The Coffee Industry Corporation exists to provide leadership, facilitation and support services to the Papua New Guinea Coffee Industry. The three pillars and the strategies that have been developed in support of our role will be facilitated by the core functions of the CIC through:
The Coffee Industry Corporation Limited is incorporated under the Companies Act and conferred with powers to be responsible for industry regulation, research and extension as set out in its Constitution. Regulatory powers and functions were conferred upon it by Parliament under the CIC (Statutory Functions & Powers) Act 1991.
The CIC exists to provide leadership, facilitative and support services to the Papua New Guinea Coffee Industry. The three pillars and the strategies that has been developed in support of our role will be facilitated by the core functions of the CIC through:
- Coffee Research, Extension and Growers Support Services
- Regulation and Policy that will support Promotion and Market Intelligence
- Corporate Support Services
CIC Functional Structure
The following is a diagram of the CIC functional structure.
CIC Executive Committee
The purpose of the Executive Committee (EXCO) is to facilitate the process of resource allocation and prioritization and to make appropriate recommendations to the Chief Executive Officer and the Board for approval. The EXCO is a committee of the CEO and the Board as a think-tank and driver of high impact activities carried out by CIC to ensure efficiency, accountability and to achieve desired returns on investments.
Coffee Research & Extension Advisory Committee
The purpose of the Coffee Research and Extension Advisory Committee (CREAC) is to support the role of Planning, Monitoring and Evaluation office to provide the monitoring and evaluation of CIC operations in research, extension, coffee inspection, export control and socio-economic studies and activities.
All other functions of the organisation structure are respective of the two main divisions of the CIC with the commercial operations of the corporation functioning as the business arm.
The Corporate Support Services section provides support services in governance, finance, human resources, and property management to the industry.Its functions and roles are to implement personnel and administration, and finance and accounts.
Services to the Industry sub-sector are provided by the Industry Associations Office. The Industry Association office exists between the Coffee Industry Corporation and four sector associations registered with IPA as the industry’s socio-political organisations to guard the industry against any negative effects by the government or any other organisation.
The four sub-sector stakeholder associations are:
- PNG Smallholder Coffee Growers Association (PNG SHCGA)
- PNG Blockholder Coffee Growers Association (PNG BHCGA)
- PNG Coffee Plantation and Processors Associations (PNG CPPA) and
- PNG Coffee Exporters Council
Functions of Industry Associations Coordinator
The Industry Associations office is responsible for:
- conducting meetings and elections every three years for office bearers
- establishing dialogue with partners and banking institutions
- ascertaining transparency in electoral procedures and public awareness.
- advising associations appointed representative (directors to the CIC Board) on association issues
- prepare reports and make submissions to the CIC on behalf of the industry
- liaise with other sections within CIC and carry out promotions for membership growth
- partnering with outside organisations and government institutions to enhance CIC policy objectives.
The respective sub-sector association operations can be defined as:
- PNG SHCGA – is made up of individual coffee growers who have a minimum of 700 coffee trees from a village-based association. These farmers then nominate their association executives including a chairman who becomes a constituency rep to the district.
- PNG BHCGA – this association is made up of blockholders who operate in the similar way as SHCGA but nominate one director to the CIC Board as to meet CIC constitution requirements.
- Similarly the CPPA and Exporters Council consists of plantations, processors and exporters who have their office executives nominated by election process and concurrently nominate directors in their separate meetings and elections to the CIC Board.
The Secretariat comprises:
- Board secretariat;
- Industry support coordination;
- Public relations; and
- Planning, monitoring and evaluation.
These are offices and functions that report directly to the CEO.
Board Secretariat and Industry Relations
The main functions of the secretariat include:
- secretarial and support duties to the Board,
- administer CIC policies, Act and Constitution,
- conduct of AGMs and Board meetings,
- preparation and lodgement of annual returns and reports,
- provide support services to the industry subsectors,
- management of legal matters,
- manage public relations activities and support to CEO’s office.
Planning, Monitoring and Evaluation Office
The PM & E supports the coordination and administers all programs and projects in the CIC. The PM & E provides the necessary liaison between EXCO and the CIC’s project teams. The project teams may be located in PM & E or elsewhere depending on circumstances such as the size of the project team, term of the project, logistics issues and others.
A full time PM & E Manager reporting to CEO will manage the Projects office. Functions performed by the PM&E include:
- Facilitate CIC’s planning, monitoring and evaluation process;
- Acting as a catalyst for the projects process;
- Tracking, analysing and collating project reports;
- Reporting on the progress of projects against planned milestones, and act as an early warning mechanism for the EXCO on project slippage;
- Undertaking a quality control function on the CIC project process, providing guidance to the project teams and input to the EXCO as necessary.
Representatives of Industry Stakeholders and the Government are part owners of the Coffee Industry Corporation Ltd and are represented on the Board of Directors. The CIC Ltd has a 12-member Board comprising of:
- 6 Smallholder Association Representatives (Western Highlands, Simbu, Eastern Highlands, Momase, New Guinea Islands, Southern Region)
- 3 Government Representatives (Treasury, Commerce and Industry, Department of Agriculture and Livestock)
- 1 Exporters Council Representative
- 1 Plantations and Processors Representative
- 1 Blockholders Association Representative
Role of the Board
The CIC Board of Directors play an important role in the running of the CIC Ltd in line with stakeholder and government social and policy goals and hence will continue to provide the following:
- Policy Direction
- Political Lobbying
- Protection for the Industry
It gives me pleasure to report on some of the work CIC has accomplished in 2015 and also highlight some of the ongoing and planned events for 2016.
Coffee production in the last couple years has been on a downward trend. The 2015 production totaled 44,030 tons, 7% lower than 2014 production level. While expectations in 2015 have been high given the smaller crops in the last three years (2012 – 2014), the prolonged El Nino induced drought and frost which occurred during crucial coffee period (Apr – Nov) causing stress on coffee trees resulting in dieback of a lot of coffee beans that affected coffee production.
The low production showed PNG exported volume slumped by almost 26% below average export of 1.1 million bags from 2013 to 2015. Last year, PNG exported 42,689 tonnes at a total value of K393.55 million. Exports in the last three years (2013 to 2015) declined by 24% in comparison with the exports from 2010 to 2012 period. The decline in exports attributed to low production witnessed in the period.
The weighted average export price for 2013 – 2015 averaged K8.45 per kilogram gbe (green bean equivalent), representing a decrease of 20% on 2010 – 2012 weighted average price. The combined decline in export volume and valued in the period resulted in a 39% decline in receipts to K1.18 billion compared to 2010 – 2012 period.
The continuous declining trend in coffee production could be attributed to many factors (natural, social, economics). However, it is so obvious that many of the coffee trees are over the age of productivity (above 25 years) and are senile trees. Aging coffee trees is one of the problems leading to decline in productivity. It is in the best interest of growers, exporters, processors, traders, buyers, associations, and marketing groups’ e.t.c, to support nurseries program. One way or another we all benefit. We must start to invest if we all have interest in coffee and justify why we are the players in the industry.
CIC is working with organized grower groups to address these problems. CIC is establishing nurseries jointly with grower groups and districts to distribute seedlings to farmers. As much CIC under its ongoing partnership program is working with interested districts to deliver extension services directly to farmers.
CIC partnership program is also extended to plantation sector. Under a tripartite agreement CIC had brokered in 2014 for an Investor Financing Agreement (IFA). This partnership program was trialed out between Anego Coffee Plantation, Outspan (exporter) and CIC. The results look promising for the future prospects. The partnership arrangement has transformed the plantation into a new look.
I encourage more of such tripartite partnership arrangements to rehabilitate all the rundown plantations in all the coffee growing provinces, as after all, the end result would be a win-win situation.
CIC’s third National Coffee Cupping Competition (NCCC) would be held again this year. The NCCC concept is to assist coffee growers and cooperatives maximize benefits under CIC’s “tree to cup” policy, which CIC emphasizes on coffee growers producing quality coffee and sell direct to overseas markets.
I wish all coffee industry stakeholders and including CIC employees a happy 2015/16 coffee season and look forward for the continuous support going forward.
Mr. Charles Dambui
Chief Executive Officer
Our Vision, Mission and Mandate
Our vision is to ensure:
“Prosperous Coffee Farming Communities; a Vibrant, Competitive and Sustainable Coffee Industry.”
Our mission is:
To increase financial returns, productivity, production and market access for female and male coffee farmers and others along the value chain, with motivated, competent and continuously learning actors.
By virtue of Coffee Industry Corporation Act (1991), the CIC Ltd is mandated to:
- Conduct research into coffee production, processing, and marketing of Papua New Guinea Coffee.
- Provide extension services to the coffee industry including training, education and information dissemination.
- Regulate coffee quality, industry trade and guard the industry from the effects of antogonistis policies and threats whether national or international.
- Guard the industry against pests and diseases, environmental, ecological and bio-chemical instrutions.
The following core values underpin the culture in CIC and key principles which guide the Board, management and staff of the Corporation:
Recognizing and promoting diversity and different roles played by individuals and stakeholders in developing this truly national commodity.
We take full responsibility for our actions and results and through this we will improve public confidence in the Corporation.
We protect and enhance the Corporation’s reputation by demonstrating respect for
others, fairness, honesty and moral values and upholding good governance.
We will make decisions based on sound policies and processes that are clearly communicated and understood by our stakeholders.
We share our knowledge and skills and respect each other’s contribution in achieving the common goals of the Corporation. We put the interest of the team above the interest of the individual.
We are a new organization pioneering into new areas of knowledge and research
and the Corporation which has the best local knowledge about all aspects of coffee
We are committed to being highly skilled and knowledgeable, aiming to always apply industry best practices.
* In order to assist the CIC and the stakeholders understand and adhere to the corporate values a pneumonic aid is developed and this is:
‘RAIT’ captures the Attitude values of the CIC while ‘TIC’ captures the Intellectual underpinning values of the CIC. These values will provide the impetus that will be the driving force behind CIC’s responsibilities as outlined in our vision, mission and mandate, and duly supported by the PNG Coffee Industry Strategic Plan 2008 – 2018.
The Coffee Industry Corporation Limited was first established as the Papua New Guinea Coffee Marketing Board in 1963 and commenced operations in 1964. It then became the Coffee Industry Board in 1976 and finally to the Coffee Industry Corporation Ltd. The CIC currently has two divisions operating within the country;
- Industry Operations Division (IOD) and,
- Research & Grower Services Division (R&GSD)
The CIC has its head office in Goroka, Eastern Highlands Province (EHP), where the Chief Executive Officer is also based. CIC’s Roles and Responsibilities The CIC has wide powers to buy and sell coffee, set prices and monitor export of coffee under its Industry Operations Division. However, to date it has concentrated on it’s regulatory functions, leaving the marketing of coffee in the hands of private companies licensed by the CIC. Some responsibilities of the CIC through its IOD include the following:
- control of coffee dealing activities;
- registration of coffee exporters and processing facilities;
- quality control and control of exports, and;
- promotions of sale and consumption of PNG coffee at home and abroad.
CIC also has an Export Office based in Lae, Morobe Province where the bulk of PNG coffee is exported overseas. The Industry Regulations section of the IOD is responsible for control of coffee dealing activities and registration processes whilst it’s Export Office is responsible for export control of coffee exported from Papua New Guinea. The Promotions and Marketing section also located in Goroka is responsible for promotions and marketing of PNG produced coffee. CIC’s research division (R&GSD) is responsible for conducting adaptive research activities to improve and maintain the quality and quantity of PNG coffee as well as offering services to growers in the industry. The main office is based at Aiyura, EHP. Apart from the main research station in Aiyura, it also has two research stations – Western Highlands Substation in the Western Highlands Province and Omuru Research Station in Madang Province. Grower services activities of the CIC are also conducted in 14 provincial offices located in the main coffee growing provinces around the country, with the main coordination of operations being conducted from Aiyura. These services are aimed at farmers who are recognized by the CIC through its PRAP program including other interested farmers.