The afterlife as a political promise. Are you sure you want it?
Roads of Scars

Can two of PNG's most depressed regions converge & prosper?

Fly River port  Kiunga  Western Province (Adrian Mathias)
Western District's upriver port on the Fly River at Kiunga - what happens when the copper, gold and silver run out?

CLEMENT KAUPA

PORT MORESBY – On the first Thursday in June, soon after Oil Search chief executive Peter Botten addressed the 244th Sydney Mining Club forum over luncheon in Australia, a mother and her two sons drowned in the remote South Fly District of Papua New Guinea’s Western Province.

The tragedy which took the lives of the mother and her child and an infant occurred after a boat they were travelling in with relatives capsized in rough waters at the mouth of the Karu River. They left behind the father, a Port Moresby-based police officer, and three older siblings.

The family travelling in the ill-fated boat was on its way to the village of Sepe on the West Kiwai coast, escorting for burial the body of a deceased police officer from Port Moresby.

The tragedy exposed the sad reality of this remote part of Papua New Guinea.

The geographically vast Western Province borders with Indonesia and is the closest part of PNG to Australia but that is where the proximity with its neighbours ends and the disparity begins.

Not that this had anything to do with the eminent Mr Botten or the operations of Oil Search, nor the Australian government and people.

But these two unrelated incidents that played out hours apart on Thursday 6 June do denote an urgency to rethink the relationships on both sides of the Torres Strait.

And they exposed fundamental flaws in the drawdown, utilisation and distribution of benefits and tax credit schemes for resource owners and people of the provinces that host various mining and other resource extraction projects in PNG.

The big question is, where did all the money go?

It’s a question worth asking when host provinces continue to lack the most basic physical and transport infrastructure, andwhen social services are at deplorable levels.

The Western Province is a good case in point. Though abundantly rich in marine life, wildlife and local food, it is locked away from the rest of PNG with no road access from the outside.

The rest of PNG is only accessible by air or by the more risky open sea crossings that take days often in treacherous conditions before the closest landing point in the east, at Kerema, is reached.

From there, it is a very long and rough ride by truck on the Hiritano Highway to Port Moresby.

The capital of Western Province is Daru on the coast but the largest town is Tabubil in the deep hinterland, where the minerals are. 

The 2011 census showed there were something more than 200,000 people in the province, the average size of a household being 6.4.

The major economic activity is the Ok Tedi copper, gold and silver mine, forecast to shut down in 2030. The mine, established by BHP in the 1980s, has been the subject of considerable litigation by landowners in respect of both environmental degradation and disputes over royalties.

BHP eventually threw in the towel in 2002 and transferred its 52% equity to the PNG Sustainable Development Program (PNGSDP), a fund set up to operate for the benefit of the Western Province people and PNG as a whole.

By 2017 it had grown its long term fund to $1.4 billion and it continues to support its community obligations. 

The mine is now operated by Ok Tedi Mining Limited (OTML), a 100% Papua New Guinean company with a 67% direct government shareholding and a 33% interest held by the people of Western Province.

The company says it employs over 2,000 people and in 2018 provided a K100 million dividend to the government as well as being a major foreign currency contributor to PNG. It also injects many millions of kina into social and infrastructure projects, although these are spread thinly over PNG and have not had a major impact in Western Province.

The big challenge will come after 2025, or even earlier if OTML is forced to advance its shutdown. The Western Province economy is almost entirely mine-dependent and it can be foreseen that most foreign and national businesses will exit promptly followed closely by many government services leaving the province without an economic base.

This will leave the national government responsible for a province saddled with environmental issues, obsolete infrastructure and abandoned public facilities.

Fortunately, to the east, it is expected that Gulf Province will soon host the massive A$14billion Papua LNG project, a boon for the least developed province in PNG and perhaps a cloud with a silver lining for Western Province.

Horizon Oil chairman John Humphrey said last November that Western Province also has condensate rich gas resources in four fields that lie to the south of ExxonMobil and Oil Search’s P’nyang gas field and there seems some prospect of interlinkages with the Papua LNG project.

Oil Search’s Botten had assured the miners’ forum that his company’s prospects in PNG are safe and promising, allaying initial fears of a hostile new prime minister and government up north.

Botten reportedly told the forum he did not expect to make significant new concessions on the recently inked Papua LNG gas deal struck with the government.

As for Gulf Province, a comprehensive 15 year development plan to establish a special economic zone at Ihu rides on the successful development of Papua LNG.

Business Advantage PNG reported that the Ihu zone will centre on the Kikori District and include free trade zone, petroleum park, industrial zone, technology park, forestry park, marine park, deep sea port, airport, township and resorts, and a government and administration area.

Comments

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Christian Döhler

The river where the tragedy took place in called Kura, not Karu.

Arthur Williams

I hope that the following press release from 26 April 2019 published in the Post Courier is found to be true in the long run. It came from the MP for Port Moresby Northwest, Sir Mekere Morauta.

"I call on Mr O’Neill to stop coveting the $US1.4 billion held by PNGSDP in its Long Term Fund.

"These monies are to be used for the benefit of the people of Western Province after mine closure. I want to assure the people of Western Province that the decision of the court means that those funds are safe.

"PNGSDP was set up by my government to be independent of future governments, to protect it from sticky fingers. That is exactly how the company was designed and history has proven me right.

"The High Court of Singapore has found, in its decision, that those who wanted to break into the bank cannot succeed."

All mines in PNG must prepare plans for their mine’s closure. As usual it will be up to the state’s officials to ensure that this is done.

This timely regulation was introduced after the closure of Misima mine where apparently little if any environmental work was done to reduce the degradation the mine had caused.

So there is hope that the upper Fly communities will have some funds for mitigation when Ok Tedi closes.

In regard to the proven oil /LNG reserves in the Western province the LOs have said several times they want a stand-alone project.

This is in line with indigenous peoples’ rights that are protected from this situation under International Law and the United Nations Declaration on the Rights of Indigenous Peoples.

"Indigenous peoples have the right to be involved in any decision that affects their lands, resources or territories.

"They have the right to give or withhold their Free, Prior and Informed Consent. They have the right to reach a collective decision through processes defined and determined by themselves.”

Happily in April last year Petroleum Minister Dr Fabian Pok said, “The Government stand is clear at the beginning and we have always maintained that P’nyang will be a standalone project.”

This was in direct opposite to the giant oily Exxon who have a 3rd share in that field. I won’t hold my breath thinking the landowners will win.

As for the other impoverished Gulf province. They too were vocal in wanting a stand-alone project but somehow their elites seem to have become quiet on that aspect of providing a massive catalyst for development if the LNG was refined on the spot in Baimuru area.

The developers and state elites are playing the psychological weapon by renaming it Papuan LNG rather than Gulf LNG which would have clarified where the project should be based rather than the incredible idea of pipelineing it again to Moresby.

I have never seen a real reason for the first LNG project needing such an expensive method of producing LNG for export by sea when the Gulf coast obviously has access to the ocean.

"Now the elites, both private and state, want to use the same pipeline method again….why?

Finally I'd like to see the end of the nomenclature ‘park’ when referring to commercial developments such as Petroleum Park, Technology Park or Marine Park.

A park is an area of natural, semi-natural or planted space set aside for human enjoyment and recreation or for the protection of wildlife or natural habitats.

I believe it is the clever multinationalistas muddying the environmental agenda by claiming a sort of ‘green’ agenda for their concreted money making establishments.

A bit like the miners claiming to be adopting ‘sustainable mining’ or the loggers clear felling while claiming to be using sustainable forestry techniques.

Philip Fitzpatrick

When I was OIC at Olsobip in 1970 watching all the exploration activity for Ok Tedi I wondered what would happen to the people after the mine closed.

The patrol post had only been built six or so years before and the people were still living pretty much as they had for thousands of years.

They were essentially going to be wrenched out of the stone age and hurled into the twentieth century over a matter of a few years. And then when all the minerals had been mined and their sacred Fubilan* mountain destroyed they would be abandoned.

Now that end point seems to be on the brink of happening.

*Fubilan comes from the word 'fubi' which is an adze. Fubi were a gift from Afek, the Min people's creation heroine. Villages in those days usually had a sacred fubi stored in their spirit house.

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