purchase and install 4 dual 5Kw solar systems and 6 solar street lights in each of the Aiambak and Tapila Field Bases thereby halving the annual diesel consumption cost for power generation, and improving security.

In line with OTDF’s focus on the LDP Program in 2018, logistics activity around the field base jetties will be increased for cargo offloading, safe storage and direct delivery to recipients. These jetties will be properly secured for cargo work and local villages will be engaged to act as cargo agents.

PURCHASING, LOGISTICS AND MAINTENANCE STATISTICS: 2017Purchasing 2017 2016 Purchase Orders processed 3,184 2,428Delivery Logistics CMCA project materials moved to recipient

244 93

OTDF internally funded project materials moved to project locations

448 173

Third party reimbursable project materials moved to recipients

99 143

TOTALS 791 409Asset Repairs and Maintenance

Repair or Maintenance to Houses and Office Buildings

58 70

Repair or Maintenance to Support Machinery

127 134

TOTALS 185 204

PROCUREMENT AND LOGISTICS

Fencing for material storage at Sturt Island

75

Mil 8 heavylifting helicopter takes off from Sawmill Flats, Tabubil carrying a load of building materials to Oksapmin High School

76

PPwC Haus, Level 6, Harbour City, Konedobu. PO Box 484, PORT MORESBY, PAPUA NEW GUINEA T: (675) 321 1500 / (675) 305 3100, F: (675) 321 1428, www.pwc.com.pg

To the shareholders of Ok Tedi Development Foundation Limited

Report on the audit of the financial statements Our opinion We have audited the financial statements of Ok Tedi Development Foundation Limited (the Company), which comprise the statement of financial position as at 31 December 2017, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory information.

In our opinion, the accompanying financial statements:

comply with International Financial Reporting Standards and other generally accepted accounting practice in Papua New Guinea; and

give a true and fair view of the financial position of the Company as at 31 December 2017, and its financial performance and cash flows for the year then ended.

Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Other than in our capacity as auditor we have no relationship with, or interests in, the Company.

Information other than the financial statements and auditor’s report The directors are responsible for the annual report which includes other information. Our opinion on the financial statements does not cover the other information included in the annual report and we do not and will not express any form of assurance conclusion on the other information.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

77

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal and regulatory requirements The Companies Act 1997 requires that in carrying out our audit we consider and report on the following matters. We confirm in relation to our audit of the financial statements for the year ended 31 December 2017:

We have obtained all the information and explanations that we have required;

In our opinion, proper accounting records have been kept by the Company as far as appears from an examination of those records.

Who we report to This report is made solely to the Company’s shareholders, as a body, in accordance with the Companies Act 1997. Our audit work has been undertaken so that we might state to the Company’s shareholders those matters which we are required to state to them in an auditor’s report and for no other purpose. We do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our audit work, for this report or for the opinions we have formed.

PricewaterhouseCoopers

Christopher Hansor Partner Registered under the Accountants Act 1996 Port Moresby 22 February 2018

86

MTDS - Medium Term Development Strategy #2NDB - National Development BankNDoE - National Department of EducationNDoH - National Department of HealthNFHSDP - North Fly Health ServicesDevelopment ProgramNGO - Non-Government OrganisationNYDA - National Youth Development AuthorityNFWA - North Fly Women’s AssociationNHIS - National Health Information SystemOH&S - Occupational Health and SafetyOLAM - Largest agricultural commodity trader in the worldOTDF - Ok Tedi Development FoundationOTML - Ok Tedi Mining LimitedOTPL - Ok Tedi Power LimitedPBN - Private Branch NetworkPEC - Provincial Executive CouncilPGK - Papua New Guinea Kina (national currency)PNG - Papua New GuineaPNGSDP - PNG Sustainable Development Program LtdPAD - Preferred Area DevelopmentPFA - Pacific Forest AllianceSD - Strategic DirectionPwC - Pricewaterhouse CoopersSFWCP - South Fly Water Catchment ProjectSME - Small and Medium EnterpriseSPA - Seed Production AreaSPAR - Sector Performance Annual ReviewSTC - Steamships Trading CompanySTP - Sewerage Treatment PlantTB - TuberculosisTCS - OTML Tax Credit SchemeTKI - Tawap Kamen InvestmentsTUC - Tabubil Urban ClinicULOTL - Upper Lower Ok Tedi LtdUPNG - University of Papua New GuineaUSA - United States of AmericaVHV - Village Health VolunteerVPC - Village Planning CommitteeW&C - Women and ChildrenWA - Women’s AssociationWelkam Olgeta - Tok Pidgin meaning Welcome AllWPPDTF - Western Province People’s Dividend Trust FundWSICG - Women’s Social Issue Concern Group

Acknowledgements:Hevilift - Mil 8 helicopter picture on page 75 Abt Associates - health associated pictures on pages 31, 32, 34 & 35

Abt Associates - North, and Middle & South Fly Health Development Program ContractorAP - Accounts PayableB4D - Business for DevelopmentCA - Cultivated AgarwoodCD - Community DevelopmentCES - Community Education ServicesCMCA - Community Mine Continuation AgreementCMSFHP - CMCA Middle & South Fly Health ProgramCR- OTML Community Relations DepartmentCRMF - Christian Radio Missionary FellowshipCSH - Coral Sea HotelsDEC - Department of Environment and ConservationDMS - Document Management SystemDNPM - Department of National Planning and MonitoringED - Economic DevelopmentECPNG - Evangelical Church of PNGEOC - Essential Obstetric & Newborn CareFRPG - Fly River Provincial GovernmentFIFO - Fly In Fly OutFLT - Financial Literacy TrainingFRL - Fly Rubber LimitedFODE - Flexible Open Distance EducationGDS - Graduate Development SchemeGIS - Geographic Information SystemGL - General LedgerGPA - Grade Point AverageGPS - Global Positioning SystemHBS - Hausman Building SolutionsHC - Health CenterHEO - Health Extension OfficerHR - Human ResourceIAI - Innovative Agro IndustryIDD - Infrastructure Development DepartmentINA - Institute of National AffairsIPA - Investment Promotion AuthorityIRC - Internal Revenue CommissionIS - Information ServicesKPI - Key Performance IndicatorLAN - Local Area NetworkLBL - Lotic Bige LimitedLDP - Livelihood Development PackagesLTI - Lost Time InjuryMCH - Maternal and Child HealthMFIL - Middle Fly Investments LtdMFWA - Middle Fly Women’s AssociationM&E - Monitoring and EvaluationMRA - Mineral Resources AuthorityMRDC - Mineral Resources Development Corporation

ABBREVIATIONS, ACRONYMS & ACKNOWLEDGEMENTS

Annual Report printed by LOTSA Printing, Cairns, Australia

87

GENERAL INFORMATIONPOPULATION Total Western

Province (Source 2011 National Census)

201,351 CMCA(Source CMCA Census 2017)

147,700

GOVERNMENT ADMINISTRATIVE STRUCTURES

Fly River Provincial Government Administrative Centre - Kiunga

Districts - 3 (North Fly; Middle Fly; South Fly)

LLGs –14 Wards – 283

VILLAGES CMCA 152Mine 6Total 158

CMCA TRUST REGIONS(see also map)

Total - 8 North Fly - 3 Middle Fly - 1 South Fly - 4

CMCA MODEL VILLAGES (Dec 2016)

North Fly - 14 Middle Fly - 9 South Fly - 16

BASELINE DATA SOURCES FOR RESULTS MONITORING AND EVALUATION

PNG National Statistics Office (2011 National Census and other intercensal data)

2011 CMCA Village Profiles (OTDF)OTDF project specific Feasibility Studies and EvaluationsOTDF GIS (spatial data)

PNG National Department of Health

PNG National Department of Education

OTDF HEADQUARTERS & FIELD BASES(see also map)

Headquarters – Kiunga Field Bases - Tabubil; Samagos Agriculture Centre & Research Station; Aiambak, Obo, Sturt Island jetty site; Nakaku; Tapila

PROVINCIAL GOVERNMENT GROWTH CENTRES (see also map)

Nomad; Lake Murray; Aiambak; Balimo; Tapila; Koabu; Wipim

BASIS OF THE ECONOMY

Western Province - 5 Year Provincial Development Plan: 2013-2017

OTDF SECTORS Health; Education; Local and Regional Economic Development; Infrastructure; Social and Community Development

GOVT ELECTIONS National - 2017 Local Level - 2018CORPORATE INFORMATION

DIRECTORS(Dec 2017)

Number allowed – 8Number - 4

OTDF FORMATION 1 April 2002 Investment Promotion Authority

INDEPENDENT FROM OTML

1 March 2010

COMPANY REVIEW 2013 Deloitte Touche Tohmatsu

OTDF SHARES Number Issued – 4OTML - 3PNGSDP - 1

CONSTITUTION Number - vabyA0407204486v1665088743Date - 19 July 2012

Not for profit

ADVISORY COMMITTEE

Members - 13 TAX STATUS Payments or Contributions to the Foundation

Tax deductible

PERMANENT STAFF(Dec 2017)

Total 57 Value Added Tax Zero percentFemale 19Male 38

2017 ANNUAL EXPENDITURE

PGK22.6 million from OTML

OK TEDI MINE LIFE EXTENSION DATE

2025

annual report 2017 · 2018-05-29 · daru lake murray wipim koabu a: our footprint....

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