A fierce encounter with defence secretary John Porti

Does PNG want 19% of a mine or 36.4% of a conflict?

Momis & BougainvillePRESIDENT JOHN MOMIS | Edited extracts

THE Rio Tinto decision to divest its shares in Bougainville Copper Ltd (BCL) is a remarkably unprincipled, shameful and evil decision.

Yet this is a decision by an international mining giant, a company that holds itself out internationally as bound by quite different standards.

The shame and evil does of Rio Tinto’s decision does not lie in the withdrawal from BCL. Rather, it relates to two key aspects of the way in which Rio has withdrawn from BCL.

First, Rio has directed that of its 53.8% equity, 36.4% should be offered to the Autonomous Bougainville Government (ABG) and 17.4% to the PNG Government. So the ABG and the national government will be equal minority shareholders in BCL, each with 36.4%. The remaining 27% will still be held by small shareholders all over the world.

The evil involved here is that it constitutes completely unwarranted Rio Tinto interference in Bougainville’s affairs, and in the complex relationships between the PNG government and Bougainville.

All issues about the Panguna mine are deeply sensitive for Bougainvilleans. The mine was imposed on Bougainville for the benefit of PNG as a whole. But it was Panguna landowners, as well as other Bougainvilleans, who bore the cost, and received very little in the way of benefits.

It was resentment about the unfairness of the mine that led to the terrible loss of life and destruction of the Bougainville conflict.

Because of that background, Bougainvilleans are determined that they must control all future decision-making about not only Panguna but also all other mining in Bougainville.

That is why, from the time that the ABG was established in 2005, it has insisted that all powers over mining must be transferred to Bougainville control. So we cannot accept the unilateral Rio Tinto decision to make the ABG and the national government equal shareholders in BCL.

In two long meetings with senior Rio officials, in July 2015 and February 2016, I made it clear to them that national government control of Panguna is unacceptable. I insisted that if Rio Tinto was to divest its majority shareholding in BCL, it must transfer the shares to the ABG at no cost.

But in their arrogance and ignorance, Rio decided that it knew better. It made its decision without discussing with us what it unilaterally decided to do.  Joint control of Panguna with the PNG government can never be accepted by Bougainville. Already, I am hearing from Bougainville of deep anger amongst my people about the BCL decision.

The second shameful and evil aspect of the Rio decision is its determination to walk away from the Panguna mine without in any way recognising the company’s contribution to the terrible environmental and social impacts of the mine.

It is clear now that the conditions for mining agreed in the 1960s largely ignored the environment. They also largely ignored the impacts on landowners, especially the many hundreds who were relocated away from their land.

Those people now number thousands. They live in terrible and squalid conditions in houses made from scrap materials, without proper water supplies or gardening land.

Yet Rio Tinto, which largely as a result of its Bougainville experience, now says it subscribes to the highest standards of social responsibility and sustainable development, says those standards don’t apply to its involvement in the very mine where their poor operating standards caused the conflict that pushed them into adopting new standards.

This is hypocrisy!

The ABG is seeking legal advice about possible court proceedings against BCL for the environmental and social impacts of the mine.

At the same time, I believe it is possible that, in cooperation with the national government, we can find ways to turn Rio’s shameful and evil decision into something that offers positive outcomes for all major stakeholders. Here I include Panguna mine-affected landowners, other Bougainvilleans, the ABG, the national government, and BCL.

The opportunity for a positive outcome arises if the national government is prepared not to take up the transfer of Rio shares in BCL that is now on offer through the Rio Tinto appointed trustee.

If it refused the shares, then they would be offered for transfer to the ABG in two months. The ABG would then be able to become the 53.8% owner of BCL. The national government could continue to be the main minority shareholder, with its existing 19% shareholding.

If the national government agrees to cooperate with Bougainville in this way, it would go a very long way to consolidating change in attitudes of Bougainvilleans to the national government.

It would also change the thinking of many Bougainvilleans who have until now opposed the re-opening of the Panguna mine. For if the mine is owned by Bougainville, the choices about mining will be very different.

Between us, we are now presented with a unique and historic opportunity to finally end the conflict over the Panguna mine, and the conflict between Bougainville and PNG.

What I propose is fully consistent with the Bougainville Peace Agreement. Under the Agreement, the two governments have committed themselves to resolving our differences and working together cooperatively.

We seek the understanding of the National Government, and of Papua New Guineans generally, of the burning desire of Bougainvilleans to control this, the most sensitive of areas of economic activity in Bougainville.


Feed You can follow this conversation by subscribing to the comment feed for this post.

Marcus Mapen

Just like wars, slavery and genocide, some human acts in the past cannot be undone. While we cannot totally forget about these things, we should not continue to live in the past.

If there is to be a mine at Panguna, then let there be a mine, if there is to be no mine then let there be no mine.

Sometimes try looking at the positive side Mr Momis, instead of eternally complaining. The people of PNG are not your enemy. The national government may have made some bad decisions in the past but the people of PNG have always supported the people of Bougainville (such times as during the Sandline crisis).

Now, Rio Tinto has given you the opportunity to own your own mine. Establishing and operating a mine (the scale of Panguna) is not an easy job, Mr Momis. The ball is now in your hands, how do you play? When you continue to complain, the people continue to suffer. In 10 years’ time copper may have no value.

But let me also tell you this, years from now when you have established an operating mine (that is if you do), you will find that many of the issues you face now will never go away. Even within your own people, these issues will persist.

Philip Fitzpatrick

This might be a test of O'Neill's leadership.

Does he want peace or pennies?

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)