JO CHANDLER | The Global Mail
Three Mounties, members of a specialist unit briefed to investigate allegations of corruption of public foreign officials, flew to Port Moresby on Sunday en route to Buka in Bougainville, where they are expected to spend a week gathering evidence and testimony and probing the miners’ interactions with the internecine workings of the island’s powerbrokers.
Though economically bereft, Bougainville has immense minerals wealth. Its Panguna site was once one of the world’s largest copper mines and underwrote PNG’s economy when it gained independence from Australia in 1975. Jockeying for access to, and income from, its buried treasure has become fierce ahead of the now autonomous island’s decree of new mining laws and the easing of a decades-long exploration moratorium.
“The Canadian police investigators have informed the Autonomous Bougainville Government [ABG] that they wish to undertake interviews with certain people who have interests in companies called Morumbi [Resources] and Invincible [Resources], both companies who are pursuing mining-related activities in Bougainville,” the region’s acting chief administrator, Chris Siriosi, has confirmed.
Invincible Resources gained local prominence back in 2006 when it paid K20 million ($8 million) to the skint ABG in a deal for a 70% share of the island’s future mineral resources. It also secured a smelter royalty recently estimated to be worth US$19.5 million.
Then-president Joseph Kabui was facing a vote of no confidence in his parliament over fallout from the still-unstamped deal when he died of a heart attack in 2008.
Invincible subsequently changed directors; had a falling out with the principal of its Bougainville operation, Australian-born mining entrepreneur Lindsay Semple (unsuccessfully sueing him); changed its corporate identity; and faded from the scene in Bougainville.
But a couple of its key figures – Semple and his longtime PNG highlander associate Philip Rali – reappeared in 2011-12 in association with a new player, Morumbi Resources, which set out to distinguish itself from traditional Big Mining by cultivating grassroots relationships and goodwill with several communities, including investing in health clinics and training student teachers, and preaching a sustainable-mining model. It today claims to have negotiated deals with half-a-dozen landowner groups “in anticipation of the [exploration] moratorium being lifted”.
At a press conference in Bougainville this morning, Acting President Albert Punghau told local media “the visiting group are conducting an investigation only. I believe decisions about whether or not criminal charges should be laid will only be made when the investigation is complete. Until then all involved are presumed innocent”.
The present Bougainville Government has been cooperating fully with the Canadian inquiry since learning of its existence several months ago, Siriosi says. He stressed that the ABG had not laid any complaint with Canada, but that the Mounties had initiated their investigation independently three years ago. A Canadian police liaison officer told The Global Mail the unit could not comment on ongoing inquiries.
The serving Bougainville President, Dr John Momis, has been outspoken against what he labels “back-door mining deals” as landowner groups, local militias, and international prospectors – small and large – jostle in anticipation of new mining laws and the re-opening of the war-ravaged island to exploitation of its mineral wealth.
Momis has slammed deals being brokered between individual communities and smaller companies as unfair to the wider population – most recently in a two-page paid spread in The National newspaper on Monday. He has foreshadowed world-first legislation which would see Bougainville landowners share mineral rights with the state; gain veto over exploration; and rights to object to developments when they are already underway.
But his government is under attack from powerful opponents who accuse the President and his AusAID-funded advisor (lawyer and long-time Bougainville scholar Anthony Regan) of crafting laws that sympathise with Australian interests and favour the return of Rio Tinto subsidiary Bougainville Copper Ltd (BCL). Regan has strenuously denied such claims.
These opponents include the ABG’s former finance and mining minister Mathias Salas, and local hero and former Bougainville Revolutionary Army (BRA) leader Sam Kauona, the latter an enthusiastic advocate for the Canadian operators now being scrutinised by the Mounties.
Kauona is an old colleague of one of the original directors of Invincible, Philip Rali (the pair were in the PNG military together before Kauona defected to the BRA). Rali introduced Kauona to his friend and business partner Lindsay Semple.
The BRA warrior and the Australian businessman developed a strong rapport, as Kauona explained to ABC correspondent Steve Marshall in 2008: “Lindsay Semple, out of hundreds of interested investors that came into Bougainville, turns out to be that person, that special person, who is genuine, who is able to listen to the way people think … I have chosen Lindsay because in my heart I feel that he's the person Bougainville needs.”
Contacted by phone, Rali told The Global Mail that he didn’t believe the claims about the Canadian investigation. He said Semple and Kauona were out of telephone range.
Morumbi’s Toronto spokesman said last night the company had no knowledge of the investigation and that the company had “no dealings with government officials in Bougainville or PNG”. Attempts to locate Invincible Resources for comment were unsuccessful.
Life expectancy on Bougainville is just 60 years for women, 59 for men – that’s eight and five years behind the PNG national average, which itself rates right near the bottom among international indicators. The island’s infrastructure and economy have profoundly decayed in the years since the war, and many people rely on scavenging scrap metal from abandoned sites and on artisanal (small-scale) mining to survive.
The island’s mostly subsistence society is mired in deep poverty and social division, according to a just-published report by the Australian Strategic Policy Institute (ASPI). “The Papua New Guinea Government, donors, neighbours and officials on Bougainville have failed to build the capacity needed by the Autonomous Bougainville Government to remediate the causes of the 1990s conflict.”
Many leaders and communities on the deeply disadvantaged island support some level of mining activity to secure their future as either an autonomous region or a fully independent nation. Under the peace deal they are due to vote on that issue between 2015 and 2020. But the clashes over mining policy are testimony to the deep divisions and enduring anxieties about the region’s prospects and the revival of the minerals industry. Antipathy toward mining interests generally, and BCL particularly, remains high, as is concern about a descent back into conflict.
Rumblings about such a threat – “The Second Bougainville Crisis” was the headline on another paid newspaper statement published by Momis opponents back in March – reverberate widely.
“The truth is that few Bougainvilleans have opposed BCL longer or harder than me,” Momis responded in his paid newspaper statement this week. “When I became President, I explored other [non-BCL] possibilities for ... re-opening of Panguna. But the Panguna landowner communities said they wanted the ‘devil they knew’ and not a ‘new devil’.
“So I respected their wishes. As a result the ABG is consulting them about how to handle possible negotiations.”
It’s now 25 years since a cauldron of disputes – local clashes over the distribution of mining royalties; fighting between rebel separatists and PNG forces; and fallout overclaims of substantial environmental damage – erupted in the 1988 uprising that shut down BCL’s massive Panguna mine, then one of the largest copper mines in the world, in 1989, and ignited a decade of civil war in which thousands of people died.
Figures are hard to confirm and the subject of expert dispute, however, upwards of 10,000 are believed to have perished from direct action and as a consequence of a long blockade, which stymied food and medical supplies. A UN estimate put the figure at 15,000, other reports go higher. Thousands of women and girls were raped, one third of the population lost their homes, and a generation of children missed out on an education.
The recent ASPI paper warns that Bougainville’s fragile peace is at risk of collapse unless the Australian Government invests soon, and substantially, in a new development effort.
The report, co-authored by ASPI executive director Peter Jennings and institute analyst Dr Karl Claxton, urges Australia’s new Coalition government under Prime Minister Tony Abbott to engage in active diplomacy, together with a tripling of aid to the island to $100 million a year.
Bougainvilleans do not yet have realistic options to choose either autonomy or independence, the pair argue. “Misunderstandings between Port Moresby and the ABG persist, while Bougainville remains a deeply divided society. Economic imperatives to resume mining add new pressures.
“The most likely referendum outcome at the moment – Papua New Guinea refusing to ratify a clear but far from unanimous vote for an independence Bougainville is utterly unprepared for – would be destabilising.”
They argue that a prompt, resourced and focused engagement by Australia with Bougainville could mitigate the risk of another collapse.
“The Bougainville situation presents an early test case for the Abbott government’s credentials for focusing Australian foreign policy more on our immediate region,” the paper argues.
“More than anything, Bougainville needs its economy and infrastructure developed to help sustain peace. A new international effort to assist Bougainville could be thought of as a preventive development initiative to forestall the need for another peacekeeping mission.”