The security of investment in Papua New
Guinea has always been granted the highest priority by the Government.
The Government is fully aware of the
perception investors have about risks they take when investing in Papua
New Guinea. It has made an undertaking to minimise the perceived risks
(including expropriation, repudiation of contracts and discrimination)
through the granting of the most favoured nation treatment to investors as
if they were nationals of Papua New Guinea.
International agreements so far
concluded include those with the Federal Republic of Germany, Malaysia,
Australia, United States, United Kingdom. Peoples’ Republic of China,
Canada.. Negotiations are currently being conducted with the Philippines,
Belgium, and the Republic of Korea.
Papua New Guinea's membership of the
World Bank’s Multilateral Investment Guarantee Agency (MIGA) in 1990
also demonstrates the Government’s commitment to ensuring that if
nationalisation did occur for the national good, the investor concerned
would be adequately compensated.
The issue of repudiating or cancelling
contracts must be settled through diplomatic channels or through the use
of other local remedies, before having any such matters adjudicated at the
International Centre for the Settlement of Investment Disputes or through
another appropriate tribunal of which Papua New Guinea is a member.
The establishment of the Investment
Promotion Authority in 1992 through the Investment Promotion Act (the Act)
was done so in recognition of the comfort that investors look for when
considering Papua New Guinea as an investment destination. The Act has
provided for such matters under Section 37 which protects against
expropriation, cancellation of contracts and discrimination through the
application of the most favoured nation treatment to investors.
The globalisation of trade and
investment has advocated a lot of the above principles which Papua New
Guinea has implemented in its domestic legislation as well as by adopting
those principles when it became a member of MIGA. This international
practice demonstrates Papua New Guinea’s seriousness in fair play and in
protecting investors and their investment in the country.