The World Bank Group’s Board approved a Country Partnership Framework for Papua New Guinea on 17 February 2026, carrying an estimated US$1.2 billion financing envelope through 2031. The Bank set out the approval in a press release issued from Port Moresby on 23 February, built around the government’s target of creating one million jobs by 2027.
One instrument pushes those jobs onto the construction contracts the Bank finances. Bidders on civil works contracts subject to international competitive procurement must allocate not less than 30 per cent of total labour cost to local staff and personnel, per the Bank’s procurement guidance on local labour participation.
That floor can be moved. Nothing on the public record shows Papua New Guinea has tried.
Three numbers, one of which does the work
US$1.2 billion is the headline figure. One million jobs by 2027 is the target the Bank has aligned itself to, drawn from PNG’s Medium-Term Development Plan 2023-27, according to the Country Partnership Framework document.
The 30 per cent is the only one of the three that binds anyone to anything.
Announcement came in a Bank press release on 18 July 2025, applying to civil works contracts subject to competitive international procurement from 1 September 2025. Managing Director of Operations Anna Bjerde announced it in the Pacific on 1 August 2025, after a week-long visit to Fiji, Papua New Guinea and Australia, according to Development Policy Centre research associate Richard Curtain.
Employing local labour generates income in communities, lets families support themselves, builds skills and encourages reinvestment locally, the Bank said in the July 2025 release. It put the scale of the problem at an estimated 1.2 billion young people entering the labour market in developing economies over the next decade.
Curtain sets out the mechanism the Bank expects. Because the requirement is pegged to aggregate labour cost rather than local-worker headcount, the Bank anticipates contractors will prefer more skilled local hires, since a skilled worker consumes more of the cost quota than an unskilled one.
The rule did not arrive alone. It builds on a wider procurement overhaul the Bank introduced in March 2025. That overhaul shifted evaluation away from lowest price toward weighted criteria covering life-cycle costs, sustainability, innovation and social impact including job creation. It also raised bidder qualification standards for high-value contracts.
Where the negotiating room sits
The Bank’s guidance is specific about who can move the number. The requirement bites on new works contracts advertised on or after 1 September 2025 that are subject to international competitive procurement and required to use the Bank’s Standard Procurement Documents. On those, the borrower requires bidders to allocate not less than 30 per cent of total labour cost to local labour. One qualifier follows: unless otherwise agreed in the Project Procurement Strategy for Development.
Two clauses in that guidance matter for Port Moresby.
One states plainly that the minimum 30 per cent is a threshold and not a ceiling, and that bidders must meet or exceed it. Thirty is where a negotiation starts, not where it finishes.
The other sets the limits. The requirement is fixed by the Bank in the Standard Procurement Documents and is not subject to change by the borrower, except in special circumstances and with the Bank’s agreement as reflected in the Project Procurement Strategy for Development.
Guidance also records that the local labour requirement sits in addition to any rated criteria or requirements on skills development and upskilling written into the standard bidding documents. A government wanting certified trade training attached to a road contract has a place to put it.
None of that happens automatically. It happens project by project, in a document the borrower helps draft, before the tender goes out.
What 30 per cent looks like against PNG evidence
Research by Peter Johnson, cited by Curtain, found that between 1990 and 2002, 68 per cent of wages paid by the Porgera Joint Venture went to international employees and 32 per cent went to PNG nationals.
On Exepreneur’s comparison, that split from a mine operating more than two decades ago sits two percentage points above the floor the Bank has now made mandatory. The two figures measure different things. Johnson counted the national share of wages paid on a resource project. The Bank counts the local share of total labour cost on a financed civil works contract. The comparison is indicative rather than an equivalence.
Curtain’s conclusion from it is direct. The 30 per cent mandate may be too low to change the existing skill imbalance, and for PNG the requirement is not likely in many cases to encourage contractors to offer higher-skilled, better-paid jobs to local workers.
His own research for the Asian Development Bank in 2016 found the pattern the rule is meant to break. Foreign companies employed local workers, but at low skill levels and often with high turnover. The common practice among foreign road and bridge construction firms was to hire from local villages while working in the vicinity. Young men went into security roles. Women were hired to collect rocks for gabions, the wire mesh cages used as retaining walls. Skilled workers who operate equipment and perform trade work were imported, which Curtain describes as a risk minimisation strategy.
Those imported workers account for much of the labour cost on a large project. That is the reason a cost-based quota can be satisfied without a single additional PNG tradesperson being hired.
Scale of the gap shows up in the specifics. Craig Bui Mana, writing in the comments on Curtain’s post, identified himself as having worked with labour hire firm Pacific Manpower. He said more than 400 welders had to be brought from the Philippines during the front-end engineering and design phase of the LNG project in the Highlands in 2012. He said the gap in specialised welding has not closed since.
The critique the Bank has not answered with data
Charles Kenny of the Center for Global Development published an assessment on 3 September 2025 under the title “The World Bank’s New Local Labor Procurement Rule: Mostly Ineffective, Marginally Harmful, and Considerably Craven.”
His objection is evidentiary. Kenny wrote that the Bank’s advertising materials for the rule provide no data on how often less than 30 per cent of labour costs on internationally awarded Bank-financed civil works contracts went to local hires in the recent past. Without that baseline, nobody can say whether the rule raises anything.
His judgment, as Curtain quotes it, is that the rule is not likely to have much effect on contracting decisions or employment, nor any on broader development outcomes.
Kenny also argued the rule adds process to an institution whose borrowers already rate its complexity and delay among its greatest weaknesses, citing direct surveys of those borrowers. Every borrower contemplating international civil works contracting must now assess local labour market capacity and availability. Bidders must outline the roles local personnel will fill and their hiring strategy.
For a government trying to move a road programme quickly, added procurement steps have a cost measured in months.
ADB went further on a different denominator
ADB President Masato Kanda announced on 16 September 2025 a requirement for meaningful local job participation on ADB-financed projects, according to Curtain’s account of the speech. The ADB quota is at least half of all person-days worked.
Curtain calls the ADB requirement a blunter instrument than the Bank’s, and the denominator is the reason. Person-days count bodies on site for a day. Cost counts what those bodies are paid. A contractor can reach half of person-days with unskilled labour and reach 30 per cent of cost the same way, but the two quotas fail in different directions.
Converting between them requires a project’s wage distribution. Neither institution has published one.
Sequence also runs opposite to what a straight comparison of the two percentages implies. The Bank announced first, in July 2025, and commenced first, on 1 September 2025.
ADB’s separate response to the skills problem is more targeted. Its Build4Skills programme integrates traineeships into ADB-funded infrastructure projects across energy, transport, water, urban and social sectors, financed from the project loan by earmarking typically 0.5 per cent of selected civil works contract budgets, according to Curtain.
He argues the earmark produces predictable funding and folds training into project costs, which is more efficient than ADB’s past practice of running training programmes separately with little involvement from construction employers. Pilots in Mongolia and Pakistan made it easier to include skills development at little extra cost, on his reading.
Curtain’s recommendation for PNG follows from that. Procurement requirements should include setting up and supporting skills training linked to established training providers, rather than resting on a cost percentage. Responding to a comment on his post, he noted that ADB’s current project on improved technical and vocational education and training for employment was designed to address PNG’s skills gap. Success, on his account, depends on linking it closely to construction employers through the infrastructure procurement process.
The PNG contracts this lands on
The Department of Works and Highways is implementing the PNG Resilient Transport Project with World Bank financing, according to the department’s own project page. It finances rehabilitation and extended performance-based maintenance of sections of the Ramu and Hiritano highways.
Its procurement plan, dated 25 June 2025, covers June 2025 to December 2026 and uses the Bank’s Systematic Tracking and Exchanges in Procurement system for all procurement transactions on the project. Contracts subject to international competitive procurement under that plan, advertised after 1 September 2025, carry the 30 per cent requirement.
The wider pipeline is larger than the Bank’s share of it. Curtain notes the PNG government’s 2025 budget papers forecast the cost of the Connect PNG Infrastructure Program each year to 2029, covering roads, bridges, airstrips, school buildings, health facilities, maritime ports, coastal wharves and electrical access work.
He also points to committed private infrastructure investment shown in the government’s Infrastructure Tax Credit Scheme data, and to expected resource projects including Wafi-Golpu, Frieda River and Papua LNG. Demand for technical and professional workers over the next decade will be strong, on his assessment, and PNG workers will fill those roles instead of imported ones only if the government and the loan providers make a concerted effort.
Multilateral rules reach only multilateral contracts. Connect PNG, the tax credit scheme projects and the resource developments sit outside them. Whatever floor PNG accepts on Bank-financed work sets a reference point for everything it negotiates elsewhere.
What the framework is measured against
The Bank’s Public Finance Review, released in Port Moresby on 23 March 2026 under the title Converting Resource Wealth into Human Capital, found resource revenues averaged just 1.9 per cent of GDP between 2013 and 2024. Production from the sector nearly doubled over the same period.
That review also found nearly half of young children are stunted, one in 25 children dies before the age of five, and education outcomes are among the weakest globally. A child born in Papua New Guinea today is expected to reach only 42 per cent of their potential productivity.
Closing those gaps requires roughly 4.5 per cent of GDP in additional annual spending on education programmes, expanded primary healthcare and a national social safety net, the review estimates.
Alongside the one million jobs target, PNG has set a K200 billion economy by 2030 and a balanced budget by 2027, according to the Bank’s release on the review. Meeting them depends on fiscal systems that turn resource wealth into results.
Labour market conditions make the procurement lever heavier than it looks. Agriculture, forestry and fishing employ the majority of PNG’s labour force, with most of those workers employed informally, according to the Bank’s country overview. The population is roughly 11.8 million and young. Formal wage employment on a financed highway contract is not a marginal gain in that setting.
The framework itself organises around four outcome areas: improved human capital, more connected communities, improved economic governance, and increased private sector-led diversification, per the Country Partnership Framework document. PNG is a fast-track country under the Bank’s gender strategy, with priorities including women’s access to jobs.
Han Fraeters, World Bank Director for Papua New Guinea, Solomon Islands and Vanuatu, said turning PNG’s natural wealth and human potential into development outcomes and opportunity is the challenge ahead, in the Bank’s February statement. Speaking to Business Advantage PNG in April 2026, he said the programme would deliver actual results and that agriculture, energy and infrastructure would receive the most investment. He added that jobs are created by the private sector rather than the public sector, and that the public sector’s role is to be enabling.
That last point cuts both ways. If the private sector creates the jobs, the terms on which government contracts the private sector are the lever government actually holds.
The election clock inside the framework
The Country Partnership Framework flags a risk the launch statements did not. It states the framework covers the periods immediately before and after the 2027 national elections, describes that as a critical juncture given PNG’s history of electoral volatility and associated violence, and calls for flexible, conflict-sensitive programming.
Financing anticipates up to a 50 per cent top-up for FY26 through the IDA21 Prevention and Resilience Allocation, with further access determined by annual progress reviews, according to the framework document.
Knowledge engagements will deepen understanding of the political economy ahead of the 2027 elections and shape post-election policy dialogue, the document adds.
The jobs target and the election share a year. A government reaching 2027 with visible local employment on financed infrastructure has something to point at. Procurement decisions that determine whether that employment happens are being taken now, in documents nobody outside the process reads.
The number that settles it
Almost a year has passed since the requirement commenced on 1 September 2025. Exepreneur could not identify any PNG government statement, business association response, or project-level compliance figure on the 30 per cent rule published since that date.
That absence is not proof the government has accepted the floor without argument. Project Procurement Strategy for Development documents are not routinely published, and a negotiation conducted inside one would leave no public trace until tender documents appear.
What it does mean is narrower and still uncomfortable. A rule governing the local labour share on every internationally tendered civil works contract inside a US$1.2 billion programme has drawn no recorded comment. Not from the government it applies to, not from the contractors who will bid, not from the industry bodies whose members stand to be hired or not hired.
The Local Labour Method Statement is where the answer surfaces. It is a bidding form in the Bank’s Standard Procurement Documents, and it is where a bidder sets out the roles local personnel will fill and the hiring strategy behind them.
The first one filed against a PNG contract under the new framework, and the local share it commits to, is the number that shows whether Port Moresby used its negotiating room or let the floor become the ceiling.
