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Australia’s salivating miners & PNG revisited


AS RIO TINTO gears up to reopen the giant copper mine at Panguna, I offer a little reminder to the shareholders salivating over potential gains on the stock forums like Hot Copper: Rio Tinto has eroded all trust in its operations on the island of Bougainville. It is a difficult position from which to return.

Sitting next to Peter Taylor, chairman of Bougainville Copper, at a recent lunch in Sydney at which the subject of corporate social responsibility of mining in Papua New Guinea was informally discussed, I made the comment that the people of PNG would be unlikely to allow a return of BHP Billiton. The legacy of the environmental disaster that is the Ok Tedi mine, and events surrounding its exit from PNG, dog it still.

Taylor scoffed, stating BHP was already there, exploring.

Indeed, according to the Mineral Resources Authority, new geological data sets created from airborne geological surveys funded by the European Union’s Mining Sector Support Program  (which has the objective of sustaining the economic performance of PNG’s mining sector), when released in April 2010, saw exploration applications submitted increase from 60 to 140, with the most interest from BHP Billiton, Barrick Gold, Rio Tinto and Newcrest.

As a guest of others at the lunch, to comment further would have been impolite, but there remains much to comment upon with regard to Rio Tinto’s own history in PNG.

In his statement to the 57th Session of the Commission on Human Rights in 2001, Klaus Töpfer, Executive Director of the United Nations Environment Program, noted that human rights cannot be secured in a degraded or polluted environment.

The fundamental right to life is threatened by soil degradation and deforestation and by exposures to toxic chemicals, hazardous wastes and contaminated drinking water. Environmental conditions clearly help to determine the extent to which people enjoy their basic rights to life, health, adequate food and housing, and traditional livelihood and culture.

It is time to recognise that those who pollute or destroy the natural environment are not just committing a crime against nature, but are violating human rights as well.

Transnational mining companies in PNG have rendered some of the largest river systems undrinkable, unusable, irreparable. Riverine disposal of mine (rock and tailings) waste is used at Barrick Gold’s Porgera mine, at Ok Tedi, and was used at Rio Tinto’s Bougainville Copper mine.

Despite the United Nations Global Compact, the Millennium Development Goals and, in the case of PNG, the National Goals and Directives enshrined in the Constitution, and an increasing number of international fora within which disputes regarding environmental degradation may be heard, there remain few legal mechanisms to hold transnational mining companies accountable for environmental damage or resulting loss of access to fresh water, loss of food sources, human health, or other human rights.

Such potential action from Papua New Guineans in the home jurisdictions of mining companies such as Australia or Canada, was struck down with the rewriting of PNG law to prohibit any legal action for redress against mining companies in foreign courts.

Drafted in 1995 by Australian law firm Allens Arthur Robinson, as legal counsel for BHP, the Compensation (Prohibition of Foreign Legal Proceedings) Act had the specific purpose of negating a claim in the Victorian Supreme Court filed by landowners of the Ok Tedi region, seeking compensation for egregious environmental damage.

Justice Cummins of the Victorian Supreme Court found on 19 September 1995, that BHP had committed a contempt of court for its part in drafting Papua New Guinean legislation to block the $4 billion compensation claim against it.

Yet its actions were meek in comparison to Rio Tinto’s on the island of Bougainville….

Rio Tinto, like BHP, caused such damage to the environment and people of its host community, it destroyed its reputation.

On 23 June, PNG Mining Minister John Pundari stated BHP was not welcome in his country. Quoted in The Australian newspaper, he said the environmental problems at Ok Tedi were real and huge, and the company should have looked for remedial solutions instead of walking away.

“I personally find it very difficult to allow the return of BHP Billiton into this country, given its legacy with the Ok Tedi mine,” he said.

He is not alone. There are many people on Bougainville and beyond who feel the same about Rio Tinto.

What do you think?

You can read Alex’s complete and, as usual, thoroughly researched article here


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Alex Harris

Thanks for comments, Paul and Reg. Could mining still take place, or rather should mining take place? It is a question that begs to be asked and publicly debated.

Should there be a limit on where? At what scale? With what parameters? At what cost to the environment and social cohesion?

Reginald Renagi

In my view, people like Peter Taylor, the chairman of Bougainville Copper and other CEOs of Australian mining companies, have all failed to exercise the proper responsibility towards what they are doing in PNG.

The extractive industry these men have been involved in for many years now do not really care at all about the harm to the people and damage done by them to PNG's natural enviroment.

It's time the PNG government needs to grow some spine and never ever allow BHP Billiton to do any more mining-related activities again in PNG.

The government must seriously review its oversight mechanisms now to ensure PNG's natural enviroment is not permanently destroyed as a direct result of the extractive industry.

I'll use the opportunity presented by Reg to note that we have received three comments from 'Tony' and 'Don' which were anonymous and, in two instances, defamatory of certain key mining executives. PNG Attitude will not publish defamatory material, although we will edit such information if it is salvageable. We rarely use anonymous comments unless the writer provides a good reason for us not to publish their names - KJ

Paul Oates

The essence of the problem is the disconnection of all the players. Each is operating in a separate silo.

The local landowners don't need the mine and have existed for thousands of years on local resources. Yet they still would like what the western world can offer as long as it doesn't destroy their environment.

The PNG government is quite happy to have mining companies virtually take over government functions and control.

The Somare government has even helped this action recently by introducing new legislation that effectively blocks local landowners from defending their area against potential destruction from mine disposal.

Yet now it is revealed that Somare claims it was all the fault of BCL who, he says, controlled his nation’s government. So where does that argument leave him with the Ramu mine I wonder?

Current Bougainville leaders, who see an income for their own government, have expressed a view that they would like to see the mine reopen. Yet they now have to bear in mind the views of their own people who fought to close the original operation.

The potential for a political solution that could be sold to the people could therefore be high on the agenda.

Possible alternatives could be to nationalise the mine and then offer the site to a new operator. Is that what is being contemplated by some who may have developed links with northern neighbour?

A mining company is there to produce minerals and make a profit. The salaries and perks of office are of course only to be expected.

Once installed, vested interests come into play. Mining is a very capital intensive operation and requires investor capital. Those that operate a mining company are or should be answerable to their shareholders.

But are the shareholders fully informed about the circumstances surrounding the mine's operations and do they really care?

The shareholders are primarily interested in a return on their investment. Many might need this to live on in their retirement. Yet if the mine was destroying their livelihood and environment, wouldn't they care about it and demand a stop to the mine's activities?

So if the whole operation were to come the full circle and everyone fully appreciate where each other was coming from, would or even could mining still take place? Does ‘the ends justify the means’ or is there a better way?

That is the real question no one has apparently been prepared to consider.

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