i

Abbreviations & Acronyms

ABBREVIATIONS AND ACRONYMS

AC Advisory Committee ACIAR Australian Centre for International Agricultural Research BoPNG Bank of PNG [Central Bank] BP British Petroleum BSP Bank of South Pacific CBO Community Based Organisation CEO Chief Executive Officer CMCA Community Mine Continuation Agreements CRDS Community and Regional Development Strategy FMIS Financial Management Information System FRPG Fly River Provincial Government GIS Geographical Information Systems GoPNG Government of Papua New Guinea HF High Frequency (Radio) HR Mgt Human Resources Management IBD Interest Bearing Deposit ICT Information and Communications Technologies IS Information Services ISP Internet Service Provider IT Information Technology LARDEC Lowland Agricultural Research & Development Extension Centre LLG Local Level Government M&E Monitoring and Evaluation MCH Maternal and Child Health MoA Memorandum of Agreement MoU Memorandum of Understanding NARI National Agricultural Research Institute NGO Non-Government Organisation NSO National Statistics Office OH & S Occupational Health and Safety OTDF Ok Tedi Development Foundation OTFRDP Ok Tedi Fly River Development Program OTMIAA Ok Tedi Mine Impact Area Association OTML Ok Tedi Mining Ltd PAD Preferred Area Development PNG Papua New Guinea PGK PNG Kina PNGSDP PNG Sustainable Development Program Ltd POM Port Moresby PWC PriceWaterhouseCoopers PVT Personal Viability Training

Abbreviations and Acronyms

ii

QA Questions Answers RDD Regional Development Department SAA Supplementary Agreement Act SDP [PNG] Sustainable Development Program Ltd SER Social and Economic Report SME Small and Medium Enterprises SSG Special Support Grant TCS Tax Credit Scheme TG Transition Group TOR Terms of Reference Trust A/C Trust Account VPC Village Planning Committees VSAT Very Small Aperture Terminal (small satellite ground station) W & C Women and Children WACAP Women and Children Action Plans WP Western Province WPPDTF Western Province Peoples' Dividend Trust Fund

iii

Contents

CONTENTS

STRATEGIC PLAN

1.  FOREWORD...................................................................................................................................................... 1 2.  MAP CMCA Regions and District Boundaries .................................................................................................. 3 3.  INTRODUCTION ............................................................................................................................................... 4 

3.1 Purpose of the Plan ......................................................................................................................................... 4 3.2 Background to Formation of OTFRDP ............................................................................................................ 5 

3.2.1 Formation of OTFRDP ............................................................................................................................. 5 3.2.2 Status of Recommendations on the 2008 New Entity Design and 2009 OTDF Program Review ......... 7 

3.3 The Operating Environment ............................................................................................................................. 7 3.3.1 The Natural Environment ......................................................................................................................... 7 3.3.2 History of the People and European Contact .......................................................................................... 8 3.3.3 Demography ............................................................................................................................................. 9 

3.4 Development Constraints and Priorities ........................................................................................................ 10 4.  STRATEGIC DIRECTION ............................................................................................................................... 12 

4.1 Vision and Mission ......................................................................................................................................... 12 4.2 Strategic Road Map ....................................................................................................................................... 13 4.3 Regional Development Concept .................................................................................................................... 14 

4.3.1 What is the Regional Development Concept? ....................................................................................... 14 4.3.2 What are the OTFRDP Structures to Address the Regional Development Concept? .......................... 14 

5.  ACCOUNTABILITY FRAMEWORK ................................................................................................................ 16 6.  STAKEHOLDERS ............................................................................................................................................ 18 7.  CORPORATE GOVERNANCE FRAMEWORK .............................................................................................. 19 

7.1 Legal Framework ........................................................................................................................................... 19 7.2 Shareholding and Board Composition ........................................................................................................... 21 7.3 Advisory Committee and Associate Directors ............................................................................................... 22 7.4 Executive Management Team ....................................................................................................................... 22 

8.  ORGANISATIONAL STRUCTURE ................................................................................................................. 24 8.1 Relationship to Accountability Framework .................................................................................................... 24 8.2 Regional Development Division ..................................................................................................................... 25 8.3 Support Services Division .............................................................................................................................. 25 8.4 Ongoing Relevance of Organisational Structure ........................................................................................... 26 

9.  FUNDING ......................................................................................................................................................... 28 9.1 Program Funding Sources ............................................................................................................................. 28 

9.1.1 Funds Derived from OTML Operations .................................................................................................. 28 9.1.2 Special Support Grant Facility ................................................................................................................ 31 

9.2 Funding Sources for Core Business .............................................................................................................. 31 9.2.1 Core Business ........................................................................................................................................ 31 9.2.2 Funding Strategy .................................................................................................................................... 32 Diagram 7: Change in Balance of Core Funding Sources by Mine Closure .................................................. 32 9.2.3 Funding Options and Phasing for Funding Strategy .............................................................................. 33 

9.3 Management of Costs .................................................................................................................................... 35 10.      RISK MANAGEMENT ................................................................................................................................... 37 

10.1 Risk Management Plan and Purpose .......................................................................................................... 37 10.2 Summary of High-Level Risks ..................................................................................................................... 37 10.3 Risk Management Responsibility ................................................................................................................ 38 

11.      TRANSITION TO MINE CLOSURE AND BEYOND ..................................................................................... 39 11.1 Transition to Independent Entity: January – June 2010 (6 months) ........................................................... 39 11.2 Transition to Proposed Mine Closure or Mine Extension July 2010 – December 2013 (3.5 years) .......... 39 11.3 Transition to Mine Closure January 2014 – Onwards ................................................................................. 39

Contents

iv

OPERATIONAL PLAN 12.  OPERATIONAL FUNCTIONS, OBJECTIVES AND STRATEGIES .......................................................... 41 

12.1  Governance & Leadership ...................................................................................................................... 41 a.  Board ....................................................................................................................................................... 42 b.  Advisory Committee ................................................................................................................................ 42 c.  Executive Management Team ................................................................................................................ 42 

12.2  Regional Development ........................................................................................................................... 46 a.  Project Identification ............................................................................................................................... 48 b.  Community Engagement ........................................................................................................................ 49 c.  CMCA Project Quality Assurance .......................................................................................................... 50 d.  Quality Assurance for Delivery of Women & Children’s Action Plan Projects ....................................... 51 e.  Data Collection and Reporting ............................................................................................................... 52 f.  Government Liaison ................................................................................................................................ 53 g.  Advocacy ................................................................................................................................................ 54 h.  Capacity Building .................................................................................................................................... 55 i.  Regional Operations ............................................................................................................................... 56 

12.3       Support Services ..................................................................................................................................... 64 12.3.1 Program Services ..................................................................................................................................... 64 

a.  Project Design & Appraisal ..................................................................................................................... 66 b.  Project Management ............................................................................................................................... 69 c.  Monitoring and Evaluation ...................................................................................................................... 71 d.  Project Costing........................................................................................................................................ 73 e.  Project Funding ....................................................................................................................................... 74 f. Technical Assistance………………………………………………………………………………………….75

12.3.2 Corporate Services ................................................................................................................................... 76 a. Finance ................................................................................................................................................... 77 b.  Human Resource Management ............................................................................................................. 81 c.  Staff Training and Development ............................................................................................................. 83 d. Occupational Health and Safety............................................................................................................. 84 e.  Information and Telecommunication Services……………………………………………………………..85 f. Legal ....................................................................................................................................................... 88 g. Administration ......................................................................................................................................... 89 h. Communications ..................................................................................................................................... 90 i.       CMCA Trust Administration .................................................................................................................... 91 j.  Facilities and Asset Management .......................................................................................................... 92 k.  Travel ...................................................................................................................................................... 94 l.  Procurement & Logistics ......................................................................................................................... 95 m.  Risk Management ................................................................................................................................... 97 

v

Annexes ANNEXES

1. STAKEHOLDERS a. Stakeholder Matrix b. Communications Plan c. Landowner Companies

2. LIST OF DOCUMENTS

3. RISK REGISTER AND MANAGEMENT PLAN

4. DETAILED EXPENDITURE PLAN FOR 2011

5. PROJECTS a. Funding Approval Flow Charts

1. CMCA Trusts 2. CMCA Women and Children Action Plan 3. PNG Sustainable Development Program 4. Western Province People’s Dividend Trust Fund

b. Project Concept Template c. Draft Project Concept – Middle Fly Health Program d. CMCA Women and Children Resourcing Matrix

6. STATUS OF RECOMMENDATIONS FROM 2008 DESIGN OF NEW ENTITY AND 2009 OTDF PROGRAM REVIEW

7. BACKGROUND DOCUMENTS: GOVERNANCE AND LEADERSHIP a. Constitution: Ok Tedi Development Foundation b. Statutory Company Information c. Mining (Ok Tedi 9th Supplemental Agreement) Act d. PNGSDP Advisory Council TOR e. OTMIAA Draft Constitution

Annexes

vi

8. BACKGROUND DOCUMENTS: REGIONAL DEVELOPMENT a. VPC Guidelines Wangbin b. VPC Notification of Appointment c. Village Project Nomination Form d. Field Base Assets e. Field Base Policy f. North Fly Regional Plan g. Rubber Plan Logframe h. Middle Fly CMCA Women and Children Action Plan 2009-2019

9. BACKGROUND DOCUMENTS: SUPPORT SERVICES

Program Services

a. Discussion Paper: OTFRDP Program Development b. Discussion Paper: Development Constraints c. Agreement with OTML on program responsibility d. PNG Treasury: List of Trust Accounts

Corporate Services

e. Asset Register f. Letter to OTML: OTFRDP 2009 Request for post closure assets g. Draft OTFRDP Legal Framework h. Reviews of Accounting Systems, May 2010 i. Site Plans Kiunga Office and Housing Estate

1

Foreword

1. FOREWORD

This Business Plan represents a major milestone in the establishment of the Ok Tedi Fly River Development Program (OTFRDP), which will begin its new role as a fully independent entity from 1st July 2010. The Business Plan provides both a strategic and an operational road map for the challenging period leading up to mine closure at the end of 2013. It will be for OTFDRP to establish itself as a credible organisation as it strives to achieve its longer term vision of ensuring self-sustainability and improving the quality of life of all Ok Tedi Mine impacted communities in the community mine continuation agreement area.

To understand how we have got to this point it is important to reflect on the journey so far. In 2001, Ok Tedi Mining Ltd (OTML) entered into Community Mine Continuation Agreements (CMCA) under the Mining (Ok Tedi Mine Continuation (9th Supplemental) Agreement) Act (SAA) with communities affected by its operations. This was to enable the mine to continue with community consent. The Agreements commit OTML to investment and development payments through 8 Trusts and six mine villages to benefit all people in the 152 mine-impacted villages. To mobilise the Trusts, OTML established Village Planning Committees in all 152 CMCA villages to identify and prioritise projects. They prepared submissions for appraisal and processing by OTML’s Regional Development Department (RDD) which managed the CMCA process. In 2002, OTML registered Ok Tedi Development Foundation (OTDF) as a not-for-profit company to support community development and future generations by administering the CMCA Trust funds. It was a framework for an institution to complement government, community and private sector development initiatives in the Western Province in preparation for the mine closure and beyond. In 2007, the review of the CMCA process was completed, which resulted in a revised MOA between OTML and CMCA communities mandating the formation of an independent Entity to manage the Trusts. As a result OTDF, trading as Ok Tedi Fly River Development Program, was registered as the New Entity in August 2008. In February 2009 the OTML Board approved the transfer of one share in OTFRDP to PNG Sustainable Development Program Ltd (PNGSDP) and will transfer the remaining 3 shares to other reputable development organisations by 2013. Chief Executive Officer (CEO) Ian Middleton was appointed in July 2009 to lead the restructuring process and to map out a new direction of innovative delivery to ensure self-sustainability and an improved quality of life for all mine-impacted people. This Business Plan was developed as part of that process, and covers the period 1st July 2010 – 31st December 2015. It will be reviewed in 2012 to capture emerging transitional matters including assets transfers and program implementation. There are some key dates which are signposts for progress for the plan. OTFRDP Business Plan Key Dates

Date Event 28 February 2010 New management team in place 30 March 2010 Business Plan presented to the OTFRDP Board 1 April 2010 Commencement of OTFRDP as an independent entity By June 2011 Move OTFRDP offices to Kiunga By January 2013 Review of 2010-2015 Business Plan December 2013 Projected mine closure

Foreword

2

The overriding mandate of OTFRDP is to improve delivery of its programs and projects to the mine-impacted communities. OTFRDP management, in consultation with its Advisory Committee which includes the Fly River Provincial Government and the Council of Churches, will work with communities to deliver local and regional projects to benefit communities. OTFRDP will be structured to operate productively outside the OTML organisation. This is an exciting development period for the new independent organisation. The OTDF Board fully supports the program of change mapped out for it. Alan Breen Board Chairman – Ok Tedi Development Foundation

3

Map

 

2. MAP CMCA Regions and District Boundaries

New OTFRDP HQ Regional Base

Proposed New Container Wharf (Sturt Is & Aiambak)

Introduction

4

Introduction

3. INTRODUCTION

3.1 PurposeofthePlan This Strategic and Operational Business Plan has been prepared to guide Ok Tedi Fly River Development Program (OTFRDP) from July 2010 to December 2015. The evolution of OTFRDP has taken 10 years, with a number of studies and reviews leading to the development of both the strategic and the operational directions in this document. The strategic directions reflect the aspirations of the mine-impacted communities who signed the 2007 Community Mine Continuation Agreement and have Advisory Committee and Board endorsement. This plan is a living document. Activities and targets should be reviewed at least annually to ensure it remains relevant, and that roles and responsibilities are clear. It is OTFRDP’s roadmap for the next five years and a basis for strategic and operational planning beyond 2013. During the next five years, the OTFRDP operating environment is expected to change significantly, as details relating to mine closure become clearer, and Papua New Guinea’s economy responds to new entrants in the resources sector. The Business Plan will be independently reviewed in 2013. The Business Plan is divided into two main Sections: the Strategic Plan and the Operational Plan. The Annexes provide more detailed information, mainly in the form of tabulated data to support summaries in the main document. The background information in this introduction is drawn from other reviews, studies and former Ok Tedi Development Foundation (OTDF) and Ok Tedi Mining Ltd (OTML) staff. However, this is the first time it has been presented to summarise how the 10-year evolution has reached this point. This plan consolidates information on funding mechanisms crucial to operations of OTFRDP and stakeholders and risks for the organisation.

5

Introduction

3.2BackgroundtoFormationofOTFRDP

3.2.1FormationofOTFRDP

Diagram 1: Steps towards an Independent OTFRDP

The Ok Tedi Development Foundation was established under Clause 6 of the Ok Tedi Mine Continuation (Ninth Supplemental) Agreement (SA) in 2001, and its tax-free status enshrined in legislation under section 11 of the Mining (Ok Tedi Mine Continuation (Ninth Supplement) Agreement) Act 2001. In April 2002, OTML registered OTDF as a not-for-profit company to:

Provide dedicated support for community development and future generation Trust funds stemming from the CMCAs; and

establish a framework for the development of an institution that can continue to complement government, community, and private sector development initiatives in the Western Province in the lead-up to and beyond mine closure.

Introduction

6

In its original conception, OTML envisaged that OTDF would attract some of BHP Billiton’s equity in the mine to support its administration and development activities. However, OTDF plans to secure a development budget were limited by BHP Billiton’s transfer of (i) 52% equity to PNGSDP and (ii) the 10% equity to the Western Province People’s Dividend Trust Fund (WPPDTF).

Between 2002 and 2006 OTDF supported the OTML Regional Development Department (RDD) to manage its regional development and infrastructure partnership programs in both the CMCA regions and the Province. Under OTML direction, RDD managed the CMCA process and development activities took a backseat to mining operations.

In 2007, the CMCA Review recommended a new entity to give communities a “higher level of decision-making power over the resources, projects and programs”. Section 3.1 of the CMCA Review outlined how the OTFRDP would be established over two years to replace OTDF. In February 2008, the Design of a New Entity for Communities Affected by the Ok Tedi Mine: Ok Tedi Fly River Development Foundation (OTFRDF) report was prepared.1 This report is referred to in this document as the OTFRDP Design.

As another outcome of the CMCA Review, OTML developed the Community and Regional Development Strategy (CRDS) acknowledging its primary obligation to support mine-impacted communities. The CRDS outlined two major areas for program implementation: Community and Livelihood Development and Regional Development. OTDF2 was identified as a development vehicle but its relationship with OTML was unclear, apart from it being a department of OTML. A notional delineation of program responsibility between OTML and OTDF was outlined in the CRDS. The report on the design of the new entity and the OTDF Program Review helped clarify the respective roles and responsibilities and they were agreed in early 2010. However, in the future OTFRDP may take on additional functions retained by OTML.

The CRDS attempted to articulate a strategy to deliver the development needs in the OTML Social and Economic Report (SER)3 and provided a framework for OTFRDP to implement them. However, the CRDS was an OTML concept. This Business Plan addresses the needs outlined in the CRDS through communities’ eyes. The CRDS and SER documents and the Women and Children Action Plans have each explored community expectations about development needs and how they could be addressed. As mine closure approaches, OTFRDP will need to manage those expectations as the ‘one stop shop’ for CMCA development activities.

In responding to stakeholders’ concerns about the legal framework for a new entity, the OTFRDP design team examined whether OTDF should be re-established under the 9th SA or whether OTFRDP should be formed as a separate new entity. Initially, stakeholders preferred the idea of a new entity created under the Companies Act because it seemed to offer independence, a fresh start and a community ownership. However, following an OTML legal review, stakeholders agreed to continue with OTDF, given its mandate for CMCA development, and corporate governance guidelines secured under the 9th SA. OTDF also offered: existing tax free advantages; surety of OTML funding support; and existing capacity and experience.

As OTDF was already incorporated its re-establishment as the new entity was expected to involve a number of adjustments over a two year period. These changes include:

The transfer of shares to reputable new owners including PNGSDP and the newly formed CMCA Association4;

enhanced community ownership and participation in planning and implementing activities; and securing of the trading name OTFRDP to enhance the changed image and ownership arrangements.

1 Much of this section is drawn from this report. Note – the proposed trading name Ok Tedi Fly River Development Foundation (OTFRDF) was changed to Ok Tedi Fly River Development Program (OTFRDP) due to government limitations on registration of the word “Foundation”. 2 Note: OTDF has been trading as OTFRDP 3 OTML prepared SER in 2004, 2006 and 2009, with the latter being included as Volume C of the OTML Mine Closure Plan. 4 Now known as OTMIAA

7

Introduction

The OTFRDP Design recommended that the new entity be primarily concerned with development planning and delivery to the CMCA region, where possible on a fee for service basis and using a best practice corporate governance approach and performance monitoring system. This would include:

Servicing the eight CMCA Trusts which will initially focus on village-level projects; and coordinating larger projects and programs across the regions that share in the monies allocated to them

under the CMCA Memorandum of Agreement (MoA) .

In the longer term, OTFRDP was expected to have the resources to undertake a number of other functions, including:

Targeted research and information management; supporting the Women & Children’s program; providing a vehicle for CMCA Trusts to pool funds for major investments; and partnering with existing funding agencies, private sector agencies and donors.

The OTFRDP Design recommended that OTDF, as it currently existed, be reviewed whilst new shareholders and OTFRDP board members were appointed. Review findings could feed into the OTFRDP strategic planning, led by the new Board. Accordingly, OTML commissioned the OTDF Programs Review, which was completed in June 2009.

The objectives of the OTDF Program Review were to:

Review the nature and scope of the community and regional development programs currently supported by the OTDF and their achievements to date;

recommend which programs should be transferred from OTML to direct OTFRDP management, those that should remain with OTML, and those that should no longer continue;

recommend an efficient and cost effective organisational structure for the OTFRDP; and recommend improvements to the current CMCA delivery process including shipping services.

Building on the Program Review, this Business Plan incorporates:

Options for securing funding from partners to cover development and operational costs; creation of a targeted development strategy for the CMCA region, to identify programs to be supported;

and operational planning and implementation processes and guidelines for the new entity.

3.2.2StatusofRecommendationsonthe2008NewEntityDesignand2009OTDFProgramReviewAnnex 6 outlines the status of recommendations made in the design of the new entity and the OTDF Program Review. Not all recommendations have been taken up by the OTFRDP Board, however the analysis in this annex shows general consistency between this Business Plan and the Review.

3.3TheOperatingEnvironment5

3.3.1TheNaturalEnvironmentWestern Province has an area of 98,048 km2 and is geographically dominated by the Fly and Strickland River catchments, which occupy 78% of the Province. However, the topography and climate varies considerably:

5 This section includes extracts from the draft CMCA Impact Areas Profiles March 2009.

Introduction

8

1. In the North Fly region Tabubil lies at 520 metres above sea level in the lower parts of the Star Mountains. The surrounding area is mountainous and is characterised by steep valleys, dense forest and a wet tropical climate. Tabubil receives 8,000-9,000 mm of rainfall annually, spread throughout the year, and has around 85% humidity and an average of 2.4 hours of sunshine per day. Neither the topography nor climate is suitable for agriculture. The rugged karst landforms make movement by land extremely difficult. Narrow river valleys cut through the mountains, providing fertile land and a warm and wet climate. From a maximum altitude of around 100 metres in the north, the narrow floodplains contain alluvial soils that support agriculture. Sago is also common on the valley floor, while the valley sides are heavily forested. Further south the valleys open out to land that is gently undulating, with well developed clay soils on the hills and organic and alluvial soils in the valley floors.

2. At the beginning of the Middle Fly region 800 km upstream, Kiunga is situated at an altitude of just 20 metres above sea level, receives 4,500 mm of rainfall annually, and traditionally supports a rich, tropical lowland forest. The Middle Fly is characterised by wide floodplains and numerous tributaries and swamps. In the upstream sections of the Middle Fly the vegetation includes open rainforest, swamp forest and sago. The lower sections of the Middle Fly have traditionally experienced more severe flooding and support expansive areas of swamp grass, and narrow stretches of swamp forest. Rainfall decreases and becomes more seasonal to the south, typical of a tropical savannah climate.

3. The South Fly region has tidal influence and supports extensive mangroves, particularly in the Fly River delta and nearby low coastal plains. The delta alone covers an area of over 7,000 km2 and the Fly River is more than 90 km wide at its mouth. Although receiving around 2,000 mm of rainfall annually and at least 6.5 hours of sunshine per day, the climate is very seasonal and prolonged dry and windy periods are common when the south-east trade winds dominate from July to November.

The region as a whole has a rich fauna. Fish species and prawns have traditionally been a central part of the diet of the people along the full length of the Fly River and certainly the lower sections of the Ok Tedi. In the North Fly region north of Kiunga, the people’s subsistence diet and livelihood is more focused on terrestrial fauna than fauna from the rivers. In the lower sections of the Fly River and in nearby coastal areas, crabs, turtles and dugong have in the past been abundant. Crocodiles remain, despite intensive hunting in the 1960s. The forested areas in the northern half of the province contain a wide range of native animals and birds, including cassowaries along with wild pigs. The Middle and South Fly areas, although relatively flat and receiving less rainfall, support a prolific population of waterfowl. A substantial population of rusa deer (cervus spp.) exist after being introduced by the Dutch into the neighbouring Indonesian province of West Papua.

3.3.2HistoryofthePeopleandEuropeanContactBy the time Europeans began exploring the areas around the Fly River, the main cultural and linguistic groups that were later to be impacted by the Ok Tedi mine had been settled: 1. The Wopkaimin people customarily exploited the resources on and around Mount Fubilan and surrounds.

The Wopkaimin had trading links in the Highlands (extending into West Papua) and formed part of the Mountain Ok or Min group. The Min people generally were more insular and isolated culturally from their neighbours and did not make or use pottery, baskets or mats. They cultivated introduced crops (such as tobacco and sweet potato), and their relatively basic lifestyle made it easy to relocate and move around in the rugged terrain. Although German-Dutch explorers first reached the Star Mountains in 1914, and Australian government officers first reached the upper Ok Tedi area in 1922, the Wopkaimin had little outside influence – other than very occasional and temporary visits by subsequent government officers and explorers – until 1968, when Kennecott Explorations (Aust) Pty Ltd commenced exploration activities. While living in six relatively small villages, the Wopkaiman were essentially hunters and gatherers, although maintained small taro gardens. Min communities have a very important taro culture Taro tru would only grow at the higher altitudes where most garden hamlets were established, it was only with the introduction of Taro kongkong did this important cultural event diminish.

2. The Awin, Yonggom and Ningerum peoples occupy lands immediately to the south, including land along what is known as the Ok Tedi, Wai Tri or Alice River. Traditionally, these people were gardeners, but they domesticated pigs and supplemented their diet through sago, hunting and fishing. They did not live in villages until encouraged to do so by Dutch missionaries and patrol officers in the late 1940s, and again in the 1960s, by the Australian administration.

9

Introduction

3. The Boazi, Zimakani and Suki peoples occupy the Middle Fly and are known as the lagoon people. These are riverine people who rely on sago, fishing and hunting rather than gardening. The rivers and waterways not only provide their food, but their transport and identity. They were often avoided by early government patrols as they had a reputation as head-hunters, and warfare continued unabated into the 1930s and 1940s. The South Fly consists of 13 tribal groups which speak 9 languages, the largest groups being the Kiwai, Gogodala, Aramba and Wabada. The people of the Fly estuary have actively engaged in trading and intermarriage since long before European contact, and have strong links with neighbouring coastal communities and Torres Strait Islanders. Subsistence patterns vary according to geography and topography: generally gardening is combined with fishing, hunting and the making of sago, although many Kiwai have little land that is suitable for gardens and are predominantly subsistence fishermen.

European influence has been relatively recent. Missionaries entered the south-west part of PNG in the 1870s and the Italian explorer Luigi D’Albertis sailed up the Fly River in 1876. His navigator, an Australian called Lawrence Hargrave, found specks of gold in what was known locally as the Ok Tedi (although D’Albertis named it the Alice River). Hunters for tail plumes of the Malay (Malacau) bird of paradise were in the area adjacent to the Indonesian border from the mid to late 1800’s. Daru was established as an administrative post in 1895. Across the border, the Dutch proclaimed sovereignty of ‘West New Guinea’ in 1948: missions entered the area and Merauke was established as an administrative post in 1902. Dutch patrols continued into ‘Papua’ until the Lake Murray patrol post was established in 1947. Government stations were also established at Telefomin in 1948 and Kiunga in 1950, and subsequently at Olsobip and Ningerum. The Montford Catholic Mission and Evangelical Church of Papua both established missions in the North Fly region in the1950s. Although government patrols to the Star Mountains first commenced in 1914, it was not until a patrol by Des Fitzer in 1963 that copper mineralisation was found near Mt Fubilan. Following civil unrest and political tension on the Indonesian side, some 10,000 people crossed the border from Irian Jaya6 in 1984. Many remain and live in ‘temporary villages’ along the lower Ok Tedi and Middle Fly. Other factors that are important in the recent history of Western Province include:

1. The introduction of rubber in the mid 1960s; 2. The start of exploration activities by Kennecott in the Star Mountains in 1968; 3. Construction of a road from Kiunga to Rumginae (1968) and to Ningerum (1970); 4. PNG independence in 1975; and 5. Construction of the Ok Tedi mine, and the town of Tabubil, which commenced in 1981, and the Kiunga to

Tabubil road, which was completed in the same year.

3.3.3DemographyDemographic data for each CMCA region presented in Table 1 is based on National Statistics Office (NSO) and OTML population data. The population characteristics do not vary markedly between CMCA regions. Population growth rate was estimated by the NSO at 3.3% for the 1999 – 2000 period. However, the high rate of growth may have resulted from undercounting in the 1990 census. Population estimates are difficult in Western Province and many villages have large variations in the populations estimated by the NSO in 2000 and OTML in the period 2001 – 2005. Theories on these variations are outlined in the CMCA Impact Area Profile.

6 The Indonesian Province of Irian Jaya has since been split into two provinces, Papua and West Papua, the latter being located along the border with Papua New Guinea’s Western Province.

Introduction

10

Table 1: CMCA Region Demographic Characteristics

Population growth rate for Western Province was estimated by the NSO at 3.3% for the 1990-2000 period. However, the high rate of growth may have resulted from undercounting in the 1990 census. Population estimates are difficult in Western Province and many villages have large variations in the populations estimated

3.4DevelopmentConstraintsandPriorities A number of development constraints impeded economic development of CMCA communities, including land ownership, lack of infrastructure, cultural attitudes, community expectations, provincial and local level government roles, and food security. These are discussed in Annex 9b. Numerous surveys over the years have identified both the constraints and the development priorities of the communities. The Women and Children Action Plans 2009-2019 (WACAP) were prepared to ensure 10% of the total CMCA compensation package was allocated to address development priorities of women and children. The plans can be incorporated into regional and provincial plans across most sectors because they used a bottom-up planning consultative approach and took account of provincial and national government development plans.

As part of the 2007 CMCA village census conducted by OTML, development needs where prioritised for each village. When aggregated for all villages, the main development priorities as identified in Diagram 2 were housing, water supply, and education.

The village census development priorities varied between regions, and vary significantly from those identified in the Women and Children Action Plans7. The regional priorities were:

North Fly: housing, access [transport infrastructure], and water supply; Middle Fly: housing, education, and access/economic development; South Fly: education, water supply, and housing.

7 Only teacher housing was identified in the Women and Children Action Plans

11

Introduction

Diagram 2: Development Priorities Identified by Village Leaders8

To ensure that priority programs are moved through the proposal and approval process quickly, rather than initiating further studies and consolidation of plans, OTFRDP will need to:

Address disparities in development priorities that have been documented, and support a process to confirm WACAP as de facto regional plans on grounds that their objectives are clear and broadly benefit the communities;

address the constraints that impact on the success of priority development projects through a robust design process and management of key risks during implementation; and

for larger impact projects include communities as well as technical and project implementation specialists in project designs, and ensure communities are also involved in regular monitoring and evaluation of larger projects (or clusters of smaller projects).This process will generate lessons learned during implementation to feed future project designs.

8 Source: extract from 2009 SER citing CMCA Village Census, 2007

12

Strategic Direction

4. STRATEGIC DIRECTION

4.1VisionandMission The Ok Tedi Fly River Development Program’s long term Vision is: To ensure self sustainability and improve the quality of life of all Western Province communities In order to achieve this Vision, OTFRDP will focus in the medium term on its Mission of wise management of funds and programs to realise the development aspirations of impacted communities by delivering with innovation. The four key Principles underpinning all OTFRDP’s strategic engagement with stakeholders and guiding day to day operations are:

Effective management and implementation of regional development programs Strengthening partnership and involvement with stakeholders Open and transparent communications Prudent financial and operational systems management and accountability Diagram 3: OTFRDP Vision, Mission and Principles

13

Strategic Direction

4.2StrategicRoadMap Having identified the four key principles by which OTFRDP will engage stakeholders to achieve its mission, Table 2 links the principles to the strategies to be employed. That is, how this will be done over the five year period of this Business Plan. It provides OTFRDP with a strategic roadmap to guide its daily operations. A diagrammatic representation of Table 2 (village Yam Haus) is included as the three section dividers and will be used for posters and other communication purposes. Table 2: Principles of Strategic Engagement and Key Strategies

MISSION PRINCIPLES OF STRATEGIC ENGAGEMENT

KEY STRATEGIES

Wise management of funds and

programs to realise the development

aspirations of impacted

communities

Effective management & implementation of regional development programs

Rehabilitate and deploy staff permanently at regional bases and field camps. Use these locations as focal points for service delivery, community engagement and capacity building

Streamline planning and approval processes Strengthen delivery approaches through improved

procurement and logistics Implement sustainable programs with early visible

outcomes for communities Use Women and Children Action Plans as a basis

for regional development priorities Co-locate transport and social infrastructure with

field bases (e.g. wharves at Aiambak and Sturt Island, health centres)

Promote and establish regional investment projects

Strengthening partnership and involvement of stakeholders

Use field bases as a means of linking to the communities for advocacy on a range of development issues

Engage sustainably with 152 village planning committees (VPC) and women’s groups to determine priorities for smaller programs

Partner with communities through Trusts and VPC across the three major regions, government and other development partners to design and implement multi-year higher impact programs

Improve community capacity for planning and implementation

Open and transparent communications

Design and implement a communications strategy which targets key stakeholders using a range of methodologies

Prudent financial and operational systems management and accountability

Establish a strong corporate governance framework

Establish systems for managing programs and investment funds which provide timely and relevant information to management and stakeholders

Distribute audited financial statements annually to stakeholders

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4.3RegionalDevelopmentConcept

4.3.1WhatistheRegionalDevelopmentConcept?The CMCA Review highlighted communities’ expectations for ongoing communication about development activities undertaken on their behalf, and the need for a client focus based on strong long-term relationships. OTFRDP’s priorities are therefore driven by development aspirations of communities along the CMCA corridor. OTFRDP is obligated to deliver existing programs to CMCA communities under OTML’s CRDS. With new funding partners, it will also develop much larger impact programs designed to benefit entire communities represented by the CMCA Trusts in the North, Middle and South Fly regions. There is a geographic focus for development activities and a comparative advantage to be achieved through a revitalised network of regional field bases; strengthened procurement and logistics systems; committed staff with extensive experience working with mine impacted communities; and a strong focus on maintaining links with communities and other stakeholders.

4.3.2 What are the OTFRDP Structures to Address the RegionalDevelopmentConcept?To optimise engagement with communities along the river, OTFRDP will permanently locate a significant proportion of its staff close to the communities with whom they work. While recognising that individual villages and Trusts may have different short-term needs, there will be many that are common, especially over an extended timeframe. This will be the case in areas such as food security, health, education and infrastructure. The planning processes to conceptualise and design complex, multi-year projects across several Trust regions are different from those at the Village Planning Committee level. However, within the OTFRDP governance structure, these projects will be reviewed by the OTFRDP Advisory Committee (AC) to ensure that local and regional concerns are addressed at the design and implementation stage. Committee members will also be important links in engaging community members as partners in monitoring and evaluating projects. All corporate and program services will support service delivery to communities and involve specialised design, implementation, monitoring and evaluation experts to assist field staff and community members across the project cycle. These support services will balance the need to design quality projects and deliver (implement) with innovation in a difficult environment against the need to maintain a robust corporate governance framework. OTFRDP plans to move its headquarters to Kiunga in early 2011 where the current Regional Development team is already located. This will locate the support services closer to both their regional development colleagues, communities, and to the Fly River Provincial Administration (FRPA) headquarters. PNGSDP has been invited to co-locate its Western Province office within the same building as the new OTFRDP offices. OTFRDP also recognises government as the leader in regional development planning in the Western Province through the National Medium Term Development Strategy and the Provincial Medium Term Development Plan, sector specific plans (eg health and education), and large scale public infrastructure plans. This has already been acknowledged through the appointment of the Fly River Provincial Government Administrator as a member of the OTFRDP AC (see Section 5.3). Churches are important development partners with government for delivering health and education services. In Western Province they deliver approximately 50% of these services to rural communities. Church facilities and infrastructure (e.g. schools, health facilities, airstrips, and radio networks) are located along the CMCA corridor and are close to the communities they serve. Formal coordination arrangements between government and churches in health and education at the national level are still relatively weak.

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However the inclusion of the United Church Regional Bishop as a representative from the PNG Council of Churches9 on the OTFRDP Advisory Committee will engage churches in strategic planning in these sectors.

Picture 1: North Fly Village Ground Breaking Ceremony

9 Source: extract from 2009 SER citing CMCA Village Census, 2007

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5. ACCOUNTABILITY FRAMEWORK The Memorandum of Agreement for the outcomes of the 2006/07 CMCA Review10 outlines the role of the Ok Tedi Fly River Development Program as being the organisation that will develop and manage projects funded from the Regional Assistance Package. Core functions will be:

1. Determining priorities for investments, projects and programs 2. Preparing a development plan for impacted communities 3. Facilitating the implementation and coordination of programs and projects through contracted

service providers 4. Encouraging and monitoring coordinated and comprehensive responses to environmental

impacts and health issues 5. Coordinating, monitoring and reporting on project delivery against the development plan 6. Managing funding and seeking additional funds from development partners 7. Providing administrative support to CMCA Trusts and Village Planning Committees 8. Advocating on behalf of impacted communities for proper development planning and mine

closure planning 9. Gender audit programs and projects of the OTFRDP

An accountability framework (Diagram 4) was developed to identify reporting lines for these core functions which were grouped into regional development functions and functions which support regional development. Regional development functions primarily focus on communities. They advocate and build local capacity to improve planning, implement, monitor and evaluate projects with stakeholders and development partners. These functions align with programs requested by communities to meet their development aspirations. Support functions ensure that quality programs are delivered through the OTFRDP Regional Development Division. They employ best practice approaches for identification, design, management, monitoring and evaluating programs. This group of functions operates within a corporate governance framework that ensures prudent financial management and accountability. This framework is the basis for the OTFRDP organisational structure (See Section 8, Diagram 5).

10 MoA Outcomes of the 2006/2007 CMCA Review Paragraph 5.4

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Diagram 4: OTFRDP Accountabilities Framework

Program  North 

Fly 

Middle 

Fly 

South 

Fly 

Corporate  

Governance

- Project Identification  - Community Engagement 

 - CMCA Project QA 

 - W & C Project QA 

 - Data Collection & 

Reporting  

- Government Liaison - Advocacy 

 - Capacity Building 

 - Regional operations 

 ‐  Food Security 

  

- Project  Design  & Appraisal 

- Project Mgt - Monitoring  & 

Evaluation 

- Project Costing - Project Funding - Technical Assist: (Health, Engineering, Education & Training, Rural Devt, Women and Children) 

- Financeo Accounts o Audit o Trust  A/C 

Investment 

- HR Mgt - Staff    Training 

& Devt - Occupational 

Health  and Safety 

- IT - Legal - Admin - Comms - CMCA  Trust 

Admin  - Facilities/ 

Asset 

Management - Travel - Procurement & 

Logistics - Risk 

Management 

Leadership Services Stakeholder Advice 

Regional Development  Support Services 

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6. STAKEHOLDERS OTFRDP’s stakeholders have a variety of different experiences and expectations of development. The key stakeholders are summarised in the table below. A detailed analysis of stakeholders external to the OTML executive management and staff structures is provided at Annex 1a. This matrix is an overview for OTFRDP to understand the human and institutional side of its operating environment and forms the basis for the organisation’s communication strategy. A draft of this strategy is included at Annex 1b. The matrix includes comments on stakeholder interests which support strategies to meet and manage their expectations. The Risk Register forming the basis of a Risk Management Plan (Annex 3) also identifies how risks can be addressed. Table 3: OTFRDP Stakeholder Summary

CLUSTER STAKEHOLDERS Community Stakeholders Village Planning Committees, CMCA Trusts , Women's Associations and

Networks, OTMIAA, Landowner Companies (list included at Annex 1c) , non-CMCA communities in Western Province

OTFRDP Governance OTFRDP Board & Shareholders (OTML & PNG Sustainable Development Program Ltd) OTFRDP Advisory Committee

PNG Government National Government: Department of Mines, Department of National Planning, Department of Health, Department of Education, Provincial Government (FRPG), District Governments, Local Level Governments

Development Agencies / Partners

Funding Sources: Western Province People's Dividend Trust, PNG Sustainable Development Program Aid Donor Agencies: AusAID, JICA, UNDP, WHO, GTZ, European Union, World Bank, Asian Development Bank, Multinational Sectoral Funds (eg HIV, Malaria, Environment) Implementation Partners: ACIAR, NARI, Forest Research Institute, Churches, North Fly Rubber Ltd

NGOs International: List of NGOs included in Annex 1c PNG NGOs and CSOs: PNG Council of Churches

Consultants and Project Managers

Tanorama, Jane Thomason Associates International, Coffey International Development, Keystone, Project Design & Management, World Wide Project Management Services

Suppliers and Service Providers

Equipment and materials suppliers, corporate and other service providers (may include landowner companies) (e.g. legal, procurement and logistics, Trust accounting, specialised design, technical specialists, information services)

Other International philanthropic organisations

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7. CORPORATE GOVERNANCE FRAMEWORK This section outlines the legal and organisational structures of Ok Tedi Fly River Development Program. Diagram 5 in Section 6 provides further information about the hierarchical relationships between the Board, Advisory Committee and Executive Management Team within the overall organisational structure.

7.1LegalFramework

Allens Arthur Robinson submitted the Ok Tedi Development Foundation Constitution (see Annex 7a) to the Registrar for Companies PNG for registration in April 2002 under the Companies Act 1997 and the Companies Regulation 1998. Under the Constitution’s Definitions and Interpretation, the Object of OTDF is:

“the promotion of sustainable social improvement and economic activity in the Relevant Area, through the implementation of the Authorised Programs, for the well being of the Relevant Persons, and does not include the carrying on of a commercial business for profit”.

Subsequently, the name Ok Tedi Fly River Development Program was registered as a trading name due to community concerns about the OTDF name being too closely aligned with Ok Tedi Mining Limited. Table 4 summarises the key limitations of the OTFRDP legal framework.

OTFRDP is required to comply with a range of PNG legislation and other agreements which have been executed. These are outlined in Annex 9g. All relevant legal obligations should be identified and actively managed. There must be a single point of accountability for the Chief Executive Officer and the Board to receive appropriate reports on OTFRDP obligations and by exception, any risks which may be associated with non-compliance. However, it is likely that key OTFDRP staff will be delegated to manage specific obligations. This should inform the overall risk management strategy.

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Table 4 : Summary of Features of the OTDF Legal Framework 11

LIMITATION OK TEDI DEVELOPMENT FOUNDATION

TRADING AS

OK TEDI FLY RIVER DEVELOPMENT PROGRAM

1. Name a) Prescribed by legislation to be OTDF.

b) Name registered to trade as Ok Tedi Fly River Development Program

2. Not for Profit a) PNG as a not-for-profit company as prescribed by Legislation 3.Shares a) Legislation prescribes only 4 shares can be issued.

b) OTML 3 shares, PNGSDP 1 share (as of February 2010)

c) Shares can only be transferred to 4 reputable organisations involved in development activities in PNG

4.Directors a) Legislation allows for 4 directors but legal opinion is that there is scope to increase the number of directors without legislative change.

b) Each shareholder is entitled to appoint 1 director

c) Alternate directors may be appointed 5. Financial Borrowings Maximum borrowing amount of PGK 100,000 in total at any time. 6.Object and Functions a) Object: Relevant area is Western Province and Telefomin in

Sandaun Province.

b) Functions: To undertake authorised programs of Rural and Economic Development; Provincial and Community Development, Infrastructure Development; any other program approved by the board and consistent with the object

7.Power to Invest May only invest any monies for the time being held by the Company in: (a) Papua New Guinea Treasury Bills; and

(b) deposits with licensed banks in Papua New Guinea 8.Company Secretary Is not required, but may have one or more Secretaries 9.Indemnity and Insurance Required for directors and employees 10.Delegation of Powers to Committees

Board can delegate powers to Committees consisting of any one or more Directors or any other person/s

11 Source: Design of a New Entity for Communities Affected by the Ok Tedi Mine: Ok Tedi Fly River Development Foundation (OTFRDF), Tanorama, February 2008. Some of the comments are based on legal opinion provided as an annex to this source document. Some relevant information has been added or updated from the Constitution.

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7.2ShareholdingandBoardComposition

When OTDF (now trading as OTFRDP) was incorporated in April 2002, four ordinary shares were issued to OTML. One share was transferred to PNG Sustainable Development Program on 20 February 2009 in keeping with the obligation which OTML has to transfer all 4 shares to reputable organisations involved in development in PNG prior to mine closure.

OTFRDP has four Directors reflecting current shareholdings or significant interests through trust obligations to CMCA communities. Two directors representing OTML’s shareholding are employees of OTML, including the Chairman; a third representing OTML’s shareholding is from the PNG Mineral Resource Authority; and the fourth is from PNGSDP. Four Associate Directors nominated by the Advisory Committee sit on the Board as non-voting observers (see more detail in Section 5.3). No sub-committees are currently established.

The CEO reports to the Board which meets quarterly in February, May, August and November. In the process of recruiting new staff to OTFRDP, a new Company Secretary who is appropriately qualified and experienced will be appointed from the senior management team. This position will most likely be held by the incumbent of the Corporate Services Manager position.

As prescribed by the 9th SA, OTML must divest itself of all its shareholding and directorships prior to mine closure. Ideally, this should not wait until mine closure, but could be a staged process to ensure continuity at Board level and stability in shareholdings. As part of this process, the Board is considering options for identifying suitable “reputable development organisations” to which shares could be transferred. The Board could broaden selection criteria to include:

1. An interest in meeting sustainable development aspirations of the people in mine-impacted communities

2. An organisation capable of funding CMCA community development aspirations 3. An organisation with broad community, sectoral and regional development implementation

experience in PNG and other jurisdictions

Entities which are being considered as possible recipients of a shareholding in OTDF include:

Ok Tedi Mine Impact Area Association (OTMIAA), which is preparing to complete incorporation by December 2011.12

A public company (international or PNG-based) with a strong capability in designing and managing development projects

Fly River Provincial Government

The Board will have several matters to consider during transition including funding, Board membership, and interacting with a broader mix of shareholders. OTFRDP will have a different operating environment as it moves into designing and implementing larger regional programs, accessing new funding sources, and expanding its development partnerships. In the early stages, the Board will need to provide direction to the CEO for him to guide the new Executive Management Team and staff.

12 OTMIAA is considered eligible to become a shareholder based on the first two more detailed selection criteria mentioned above. Incorporation is not considered by OTML a pre-requisite for a shareholding, however it is an objective of OTMIAA.

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7.3 AdvisoryCommitteeandAssociateDirectors The role of the Advisory Committee is to provide strategic guidance and feedback to the Board and the CEO on the OTFRDP Strategic and Operational Business Plan and on larger impact programs.

The concept of an Advisory Committee (previously referred to as an Advisory Board) as a second tier of Governance for OTFRDP was discussed and agreed in principle by the Transition Group (TG)13 to allow for broad community participation. It was also recognised that this would meet the intent of the CMCA Review MoA which outlined specific directions for Committee [Board] Composition. The AC is constituted so that there is a cross-sectional representation drawn from all geographic areas (16 members represent the 8 trust regions - 2 from each); the PNG Council of Churches; and the Fly River Provincial Government. The AC met for the first time in November 2009.

The AC is scheduled to meet with the CEO quarterly prior to each Board meeting. It has nominated four of its members (titled “Associate Directors”) to shadow the four formally appointed Board Directors, and ensure that the directions taken/voted on are in accordance with the wishes of the AC. Three Associate Directors represent each of the three regions (North, Middle and South Fly), and the fourth represents the interests of Women and Children in all 8 trusts and 6 mine villages as articulated through the WACAP. The designation of the term “Associate Director” does not confer full voting membership on the OTFRDP Board, but allows those members to experience the Board processes and through their participation build their capacity in preparation for future OTFRDP Board membership as outlined below.

The 16-member trust representation is drawn from a “CMCA Association” which will be formally constituted as the Ok Tedi Mine Impact Area Association (OTMIAA). The trusts have agreed that OTMIAA should be incorporated by the end of 2011 to enable it to take up a shareholding in OTFRDP by 2013. In the meantime, the trusts will act de-facto as an association pending formal incorporation, demonstrating the capability of OTMIAA to take up the shareholding as a “reputable development organisation”.

7.4ExecutiveManagementTeam

The Executive Management Team comprising the Chief Executive Officer, Executive Manager Support Services and Executive Manager Regional Development is responsible for the day-to-day operations of OTFRDP, reporting to the Board and preparing project proposals for Advisory Committee consideration.

The CEO has been in the position since July 2009 as the only employee of the new entity, with support from OTDF staff. From a governance perspective, the position of Executive Manager Support Services will also hold the role of Deputy CEO. Initially, the CEO will play a significant role in the areas of regional development and in the development of new programs and projects. This strategy will enable OTFRDP to capitalise on the CEO’s profile and existing working relationships with the CMCA communities, funding organisations and other key stakeholders at National and Provincial level as well as internationally.

The Executive Management Team should engage an organisational development specialist to assist in preparing the new OTFRDP teams working in both functional and geographical clusters to maximise their efficiency and effectiveness in achieving the objectives of the OTFRDP Business Plan.

13 The Transition Group was chaired by the Fly River Provincial Government and consisted of representatives from CMCA regions, PNGSDP and OTML

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Picture 2: 2007 Community Mine Continuation Agreement Signing

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8. ORGANISATIONAL STRUCTURE

8.1 RelationshiptoAccountabilityFramework Ok Tedi Fly River Development Program was established as a project-based organisation to implement projects funded from various sources for particular purposes. It takes over responsibility from OTDF to serve the 8 CMCA trusts, and will be responsible for implementing regional programs targeting the CMCA communities. Based on its accountabilities framework, an organisational structure for OTFRDP has been developed (Diagram 5) for a permanent staffing level of approximately 60 people. The two Divisions – Regional Development and Support Services – align with the two accountability clusters. Staffing levels are based on an assessment of resources needed to manage the functions that are required under existing obligations, and estimates of expected requirements to manage larger projects funded through other sources as outlined in Section 7. Some functions such as legal, audit, or engineering do not require full-time expertise. Other expertise, specific to a project or cluster of projects, such as education, health or project design & feasibility can be contracted as required. Some cyclical corporate responsibilities may also be best served by an ongoing service contract. Historically, a number of positions supporting field bases such as outboard motor operators were recruited on casual or contract basis depending on need and availability of personnel. In the new structure, these have been incorporated into the permanent staffing levels. Functions performed by casual or part-time service providers are reflected in the OTFRDP organisational structure but separated from the full-time staff performing core activities. Permanent positions will be phased in as required. The Program Design and Management function is new, and it would be strategic for the Program Services Manager to participate in recruiting those staff. Across the whole organisation, most staff will contribute to the functions outlined in the accountabilities framework, but the Board and CEO must be able to identify one position accountable for each function and ensure that related job descriptions, annual activities, targets and budgets are accurate. An example is occupational health and safety; it is everybody’s business. However, from a governance perspective, the Corporate Services Manager is accountable to the CEO for ensuring that appropriate policies and procedures are in place to meet regulatory requirements and good management practice, and that staff have the knowledge, skills and resources to comply with them. All line managers implement the policies and procedures and staff also have a responsibility for ensuring their own health and safety. The manager could establish a small team which is representative of a range of functions and perspectives in the organisation who would advise on appropriate policies and procedures, as well as provide information on necessary equipment and materials that should be provided to staff or included in the workplace14. Another example is advocacy. Staff in the Regional Development Division have direct contact with community members, local level government and civil society organisations. Although these staff will have a greater potential to advocate to stakeholders about OTFRDP’s strategies and operational approaches, every staff member should have the knowledge, the skill and confidence to be able to articulate OTFRDP’s vision and mission. There may be protocols attached to the level at which staff engage, and this is often described in a communications plan which outlines, for instance, how staff communicate key messages to specific stakeholders (e.g. politicians, trust members, media, government officials, NGOs, international organisations) both pro-actively and reactively.

14 Each Division and work location will have a nominated safety officer, first aid officer and fire warden. These roles, and appropriate training, will be assigned to selected staff in addition to their regular duties.

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8.2 RegionalDevelopmentDivision The staffing structures and functions of the Regional Development teams address the expected project proposals from CMCA communities. The initial focus therefore is on promoting food security for communities (in areas such as agriculture, livestock and fisheries) and logistical support for program delivery. Over time, needs will change and priorities will vary to meet new economic, social or environmental factors. There should be flexibility to ensure the mix of expertise between this Division and the Program Services team continues to be relevant. In the future, as CMCA trust funds are gradually expended, different kinds of projects and programs may require fewer numbers in teams and a varying mix of skills to support communities. In the five years of this Business Plan, the core expertise required, particularly to support food security, will remain stable. Additional technical and project management expertise required for larger impact projects will be contracted for the duration of the project and funded entirely through project budgets.

8.3SupportServicesDivision Located in the OTFRDP headquarters (in Tabubil, and later Kiunga) the Support Services Division has two major functional clusters supporting the delivery of projects and programs by the Regional Development Division. Program Services provides specific design, appraisal, monitoring and evaluation, technical and contract management and costing services to ensure that quality is maintained throughout the project cycle. The technical team includes Community Development Officers who will support local and regional planning, design, monitoring and evaluation of projects identified in the Women and Children Action Plans. They will ensure that women’s priorities are considered throughout the project cycle. The technical team works across the eight trust regions with support from the Program Management Team members in the design and implementation of projects and programs in those regions, not only for CMCA trust-funded activities, but also for activities funded from other sources. The current core technical specialisations of Community Development, Business Development, Forestry, Rubber and Engineering will be supplemented by contracted sectoral specialists as required. Generally these contracted assignments will be project specific. As the portfolio of projects and programs increases, the permanent members of this team may expand. Corporate Services ensures that OTFRDP fulfils its corporate governance obligations, as well as supporting operations through providing finance, information services (IS), human resource management, and procurement and logistics services. As part of the 2007 CMCA MoA, OTFRDP continues OTDF’s obligations to provide dedicated administrative support to the CMCA trusts, so long as there are funds to be managed and disbursed. OTFRDP formally assumed the Trust Administrator role in March 2010. OTFRDP cannot continue to rely on OTML to provide a service for functions that are not required on a full-time basis. Some service contracts have been agreed such as procurement and logistics in Port Moresby, or are being considered in areas such as IS, audit and legal services. For OTFRDP, this is a cost-effective way to access expertise but still requires accountability within the organisation.

The Regional Development Division identifies designs and delivers programs in partnership with CMCA communities in the North Fly, Middle Fly and South Fly regions to achieve the development aspirations of all people in those regions.

The Support Services Division ensures that quality programs are delivered to CMCA communities through the OTFRDP Regional Development Division. They employ best practice approaches for identification, design, management, monitoring and evaluating programs; operating within a corporate governance framework that ensures prudent financial management, transparency and accountability.

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8.4OngoingRelevanceofOrganisationalStructure The organisational structure and related accountabilities framework were developed based on OTFRDP’s current and expected functions. They are living documents to be adjusted based on operational experience and new demands. Position Descriptions of senior managers and staff will be refined over time to cover all accountabilities. The alignment of functions and accountabilities within the organisational structure should be reviewed annually as a routine exercise in a dynamic organisation. The structures should also be revisited during the independent review of the Business Plan in 2013 to ensure that they will meet the challenges of the next phase.

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9. FUNDING This section describes the sources of program funding available to Ok Tedi Fly River Development Program, other funds which have the potential to complement OTFRDP development activities, and options for securing operational funding.

9.1ProgramFundingSources

9.1.1FundsDerivedfromOTMLOperationsIn the five years covering this Business Plan, funding channelled though OTFRDP for implementation of development activities will originate primarily from the business operations of Ok Tedi Mining Limited. CMCA community development project funds are disbursed via trust funds set up to manage benefit payments in various ways, through dividend payments to PNGSDP and the Government of PNG, or through the SSG or Tax Credit Scheme (TCS). When mining ceases, the only income flowing into these trust funds will be interest earned from unspent funds and other investment returns. Diagram 6 is an overview of the flow of funds from trust funds that receive income from OTML and the TCS. Table 5 is a summary of trust fund and tax credit funds available for OTFRDP to implement projects up to mine closure. OTFRDP’s trust administration team manages the CMCA trust account development and investment funds derived from compensation payments. They are familiar with the protocols surrounding access to both investment and the development funds and the relevant accountabilities to trusts through the quarterly meeting process. OTFRDP has limited experience in accessing funds which receive OTML Dividends as a result of the PNGSDP 52% shareholding in OTML and the Government of PNG’s 30% shareholding (including the 5% Western Province People’s Dividend Trust) . Accessing these funds to implement priority projects for the people along the Fly River corridor will be the core business of OTFRDP. A critical issue will be to determine whether it can fund some or all of its operations by charging management fees as a percentage of the approved program funds, as is the practice with non-government organisations and United Nations (UN) agencies accessing development partner funds. Section 5.4 of the 2007 CMCA Review MoA specifies that the OTFRDP will be the main organisation responsible for developing and managing the projects funded under a Regional Assistance Package. The rationale for focusing on the trust funds and TCS identified in Diagram 6 as a priority is that these funds are targeted to benefit the CMCA communities (and in some cases other Western Province people). Proposals do not compete with other beneficiaries, and should therefore be easier to access providing all the necessary consultations are conducted and selection criteria are met. In summary, within this group of available funds, priority should be given to:

1. Development funds exclusively targeted to CMCA communities; and 2. the PNGSDP

The figures in Table 5 reflect that proportion of the available funds which are priority funding sources. In theory, all the CMCA development funds will be expended for projects to be completed by mine closure; however draw-down on these funds so far has been limited. It is the view of the consultants who conducted the May 2009 OTDF Program Review and also the CEO, that OTFRDP “….will have difficulty in developing an expenditure plan for the efficient and effective use of these funds in the proposed timeframe” (based on the assumption of mine closure in December 2013).

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Diagram 6: Availability of Potential Funds for Development Activities Managed by OTFRDP

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Table 5: Development Funds Available for Priority Projects 2010-2013

Current Balance Dec

2009

Annual Increase

CMCA Trusts

Nupmo 2.3 0.7 5.1 9.3

Tutuwe 5.4 2.4 15.1 6.2

Wai Tri 24.4 3.4 38.1 20.7

Middle Fly 26.7 3.4 40.1 21.5

Dudi 1.6 0.7 4.3 9.9

Kiwaba 4.2 0.9 7.7 7.0

Manawete 4.2 3.4 17.6 5.6

Suki Fly Gogo 2.8 0.9 6.3 9.8

Subtotal 71.6 15.7 134.3 90.0

PNG SDP Western Province  

Development Fund 55.8 21.5 141.8

Western Province People 10% 

Dividend Trust  ‐ CMCA  (50% of 

10%) 204.1 50.0 404.1

Tax Credit Scheme 80.0 0.0

TOTAL AVAILABLE 680.2

Notes:

* Tax Credit Scheme funds fully committed to 2013

* Cash payments not included * Under current SA investment funds available for development only upon mine closure

* Figures based on the 9th SA - assuming mine closure in 2013

Fund

Estimated Total Dev

Funds Available by

2013

Balances PGK Million

Investment Funds (to be

converted to Devt on Mine Closure)

Development

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9.1.2SpecialSupportGrantFacilityThe Special Support Grant (SSG) facility was introduced in 1998 to the Provincial and Local Level Governments as part of their development needs in recognition of their contribution to the national revenue. Through this funding facility the National Government provides budgetary support as a major component of a benefits package. The calculation of funds for the Western Province is based on projected revenues from mining projects15. This is distributed between the Provincial Government and the project-impacted area according to a sharing agreement. In the Western Province, 80% of the distribution is allocated to the Provincial Government and 20% to the impacted area through the North Fly District Administration (NFDA). Application of SSG is guided by the national medium term development strategy, and priorities outlined in the relevant provincial and district development plans. Because of the uncertainty about mining revenues, SSG applications are submitted after the passage of the National Budgets by Parliament. Multi-year projects can only be approved where ongoing funding is assured for project completion. Eligible socio-economic development projects funded under the SSG facility are primarily infrastructure projects for transport, health, education, primary industry, district administration etc., and all projects are appraised by the Department of National Planning and Monitoring. The Public Finances (Management) Act requirements for procurement and contracting must be followed. The Fly River Provincial Administration (FRPA) is responsible for managing the funds through their annual budgets, however capacity to implement the approved SSG projects has been weak, and the FRPA has relied on OTML to take a lead role in project implementation. There is an expectation by OTML that OTFRDP will take over management of projects funded under the SSG, using its tax-free status. However before taking on this role, criteria and protocols for OTFRDP’s future involvement in the management of SSG projects will be developed. Serious consideration should also be given to ensuring that OTFRDP does not become a substitute for responsibilities that should be taken on by the provincial government. 9.1.3DonorFundingIn the future, OTFRDP will tender as a proven implementation organisation for donor-funded projects, either directly or with development partners such as the European Union, AusAID and multilateral agencies such as the Asian Development Bank and World Bank. However at present, with the funding available under these earmarked trust funds and the TCS, OTFRDP will focus on accessing these funds which allows the organisation to clearly articulate its core business and focus on working with key development partners.

9.2FundingSourcesforCoreBusiness

9.2.1CoreBusinessTo date OTML has funded the program implementation functions which OTFRDP will assume in the future from its operating budget. Unlike OTML, OTFRDP does not produce goods, or extract resources which can be sold to provide income for operating expenses. OTFRDP’s business is providing program design and management services to the CMCA communities and related trusts within the legal framework of a ‘charity’16 that provides it with tax-free status. To do this, OTFRDP identified a core set of capabilities necessary to meet obligations to the communities as part of the analysis of functions described in Section 2. This has formed the basis of the organisational structure, related personnel costs, and the operating budget (see Annex 4). It is a much smaller organisation with cost structures similar to a PNG private-sector organisation or non-government organisation. Apart from the staff and overhead expenses necessary to maintain the core organisational capability, there will be increases in operating costs that are related to the expected scaling up of the volume of programs. This section will focus on the core operations of OTFRDP and explore options for funding.

15 Projections are provided annually by the Dept Mining. 16 OTDF is registered as a not-for-profit organisation

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The following assumptions about core business have been made:

1. Core business centres on delivering quality programs to CMCA communities. As long as CMCA trusts have funds available from the various sources that make up the regional package of assistance, this core business will continue.

2. OTFRDP is a new entity and cannot legitimately claim a track record in program delivery in its own right. Previous experience has been under OTML management. OTFRDP will need to demonstrate its capacity to deliver as an independent organisation. New funders will have an obligation to assess OTFRDP capability to deliver programs before considering allocation of a percentage of project funds to cover overheads.

3. OTFRDP has a number of legal obligations to CMCA trusts which require an appropriate resource allocation, either through permanent staffing or contracted services.

4. Community and Government stakeholders expect high standards of governance and ethical behaviour in managing funds, delivering sustainable programs in CMCA areas and establishing productive and respectful internal and external stakeholder relationships.

5. Operational and staffing costs of certain services which OTML are obligated to provide and which for reasons of efficiency and effectiveness have been transferred to OTFRDP (e.g. trust administration, food security) should continue to be funded by OTML.

9.2.2FundingStrategyCurrent OTFRDP operations are fully funded by OTML; however during the transition to mine closure, the balance of 100% reliance on OTML for operational budget support must change. Diagram 7 is a notional model of the way in which this balance could shift as other sources of income are secured to contribute to core funding. The strategy has two thrusts:

1. Operating cost reduction. This has already commenced with the reduction in personnel costs by hiring of new staff on remuneration packages which align more closely with the PNG private sector.

2. New sources of income where implementation of projects attracts project management and administration fees as a percentage of project funding. This is standard industry practice for most project-based organisations.

Diagram 7: Change in Balance of Core Funding Sources by Mine Closure

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Strategic Direction

9.2.3FundingOptionsandPhasingforFundingStrategyEstablishment Period: Funding to establish a new entity such as OTFRDP would normally be sought through commitment by sponsors, principals, partners or shareholders to contribute to initial set-up and operating costs for a certain period. Within that period, the entity would be expected to demonstrate within its Business Plan how funding will be sustained after that period. In this case, OTML is the major shareholder and is currently funding establishment and operating costs. OTML is currently planning for mine life extension until 2020 with significantly reduced operations after 2013. This will consequently result in reduced income being available after 2013 to support OTFRDP. The following options are not mutually exclusive. However to ensure a secure funding base for future OTFRDP operations consideration of these options is based on the premise that:

Shareholders should have an obligation to ensure that the organisation is adequately resourced to achieve its mandate, and

Funding organisations should follow accepted international practice and include administrative (overhead) costs as a percentage of total project input costs. This has already been foreshadowed in the CMCA Women and Children Action Plans and the 2008 new entity design document.

Option1:OTMLPrimaryFunderofCoreOperationsandProjectDeliveryThe basis for OTML as the majority shareholder continuing the funding of OTFRDP operating costs includes:

1. Residual OTML Obligations – Fee for Service: As long as funds remain in the CMCA trust accounts, OTML has obligations to the communities which it has transferred to OTFRDP. There is therefore a case for OTML to continue funding those obligations until they are fully acquitted. This will require quantification of those ongoing obligations using the new OTFRDP cost structures, followed by discussion on options for funding them. Options could include a mix of the following:

Funding by OTML of agreed costs of obligations until mine closure through annual budget support, calculation of the cost of completing all obligations using agreed accounting formulae and pay-out to OTFRDP of an amount to cover those costs,

establishment of an agreed expenditure schedule for CMCA trust accounts to provide a timeframe during which OTML will be liable for funding of OTFRDP’s services to trust accounts.

2. Design and Management of New Programs funded by CMCA Trust Accounts - Fee for Service: In the past, the cost of delivering programs funded by CMCA trusts has not included the overheads associated with implementing programs throughout the cycle until program completion. Since 2008, a surcharge has been levied on all projects to offset a small proportion of the costs of logistics which have been managed by OTML. Under the 2007 MoA17, OTFRDP is required to assume full responsibility for the costs of logistics. However logistics is just one element of the project cycle from identification to completion, including monitoring and evaluation. Trusts will need to be convinced of the value of paying for a service which they used to get for free, and it is likely that they will still consider that OTML has an obligation to underwrite the OTFRDP ‘delivery costs’ of their programs.

17 Section 5.11

Strategic Direction

34

Option2:PNGSDPaFunderofProjectDeliveryfrom2011OnwardsAs a stakeholder PNGSDP has several areas of interest in OTFRDP:

(a) As a 25% shareholder in OTFRDP, PNGSDP is obligated to support the initiatives outlined in the Business Plan;

(b) As the manager of Development Funds earmarked for Western Province activities, including CMCA communities, PNGSDP fosters partnerships with implementing organisations such as OTFRDP. PNGSDP provides counterpart funding to match CMCA trust funds for projects identified by communities that meet PNGSDP criteria. OTFRDP will have the infrastructure and personnel to expand this development partnership, provided it is assured of core funding to maintain this capacity to appropriate standards of quality. An allocation of a percentage of PNGSDP project funds to OTFRDP overheads and a similar arrangement for CMCA trust funds for projects implemented by OTFRDP, would provide the entity with a more predictable funding flow.

OTFRDP could also take a formal role as PNGSDP’s primary implementation partner for specific groups of projects in the PNGSDP pipeline. This is consistent with the objective of fostering a closer partnership between the two organisations, through sharing of office space, and joint identification and design of projects. A formal implementation role would provide OTFRDP with a more stable funding base given the longer term nature of PNGSDP’s presence in the Western Province. PNGSDP’s involvement after mine closure will also be through its Long Term Fund obligations. After mine closure, the sources of operational funding will become less certain. However the PNGSDP Articles of Association (Section 10.4: Rate of Application of the Long Term Fund) indicate that the fund “Must be applied to Sustainable Development Purposes for… maintenance of expenditures on services and support for Sustainable Development Purposes within the Western Province of Papua New Guinea at the level funded by OTML and its associated entities before mine closure.” If OTFRDP remains an independent entity after mine closure, this could be a possible source of future operational funding. Alternatively, if the functions of OTFRDP or the structure were folded into PNGSDP, this clause could still apply.

Option3:GovernmentofPNGaFunderofCoreOperationsandProjectDeliveryThe Government of PNG through the Mineral Resources Authority has a seat on the OTFRDP Board in recognition of its interest in the development aspirations of the Western Province as a funder through the Western Province Peoples 10% Dividend Trust Fund. Half of the WPPDTF is earmarked for CMCA communities, but has not yet been accessed. OTFRDP will have the infrastructure and personnel to expand this development partnership, provided it can be assured of core funding to maintain this capacity to appropriate standards of quality. The FRPA also has funding available through the SSG which is project-based, and reliant on ongoing mining operations. It would normally include a project management component if implemented by a contractor or other external organisation.

Option4:OtherDevelopmentPartnersPayFeesforProgramServicesProgram Management Funding from Other Sources – Fee for Service Opportunities may arise for OTFRDP to implement projects funded by other development partners (e.g. NGOs, bilateral and multilateral donors). These should be considered on a case-by-case basis during the next 3.5 years until December 2013, and thereafter more vigorously pursued as funding tied to OTML operations phases out or ceases.

35

Strategic Direction RecommendedOptionsandPhasingThe most likely outcome will be a combination of the above options until mine closure, with some direct funding through OTML to cover its ongoing obligations. This may require execution of funding MoU’s to cover different areas of business and the related funding sources. In the case of PNGSDP and WPPDTF, in the next 3.5 years, this may be through project implementation. Phasing out of OTML support for ongoing obligations will need to be matched by a phasing in of PNGSDP core funding through its long term fund. Diagram 8 demonstrates how MoU’s could be executed to ensure core funding for specific functions. Diagram 8: Possible Funding MoU Criteria 18

9.3ManagementofCosts

In the future, operational costs for OTFRDP will reflect the PNG private sector rather than elevated OTML cost levels, and this will be important for ensuring the organisation’s credibility with the CMCA communities and other stakeholders. In the process of making the transition from a Department of OTML to an independent entity, OTFRDP has been reviewing all of its costs and assessing alternatives to the current arrangements. A number of strategies for managing costs include:

1. Personnel Recruitment and Remuneration

Personnel costs represent the highest percentage of the overall OTFRDP budget, and this must be efficiently managed within the constraints of future funding. It must also recognise that the organisation relies on its people to achieve the entities vision and mission. Strategies to manage personnel costs in the transition to independence include:

(a) All staff recruited will be PNG citizens or permanent residents rather than expatriates, with remuneration packages which reflect PNG conditions;

(b) Change of fly-in-fly-out arrangements to 8 weeks on and 2 weeks off, ideally with the objective of staff and their families being permanently located within Western Province on residential status; and,

(c) Reduction in the overall number of staff within the organisation, with flexibility to scale up or down through project-based contracts and outsourcing of some corporate functions.

While the reduction in remuneration levels has impacted on OTFRDP’s ability to attract some staff who were made redundant from OTML, this approach has signalled a change to a more streamlined, project-based organisation with a commitment to regional development.

2. Operational Costs A large component of OTFRDP’s operational budget includes fuel and transportation costs required for field work. There are potential efficiencies through more coordinated planning of field work, and reduction of distances travelled by accommodating staff at regional bases. Following the principles of prudent financial management and accountability and effective management and implementation of regional development programs, staff will be encouraged to identify efficiencies that reduce operating costs.

18 Source: OTFRDP Design

Strategic Direction

36

Enhancing program delivery performance using value for money approaches will include moving away from a reliance on OTML systems for procurement and logistics which are geared to a mining operation. A number of other OTML systems currently used (including accounting software systems and IS infrastructure) are also considered inappropriate for OTFRDP’s medium term business operations. The cost of providing these has been pro-rated by OTML and cross-charged to OTFRDP at very high rates which do not reflect value for money for the organisation. The Executive Management team will identify operating cost savings which can be achieved as OTFRDP makes the transition to independence. This will include options for establishing its own systems, or negotiating a value for money service agreement with OTML for some ongoing services where the cost of setting up infrastructure may be prohibitive.

3. Assets OTFRDP has taken over some of the OTML assets formerly utilised in OTDF operations, and will continue this process where those assets can be usefully employed. A decision on the operational need for an asset must be made before OTFRDP assumes ownership. There are two critical aspects to be considered:

(a) The condition of the assets prior to acceptance should be assessed to determine the likely remaining useful life. This will determine the timing of replacement, possible repair and maintenance costs, factors such as software compatibility, and spare part availability. A comparative analysis may be required to determine whether purchase of a new asset is a better value for money option than taking over an older or less reliable asset.

(b) The accrual of depreciation must also be considered, as this accrued liability represents a notional replacement cost for assets. The current depreciation schedule and assets register should be reviewed to ensure that future liability for replacement of assets is funded.

Consideration should also be given to the degree to which OTFRDP as a development organisation takes over large assets which could be owned by CMCA communities and made available to OTFRDP on a commercial basis as required. This is the basis upon which OTFRDP accommodation and office buildings will be treated.

4. Non-core Business Operating Costs and OTFRDP Tax Free Status OTFRDP’s tax-free status19 makes it an attractive vehicle for project implementation beyond its core business of delivering programs for communities in the CMCA corridor. There is a risk that OTFRDP could increase its overheads (including human and physical resources) beyond that needed to deliver its core business without recouping sufficient costs from project management fees to fund them. OTFRDP will need to develop a set of clear and unambiguous criteria and related project management fees as a basis for accepting non-core business. The Executive Management team should also ensure that a risk assessment is made before taking on non-core business in relation to maintaining OTFRDP’s tax-free status.

19 Section 11, The Mining (Ok Tedi Mine Continuation (Ninth Supplement) Agreement) Act 2001, “Tax status of Foundation” states:

(1) For the purposes of the Income Tax Act 1959 –

(a) The income of the Foundation is exempt from income tax; and

(b) moneys paid or the costs of assets contributed to the Foundation may be claimed, and will be allowed, as a deduction to the person who made the payment or contribution in the year of payment or contribution, as the case may be.

(2) For the purposes of the Value Added Tax Act 1998, tax on all supplies made by the Foundation is to be charged at a rate of zero percent.

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Strategic Direction

10. RISK MANAGEMENT

10.1RiskManagementPlanandPurpose The risk management plan should define how risk management is to be conducted throughout the organisation. The aim of the risk management plan should be to embed risk management in all the organisation’s important practices and business processes so that it is relevant, effective, efficient and sustained. In particular, risk management should be embedded into the policy development, business and strategic planning and change management. It should also be a component of other plans and processes such as those for asset management, audit, business continuity, environmental management, fraud control, human resources, investment and project management. The risk management plan may include specific sections for particular functions, areas, projects, activities or processes. In practice, these sections may be separate plans but need to be consistent with OTFRDP’s risk management policy. Examples of risk analyses which have been prepared by OTFRDP are included with the Risk Register and related Management Matrix at Annex 3.

10.2SummaryofHigh‐LevelRisks The main risks to OTFRDP and risk management strategies are detailed in the Risk Register and Management Matrix at Annex 3. Risk events rated as “high” in the matrix are summarised in clusters below20.

Reputation / Goodwill Communities and village planning committees do not have confidence in the new entity Political interference in approval of WPPDTF Funds (PGK 400 million) with funds not available to

OTFRDP for programming purposes Lack of confidence of funding organisations and development partners in the ability of OTFRDP to

operate as an independent entity Effective Sustainable Development Outcomes

Limited absorptive capacity of local counterparts with programs not delivered effectively on the ground due to lack of resources and inputs from government in critical areas

Difficulty in procuring well qualified and experienced providers of goods and services in Western Province to deliver project outputs

Inadequate funding available to conduct detailed and rigorous program designs and feasibility studies

Proposals to the CMCA Trust Funds by the VPCs delayed causing possible safety concerns for OTFRDP staff visiting disaffected communities

Overemphasis on large-scale infrastructure programs with short lead-times that are supply driven as opposed to demand driven programming

Program Output Delivery Efficiency

Logistical constraints and procurement bottlenecks cause delay in program implementation for communities with potential dissatisfaction with services provided to trusts by OTFRDP

Available trust funds are significantly underutilised by mine closure leading to delays in the achievement of communities’ development objectives

Land ownership ambiguity or disputes on sites for building or other development causing delay in program implementation

20 Overall “high” score includes all events which have a combination of “High” and “Medium” or all “High” impact or likelihood.

Strategic Direction

38

Funding

Operational costs are not funded, threatening viability of the new entity Systems

Accounting system is not adequate to account for trust fund transactions leading to inaccurate and/or untimely quarterly trust reporting

Contracts for major projects do not include all risk management clauses to cover disputes, force majeure, lack of contractor performance, termination, milestones, confidentiality etc.

10.3RiskManagementResponsibility The accountability framework identifies risk management as a support services function. However, the responsibility for managing individual risks identified in the risk management matrix will cut across the whole organisation. Under the current structure, the Executive Manager Support Services would be responsible for convening a risk management subcommittee and reporting to the CEO on any potential changes to the organisation’s overall risk profile. Many risks can be addressed by appropriate policies and procedures which minimise the impact of specific risk events (e.g. regional safety policies and procedures). As the number of projects grows, OTFRDP may require a risk assessment to be made on any new project before proceeding with a tender or application process. Although individual project risks may be relatively minor, when handling a portfolio of projects, a combination of risks arising from different projects may significantly expose the organisation. A common example is cash flow where forward funding of project inputs is required at the same time for a number of activities in a portfolio, or where there is a potential impact on capacity of accounting and finance staff to manage a significant increase in transactions during periods of combined/high project activity.

39

Strategic Direction

11. TRANSITION TO MINE CLOSURE AND BEYOND This Business Plan covers the 5-year period July 2010 to June 2015. Based on the assumption that there will be a mine extension after December 2013, there are at least three transitional stages during the period leading up to mine closure.

11.1TransitiontoIndependentEntity:January–June2010(6months) There are many activities outlined in the Operational Plan section of this Business Plan which have already commenced in preparation for OTFRDP’s establishment as an independent entity in July 2010. The most important and time-consuming activity has been recruitment of staff. Many of the policies, systems and procedures which they will manage come from OTML and require documentation or changing to match the OTFRDP operational environment. During this transitional period, it will be important to recognise the capacity of newly recruited staff to take up their roles in the organisation while assisting in the development of new ways of doing business. Capacity issues may delay the phasing of systems and procedures such as new accounting software, human resources policies, procurement and logistics.

11.2TransitiontoProposedMineClosureorMineExtensionJuly2010–December2013(3.5years)

From July 2010, OTFRDP will be operating as an independent entity, starting with a 3.5-year period in which to prepare itself for mine closure either in 2013, or 2020 if there is an extension to the mine’s life. Some of these activities are already highlighted within this Business Plan but are sufficiently important to be mentioned here again as priority transitional activities which provide a foundation for determining strategic directions of OTFRDP after 2013. They include:

Team-building to maintain efficient and effective design and delivery of programs Reviewing strategic directions following announcement of OTML’s position on mine closure, including

revising funding analyses under a mine life extension scenario Refining OTFRDP shareholder composition Developing a strategy to support isolated villagers Developing a Terms of Reference for the Business Plan from 2016 onwards

11.3TransitiontoMineClosureJanuary2014–Onwards Whether there is a mine extension or whether OTML announces mine closure, the period after December 2013 will be different. Options exist for OTFRDP to become a successful development organisation which can apply its expertise in other areas and replicate some of the approaches taken in the CMCA corridor. This opportunity could be linked to other mining interests which OTML pursues in PNG. Mine extension could also provide emerging opportunities for broadening the business base that would impact on planning for disbursement of trust funds for development purposes.

Strategic Direction

40

Picture 3: Children Collect ‘Marita’ in the North Fly Mountains

Picture 4: Model Farmer Harvesting ‘Taro’

41

Operational Plan

12. OPERATIONAL FUNCTIONS, OBJECTIVES AND STRATEGIES

This section combines the organisational structure with the clusters of functions outlined in the Accountability Framework (See Diagram 4). It describes the functions in more detail and discusses related operational progress and issues. It links the functions to the Key Strategies outlined in Table 2: Principles of Strategic Engagement and Key Strategies. The objectives, strategies, performance indicators and responsibility for implementation of each function are summarised in a table at the end of the relevant section. These individual tables are starting points for more detailed annual operational plans for each Division of OTFRDP.

12.1 Governance&Leadership OTFRDP’s governance and leadership functions are vested in the Board, Advisory Committee and the Executive Management Team. Diagram 9: Organisation Chart – Governance and Leadership Diagram 10: Accountability Framework: Governance and Leadership

Advisory Committee

OTDF Board

CEO

Executive Secretary

Executive Manager Regional Development

Executive Manager Support Services

The OTFRDP Board, Advisory Committee and Executive Management Team are responsible for ensuring achievement of the oorrggaanniissaattiioonn’’ss mmiissssiioonn ooff bbeeiinngg “committed to best practice and wise management of funds and programs with emphasis on accountability, transparency, performance and equal participation in order to realise the development aspirations of the impacted communities”.

  Governance 

Leadership Services  Stakeholder Advice 

Operational Plan

42

a. BoardThe Board, and the Executive Management Team (EMT) would benefit from a series of working sessions to improve their capacity to fulfil their respective roles and responsibilities. These would be best delivered as new directors and shareholders are joining OTFRDP and the organisation is establishing its new business processes. The Board will continue its search for reputable organisations to take over the remaining three OTML shareholdings as part of the transitional process leading up to mine closure. The trusts have agreed that OTMIAA should be incorporated by the end of 2011 to enable it to take up a shareholding in OTFRDP. As part of the preparatory processes, the 8 trusts have approved expenditure of 0.75 million Kina to set up an office and to progress the incorporation process in accordance with set guidelines for disbursement of quarterly tranches.

b. AdvisoryCommitteeThe Advisory Committee (AC) membership of 18 has been confirmed. However this membership may change in composition over time and not all nominated representatives will be available to attend every meeting. The capacity of AC members to understand and contribute to decision-making processes will vary. The Board and CEO need to monitor this and develop strategies to foster improvements. Members of the new AC will benefit from brief terms of reference that outline the AC roles and responsibilities and a procedures manual as an induction and reference tool. The terms of reference and procedures manual are important governance tools to enhance transparency in decision-making and accountability of members to their constituencies. With these tools in place, members can maximise their contribution to the development projects they are to consider and make recommendations to the Board. PNGSDP has a similar document for its Advisory Council which may be a useful guide. The Advisory Committee proposed an annual communications trip to each of the 8 trust locations to reinforce key messages. All 152 VPC chairs were invited and expected to attend, and then relay presentations by OTFRDP staff to their respective communities. The first community consultation trip was conducted over the first two weeks of May 2010.

c. ExecutiveManagementTeamThe CEO was recruited in July 2009, and the Position Descriptions for the positions of Executive Manager Regional Development and Executive Manager Support Services were developed as part of the business planning process for recruitment by an externally contracted human resource company.

This new team was in place by the second quarter of 2010 and needs to form productive working relationships with each other and with their teams. As part of team-building, the two Executive Managers will continue to recruit new team members to fill vacancies in their divisions. Together, the Executive Management Team will refine strategies and implement the activities outlined in the Business Plan. They will work with a mixture of staff with experience from the former organisational structure recruited from OTML and new staff recruited externally. The EMT will spearhead the new ways of doing business, involving greater accountability and refining and adapting policies, procedures and related systems.

The EMT has a number of organisation-wide responsibilities. These include; implementing effective, efficient, staged transition processes leading up to mine closure and monitoring the organisational structure and functions so they remain relevant to the operating environment. The EMT will prioritise the work of the two divisions to ensure that quality programs are identified, developed and delivered and that focus on the key strategies outlined in Table 2 is maintained.

OrganisationalStructureThe organisational structure supports the functional accountabilities. However, it is a living structure and will be regularly evaluated and revised to ensure structures match operational requirements. The EMT will also monitor

43

Operational Plan

Job Descriptions. These were prepared concurrently with the Business Plan and may not reflect key functional accountabilities or the practical aspects of different teams working together.

TransitionThe Executive Management Team’s leadership during OTFRDP’s transition to an independent entity is crucial to building its credibility with stakeholders. The three stages are transition to:

(a) Independent entity (January – June 2010); (b) proposed mine closure or mine extension (July 2010 – December 2013) ; and (c) mine closure (January 2014 onwards)

Transition to Independent Entity: January – June 2010 (6 months) 

This stage progressed concurrently with the preparation of the Business Plan. Many of the issues and transitional risks were addressed during this period. Much of the transitional work was implemented under tight deadlines and limited resources by OTML and transitional OTDF staff. In the next 6-12 months it will need to be consolidated. Key achievements are:

Recruiting to newly created positions (two Executive Managers; Corporate Services Manager, Program Services Manager, Executive Secretary)

Managing redundancy of former contracted OTML staff Contracting former OTML employees to OTFRDP Tendering for construction of a building at Kiunga for OTFRDP headquarters Transferring CMCA Trust Administration to an OTFRDP staff member as delegated by OTML Establishing a service contract for procurement and warehousing support in Port Moresby Involving the CEO on Mine Closure planning (Mine Closure Plan was completed in December 2009) Engaging with the State on access to the WPPDTF Reviewing financial management systems Scoping Regional Base upgrades Transferring assets from OTML Preparing a draft communications plan (see Annex 1b) Transferring programs to OTFRDP (e.g. CMCA trust administration & food security)

Mine Closure or Mine Life Extension July 2010 – December 2013 (3.5 years) From July 2010, OTFRDP will operate as the new entity. It has 3 years to prepare itself for mine closure either in 2013 or at some point in the future if there is an extension to the mine’s life. Some activities are highlighted in this Business Plan but are sufficiently important to be included here again because they are foundations for determining the strategic direction of OTFRDP:

Team building / facilitation Consolidating policies, systems and procedures to support innovation in delivery Reviewing options to take on additional OTML functions (e.g. Regional Engineering and Radio Fly) Gaining experience in designing and implementing larger multi-year, multi-region impact projects Revising funding analyses under a mine life extension scenario Confirming OTFRDP shareholder composition Developing strategies to support isolated villages

OTFRDP will bring 18 months of operational experience to the commencement of a new financial year in January 2012. Key activities and issues which will be important during the remaining period of this Business Plan will depend on whether a new SA will be executed, and how that might impact on OTFRDP operations. Options may include providing development services to OTML in areas where it is expanding its interests, or replicating similar models of operations with other mining interests in PNG. Mine life extension, albeit at a reduced level will require planning for future opportunities for landowner businesses, trust fund investments and disbursement as well as shipping and transport requirements.

Operational Plan

44

Terms of Reference and indicative timing for an independent mid-term review of the Business Plan should be agreed by December 2012. Reviewing the Business Plan after the experience of two and a half years, and with more information about the future of OTML, will guide OTFRDP on the strategic and operational directions of the plan beyond 2013. The TOR for the review should include possible transfer of additional programs/activities from OTML (including the Community Business Support Unit and Radio Fly), strategies for transition to non-OTML funding sources, further assets transfers from OTML, and the OTFRDP accountability framework and organisational structure. Governance and Leadership: Summary of Objectives, Strategies and Performance Indicators

Function:

Governance

Objective/s Establish a strong corporate governance framework

Strategies Performance Indicators Accountability 1. A staged transfer of OTML

shareholdings and a transition to a new Board structure, including chairmanship

1. New shareholders identified shares transferred and reported to IPA

2. Confirm roles and responsibilities of Board members, number of Board members, possible sub-committees and a staged approach to a new Board structure, including chairmanship

3. New Board structures implemented and reported under the Companies Act, and included in revised Business Plan by 2013

Board Chair

2. Establish operational guidelines for the Advisory Committee

1. Terms of Reference for operations of the OTFRDP Advisory Committee, including meeting schedules, induction, term of office of members, alternates, gender balance, reporting responsibility of members, remuneration.

2. AC members formally inducted

CEO

3. Establish operational guidelines for the Executive Management Team

Operational guidelines prepared including frequency of meetings, documentation of decisions, delegations

EMT

45

Operational Plan

Function Leadership

Objective/s Provide strategic feedback and guidance to the OTFRDP Board on development issues affecting mine impacted communities

Strategies Performance Indicators Accountability 1. Ensure the advisory role is clear and unambiguous

in relation to the business of OTFRDP

Terms of Reference outlining roles and responsibilities

CEO

2. Build AC trust members’ capacity to provide sound advice, and establish the credibility and track record of OTMIAA as a reputable development organisation

1. Members have knowledge and skills to provide appropriate advice to the OTFRDP Board on community and regional issues

2. OTMIAA incorporated

CEO

3. Proposed increase in participation of women in the Advisory Committee

Gender balance of AC trust representative membership by mine closure

CEO

Objective/s Ensure organisational structure meets the strategic and operational requirements of OTFRDP

Strategies Performance Indicators Accountability Review existing and new functions and ensure accountabilities are covered in relevant job descriptions, and align with the accountabilities framework and organisational structure

All OTFRDP functions are identified and accountabilities assigned to relevant position in organisational structure

CEO

Objective/s Ensure a staged transition to an independent entity

Strategies Performance Indicators Accountability 1. Implement priority transition activities to

independent entity by 30th June 2010 Activity list and timeframes for : Trust administration Personnel recruitment & induction Team building Transfer of office to Kiunga Accommodation Estate in Kiunga Regional base upgrades Information services agreements Domain name for OTFRDP New logo Corporate wardrobe Accounting system review Audit service contract Mine Closure Committee representation & mine closure planning Communications Plan Cargo and ferry shipping services Procurement and logistics in POM Authority levels defined Operating resources in place

CEO

Operational Plan

46

12.2 RegionalDevelopment The regional development function has a geographical dimension to its organisational structure. There are three regions within which 8 trusts and the cluster of 6 mine villages are located. North Fly Region covers the mine villages, Nupmo, Tutwe and Wai-Tri and Alice River Trusts; Middle Fly Region covers the Middle Fly Trust and South Fly Region covers Suki Fly Gogo, Dudi, Manawete and Kiwaba Trusts. The Executive Manager Regional Development is based at Kiunga, on the border between the North and Middle Fly Regions (see Section 2: Map of CMCA Regions and District Boundaries). Regional bases are located at Tabubil, Kiunga and Sturt Island. Field bases are located at Bige, Aiambak, Obo, Suki and Tapila. Diagram 11: Organisation Chart – Regional Development

The Regional Development Division identifies designs and delivers programs in partnership with CMCA communities in the North Fly, Middle Fly and South Fly regions to achieve the development aspirations of all people in those regions.

Executive Manager Regional Development

Admin Ass is tant

Team Leader Mine Villages (1) Team Leader Lower Ok Tedi (1) Logistics Of ficer (1) Agriculture Officer (2) Livestock Off icer (1) Fisheries Officer (1)

Logistics Off icer (1) Agriculture Of ficer (2) Livestock Officer (1) Fisheries Officer (1) Outboard Ops (2)

Logistic s Officer (1) Agriculture Of ficer (4) Livestock Officer (1) Fisheries Officer (2) Outboard Ops (3)

Field Base Support

(Contrac tors ) and casuals)

Coordinator North Fly

Coordinator Middle Fly

Coordinator South F ly

Field Base Support

(Contrac tors ) and casuals)

F ield Base Support

(Contractors ) and casuals)

47

Operational Plan

This section covers the generic functions common to all regions. It focuses on current program commitments under the Community and Regional Development Strategy and identifying future projects. This section outlines strategies to improve delivery of smaller CMCA trust projects, including: Facilitating the Village Planning committee processes; building the capacity of VPCs and women’s groups responsible for operationalising the CMCA Women and Children Action Plans; and improving communications and logistics. Diagram 12: Accountability Framework: Regional Development Central to the effectiveness of the Regional Development Division is the extent to which staff consult with stakeholders when completing existing activities and identifying new projects. The initial focus is on promoting food security for communities (e.g. agriculture, livestock and fisheries) and logistical support for program delivery. In consultation with the Village Planning Committees, LLG Ward Committees and Women’s Groups, new programs will be identified, designed, funded, delivered, monitored and evaluated. The field bases are the key platforms for consultation and project management support at the local level. The Program Services team will support this process by providing program design, management and evaluation support.

North 

Fly

Middle 

Fly

South 

Fly

- Project Ident ification

 

- Community Engagement

 

- CMCA Pro ject QA  

- W  & C Projec t QA 

 

- Data Collection & Reporting  

 

- Government Liaison 

- Advocacy 

 

- Capacity Build ing   

- Regional operations 

 

‐  Food Secur it y 

 

 

Regional Development

Operational Plan

48

a. ProjectIdentificationHistorically, CMCA communities have identified projects to be funded from CMCA trust funds through their Village Planning Committees. Generally these ‘projects’ were limited to one-off purchases of goods or services, such as outboard motors and sewing machines, to be delivered within 12 months of approval. The overall impact of these expenditures has not been significant due to their small size, scattered nature and in some cases poor implementation arrangements and lack of follow-up. Some trusts21 have successfully negotiated co-funding of projects with PNGSDP. Accessing counterpart funding requires additional levels of detail for projects, including technical inputs (e.g. Project Funding Agreements) to demonstrate feasibility and longer timeframes for approval than the quarterly trust meeting cycle where VPC projects are considered. Experience in working with VPCs has shown that the capacity of the committees and individuals within them can be limited. This in turn affects the quality of projects proposed and the likelihood of success in securing funding or achieving the expected project benefits. The Regional Development teams will facilitate training and work closely with VPCs to build their capacity to develop, implement and monitor viable projects. Regional teams will support VPCs, women and youth groups, ward councillors and communities to identify projects that provide sustainable livelihood opportunities. Lessons learned from previous experiences have been incorporated into revised strategies to assist communities to identify projects that contribute to broader regional development initiatives. Each of the three regions has differing development constraints, priorities and opportunities. These are captured in specific regional development plans and will guide the identification of individual projects. Project Identification: Summary of Objectives, Strategies and Performance Indicators

Function Project Identification

Objective/s Identify sustainable regional programs that address the development aspirations of CMCA communities

Strategies Performance Indicators Accountability 1. Regular engagement by regional development

and support services staff with all village planning committees and women’s groups to review lessons learned from previous project implementation, determine priorities for smaller programs and to identify and advocate for larger programs with impact across regions

1. Consolidated VPC and women’s groups meeting schedules for all regions approved & disseminated

2. Regional programs with community support at concept stage of pipeline in priority sectors of primary industry, health, education and infrastructure (roads, jetties, electrification)

3. Timely technical advice provided to communities on project feasibility and suitability for funding

4. Counter-funding arrangements confirmed

EM Regional Development & EM Support Services

21 For example the Kiwaba Water Supply Project and Suki Handicrafts Project

49

Operational Plan

b. CommunityEngagementAs outlined in Section 3.3 of the Strategic Plan, CMCA communities are characterised as being relatively small in population but geographically dispersed along the Fly River. Some groups are nomadic (shifting agriculturalists and hunters and gatherers), moving from place to place as part of their seasonal food gathering lifestyle. Until telecommunications networks reach all these communities in the next few years, many will have limited outside contact. The logistical challenges of providing services to these communities require approaches which focus on regular and sustained engagement. To ensure that each of the152 CMCA villages has the opportunity to actively participate in planning for their development, OTFRDP has committed to visiting every village at least once each year. Given the logistical challenges in providing services to them, OTFRDP will bring operations closer to the communities they service by deploying staff in the regional field bases, and reducing the fly-in-fly-out rotations to maintain continuity. OTFRDP aims to combine patrols with other service providers from government and development partners (e.g. PNGSDP). On these combined patrols, staff will identify and discuss possible projects for future funding, provide key messages to communities on existing trust projects of which they are beneficiaries, monitor impacts of previous projects, and draw lessons from implementation. They will also update villages on the progress of planning for mine closure and related future consequences. OTFRDP anticipates that a greater community understanding of sustainable development opportunities in areas such as year-round food security, and economic activities yielding cash income will reduce the potential for disaffection and conflict as reduced incomes from mining operations occur post-2013. This engagement by a combined team also facilitates an assessment of village profiles, identification of community based orgainsations, and capacity building activities for VPCs, women and young people. Community Engagement: Summary of Objectives, Strategies and Performance Indicators

Function Community Engagement

Objective/s Maintain respectful, productive working relationships with communities

Strategies Performance Indicators Accountability 1. Sustained engagement with 152

village planning committees and women’s groups

1. Regional Program & Community Development officers set foot in every village in their region annually

2. Identify and record skills base in community 3. Identify and record effective male and

female community leaders (current and emerging)

4. Village based rapid project identification conducted with Ward Members to align with Ward Development profiles

EM Regional Development

2. Combine patrols with development partners

1. Consolidated patrol plan for all regions approved & disseminated

EM Regional Development

2. Patrols planned and implemented with OTDRFP technical staff, FRPG and PNGSDP

Regional Coordinators & T/L Comm Dvt

3. Provide information to communities on implications of Mine Closure Planning

Mine closure planning messages included in communications plan and disseminated to communities

North, Middle & South Fly Regional Coordinators & T/L Comm Dvt

Operational Plan

50

c. CMCAProjectQualityAssuranceProcurement and logistical constraints have meant that delivery of materials for smaller-scale projects has not been achieved within 12 months in many instances. While timely delivery of materials is one aspect of quality, there are a number of other quality issues which determine the ultimate effectiveness of a project. For example, complementing equipment such as walkabout sawmills with adequate training and using equipment to benefit a community as intended in the project proposal. Each project proposal should outline its benefits and identify which community members to monitor project outcomes. In some instances, community-based organisations such as church and youth groups may be involved in implementing projects (e.g. minor construction work) under formal agreements which outline their obligations to ensure successful completion. Using community members to monitor project implementation is often a very effective means of ensuring transparency in project delivery. Using local labour rather than outside contractors also increases ownership of these kinds of projects, and may encourage proactive maintenance or safeguard against damage. CMCA Project Quality Assurance: Summary of Objectives, Strategies and Performance Indicators

Function CMCA Project QA

Objective/s Increase community ownership of CMCA projects

Strategies Performance Indicators Accountability 1. Monitor CMCA project implementation

1. Community-based monitoring arrangements in place as per project monitoring and evaluation frameworks

2. Training conducted for community-based monitoring

EM Regional Development

2. Identify and engage Community Based Organisations to implement village based CMCA projects

1. CBO database 2. Project implementation records

showing participating CBOs and formal agreements for implementation

Regional Coordinators

51

Operational Plan

d. QualityAssuranceforDeliveryofWomen&Children’sActionPlanProjects

The Women & Children’s Action Plans vision for all CMCA people is “Harmonious and Prosperous Living in the Communities.” The CMCA WACAPs are the basis for implementing the 10% of CMCA trust funds allocated to specifically benefit this group. There has been considerable effort in preparing the WACAP, which includes performance indicators within the individual monitoring frameworks for the stated WACAP goals in each of the trusts and mine villages. Working with their Program Services and Regional Development colleagues, the Community Development Team will take a lead role in assisting women’s groups to identify, design, monitor and evaluate projects within the framework of the WACAP. Specific women’s groups will be identified to monitor and evaluate project implementation to ensure achievement of project objectives, and to gather lessons learned. Building the capacity of women’s groups to participate throughout an entire project cycle will be a priority. Many women’s groups are still marginalised and represent the most vulnerable groups in their communities. They will need special recognition, focus and attention to help them fulfil their roles as significant stakeholders in operationalising the CMCA trust funds. To facilitate transparency and accountability, the Corporate Services Manager will be responsible for reporting to women’s groups and other stakeholders on project expenditure. CMCA Women and Children Action Plan Quality Assurance: Summary of Objectives, Strategies and Performance Indicators

Function CMCA Women and Children Action Plans QA

Objective/s Increase community ownership of CMCA Women and Children Action Plan projects

Strategies Performance Indicators Accountability Monitor CMCA Women and Children Action Plan implementation

1. Community-based monitoring arrangements in place as per project monitoring and evaluation frameworks

2. Training conducted for community-based monitoring

EM Regional Development

3. Reports on budget expenditure for 10% of funds disseminated to stakeholders

Corporate Services Manager

Operational Plan

52

e. DataCollectionandReportingManagement information systems are not yet in place to capture all baseline data nor to monitor the implementation of past projects. For instance, one contributing factor to the decline in agricultural production is the lack of baseline information on which to base decisions about priority projects. In the case of food security, information is critical to the well-being of communities, their preparedness for events such as El Niño, and other natural phenomena. Technical Program Services team members will work closely with regional field teams to provide specialised inputs into collecting baseline data (e.g. Forestry, Community Development) to help them assess the viability and benefits of projects. As a result of the recently signed research partnership with ACIAR, OTFRDP will adopt a GIS data collection and monitoring program. Data Collection and Reporting: Summary of Objectives, Strategies and Performance Indicators

Function Data Collection and Reporting

Objective/s Collect objective data to support monitoring and evaluation plans

Strategies Performance Indicators Accountability

Regional teams maintain accurate data collection and information analysis to assist M & E

1. Baseline data collected for technical and community development programs

2. Spatial data provided to GIS analyst as required

Regional Coords

3. Data collection responsibilities, sources and frequencies outlined in M & E frameworks

Program Services Manager

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Operational Plan

f. GovernmentLiaisonThe presence of OTML in the CMCA corridor as an organisation with the resources to implement large infrastructure projects and support other social and economic development initiatives has sidelined the government’s roles and responsibilities under the Organic Law. As OTML influence as provider of these services scales down, OTFRDP will support the Fly River Provincial Government and the Local Level Governments’ emerging roles in planning and project implementation. OTFRDP will regularly meet with all levels of government and assist Ward Members to identify appropriate infrastructure, social, and economic projects in line with their obligations. Implementation of TCS and SSG projects require approval of proposals by the Department of National Planning and Monitoring to ensure alignment with the national medium term development plan. In the remaining time that these funds are available, OTFRDP will work closely with OTML, provincial and local level government to identify eligible projects. This approach will also be followed to identify larger projects in sectors such as education and health which align with both provincial and national plans and priorities.

Coordinators will play a lead role in guiding the dialogue with government at all levels to focus on achieving CMCA communities’ development aspirations. Government Liaison: Summary of Objectives, Strategies and Performance Indicators

Function Government Liaison

Objective/s Ensure regional projects align with and complement national and local level government plans and priorities

Strategies Performance Indicators Accountability 1. Participate in quarterly FRPG Provincial

Management Team (PMT) meetings Presentations on regional projects to FRPG PMT meetings

EMT

2. Establish regular arrangements for dialogue with Ward Members and LLG officials

1. Records of meetings with LLG Presidents

2. Records of participation in VPC meetings

Regional Coordinators

3. Assist Ward Members to develop Ward Development Profiles which align with regional plans

Ward Development Profiles aligned with regional plans

Regional Coordinators & Program Services Manager

4. Maintain regular engagement with national line agencies and provincial and district level staff in key sectors (such as health and education) to align regional projects with sectoral plans for Western Province

Regional project designs take account of relevant sectoral plans at all levels of government

EMT

Operational Plan

54

g. AdvocacyThe concept of regional development is relatively new to most CMCA communities, and their approach and planning horizon must shift from short-term projects to high impact multi-year projects. Longer-term benefits can also accrue to communities through their ability to work together to commercialise their primary production activities. These new concepts, outlining the broader benefits will be reinforced by the teams in the field through their support for VPCs, increased fish and crop production, processing and market access opportunities. Some of these ideas will require a fundamental lifestyle change for communities. This may be a slow process in some cases as remote and conservative rural communities weigh up the pros and cons of changes to their lives. The OTFRDP field teams will play a key role in ensuring that these communities become aware of the benefits of taking a broader regional approach. They will ensure that the information and advice they provide is based on clear and unambiguous messages outlined in the communication plan and on sound evidence that introduction of proven technologies (e.g. drought resistant crop varieties) will result in positive outcomes. Longer and more sustained engagement from field teams based closer to communities is more likely to facilitate this building of trust. Advocacy: Summary of Objectives, Strategies and Performance Indicators

Function Advocacy

Objective/s Promote the OTFRDP regional development principle

Strategies Performance Indicators Accountability Use field bases as a means of linking to communities for advocacy on a range of development issues

1. Communications plan includes regional staff messages for communities

2. Regional team members able to provide program information to communities on all programs in their region

3. Communities become aware of and support the respective development issues

4. Conduct quarterly Radio Fly presentations

Regional Coords

55

Operational Plan

h. CapacityBuildingThere are a range of skills required at every stage of a project cycle from identification through design, implementation and monitoring to completion. This applies to the simplest projects but becomes even more important as complexity increases as projects involve a wide range of stakeholders and consequent human, physical and financial inputs. The trusts, VPCs, women’s groups and other community-based organisations are key stakeholders throughout a project cycle; however, their ability to deliver quality projects is limited by their lack of capacity. Therefore, at the identification and design stage, capacity gaps must be identified and addressed through a plan to build the necessary skills for each stakeholder. Broadening the skill base within a community will hopefully reduce the burden on a small group of leaders and improve transparency in processes and accountability to community members as their own capacity to actively participate in projects is developed. Over time, membership of the VPC, trusts and women’s groups will turn over and local circumstances may change. This will require induction of new members, revision of policies and procedures to ensure that these structures operate effectively and remain relevant to their constituency. Regional teams will develop capacity building activities (e.g. training, coaching and mentoring) as well as establish appropriate systems to facilitate project delivery and communicate key messages to all stakeholders. The need for capacity building of all VPCs was reinforced by community members during the May 2010 communications trip and the Regional Development team has committed to training every VPC by the end of 2010. Capacity Building: Summary of Objectives, Strategies and Performance Indicators

Function Capacity Building

Objective/s Improve community capacity for planning and implementation

Strategies Performance Indicators Accountability 1. Train, mentor and coach CMCA Trust

Chairs, VPC Chairs and members to fulfil their roles and responsibilities

1. Capacity building plan for each Trust 2. Trust meetings conducted with minimal

support 3. Trust members disseminating accurate

and timely project information

Regional Coordinators

2. Train, mentor and coach Village Planning Committees Chairs and members to fulfil their roles and responsibilities

1. Capacity building plan for each VPC 2. VPCs take ownership of deliveries from

regional bases by end of 2011 3. VPC meetings conducted with minimal

support 4. VPC members disseminating accurate and

timely project information

Regional Coordinators & T/L Community Dev

3. Train, mentor and coach women’s group members to fulfil their roles and responsibilities

1. Capacity building plan for each women’s group

2. Women’s group meetings conducted with minimal support

3. Women’s group members disseminating accurate and timely project information

Regional Coordinators & T/L Community Dev

4. Train, mentor and coach Community Based Organisations to implement projects

1. Skills assessment of CBOs 2. Training conducted, based on matching

required skills to project needs

Regional Coordinators

Operational Plan

56

i. RegionalOperationsThe Regional Development team is currently located in Kiunga and will be joined by the remaining headquarters staff when OTFRDP transfers to its new offices in 2011. In the past, this separation limited the degree to which teamwork has been possible; however, there is a strong commitment to ensuring that regional operations are fully integrated with the program and corporate services teams to meet the shared vision and support the key strategic principles of operation. The challenge of operating in a team environment while being geographically dispersed will remain as field bases are re-established and staff spend more time on-site closer to the communities they serve. The Executive Manager Regional Development will employ approaches such as regular management meetings, cooperation with other OTFRDP teams and development partners as well as close attention to implementing the communications strategy. These approaches will maximise the opportunities to deliver quality programs in a coordinated and timely manner.

OTFRDP will ensure that communities have a financial commitment to the long-term future of the organisation through pooled investments in office buildings and accommodation in Kiunga to be rented to OTFRDP, and also in the establishment of dedicated shipping services for passengers and cargo. This is clear evidence of the newly independent entity’s shift in primary focus to serving the CMCA communities. Regional operations will build on the efforts which have gone into preparing the CRDS and the WACAPs by ensuring that sustainable priority activities are implemented and food secure communities are established. Regional development plans will align with community aspirations and the Government‘s medium term development and sectoral plans. Regional Operations: Summary of Objectives, Strategies and Performance Indicators

Function Regional Operations

Objective/s Improve efficiency and effectiveness of program delivery in the regions

Strategies Performance Indicators Accountability 1. Rehabilitate regional bases and field

camps and deploy staff permanently

1. Rehabilitation plans completed, costs allocated and implementation planned

2. Staff deployed (list locations and number of staff)

3. Locations used as focal points in planning for service delivery, community engagement and capacity building

Exec Manager Regional Dev.

2. Co-locate transport and social infrastructure with field bases (e.g. wharves at Aiambak and Sturt Island, health centres etc.)

Priority infrastructure projects in pipeline with focus on opportunities for co-location (list project, cost and timing)

Program Services Manager

3. Combine patrols with development partners

1. Consolidated patrol plan for all regions approved & disseminated

2. Patrols planned and implemented with OTFRDP technical staff, FRPG and PNGSDP

EM Regional Development

4. Establish Samagos Extension Centre as a focus for regional primary production programs

1. Equipment, livestock and other materials transferred from Tabubil trust yard

2. Agreement with FRPG Govt co locate with North Fly fisheries

3. Extension centre operations and maintenance plan prepared and implemented

4. Partnership agreement with ACIAR & LARDEC to support hatchery for native fish species fingerlings, and local feed production

EM Regional Development

57

Operational Plan

Function Regional Operations

Objective/s Improve efficiency and effectiveness of program delivery in the regions

5. Explore options for alternative energy sources, and carbon trading

Options paper prepared for review by Board EM Regional Development & Program Services Manager

6. Support development of community and government institutions in the region

1. Regular communication maintained with VPCs as per patrol plans and communication plan

2. Capacity development plan for Trusts 3. Ward development profiles aligned with

regional development plans

Regional Coordinators

i. FoodSecurity Food Security is about people having enough (excess) food (crops and livestock) of sufficient nutritional value for consumption and income generation. To achieve food security there needs to be complementary programs which target household health and education issues and provide access to transport and market infrastructure. The impact of mining has resulted in significant livelihood changes among the affected communities. Many households are less dependent on agricultural production as their principal source of livelihood and more reliant on cash incomes. Large compensation payments to the mine-impacted communities have contributed to this ongoing process. With pending mine closure or mine life extension at reduced production, there will be an inevitable reduction in cash incomes from payments by OTML. Some communities and households are likely to find difficulty in transitioning back to an agricultural economy. Communities will need to select and invest in strategies which maximise their opportunities to achieve food security and a sustainable livelihood. The food security program aims to provide communities and households with information, training and resources which will assist them to achieve food security at the household level.

Operational Plan

58

Food Security: Summary of Objectives, Strategies and Performance Indicators

Function Food Security

Objective/s Increase production of and access to food from crops, livestock and aquaculture

Strategies Performance Indicators Accountability 1. Promote and support appropriate and

sustainable food security programs across all regions

1. Research and field trial database established and maintained

2. Conduct research trials, raise and distribute seedlings & fingerlings with technical services team and development partners as outlined in partnership agreements

EM Regional Development

2. Conduct joint training activities focused on food security [as part of patrols] with development partners

1. Consolidated food security training plan for all regions approved & disseminated

EM Regional Development

2. Technical training provided by OTFRDP technical staff, DAL, ACIAR, NARI, PNGSDP

3. Crop varieties fish and livestock species appropriate for each location being grown and marketed between regions

Regional Coordinators

3. Facilitate joint field days at seed multiplication centres model farms and demonstration sites

1. Consolidated food security field day schedule for all regions approved & disseminated

EM Regional Development

2. Technical training provided by OTFRDP technical staff, DAL, ACIAR, NARI, PNGSDP

3. Crops, aquaculture and livestock programs appropriate for each location

Regional Coordinators

4. Facilitate joint exposure trips to model farms 1. Consolidated exposure trip schedule for all regions approved & disseminated

2. Trips to relevant locations within WP

Regional Coordinators

5. Encourage establishment of Farmer Cooperatives

1. Farmer cooperatives established and operating

2. Markets identified and contracts negotiated

Regional Coordinators

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Operational Plan

ii. NorthFly North Fly Region serves 4 tribes, 68 villages and a population of over 25,300. There are five subregions – Nupmo, Tutuwe, Waitri, Alice River, and the six mine villages. Support to the preferred areas will be limited to technical support, provided upon request for activities supported by non-CMCA funding. The region will be serviced by 17 staff of which 9 are permanent staff, 3 are contractors and 5 are casuals. North Fly: Summary of Objectives, Strategies and Performance Indicators Function Regional Operations : North Fly

Objective/s Improve efficiency and effectiveness of program delivery in North Fly Region

Strategies Performance Indicators Accountability

1. Build sustainable and food secure communities starting at household level.

1. Increased production of sustainable alternate food crops that have been accepted by the community

2. Conduct advocacy with communities for food security

3. Model farmers identified, capacity developed for engagement in semi commercial farming

4. Community awareness conducted on the preparedness for the predicted el Niño in 2012

North Fly Regional Coordinator

2. Assist the VPC to convene quarterly meetings to disseminate information on previous projects and approvals of new projects and trusts information for each region.

14 meetings conducted annually comprising:

Quarterly VPC Chairmen’s meeting Quarterly Trust meetings Quarterly meetings in six mine villages

North Fly Regional Coordinator

3. Support Tutuwe, Waitri, Alice River, Nupmo trusts and 6 mine villages to develop the capacity to manage their trusts and deliver with innovations and the use of revenue entitlements sustainably and equitably.

1. Approved CMCA projects are administered, delivered and implemented in consistent with the existing guidelines, policies, systems and processes

2. Project activity plans are implemented in accordance with Trust Guidelines

North Fly Regional Coordinator

4. Increase alternate food, livestock and fresh water fish production and improve access to the food variety and income at the household level now and after mine closure.

1. Skills trainings and field days conducted in the villages & preferred area regions

2. Model Farmers and vulnerable family groups identified and supported to promote the adoption of sustainable integrated fisheries and agriculture activities into semi-commercial productions

3. Promote Food Security through show cases, field days, exposure trips and workshops

North Fly Regional Coordinator

Operational Plan

60

Function Regional Operations : North Fly

Objective/s Improve efficiency and effectiveness of program delivery in North Fly Region

5. Support farmers in the North Fly region by multiplication and distribution of crops and livestock and fresh water fish culture from Samagos Extension Centre

1. Food crops (yams, corn, taro, cassava) multiplied and distributed

2. Livestock multiplied and distributed

North Fly Regional Coordinator

6. Ensure that community forest resources and development activities are sustainably managed

1. Community sawmills procured & delivered, training conducted by contractors

2. Seedlings of high value species trees (eg teak and eagle wood) raised, distributed and planted

North Fly Regional Coordinator

7. Assist farmers to improve pond management and culture native fish species

1. Golgobip Hatchery fully established 2. Extension training completed 3. Native fish species fingerlings distributed 4. Model farmers make transition to semi-

commercial farming

North Fly Regional Coordinator

8. To improve delivery of essential health programs and build health capability in the North Fly District

1. Korkit and Kawentigin Aid Posts established

2. Cooperate with JTAI on the North Fly Health Project

North Fly Regional Coordinator

9. Identify, design and implement infrastructure projects in the region together with the Engineering Officer

1. Project proposals submitted and approved for

- 3 feeder roads - 10 x HF Radios in Nupmo Region

2. Contracts for construction and procurement

North Fly Regional Coordinator

iii. MiddleFly

The Middle Fly Region has five tribes, 19 villages, and a population of over 18,000 to serve within a single trust region. This region has three subregions – Upper, Central and Lower. Aiambak will be the main field base for the region whilst bases in Obo and Kiunga will serve the Lower and Upper Middle Fly villages respectively. The region will be serviced by 9 staff of which 5 are permanent, 2 are contractors, and 2 are casuals.

61

Operational Plan

Middle Fly: Summary of Objectives, Strategies and Performance Indicators

Function Regional Operations : Middle Fly

Objective/s Improve efficiency and effectiveness of program delivery in Middle Fly Region

Strategies Performance Indicators Accountability 1. Build sustainable and food secure communities

starting at household level 1. Increased production of sustainable

alternate food crops that have been accepted by the community.

2. Multiplication and distribution centre at Aiambak re-established

3. Conduct advocacy with communities for food security

4. Model farmers identified, capacity developed for engagement in semi commercial farming.

5. Community awareness conducted on the preparedness for the predicted El Niño in 2012

Middle Fly Regional Coordinator

2. Support small scale rubber enterprises in Middle Fly communities

1. Assessment of the current status of village small holder rubber.

2. Rubber source bush nursery at Aiambak maintained end rehabilitation of rubber promoted

3. Assist in delivery of planting materials to village small holder rubber farmers.

4. Incentive scheme established similar to the PNGSP/NFRL program at Lake Murray

Middle Fly Regional Coordinator

3. Identify and design agro-forestry projects together with the Forestry Technical Officer and other Program Services team members

1. Feasibility study on for establishment of timber CPU at Aiambak

2. Komovai agro-forestry project maintained

Middle Fly Regional Coordinator

4. Identify design and implement Women and Children livelihood projects together with Community Development team members

1. Women’s Learning Centres in all sub regions

2. Women’s capacity building through trainings & exposures.

3. Continual support to current cooking, sewing and art & craft project.

Middle Fly Regional Coordinator

5. Identify, design and implement infrastructure projects in the region together with the Engineering Officer

1. Project proposals submitted and approved for

Aiambak Jetty Aiambak-Lake Murray road

2. Contracts for construction

Middle Fly Regional Coordinator

3. Engage selected communities on possible options for relocation.

1. Communities possibly requiring relocation identified

2. Meetings conducted to discuss options and possible actions

Middle Fly Regional Coordinator

Operational Plan

62

iv. SouthFly The South Fly Region serves 8 tribes, 65 villages and a population of over 44,800. It is the largest in terms of geographical spread and population numbers. The region has four sub-regions – Suki Fly Gogo, Manawete, Dudi, and Kiwaba. Sturt Island will be the main field base for the region while Nakaku, Tapila and Gesowa22 will serve as sub-field bases. The region will be serviced by 11 staff of which 8 are permanent, and 3 contractors, with field base casuals hired as required. South Fly: Summary of Objectives, Strategies and Performance Indicators

Function Regional Operations : South Fly

Objective/s Improve efficiency and effectiveness of program delivery in the South Fly Region

Strategies Performance Indicators Accountability 1. Build sustainable and food secure

communities starting at household level 1. No. of adoptable food crops introduced, qty

grown, multiplied, distributed and sold. 2. No. of families engaged in farming 3. No. of model farmers accepted, trained and

participating in subsistence to semi commercial farming.

4. Maximum number of people that have adopted drought resistant crops and feeding families

South Fly Regional Coordinator

4. Support small scale rubber enterprises in South Fly communities

1. Awareness through combine patrols with NFRL and program officer.

2. Stocktake on the currents status of village small holder rubber in the four sub regions.

3. Maintain current source bush nursery at Nakaku and Sturt Island and establish similar ones at Teapopo and Tapila.

4. Assist in delivery of planting materials to village small holder rubber farmers.

5. Community based rubber development training conducted by program officer & NFRL

South Fly Regional Coordinator

5. Identify and design agro-forestry projects together with the Forestry Technical Officer and other Program Services team members

1. Awareness sessions with communities 2. Feasibility studies for establishment of agro-

forestry projects. 3. Options for forestry in the region identified

with communities

South Fly Regional Coordinator

6. Identify design and implement Women and Children livelihood projects together with Community Development team members

1. Women’s Learning Centres in all sub regions 2. Women’s capacity building through trainings &

exposures. 3. Continual support to current cooking, sewing

and art & craft project.

South Fly Regional Coordinator

7. Identify, design and implement infrastructure 1. Project proposals submitted and approved for South Fly Regional

22 A Women’s Resource Centre at Gesowa to be constructed later in 2010 will be utilised as a sub-field base.

63

Operational Plan

Function Regional Operations : South Fly

Objective/s Improve efficiency and effectiveness of program delivery in the South Fly Region

projects in the region together with the Engineering Officer Sturt Island Jetty

Wasua – Balimo road upgrading R&M of health & education facilities Water supply

2. Contracts for construction

Coordinator

8. Engage selected communities on possible options for relocation.

1. Communities possibly requiring relocation identified

2. Meetings conducted to discuss options and possible actions

South Fly Regional Coordinator

9. Support resolution of land disputes which are constraining development opportunities

3. Disputed land [earmarked for development] identified

4. Options developed for resolving dispute

South Fly Regional Coordinator

Operational Plan

64

12.3 SupportServices

Diagram 13: Organisation Chart – Support Services

12.3.1ProgramServices The Program Services cluster of functions is entirely new and combines elements of both previous and new functions. Program Services comprise two main areas: Design and Management and Project Technical Services. These teams provide design, appraisal, monitoring and evaluation, technical and contract management and costing services to ensure that quality is maintained throughout the project cycle. The technical team includes Community Development Officers who support local and regional planning, design, monitoring and evaluation of projects identified in the Women and Children Action Plans. They ensure that women’s priorities are considered throughout the project cycle. The technical team works across the three trust regions with support from the Program Management Team in designing and implementing projects and programs in those regions, not only for CMCA trust funded activities, but also for activities funded from other sources. The current core technical specialisations of Community Development, Business Development, Forestry, Rubber and Engineering will be supplemented by contracted sectoral specialists as required. Generally these contracted assignments will be project specific. As the portfolio of projects and programs increases, the number of permanent members of this team may increase.

The Support Services Division ensures that quality programs are delivered to CMCA communities through the OTFRDP Regional Development Division. They employ best practice approaches for identification, design, management, monitoring and evaluating programs; operating within a corporate governance framework that ensures prudent financial management, transparency and accountability.

Program  Services 

Support Services 

Corporate  Services 

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Operational Plan

OTFRDP Priority Sectors and Proposed Activities

Sector Activity Definition

Health Middle and South Fly Health Services Development Program, Health infrastructure, medical supplies procurement, health services management, human resources development, family planning, maternal and child health, preventable diseases, health research.

Education Basic education, literacy, teacher training, technical and vocational education and training, higher education, buildings and education materials.

Agriculture Agricultural extension activities, commercial food production, forestry, agro-forestry, fisheries/aquaculture, livestock, food security, supporting subsistence farming.

Community Development

Capacity development and training of local NGOs, women’s groups, health workers, and government officials.

Small & Medium Enterprise (SME) Development

Landowner Company business development activities, local Industry development including ecotourism, rubber, aquaculture.

Infrastructure Development

Road rehabilitation and construction, bridges, renewable energy, communications, community housing, transport, water supply, sanitation, power, shipping, wharves, radio communications, information and communication technology, health & education buildings.

Diagram 14: Organisation Chart – Program Services

Program Services

Project Technical Services

Team Leader Community Development (1) Regional Community Development Officer (4) Business Development (1)

Regional Forestry Officer (1) Regional Rubber Officer (1) Regional Engineering Officer (1)

Design & Mgt

Project design & appraisal Officer (1) Project Costing Officer (1) Project Monitoring & Evaluation Officer (1)

Project Specific Contracted Services (i.e., larger projects): Technical (Infrastructure, Health, Education) Design, Monitoring & Evaluation

Operational Plan

66

Diagram 15: Accountability Framework: Program Services

a. ProjectDesign&Appraisal

CurrentprocessesforidentifyingCMCAprojectsThe Program Services Team will provide expertise in project identification, design, management, and monitoring and evaluation to support VPCs to develop both smaller scale projects and larger multi-year projects with greater regional impact. Larger projects will be funded from sources such as PNGSDP and the Western Province People’s Dividend Trust Fund (WPPDTF). Technical inputs for key sectors include in-house technical capacity in forestry, rubber, community development, business development and engineering. Program Services will also contract specialised expertise in priority sectors such as health and education to support design and appraisal processes. This expertise is complemented by field teams with implementation experience and understanding of the local context of the areas in which they work. The current flowcharts for developing smaller projects through VPC and for the WACAP projects and the flowcharts for accessing larger projects PNGSDP and WPPDTF funds are included in Annex 5a. Access to these funds is discussed in more detail under Section 12.3.1e: Project Funding. Trusts are now looking at more strategic options to maximise benefits of expenditure through a range of approaches, including pooling funds to invest in projects which benefit all regions. OTFRDP will capitalise on the work done in preparing WACAPs and use them as a basis for developing regional development plans for each of the North, Middle and South Fly regions. Complementing these regional development plans, are the medium term and sectoral plans of government at all levels. Regional Coordinators and their teams will support Ward members and LLG officials with preparing Ward development profiles to be used to prioritise community projects. Where appropriate, OTFRDP will develop partnerships to design programs that complement government-funded activities. These partnerships will be facilitated through regular, formal coordinating meetings with the Fly River Provincial Government (FRPG) Provincial Management Team, and a quarterly steering committee meeting comprising OTDFRP, FRPG and PNGSDP.

Program  Services 

a. Project Design & Appraisal

b. Project Mgt c. Monitoring &

Evaluation d. Project Costing e. Project Funding f. Technical Assist:

(Health, Engineering, Education & Training, Rural Devt, Women and Children)

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Operational Plan

CoordinationwithPlanningandImplementationofOTMLTCSProjectsTable 6 shows that from 2007-2009, an average of 53% of TCS infrastructure projects have been implemented in the CMCA corridor. However, committed expenditure in the corridor for the period 2010 – 2013 is forecast to average only 27%. Although opportunities to influence expenditure priorities up to 2013 have been limited, this should change after 2014 under the mine life extension scenario because OTFRDP will be more actively involved in prioritising infrastructure to support regional development. Given the significant amounts of money allocated to CMCA communities, OTFRDP should ensure that complementary projects maximise the benefit to the communities from OTML investment through the TCS. The Program Services Manager will be responsible for engaging regularly with OTML and the national and provincial governments to identify eligible projects for TCS funding under a mine life extension scenario.

CMCA %

Total Actual

Exp (PGK)

Actual

Exp

2007 6,954,158 3,245,564 47%

2008 24,169,137 14,211,747 59%

2009 40,626,777 20,691,772 51%

TOTALS 71,750,071 38,149,084 53%

2010 81,661,464 24,806,502 30%

2011 38,389,268 7,277,438 19%

2012 14,213,699 2,482,000 17%

2013 8,392,215 4,400,000 52%

TOTALS 142,656,647 38,965,941 27%

Budget

ExpBudget (PGK)

Table 6: Percentage of TCS Expenditure in CMCA Actual 2007-2009 and Forecast 2010-2013

YearTotal Actual

Exp (PGK)

Forecast Exp

(PGK) Year

CoordinationwithPlanningandImplementationofProvincialSupportServicesGrantProjectsA number of infrastructure projects funded through the SSG could overlap with OTFRDP’s regional development plans. It will be essential to liaise with the Ward Members and the Fly River Provincial Administration to maximise opportunities to consolidate funding from different sources. This is particularly relevant where there are specific criteria for funding of SSG projects which may have less flexibility than projects proposed by CMCA trusts from their own resources. Constraints on the timing of the funding source which is tied to the government annual budget processes and in principle, must be completed within a single budget cycle also mean that proposals for SSG support must address these selection criteria. The Program Services Manager will support the Executive Management Team to advocate with local level governments for appropriate SSG projects which maximise the impact to target communities.

Operational Plan

68

CoordinationwithPlanningandImplementationofOtherDevelopmentProjectsA number of other projects funded from many different sources are being planned and implemented in the Western Province. The Program Services team will coordinate with other development project implementers and funders (e.g. AusAID). This will allow the experience of implementing similar or complementary projects to be incorporated into designs and delivery strategies of all projects identified by communities and reduce the potential for duplication. Project designs will be prepared using agreed templates (see Annex 5 b and c) that reflect accepted development practice and will align with relevant plans. Larger and more complex projects may require independent feasibility studies contracted as part of the design process. All projects will be designed using participatory approaches with key stakeholders. Project Design and Appraisal: Summary of Objectives, Strategies and Performance Indicators

Function Project Design and Appraisal

Objective/s Apply appropriate standards of project design and criteria for appraisal according to potential impact and cost

Strategies Performance Indicators Accountability 1. Assist communities and government to

develop new Regional Development Plans 1. Regional plans and priorities identified in

project designs. 2. CMCA Women and Children Action Plans

used as an initial basis for regional development priorities

Program Services Manager

2. Identify priority projects in CMCA Women and Children Action Plans

1. Priority projects list incorporated within overall project pipeline

2. Regional Community Development Team represented in all project designs to ensure WACAP priorities and gender issues more generally incorporated into designs

Program Services Manager & T/L Community Development

3. Develop new pipeline of smaller scale project activities through consultations with VPCs and women’s groups.

1. Criteria to include sustainable programs with early visible outcomes for communities

2. Thresholds established for accessing funding from trusts, PNGSDP, WPPDTF

Program Services Manager

4. Streamline planning and approval processes [for CMCA trust projects]

1. Planning and approval procedures and related cycles revised and distributed to all VPCs

Program Services Manager

2. Field staff have access to up-to-date information on funding sources selection criteria for different types of projects and synergies with other projects

Exec Mgr Regional Dev.

5. Design larger impact multi-year projects for WPPDTF funding for project pipeline

1. Concept proposals in WPPDTF template approved by OTFRDP Board for submission to WPPDTF

2. Design includes consultation with trusts, VPCs, development partners and government, input from OTFRDP technical team/s

Program Services Manager

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Operational Plan

Function Project Design and Appraisal

Objective/s Apply appropriate standards of project design and criteria for appraisal according to potential impact and cost

3. M & E framework included in final design

6. Design projects for PNGSDP funding for project pipeline

1. Concept proposals in PNGSDP template approved by OTFRDP Board for submission to PNGSDP

2. Counter funding by Trusts confirmed 3. Design includes consultation with trusts,

VPCs, development partners and government, input from OTDRFP technical team/s

4. M & E framework included in final design

Program Services Manager

b. ProjectManagementThe current portfolio of OTFRDP ‘projects’ are generally discrete and relatively low impact. They are limited by the logistical challenges of delivering materials using vessels geared to OTML operational priorities. Implementing more integrated projects, perhaps extending over several years, with multiple funding sources and a wide range of stakeholders, will require new systems and procedures. These systems will enable OTFRDP to manage its projects within the constraints of time, cost and performance requirements, and apply a generally accepted set of project management principles, tools and techniques to plan, control, monitor and evaluate them. It is likely that larger contracts may be tendered, but a core expertise and associated systems will be essential so that OTFRDP can provide timely and accurate information on project progress to all stakeholders.

Landowner companies based along the CMCA corridor have the potential to capitalise on their competitive advantage of having equipment and personnel on location. Ideally, these companies could enjoy preferential treatment in tendering for projects. This would benefit the wider communities as the funds would circulate in the local economy. OTFRDP will establish policies and procedures which address the use of landowner companies, and pro-actively address capacity gaps by developing activities that allow these organisations to participate in projects.

Operational Plan

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Project Management: Summary of Objectives, Strategies and Performance Indicators

Function Project Management

Objective/s Apply appropriate standards for project management according to potential impact and cost

Strategies Performance Indicators Accountability 1. Maintain database of projects.

Database of all projects (CMCA trust, PNGSDP and other) including progress towards completion of current projects – accessible to senior managers

Program Services Manager

2. Establish and implement project management standards and systems for small and larger impact projects

1. Documentation of policies, procedures, templates, roles and responsibilities at each stage of the project cycle (including procurement, contract management, project financial systems, progress reporting, monitoring and evaluation)

2. Training of relevant staff / consultants/ contractors in systems and procedures

3. Training of Community members in relevant roles and responsibilities for implementation

4. Project manager assigned to every project

Program Services Manager

3. Establish a database of project managers and consultants to support project management requirements in peak periods

Database of expertise with curricula vitae, contract details and referees using networks developed by staff and managers

Program Services Manager

4. Establish policies and procedures for use of landowner companies as contractors on OTFRDP projects

1. Policies and procedures including criteria for use of landowner companies as preferential contractors, and associated risks

Executive Manager Support Services

2. Project-specific capacity gaps in landowner companies identified and discussed

Program Services Manager

3. Capacity building activities planned and implemented for landowner companies

Business Development Officer

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Operational Plan

c. MonitoringandEvaluationAn important element for measuring efficiency and effectiveness in project implementation is appropriate monitoring and evaluation mechanisms. By thinking about expected outcomes from the outset, proponents can confirm how they will measure results through performance indicators. Under OTML management, there was not a strong culture of monitoring and evaluation of projects; therefore there is little objective evidence of the impact of expended development funds. To ensure projects are implemented in a transparent and accountable manner according to the approved design, monitoring and evaluation frameworks must be included in project designs. The frameworks should include when and how information on performance indicators will be collected on project progress, and who will be responsible for collecting that information. Regional field staff will play a role in consolidating information for reporting purposes, and may also identify the need for technical inputs to validate findings. In some cases, the most appropriate people to collect information will be community members themselves; however this may require some capacity development to enable them to fulfil this role. Participatory monitoring and evaluation will foster community ownership of the projects, and identify risks, lessons learned and unexpected outcomes which may lead to adjustments in project implementation. Unintended outcomes then become a shared problem rather than one which is solely the business of the implementing organisation (e.g. a consultant or CBO). An additional objective to involving communities is to develop a culture of accountability within the community, as well as to other stakeholders. In the past, some community leaders have objected to the notion of outsiders monitoring projects which have been funded from their own resources. However, the concept of project trust funds being used to benefit all members of the community, including those who are more vulnerable or marginalised is an important advocacy message to be reinforced. This message fits well with the regional development concept which aims to provide sustainable economic opportunities along the corridor, and demonstrates to development partners that communities are committed to transparent and accountable use of trust funds allocated for their longer-term benefit. The focus should be on continuous improvement in project implementation and innovation in delivery. OTFRDP will support financial reporting to trusts on expenditure of their funds; however this will be supplemented in the future with reporting on the outcomes resulting from that expenditure.

Operational Plan

72

Monitoring and Evaluation: Summary of Objectives, Strategies and Performance Indicators

Function Monitoring and Evaluation

Objective/s Monitor projects to ensure efficiency and effectiveness of implementation, and evaluate projects for their contribution to achieving development aspirations of target communities

Strategies Performance Indicators Accountability

1. Implement monitoring and evaluation systems for small, medium and large impact projects

1. Appropriate monitoring and evaluation systems specified at design stage and designed to include community members

2. Training included for communities or staff for specific monitoring and evaluation roles and responsibilities within project M & E frameworks

3. Mechanisms established for identifying, sharing and analysing lessons learned across all regions and sectors for quality improvement and innovation of project design and implementation systems

4. Consolidated monitoring and evaluation plan covering all current projects to facilitate logistics and community engagement obligations

5. Impact evaluations planned for individual or clusters of projects

6. Contribution to achievement by all projects to CMCA Women and Children Action Plan objectives documented

Program Services Manager

2. Enhance knowledge and understanding of stakeholders on the role of monitoring and evaluation in delivering quality projects

1. Conduct workshops and prepare promotional materials to advocate for stakeholder involvement in M & E

2. Regional Development teams include M & E in advocacy messages with communities

Program Services Manager

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Operational Plan

d. ProjectCostingIn the process of developing project proposals which require approvals by higher authorities, accurate costing is required. This costing will be used to determine which funding sources to be approached; value for money approaches to implementation; and priorities between projects. Accurate project planning requires costing information based on identification of all necessary physical and human resources to implement a project and associated unit costs. In some cases where infrastructure is involved, engineering specifications may be required and a specialist costing engineer or quantity surveyor engaged to provide accurate estimates of cost against the approved design. OTFRDP will develop a capability within the Program Services team to advise on project costing approaches and possible impacts on contracting strategies. This will require databases to establish accurate unit costs to deliver regularly procured items and active participation in the scoping of project inputs at the design stage. Working closely with the Finance team, the Project Costing Officer will provide input into the preparation of project budgets and cash flow analyses and identify potential financial risks to be considered in the costing process (e.g. currency fluctuations). The Project Costing Officer will also work closely with the Procurement and Logistics team and Regional Field teams to ensure that their practical experience and knowledge of suppliers and contractors is fully utilised in the costing process. Project Costing: Summary of Objectives, Strategies and Performance Indicators

Function Project Costing

Objective/s Prepare value for money project costings prepared for funding proposals and used in management of project budgets

Strategies Performance Indicators Accountability 1. Project costings prepared based on

accurate resource schedules and specifications, and relevant costing approaches

1. Databases of relevant unit costs maintained using accounting system, historical data and other sources

2. Accurate project resource schedules and specifications developed with design team/s

3. Strategies developed for complex costing situations (including accessing specialist technical inputs and contracting strategies)

Program Services Manager

2. Budgets and cash flow analyses prepared for projects with approved funding based on approved project costs and/or contracts awarded

1. Budgets and cash flows input into accounting system and available to senior managers and individual project managers

Program Services Manager

2. Budgets analysed against actual expenditure and reported to Executive Management Team

3. Cash flow incorporated into overall cash flow analysis performed as a corporate treasury function

Corporate Services Manager

Operational Plan

74

e. ProjectFundingOTFRDP is currently dependent on OTML for operational funding. A crucial function within OTFRDP relates to having an in-depth knowledge of the likely sources of project funding, eligibility criteria, proposal requirements and funding cycles that will contribute to funding core OTFRDP business. As OTML funding for services currently provided by OTFRDP reduces, other sources of operational funding will be limited possibly to PNGSDP and to project management fees added to trust fund draw-downs. The Program Services Manager will explore opportunities for capitalising on OTFRDP’s competitive advantage in the Western Province by accessing international donor funds either through direct partnering or contracting.

OTFRDP has established its own thresholds for accessing the various CMCA funds, they are: CMCA Trusts less than PGK 300,000 PNGSDP PGK 300,000 – 2 million WPPDTF more than PGK 2 million These thresholds also reflect the level of inputs which may be required to develop project proposals to a ‘bankable’ stage for consideration by the funding organisations. Having a clear understanding of the availability of these sources of funds will also facilitate planning of potential future income streams from a pipeline of projects. The Program Services Manager will work closely with the Executive Management Team to develop strategies for accessing specific funds, and establishing working relationships with key contacts managing these funds. This will also include developing annual workplans for pipeline proposal development, and establishing a basis for charging project management fees. Project Funding: Summary of Objectives, Strategies and Performance Indicators

Function Project Funding

Objective/s Ensure project funding sources are available to match project pipeline opportunities and maintain core OTDRFP funding

Strategies Performance Indicators Accountability 1. Maintain database of priority trust fund sources,

contacts, funds availability, funding cycles, organisational eligibility and selection criteria

Database and documentation available to senior managers

Program Services Manager

2. Monitor project management or implementation opportunities through donor organisations and development partners

Exception report to Executive Management Team on opportunities which match OTFRDP expertise, capacity and competitive advantage

Program Services Manager

75

Operational Plan

f. TechnicalAssistanceOTFRDP has existing expertise to support the core activities of community development, business development, rubber, and forestry. To reduce its reliance on OTML Regional Engineering, engagement of in-house engineering expertise to support the design and costing of infrastructure projects is also planned. Other expertise will be contracted as required in the priority program areas of health, education large scale infrastructure, and specific areas of agriculture and fisheries which cannot be covered by field staff. In some cases, this expertise will be provided by research development partners (e.g. ACIAR and NARI) as part of their contribution to a project. Both in-house and contracted expertise will contribute to all parts of the project cycle to ensure that quality projects are identified and delivered. Technical Assistance: Summary of Objectives, Strategies and Performance Indicators

Function Technical Assistance

Objective/s Provide technical services in key sectors to communities and OTFRDP at all stages of the project cycle

Strategies Performance Indicators Accountability 1. Provide in-house and contracted technical

services to assist OTFRDP to identify, design, implement, monitor and evaluate projects

1. In-house technical staff for regional community development, forestry, rubber, business development and engineering providing advice, conducting research and field trials with development partners, identifying viable regional projects, and providing technical inputs at design, implementation and M & E stages of projects

2. Contracted staff complements in-house technical and regional staff in agriculture, fisheries and livestock, health, education, infrastructure and other sectors as required.

3. Result of impact projects in priority sectors independently evaluated for contribution to development aspirations of target communities

Program Services Manager

2. Develop research and development partnerships with key PNG and international organisations

1. Research and development partnership agreements

2. Results of R & D partnerships evaluated for contribution to development aspirations of target communities

Program Services Manager

Operational Plan

76

12.3.2CorporateServices Diagram 15: Accountabilities Chart - Corporate Services

a. Finance i. Accounts ii. Audit iii. Trust Account Investment  

b. Human Resource Management c. Staff  Training & Devt d. Occupational Health and Safety e. Information services f. Legal g. Administration h. Communications i. CMCA Trust Administration  j. Facilities and  Asset Management k. Travel l. Procurement & Logistics m. Risk Management  

Program Services 

Support Services 

CorporateServices 

77

Operational Plan

a.Finance

i. AccountsOTFRDP currently utilises the OTML accounting system Ellipse and a separate human resources/payroll module (Alesco). Due to relatively high turnover of staff in the finance area, there is little corporate memory in OTFRDP about the system, policies and procedures. This has led to below-average performance in managing transactions such as accounts payable, which have the potential to impact on OTFRDP’s reputation with suppliers and contractors. Many of the features of Ellipse are not required by OTFRDP and the pro-rated cost of using this system does not provide value for money. A number of assessments of the organisation’s financial management information system needs have been undertaken, with the latest being in May 2010 (see Annex 9h). The objective of these assessments is to identify the best possible stand alone accounting system for OTFRDP. The most likely new accounting software package would be Quickbooks, which is well supported in PNG and already in use for trust accounting. Quickbooks has the capability to handle project accounting, and payroll. While this is an exciting new phase for OTFRDP as an independent entity, careful management of the transition to a new system will be required to ensure that all stakeholders have complete confidence in the reports which are generated, and the system’s ability to be able to generate timely payments to staff for payroll and to key suppliers. Critical questions to be considered before selecting a new system include whether payroll (including basic human resource management functions) and asset management can and should be handled within the one software package or proprietary ‘add-ons’. The system must also be capable of handling the functions required by a project-based organisation with accountabilities to a range of project funders. Procurement and contract management functions will also be essential functions to be integrated into an appropriate financial management package. Given the relative remoteness of OTFRDP, emphasis should also be given to selecting a package that is widely used in PNG, with a training and business analysis capability, as well as robust help-desk arrangements. As an independent entity, OTFRDP intends to streamline its procedures and review policies to align with its own corporate governance and operational requirements, rather than those of OTML. Training of relevant staff to manage new policies and procedures will also be required. In the interim, newly recruited staff will also be trained on the current Ellipse and Alesco systems to maintain continuity of accounting and payroll services.

Operational Plan

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Accounts: Summary of Objectives, Strategies and Performance Indicators

Function Accounts

Objective/s Provide value for money finance, accounting and payroll services to OTFRDP

Strategies Performance Indicators Accountability 1. Implement a stand-alone accounting and

payroll system suitable for OTFRDP operations

1. Previous studies and recommendations reviewed and recommendation made to Executive Management Team on system capable of handling all required functions including project-based accounting, payroll, procurement, asset management, cash management

2. Implementation plan and related capital and recurrent budget prepared

3. System successfully migrated from OTML, staff training conducted, system operational

Corporate Services Manager

2. Develop and implement OTFRDP accounting, finance and procurement policies and procedures to ensure timely and accurate processing of all transactions

1. Policies and procedures approved by Executive Management Team

2. Policies and procedures disseminated , staff trained

3. Transactions processed within agreed performance parameters

Corporate Services Manager

3. Provide strategic advice on maintenance of OTFRDP tax-free status

Reports by exception to Executive Management Team on emerging issues affecting tax free status

Corporate Services Manager

4. Prepare accounts for audit and presentation to OTFRDP Board and stakeholders , project reporting to donors and development partners

Unqualified audit of annual OTFRDP accounts

Corporate Services Manager

5. Prepare project financial reports for donors and development partners

1. Project financial reports quality assured within OTFRDP and meet contractual requirements for timeliness and accuracy

2. Donor / development partner acceptance of project financial report/s

Corporate Services Manager

6. Provide costing services for all OTFRDP programs and projects

1. Collaboration with CMCA trust services and program services teams to provide advice and data on historical and unit costs and assist in project budget preparation

2. Advice on possible project cost efficiencies

Team Leader Finance & Treasury

79

Operational Plan

Function Accounts

Objective/s Provide value for money treasury services to OTFRDP and trusts

Strategies Performance Indicators Accountability 1. Provide strategic investment advice to

manage cash reserves of OTFRDP, and project advances and tranches from trust funds donors, and development partners.

1. Investments made within governance framework of OTFRDP (e.g. Constitution), and contractual agreements with donors and development partners

Corporate Services Manager

2. Trust investment opportunities based on Trust Resolutions

Trust Administrator

3. Ensure trust funds are safely invested in a diversified portfolio to yield maximum benefits.

Investment portfolio based on sound investment advice and due diligence as and when required

Trust Administrator

Objective/s Provide value for money independent accounting and investment advisory services to CMCA trusts

Strategies Performance Indicators Accountability 1. Manage a contract for outsourced

independent accounting services to CMCA trusts

Performance based contract for provision of timely and accurate accounting services to CMCA trusts

CEO & Trust Administrator

2. Custodian appointed to administer investments made by pooled trust funds

1. Legal advice on use of custodians for pooled trust investments provided to trusts

2. Custodian appointed as per requirements of trust deeds, and performance reviewed annually

3. Trust administrative tasks of OTFRDP adjusted to complement custodian tasks.

Trust Administrator

3. Investment strategies developed and investments made in line with trust deeds

1. Work toward achieving the 4 investment options (OTFRDP office complex, the Kiunga Housing Estate, Cargo Vessel and the Passenger Ferry)

2. Surplus funds held in short term investments (IBDs) with BSP and in Inscribed Stocks with BoPNG,

3. All major investments undergo due diligence

Trust Administrator

Operational Plan

80

ii.AuditInternal controls will be established under the policies and procedures developed by the Corporate Services Manager the Constitution (see Annex 7a) requires that the OTFRDP Annual Accounts be audited and published in a newspaper. As required, trusts also require their accounts to be independently audited; this function is undertaken through an outsourced contract with a reputable firm of external auditors (eg Deloitte, PWC) who OTFRDP will engage under an appropriate set of performance-based terms of reference. As part of their terms of reference, the external auditors may be required to undertake other types of audit such as compliance and systems.

The OTFRDP will establish an internal Audit and Risk Committee reporting directly to the EMT from which the CEO will report the status of new and existing risks to the Board every six months. This Committee will also be responsible for reviewing audit reports and advising the CEO on any actions arising from recommendations by the external auditors.

Audit: Summary of Objectives, Strategies and Performance Indicators

Function Audit

Objective/s Provide value for money audit services to OTFRDP and trusts

Strategies Performance Indicators Accountability 1. Manage a contract for outsourced

independent audit services to OTFRDP

1. Performance based contract for provision of audit services to OTFRDP

2. Establish TOR for an audit [and risk] committee reporting to the OTFRDP Board

Corporate Services Manager & Exec Mgr Support Services

81

Operational Plan

b. HumanResourceManagementOTFRDP’s business relies heavily on the quality of its people and the working relationships they develop with internal and external stakeholders. It is the responsibility of individuals and their managers to reflect commitment and professionalism that enhances the integrity of OTFRDP in all settings. The human resource function will provide the necessary support required to fulfil these human resource needs. As part of the transition from OTML policies and procedures, which have been used in the interim, the Group HR Officer will review and revise all applicable policies and procedures to ensure they are in line with PNG government legislation and industry practice. Policies and procedures will also be assessed to determine whether they best suit OTFRDP operational requirements. These will be accessible to all staff. During the transition, and particularly while OTFRDP is still based in Tabubil, the entity will continue to utilise selected OTML facilities and services including Payroll, Information Systems, Travel, Training, Accommodation and Messing. As part of planning for the transfer to a new headquarters at Kiunga, the Group HR Officer will support and contribute to the staged transition from OTML systems to OTFRDP stand-alone systems. Position descriptions prepared to facilitate recruitment in late 2009 were in a number of cases adapted from OTML examples in parallel with development of the business plan and operational framework. These will be reviewed after 12 months of operation both for consistency in formatting and approach and also specific job accountabilities to enable managers to conduct open and transparent performance appraisals. OTFRDP retained approximately 50% of the former OTDF staff (including contractors) through an internal recruitment process. This has provided a level of continuity which was essential during the transition to a new entity. The remaining positions are progressively being recruited through external recruitment processes with the objective of all positions being filled and staff functioning in their roles by August 2010. The Group HR Officer will support all managers to ensure OTFRDP identifies, employs and retains the best candidates for the organisation. This will include regular reviews of staff benefits and remuneration in line with standard industry practices.

Human Resource Management: Summary of Objectives, Strategies and Performance Indicators Function Human Resource Management

Objective/s Provide the optimal number and quality of technical managerial and professional staff to fulfil OTDFRP

functions

Strategies Performance Indicators Accountability 1. Maintain comprehensive personnel and

remuneration records to support performance-based human resource management by the Executive Management Team

1. Confidential database/s and files including job descriptions, contracts signed by CEO, personal information, remuneration, terms and conditions performance information, leave accruals

2. Up to date position descriptions for all positions, consistent in format and content.

3. Integration of personnel and remuneration records with payroll system

4. Offer Proposal Form developed to maintain salary consistency level for all staff

Group HR Officer

2. Advise the Executive Management Team on human resource management policies and practices in line with government legislation and industry practice

1. Files of policies and procedures established and maintained.

2. Advice to EMT on changes to legislation or emerging industry practice which may affect OTFRDP policies and procedures

3. HR policies/procedures reviewed/revised to

Group HR Officer

Operational Plan

82

Function Human Resource Management

Objective/s Provide the optimal number and quality of technical managerial and professional staff to fulfil OTDFRP functions

best suit OTFRDP operational requirements 4. Procedures to enable the career path of

employees and succession planning for all positions

3. Conduct regular performance based reviews

of all OTFRDP staff

1. Schedule of performance reviews distributed and reviews conducted and documented

2. Performance Development Reviews (PDRs) Developed

3. Position Descriptions (PDs) used as performance review guide

Executive Management Team (and delegates)

4. Ensure experienced and suitably qualified staff are recruited and retained to achieve corporate goals of OTFRDP

1. Merit based recruitment policies established and implemented using Position Descriptions as basis

Group HR Officer & Line Managers

2. Staff benefits and remuneration reviewed annually

EMT & Line Managers

83

Operational Plan

c. StaffTrainingandDevelopmentA key aspect of the quality of services provided by all OTFRDP staff and management is the skills and abilities they bring to their jobs. In a changing operational environment, new challenges may require new or upgraded skills. Line managers play an important role in identifying the ability of employees to meet the requirements of their job through an annual process of reviewing performance against the accountabilities in their position description. The Group HR Officer will support the process by consolidating information provided by line managers about employee strengths and weaknesses into an employee skills matrix which will be used to plan and implement capacity development activities. This could include skills training, mentoring or coaching, job placement in other OTFRDP positions at the same level or acting in higher duties as a retention strategy as well as for succession planning and maintaining continuity of business. Continuity is reliant on policies and procedures which guide the organisation’s operating systems, and also on competent employees who can maintain those systems.  Safety training and first aid certification is required to be maintained by selected staff while OTFRDP operates under OTML in Tabubil. These obligations will expand when the headquarters move to Kiunga and staff move permanently into regional field bases. The Group HR Officer will prepare an annual staff development plan and related budget which will address both group and individual staff development and best industry practice training. Staff Training and Development: Summary of Objectives, Strategies and Performance Indicators

Function Staff Training and Development

Objective/s Ensure all staff have necessary skills and knowledge to fulfil the requirements of their job

Strategies Performance Indicators Accountability 1. Identify current and emerging skills

and knowledge requirements of staff

1. Senior managers identify skills and knowledge gaps of their staff and suggest possible approaches to develop staff (in consultation with Group HR Officer and other resources)

Executive Management Team, Regional Coordinators, Program Services Manager, Corporate Services Manager

2. Consolidated employee skills matrix tool and staff development report

Group HR Officer

2. Plan and implement training and capacity building activities

1. Consolidated staff development plan including a range of methodologies (e.g. short course training, mentoring & coaching, seminars, self paced flexible learning packages, job placement etc)

2. Budget allocations for staff development activities

Group HR Officer

Operational Plan

84

d.OccupationalHealthandSafetyOccupational Health and Safety (OH&S) is everybody’s business and it is the responsibility of every employee to be on time to attend the daily 10 minute safety session and fortnightly divisional safety kibungs23 to contribute to making safety a priority. While the current OTFRDP office headquarters remain in Tabubil, all staff are required to participate in and adhere to OTML organisational safety practices but within OTFRDP operational requirements. All senior staff from each division will have combined safety meetings each month to discuss common issues such as regional emergency procedures and HIV&AIDS. Following the OTML “Safe Days” format, these will be renamed “Community Days”. Each of the regional/operational areas will have trained and certified safety representatives who will assist Regional Coordinators and Team Leaders to manage any safety issues at the workplace. OTFRDP’s Safety Policy and Safety Management Tools will all be adapted from OTML and include Job Safety Analysis/Job Safety Observations and Take Five.

Occupational Health & Safety: Summary of Objectives, Strategies and Performance Indicators

Function

Occupational Health and Safety

Objective/s OTFRDP staff , contractors and consultants able to work in a safe and secure office and field environments

Strategies Performance Indicators Accountability 1. Participation in OTML safety organisational

structures while OTFRDP HQ is based in Tabubil or under OTML operational requirements

2. Membership of safety committees 3. Appointment of safety representatives

Executive Management Team

4. Appointment of first aiders and fire wardens at all regional and field bases

Regional Coordinators

5. Safety and security briefings organised at induction of new staff and fielding of subcontractors and consultants

Group HR Officer

6. Reports of incidents and accidents aligning with OTML Incident Management Standards maintained and tabled at regular safety communication meetings

Corporate Services Manager

7. Risk register updated to include OH & S risks Corporate Services Manager

2. Maintain and disseminate OTFRDP - specific Occupational Health & Safety Policies and procedures to meet non-OTML operational requirements as part of the OTFRDP Risk Register Management Plan

1. Include oversight of risk management for O H & S in TOR for an audit [and risk] committee reporting to the OTFRDP Board

Executive Management Team

2. Scheduled first aid certification, safety training and briefings included in staff development plan (awareness incorporated into monthly safe days)

Group HR Officer

3. Team meeting agendas include O H & S issues as regular agenda items

Executive Management Team

23 Tok Pisin word for gathering

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Operational Plan

Function

Occupational Health and Safety

Objective/s OTFRDP staff , contractors and consultants able to work in a safe and secure office and field environments

4. Service contracts spell out obligations of contractors and consultants in relation to maintaining evacuation, medical and health insurance.

5. Regional Safety Policies & emergency response procedures developed

EM Support Services

e. InformationandTelecommunicationServicesManaging a service delivery organisation in a geographically dispersed environment working with remote communities presents a challenge for the Executive Management Team. The emergence of mobile phone and satellite technologies in the Western Province over recent years has made a significant difference to the possibilities for working more efficiently and effectively. OTDRFP will rely on OTML for ICT infrastructure support and make the transition to more independent operations following the move to Kiunga. This will require a transition plan to coordinate with OTML Information Services, and other service providers. An important transition has been to establish a separate email identity with a new domain name (otfrdp.com). Email access from the regional field bases via satellite technology will enable staff to access shared files and provide communities with up-to-date information on projects.

The Information Services Officer will work closely with the Executive Management Team to ensure that all opportunities are maximised to use the latest available technologies and telecommunications infrastructure for file sharing, internet and email access, telephones and both mobile (hand held and vehicle) and base radios. The Information Services Officer will also be the custodian of the GIS and administrator of a secure, centralised information data base.

Under transitional arrangements for the transfer of OTML responsibilities, OTFRDP will eventually take over responsibility for the operation of Radio Fly. Radio Fly is an important part of community interaction and public relations, and it will be essential to ensure its continuity during the transition.

Operational Plan

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Information and Telecommunication Services: Summary of Objectives, Strategies and Performance Indicators Function Information and telecommunication services

Objective/s Ensure OTFRDP staff in all regional locations have shared access to relevant program and corporate

electronic files and data through email and internet

Strategies Performance Indicators Accountability 1. Manage value for money in-house services and outsourced contract/s for ICT services to OTFRDP across all regions

1. Performance based service contract/s in place 2. Transition plan for ICT services from new Kiunga

HQ including plan for roll-out of services to regions and field offices in line with infrastructure roll-out

3. OTFRDP Domain name secured and maintained 4. Strategic advice (in-house or contracted) to the

Executive Management Team on future ICT options

5. Staff training on IT skills such as troubleshooting and virus updates

6. Create a MIS (Management Information System) to allow for management of the organisation’s information and knowledge including data collection and storage

Information Services Officer

2. Establish policies and procedures for shared access of files, FMIS, email and internet usage

1. Policies and procedures including permissions, filing rules, email and other protocols

2. Liaison with Comms Facilities & Asset Mgt Officer to record all IT hardware and software information and equipment for asset register

Information Services Officer

3. Establish a GIS capability to support projects implemented under ACIAR and other development partnerships

1. GIS analyst in place under ACIAR partnership agreement

2. GIS system established and data stored 3. Guidelines for spatial data collection provided to

research and field staff

Information Services Officer

4. Manage ISP service agreements and internet domain name

1. ISP service agreements with OTML and other providers

2. Domain name registration documentation

Information Services Officer

Objective/s Ensure cost effective mobile, landline and satellite phone services available to support management and operations

Strategies Performance Indicators Accountability 1. Establish policies and procedures for

use of mobile phones for business purposes and for access to and use of landlines in OTFRDP facilities.

1. Policies and procedures 2. Liaison with Information Services Officer on

relevant applications used on this equipment

Corp Services Manager

2. Procure and deploy telecommunications equipment in headquarters, regional and field bases

1. Asset register - record of OTFRDP landlines, satellite and mobile phones in facilities and held/ managed by staff

2. Training in equipment usage and maintenance 3. Install VSAT systems in Aiambak and Sturt Island

Field bases

Corp Services Manager

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Operational Plan

Function Information and telecommunication services

Objective/s Ensure OTFRDP staff in all regional locations have shared access to relevant program and corporate electronic files and data through email and internet

3. Procure and deploy HF radio equipment in vehicles and field bases

1. Asset register - record of radios in facilities and held / managed by staff

2. Training in equipment usage and maintenance

Corp Services Manager

Objective /s Ensure Radio Fly’s role in communicating messages to CMCA communities is maintained

Strategies Performance Indicators Accountability Prepare transition/implementation plan for OTFRDP management of Radio Fly

1. Transition / implementation plan including staffing and infrastructure requirements, additional training, capital and recurrent budgets approved by Board

Executive Manager Support Services

Operational Plan

88

f.LegalAs one of their key governance requirements, the Board and Executive Management of OTFRDP must ensure that the organisation operates within Papua New Guinea’s legal framework. A draft list of legislation to which OTFRDP may need to adhere is provided at Annex 9g, and this will be maintained by the Executive Manager Support Services. OTFRDP will also be entering into contractual arrangements and memoranda of agreement with individuals and companies who tender for project work, development partners and government. Having a robust contract management system with appropriate templates and legal advice as required will be an important element in managing corporate risk. OTFRDP will enter into an arrangement for independent legal services with a reputable company based in PNG for both ad hoc and regular advice.

Legal: Summary of Objectives, Strategies and Performance Indicators

Function

Legal

Objective/s

Ensure that all OTFRDP corporate and operational obligations comply with the prevailing legislative and regulating requirements in PNG

Strategies Performance Indicators Accountability 1. Manage a contract for outsourced

independent legal services to OTFRDP for advice and services including service agreements with suppliers and contractors, consultant contracts, development partner contracts, governance obligations.

1. Contracts reviewed for consistency and risk 2. Operating environment and governance

structures in line with the overall OTFRDP governance framework (e.g. Constitution)

3. Liaison as required with OTML legal advisers on matters which OTFRDP handles on behalf of OTML

4. Policies and procedures for accessing legal advice documented and disseminated

Exec Mgr Support Services

2. Ensure that a list of all relevant acts and other agreements or instruments under which all OTFRDP legal obligations are documented and responsibility within the organisational structure for each key obligation is confirmed

1. Permanent OTFRDP staff member assigned to manage overall legal obligations

2. List of relevant acts and responsibilities 3. List of other agreements and instruments and

responsibilities 4. Staff responsible for specific obligations

identified, briefed and trained 5. Board briefed and reporting template /

procedure agreed

Exec Mgr Support Services

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Operational Plan

g.AdministrationThe Executive Management Team and other senior managers require administrative support provided through the Corporate Services Division to ensure they work effectively and efficiently in a dynamic operating environment. It is essential that this capacity is available on a continuous basis, and this will require approaches such as well-established referral systems and protocols, management of shared calendars, filing of paper and electronic correspondence, and word processing and spreadsheet support. Under the Executive Secretary’s guidance, administrative assistants will back-stop each other to provide this essential support.

Administration: Summary of Objectives, Strategies and Performance Indicators

Function Administration

Objective/s Provide administrative support to Executive Management Team and Senior Managers

Strategies Performance Indicators Accountability Recruit well qualified and experienced administrative support staff to assist the Executive Management Team and senior managers to maintain their efficiency.

1. Positions of Executive Secretary and Administrative Assistants are filled and back-stopped at all times

2. Position descriptions outline key responsibilities for each position and performance of incumbent/s meets requirements of the immediate manager/s

Corporate Services Manager

Operational Plan

90

h.CommunicationsOTFRDP is committed to serving the people in the CMCA communities however this requires a clear understanding of who are the key leaders that have a stake in the development of these communities. A coordinated approach is also needed to ensure that common and consistent messages are disseminated to all stakeholders. Stakeholders have been identified and recorded in Annex 1a while the strategy by which stakeholders are engaged has been prepared as a Communications Strategy (Annex 1b) which should guide all OTFRDP staff working with communities and with other stakeholders. This will be a changing document that responds to emerging issues, new initiatives and challenges. The CEO will ensure that all key communications acknowledge the sensitivities of a change in the way of doing business, introduction of new faces within OTFRDP, and the external environment which may also impact on perceptions about OTFRDP and its emerging role in the Western Province.

Communications: Summary of Objectives, Strategies and Performance Indicators

Function Communications

Objective/s Maintain open and transparent communications with all stakeholders

Strategies Performance Indicators Accountability 1. Design and implement a communications

strategy which targets key stakeholders using a range of methodologies

1. Stakeholder matrix maintained and updated 2. Communications strategy maintained and

implemented. 3. Communications strategy includes use of

Radio Fly as a communication mechanism for operational and advocacy messages

4. Mechanisms in place for monitoring and evaluating impact of communications and for regular reporting to Board and other stakeholders

Executive Management Team

2. Establish a steering committee with PNGSDP and FRPG

Quarterly committee meetings covering key agenda items focusing on coordination and cooperation on development projects

CEO

91

Operational Plan

i. CMCATrustAdministrationThe administration of the 8 CMCA trusts is undertaken within the legal framework of CMCA trust deeds which must be consistently applied in all of the Trustees’ decisions. Meetings are held quarterly and this schedule determines the work of the trust administration team who must organise a total of 32 trust meetings annually. This involves organising travel and preparing sitting fees, agenda papers and reports from the past quarter. The trust administration team liaises closely with Regional Coordinators on logistics, and meeting notices are communicated using email, HF radio and Radio Fly. The meetings focus on progress of approved projects throughout the project cycle and discussion of newly proposed projects, along with a review of trust accounts and investments. The future objective is to reduce the duration of each trust meeting to two hours through more efficient meeting processes and by ensuring agenda papers are complete and disseminated before each meeting.

The future challenges for trust administration include the pooling of investment funds by all trusts to share in larger scale investments (e.g. OTDF Kiunga office complex, Housing Estate, Cargo Vessel and Passenger Ferry), including conducting due diligence, and establishment of appropriate legal frameworks (e.g. appointment of a custodian to hold and manage assets). Upon mine closure, funds which are currently allocated to investments will be converted to development funding, and future planning for the use of these new development funds will be required. In March 2010 the OTFRDP Team Leader Trust Administration was appointed as the new Trust Administrator in a departure from the requirement that an OTML employee hold this position.

CMCA Trust Administration: Summary of Objectives, Strategies and Performance Indicators

Function CMCA Trust Administration

Objective/s Assist CMCA trusts to conduct efficient and effective quarterly meetings

Strategies Performance Indicators Accountability 1. Ensure trust meetings are held closer to

communities and related regional field bases wherever possible

1. Schedule and locations demonstrate meetings are being held closer to the relevant communities

2. Travel costs reduced

Trust Administrator

2. Familiarise all participants in trust meetings with their roles and responsibilities, ensure they receive relevant meeting documentation, and are mobilised in a timely manner

1. Policies and procedures for meeting preparation in place and implemented

2. Meeting documents and agenda received, collated and disseminated within specified timeframes

3. All project submissions are consistent with the Trust Deed and follow the appraisal process.

4. Training for new trust and VPC members scheduled and implemented

Trust Administrator

3. Conduct meetings efficiently and effectively according to trust governance requirements and trust members’ expectations

1. Meetings held no longer than 2 hours. 2. Agenda includes key governance items,

progress reporting on projects, open discussion on opportunities and constraints and key messages from OTFRDP communication plan

3. Minutes including resolutions prepared and circulated, action items followed up within agreed timeframe

Trust Administrator

Operational Plan

92

j. FacilitiesandAssetManagementIn the process of becoming an independent entity OTFRDP has identified the facilities and assets which it needs to operate. This process has also included a stocktake of field base assets which are recorded on a depreciation schedule in the Ellipse accounting system. Agreed assets and respective values will be formally handed over to OTFRDP in July 2010. OTML’s mine closure planning has included discussion on deployment of assets that will no longer be required at mine closure. OTFRDP has identified a range of facilities and related equipment that have been incorporated into the Mine Closure plan for handing over and utilisation at closure. Regional development teams have commenced assessing the requirements for refurbishment of regional field bases, including permanent housing for deployed staff. Where practical and possible, OTFRDP will lease vehicles and properties purchased / constructed from trusts and village development funds. Use of field base accommodation and boats by third parties will be charged out to recover some of the costs of repairs and maintenance.

Assets transferred to OTFRDP by OTML, and those purchased by OTFRDP will be recorded as part of an asset management function. Financial accounts will include depreciation as required under PNG laws. Capital expenditure forecasts for annual budgets will take account of existing assets and their usable life as well as future requirements.

Protection of either leased or owned assets is essential to ensure they are available for operational requirements. This will require that they are well maintained, adequately secured, and insured against damage.

Facilities and Asset Management: Summary of Objectives, Strategies and Performance Indicators

Function Facilities and Asset Management

Objective/s Manage all physical resources that contribute to achieving OTFRDP operational and managerial goals

Strategies Performance Indicators Accountability 1. Identify and record all significant

facilities and assets over which OTFRDP has management responsibility (including leased and rented items)

1. Policy on ownership of facilities and assets 2. Database established (preferably integrated

within accounting system) to include existing and new property (land), buildings, infrastructure, office equipment, vehicles and vessels and related management arrangements (e.g. lease, owned) and assessment of condition, location etc

T/L Procurement & Logistics

3. Include depreciation schedule where required for all significant facilities and assets

Corporate Services Manager

2. Establish and implement protection and maintenance schedules for relevant facilities and assets

1. Schedules and maintenance reports maintained in relevant locations

2. Facility and asset protection policies and procedures including documentation security arrangements at each regional field base

Corporate Services Manager

2. Include protection and management of facilities and assets in the risk register

Risk register Exec Mgr Support Services

3. Account and record stock and inventory records of all materials and supplies purchased and stored

Inventory records at all OTFRDP regional offices and field bases.

T/L Procurement & Logistics

4. Establish OTFRDP headquarters and 1. Regular site meetings with construction Exec Mgr Support

93

Operational Plan

Function Facilities and Asset Management

Objective/s Manage all physical resources that contribute to achieving OTFRDP operational and managerial goals

housing estate at Kiunga contractors 2. Re-location plan including specification of

equipment and furniture requirements, IT infrastructure, staff housing deployment

3. Opening ceremony and related publicity for new offices

Services

Objective/s Protect and maintain OTFRDP assets to maximise their useful life.

Strategies Performance Indicators Accountability 1. Ensure maintenance is carried out in

accordance with the maintenance register schedule

Maintenance register and schedule prepared for all physical assets and scheduled maintenance conducted

TL Procurement & Logistics

2. Implement appropriate security arrangements to protect all OTFRDP assets in headquarters and the field

1. Security plan prepared including assessment of levels of risk and recommendations on appropriate security arrangements

2. Reports of incidents and actions to EMT and audit and risk committee

Exec Mgr Support Services

Operational Plan

94

k. TravelTravel falls under human resources in the OTFRDP organisational structure as leave travel is a significant entitlement for all OTFRDP employees. As staff numbers increase to the full complement, responsibility for handling this will require a dedicated travel officer. OTFRDP will also gradually reduce the reliance on OTML charters and ensure that cost-effective commercial airline travel arrangements are in place for all leave and business travel. A register of all travel will be maintained by the Group HR Officer and monitored by the Executive Management Team.

The strategy of joint patrols and regular planned field visits outlined under the Regional Operations function will also be aimed at using cost effective approaches to movement of staff along the river. Policies and procedures will be developed to guide work-related travel and logistics. Within the next 1-2 years, the presence of a passenger ferry and wharves at field bases will result in further adjustment of these policies.

Travel: Summary of Objectives, Strategies and Performance Indicators

Function Travel

Objective/s Ensure all OTFRDP staff are mobilised for work and leave travel in a timely manner

Strategies Performance Indicators Accountability Provide cost effective work-related and leave entitlement travel arrangements

1. Work-related travel policies and procedures prepared and maintained including preferred modes of transport between regional bases

2. Increase travel on commercial airlines instead of OTML charters

3. Consolidated staff travel register maintained for Executive Management Team

4. Leave travel entitlements documented and cost estimates updated in OTFRDP budget estimates (are there already policies or are these needed?)

5. The most cost effective fares for leave travel organised in a timely manner according to contractual requirements

Group HR Officer

95

Operational Plan

l. Procurement&LogisticsOTFRDP has been dependent on OTML systems for procurement and logistics which do not meet operational requirements for delivery of CMCA projects. OTFRDP has entered into a contract with HiLift in Port Moresby for provision of a dedicated procurement and warehousing function for CMCA projects and OTFRDP operational requirements. This is the first step in an integrated process which will incorporate quarterly delivery of containers from 2011 on a dedicated cargo vessel operating between Port Moresby and Kiunga. Containers of CMCA trust project materials which have been checked, packaged and loaded in the Port Moresby warehouse will be shipped to and offloaded at regional field base wharves at Aiambak and Sturt Island. The quarterly delivery cycle is dependent on the construction of the wharves and securing a dedicated cargo ship. Shipping has long been a priority of several trust groups and many individuals within the CMCA. Geographically, the Fly River lends itself to improved transportation opportunities for many people currently living in isolation within the CMCA corridor. The most recent attempt to secure shipping services was made by the Middle Fly Trust through its business arm, Flood Plains Ltd. However, plans were rejected by previous OTML management who also complicated the proposal by trying to make the vessel a multi-service provider including cargo, medical and banking services. Following advice from OTML logistics specialists, options for two purpose built vessels are being considered for trust investment to benefit all CMCA trust communities:

(a) Cargo Vessel – a 55 metre stern loading vessel capable of carrying 50 containers and 400,000 litres of fuel with a minimum 30 tonne crane capacity. This vessel will be contracted to OTML for dedicated services between Port Moresby and Kiunga for general OTML and contractors’ cargo into Kiunga and scrap metal and decommissioned buildings back to Port Moresby. OTML will subcontract vessel operations and maintenance to a shipping company (e.g. Steamships, P&O or Toll). This vessel not only provides an immediate visual presence on the river for the trusts but it presents an opportunity to have containers for the respective regions delivered direct to site at no freight cost (container delivery and pick up will be written into the shipping contract). OTML recently confirmed their new shipping strategy and due diligence for both vessels has begun.

(b) Passenger Vessel – this 34 metre vessel will provide a passenger ferry service between Kiunga and

Daru, stopping at Aiambak and Obo in the Middle Fly and Sturt Island and Gesowa in the South Fly along the way. The intention is to provide a cost-effective option for people to move regularly from their communities into larger centres to trade goods and access services (banking, food and hospitals etc.). A regular service carrying 150 passengers and carry-on cargo is hoped to contribute to the movement of public servants like teachers and health workers which should contribute to retention of staff in some of the more remote locations. Each sector is expected to cost PGK 100 per person, or a total of PGK 300 to travel the length of the Fly. By comparison, air travel in the Middle Fly from Obo Station to Kiunga on Airlines PNG is currently more than PGK 500 per person, one way.

Future plans for a second passenger ferry would depend on demand, while the cargo vessel is expected to service a growing Kiunga market after mine closure. Pooled funding proposals for both vessels have been accepted by the Advisory Committee and communities through widespread consultation.

Operational Plan

96

Procurement and Logistics: Summary of Objectives, Strategies and Performance Indicators Function Procurement and Logistics

Objective/s Procure goods and services required to meet management and operational requirements

Strategies Performance Indicators Accountability

1. Establish an integrated procurement function which utilises a value for money approach to procuring goods and services for core business, CMCA trust projects, village allocation funds and projects funded from other sources.

1. Procurement policies and procedures 2. Contract for outsourced procurement

services and warehousing function based in Port Moresby

3. Procurement cycle in line with agreed delivery timeframes for CMCA and other projects

4. Delivery cycles aligned with shipping schedules

Corporate Services Manager

1. Ensure procurement procedures comply with contractual obligations of development partners or donors

1. Contract requirements communicated to procurement staff during specification process.

2. Required documentation maintained as required under contract/s

Corporate Services Manager

Objective/s Deploy all human and physical resources required to meet management and operational requirements

Strategies Performance Indicators Accountability Coordinate deployment of staff, contractors, consultants, equipment, vehicles and vessels to meet core management and operational requirements

1. Systems in place including through middle management meetings to provide management information on staff deployment, to optimise use of vessels and vehicles in field work, and ensure that equipment and materials on site to conduct core business

2. Regional Development and Program Services teams are integrated into systems and have access to them

Corporate Services Manager

Coordinate deployment of contractors, consultants, equipment, vehicles and vessels to meet CMCA and regional project delivery schedules

1. Systems in place to provide management information aimed at optimising deployment of human resources, vessels and vehicles in field work, and ensure that equipment and materials are on site to meet project timelines.

2. Regional Development and Program Services teams are integrated into systems and have access to them

Exec Mgr Support Services

97

Operational Plan

m. RiskManagementManagement of risk is an essential part of corporate governance and project management. The OTFRDP risk register and management plan in Annex 3 identifies key strategic and operational risks. Natural and man-made disasters and emergencies are recognised as risk events largely outside the control of communities and OTFRDP, and therefore the emphasis is on mitigating the impact of these risks. Generally speaking the mitigation strategy should focus on disaster preparedness; for instance, occurrence of an El Niño-driven drought event will require field teams to assess the likely impact on food security, ongoing projects, and the related logistical issues. OTFRDP may become involved in responding to other emergencies along the CMCA corridor as a result of its presence in field locations, with equipment and communications capabilities located at regional field bases. The role of OTFRDP should be clearly defined through discussion with the government’s emergency services organisations. These issues deserve special attention outside of the general risk register.

Risk Management: Summary of Objectives, Strategies and Performance Indicators

Function Risk Management

Objective/s Identify and manage priority risks that could impact on achievement of OTFRDP Vision and Mission

Strategies Performance Indicators Accountability 1. Actively manage all categories of

risks using an up-to-date risk register

1. Establish an audit and risk committee reporting biannually by exception to the OTFRDP Board on the updated risk register

2. Responsibility assigned for identifying, recommending treatment, and reporting individual or categories of risks in risk register

3. Teams actively managing risks and implementing treatment through regular meetings

4. Maintain the OTFRDP risk register

Exec Manager Support Services

2. Identify natural disasters (e.g. drought) as special risk categories and develop specific mitigation strategies

1. Natural disaster risks identified and included in risk register and management plan

2. Programs developed to support mitigation strategies in consultation with the FRPG (e.g. germplasm, food security, procurement and logistics options)

Exec Manager Regional Development

3. Identify disasters (e.g. aircraft or vessel accidents) as special risk categories and develop protocols for OTFRDP involvement with emergency management agencies

1. Other disaster risks identified and included in risk register and management plan

2. Formal protocols in place with agencies in WP responsible for emergency services

Exec Manager Support Services