The Department’s aspirations, policies, plans and programmes are all targeted at taking “bold and pioneering measures to develop new industries,” especially those which would ensure a sound and self-sustaining export-driven economy.


The prime targets are the small scale to medium businesses. These are the engines for economic development, not the giant multi-national corporations..

For example, in 1992 the Department and Ministry were responsible for devising the “Beyond the Minerals Boom” policy. It supplies policy guidelines and a vision for year 2000. The policy addresses the question: “Where to after the mining and petroleum resources have been depleted?” The Department’s answer is: in manufacturing and exports.

Major projects that the Department and Ministry have facilitated and which are now in production include the Lae (Halla) cement project and Lae mackerel cannery, where a total of K67 million has so far been invested.destinationpng_352

Projects under construction in 1995 include the K55 million “ZZZ” tuna cannery in Madang and the Motukea oil refinery project, worth K215 million.

Projects that have been approved are Battery manufacturing for K5 million and the Pacific Fish Cannery to be located in Port Moresby for K8.8 million.

Projects under negotiations in 1995 are Phase Two of Halla cement in Lae worth K170 million and the K75 million Kopi Oil refinery in Gulf Province.

Over the past 4 years, the Department and the Ministry have worked on incentives to encourage investment in the manufacturing and industrial sector. These include:

  • – contribution of 50 per cent to feasibility studies for projects,destinationpng_356
  • – government credit guarantee scheme (now discontinued),
  • – industrial financing provided through the European Investment Bank especially for manufacturing projects, and
  • – fiscal incentives which include pioneer industry schemes incorporating tax holidays, double deduction staff training schemes, new product exemptions, rural development incentives, reduced duty on imports for manufacturing, tariff measures to protect local manufacturing, wages subsidy schemes, industrial centres with government subsidised electricity and other utilities and, lastly, free zones where the government permits entry of major consumers of goods to encourage commercial activities to flourish.

Other, nonfiscal incentives are:

  • – policy intervention where the Department recommends to other service providers to give special rates to investors to reduce their costs,
  • – organisational reforms to ensure efficient promotion of investments,
  • – investment guarantees against expropriations,
  • – bi-lateral investment agreements with other countries to protect those countries’ investments in PNG,
  • – double taxation agreements with Australia, Canada, United Kingdom, Malaysia and Germany, which protect companies from those countries being double taxed and
  • – special trade agreements.

There are constraints that the Department and Ministrywill have to take into account and to work towards overcoming. They include a small, fragmented domestic market, a short supply of skilled labor, high labour costs, high costs of land, housing, transport and utilities, inappropriate technology and persistent law and order problems. destinationpng_350All these are attributed to the high structural cost of the economy.

The other major threat to the vision set out in ‘Beyond the Minerals Boom’ would be the move to free trade and the removal of protective incentives for PNG citizen businesses. PNG’s membership of organisations such as the World Trade Organisation and the Asia Pacific Economic Co-operation (APEC) means the country must pursue free trade policies. Freeing up trade will encourage foreign investors in those areas but will have a negative impact on indigenous businesses.destinationpng_355

The Department’s target for the next few years are industries based in agriculture, forestry, fisheries, mining and petroleum, textiles, chemical and engineering. Others include waste paper recycling, stationery and automotive parts.

Within the sphere of the Ministry of Commerce and Industry are several important statutory organisations and sections.

The Investment Promotion Authority (IPA ) is the most important of them. The IPA has its maindestinationpng_354 objective to promote Papua New Guinea abroad as a location for investment. It has also been actively pushing for joint ventures between PNG businessmen and women and foreign investors. IPA, which succeeded the National Investment Development Authority (NIDA) in 1992, has also successfully updated and improved investment laws and procedures. IPA now has the tag ‘one stop shop’ for investors. IPA has its own act and is headed by one of a growing number PNG women professionals, Aivu Tauvasa.

The Small Business Development Corporation (SBDC) aims to promote and facilitate the growth of indigenous business sector. SBDC has succeeded to some degree, but funding constraints have not allowed it to venture further.

The others include Industrial Centres Development Corporation (ICDC), Construction Industry Development Authority and National Institute of Industrial Technology (NISIT). These authorities all aim to achieve industrialisation as the vehicle for the creation of employment and economic growth for the country.