Assessing the Labour Market Impact of the PNG LNG Project and Implications for Future Projects

Abstract

This paper assesses the labour market impact of the Papua New Guinea (PNG) LNG project – the largest resource project ever completed in PNG. It discusses employment during the construction phase from 2010 to 2014 and the subsequent production phase. While national employment figures in the formal economy grew substantially during LNG construction, many jobs were held by foreign workers. Many Papua New Guineans living close to LNG construction sites were employed for short periods of time without the opportunity to develop skills or gain enough work experience to facilitate their permanent transition into the formal workforce. The major LNG developers have been criticised for not providing more training opportunities for local workers and instead heavily relying on foreign workers. Many PNG government departments were taken by surprise by the project, and training institutions were not ready to provide training in relevant areas. The paper ends with recommendations for the future, including the upcoming Papua LNG project.

Keywords: PNG LNG project skills training development

JEL Classification: J21, J24