Garnaut’s roar a meow; O’Neill unmoved on BHP
25 January 2013
KRISTIAN LASSLETT
“THE ENVIRONMENTAL EFFECTS of the Australian-managed Ok Tedi mine in Papua New Guinea will be felt for hundreds of years”, wrote Greg Roberts back in 2006.
By comparison the recent public spat between Ok Tedi Mining chairman Ross Garnaut and PNG prime minister Peter O’Neill, rates low on the scale of social importance. Nevertheless, it has made the front pages in Australia for the best part of three months.
The political saga began last year when the PNG government attempted to end BHP’s enduring role in PNG Sustainable Development Program (PNGSDP), a charitable trust with a 63% interest in Ok Tedi Mining Limited (OTML).
Ross Garnaut took the occasion of his retirement as Chairman of PNGSDP in October 2012 to issue words of concern over local control, suggesting it risked the fund’s cooptation by PNG leaders. Presumably BHP is immune to self-interest in this respect.
An outraged prime minister O’Neill slapped a travel ban on the Australian economist.
Unable to enter PNG, Garnaut recently announced that his position at OTML is no longer tenable. Garnaut has not, however, gone quietly.
Carefully worded statements were made to hand-picked journalists. First, excerpts from his resignation letter appeared in The Australian, not surprisingly in a piece by Rowan Callick – the reporter of choice for mining companies with a grievance in PNG.
In a curious twist, the Australian Financial Review published a ‘leaked’ DFAT document on the same day, complete with sordid details on BHP’s political stoush with Prime Minister O’Neill. Ballets are less choreographed.
To finish it all off Garnaut was interviewed on ABC radio by Jemima Garrett – the second choice for mining companies with a grievance in PNG. Hyperbole ensued.
“My ban was a low point for Australian diplomacy generally, a low point for PNG development and a low point for Papua New Guinea democracy”, Garnaut argued.
This is quite a bold claim given that PNG has endured a bloody civil war (which Australia amplified), ecocide and a jarring land grab.
Nevertheless Garnaut continued, unchallenged by Garrett, “if it [the travel ban] became an accepted precedent the retention of the precedent would introduce a major new element of sovereign risk.”
Garnaut concluded the interview by controversially invoking Australia’s role as ‘regional sheriff’: “Australia is the regional power that is in the best position to lead the development of rules that could prevent the arbitrary use of incidental powers that could seriously disrupt international business and development”.
Declarations of war are more subtle.
However, this isn’t the first time that a chairman of a major mining company has publicly slammed a PNG prime minister. Rewind 25 years, and it was Bougainville Copper Limited’s (BCL) then chairman, Don Carruthers.
BCL had just had its mine knocked off line by a couple of sticks of dynamite, strategically placed by aggrieved landowners.
Carruthers was outraged and flew to Port Moresby. Once there he demanded that the government assert its authority.
As the single largest contributor to government coffers, Carruthers assumed PNG would be responsive to BCL’s request – that the company was deeply unpopular in Port Moresby was news to a Chairman based thousands of miles away in Melbourne.
The prime minister, Sir Rabbie Namaliu, now on the BCL board, refused the company’s demand for security force intervention. Instead, to the chairman’s horror, PNG’s deputy prime minister was instructed to negotiate a peaceful solution with the landowners.
Carruthers’ response was terse. First, he privately warned the prime minister that Conzinc Rio Tinto Australia (BCL’s parent) would “want to review its assessment of PNG as a place to invest”.
Then he chose to air his grievances in a public statement. Carruthers announced, “there could not be anything more damaging to PNG’s reputation as a place to invest than an attack on Bougainville Copper” (Post-Courier, 29/11/1988).
PNG’s opposition had a field day. Cabinet was not impressed. A Minister from the period recalls, “he [Carruthers] was arrogant, he put himself in a situation where Melanesians couldn’t trust him”.
Of course, BHP is not BCL – though the devastation left in their wake parallels – and Garnaut is not Carruthers, but what if anything can we extrapolate from the case of BCL that helps us to understand the most recent debacle.
First, when those in senior corporate positions resort to very public acts of condemnation, it is often a sign they are without friends in PNG’s political epicentre. Real power is never heard.
Second, “blow ins” – the term reserved for fly in fly out executives, are poorly positioned to defend corporate interests, in the fluid political whirlpool of Port Moresby. As one industry stalwart told me “you have to be there”.
Third, public statements are choreographed affairs done with political purpose. BCL’s chairman felt strategic advantage could be obtained from public condemnation of the PNG government.
Garnaut knows better, so I struggle to understand what he hoped to achieve, other than Al Capone status in PNG.
Fourth, ‘investor confidence’ is a popular bogeyman. But if the omnishambles that was Bougainville didn’t sink PNG, PNGSDP certainly won’t. O’Neill knows it.
Finally, foreign mining executives too often feel they should have direct input into how elected leaders run PNG, and then react badly – childishly even – when they get a fat lip, figuratively speaking. The year 1975 seems to have been deleted from the mining factbook on PNG.
As a criminologist with a serious commitment to human rights, I don’t support Garnaut’s travel ban. But in comparison to the systematic and widespread violation of human rights in PNG by the mining industry, it is a triviality.
Dr Kristian Lasslett is a member of the International State Crime Initiative
Thank you, Kristian Lasslett, for standing up for the PNG people whose human rights have been violated by the mining industry.
I cannot understand how BHP, one of the biggest mining companies in the world, which began in Australia, and in which many Australians own shares, cannot seem to accept responsibility for the mess they made in PNG with their Ok Tedi mine, and also accept responsibility to fix it up.
If they are so rich and clever they should be able to hire the best people in the world to restore the Fly river to its original state for the sake of all the people whose lives depend on it.
If mining companies can't do just that then the mine should not go ahead.
I remember meeting the engineers from the SMA while they were working on building the tailings dam back in the early days. I guess all the trouble goes back to the time that this dam failed.
Garnaut does not sound like a caring person and his arrogance is overwhelming!
Posted by: Mrs Barbara Short | 25 January 2013 at 05:47 AM