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Barrick using Oz law to sue PNG over Porgera

Barrick Ltd is using a treaty between PNG and Australia to claim compensation for PNG's refusal to grant an extension of its expired lease at the Porgera gold mine

| Michael West Media | Extracts

SYDNEY - After 30 years extracting gold, committing environmental and human rights abuses, the operator of Porgera mine is suing the PNG government for not extending its licence.

It is using an Investor State Dispute Settlement (ISDS) clause in a Free Trade Agreement to sue, a clause made famous when US multinational Philip Morris tried to sue Australia over its tobacco plain packaging laws.

Australian mining companies are increasingly using ISDS processes and are being awarded billions based on dubious calculations of potential lost profits by unaccountable international tribunals.

ISDS processes, effectively a right by corporations to sue governments, became notorious in Australia when the US corporation the Philip Morris tobacco company shifted some assets to Hong Kong and used an Australia-Hong Kong investment treaty to sue the Australian government over its tobacco plain packaging laws.

Philip Morris Asia claimed billions in compensation as a result of the new laws but eventually the claim was dismissed, although Australia still had to pick up the tab for $12 million in legal costs.

ISDS processes enable foreign (but not local) investors to bypass national courts and sue governments for compensation in international tribunals if they can argue that a change in a domestic law or policy has reduced the value of their investment, or that they were not consulted about the change.

While ISDS processes give additional legal rights to international corporations that already have enormous market power, they place no obligations on those corporations to abide by human rights or environmental standards.

This has led to many cases where the pursuit of profit is at odds with health and environmental regulation.

While these cases are often sent to arbitration to be resolved, the arbitrators are not independent judges but practising advocates with potential, or actual, conflicts of interest.

Other criticisms of the process include a lack of transparency and the length of proceedings, high legal costs, astronomical awards and lack of precedents and appeals leading to inconsistent decisions.

There are now 1,023 reported ISDS cases globally. As of October 2019, 46 cases had awarded more than US$100 million, while 10 cases had awarded more than US$1 billion.

Investment law expert George Kahale has noted the growth of third-party funding of ISDS cases, in which speculative investors fund cases in return for a share of the claimed compensation.

Professor Kahale argues that such funding fuels the growth of “surrealistic” claims and are “more about making money than obtaining justice”.

And now Australian mining companies are increasingly using investor rights in trade and investment agreements to sue developing countries. All of the seven recorded cases from Australia involve mining companies.

On 10 July, the Canadian company announced that its Australian subsidiary, Barrick Australia Pty Ltd was using the ISDS in a bilateral investment treaty between Papua New Guinea and Australia to claim compensation for the PNG government’s refusal to grant an extension of the company’s expired 30-year lease at the controversial Porgera gold mine.

Canada does not have an investment treaty with PNG, so Barrick’s use of an Australian subsidiary appears to be an exercise in forum-shopping.

The Porgera gold mine has a documented record of decades of environmental and human rights abuses.

Human rights experts have strongly argued that the company should tackle these abuse claims before regaining its social licence to operate.

Yet despite its record, Barrick is seeking compensation because its lease has not been extended. Barrick could claim for huge losses of expected future profits.


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Corney Korokan Alone

Barrick has already lost the SML license when it was allowed to expire. The new lease for the license is with Kumul Mineral Holdings Limited.

So effectively Barrick already knows it has zero leverage going into this low level discussion after the BNL chairman and prime minister, James Marape, met recently.

That is absolutely clear to all serious observers in the industry, business leaders, civic leaders, in senior government quarters and amongst keen citizen observers.

The voting public together with social media commentators have already given prime minister, James Marape an A plus grading on his firm outlook, beliefs and vision for an equitable benefit from the natural resource assets that the country has.

The prime minister took time to personally interact with the citizenry on Facebook and he is well aware of the massive political capital that he has built with that single decision involving Porgera. That capital will not be squandered.

The government has already made the best decision and the people rightly expect the PM to be resolute on that. He will not budge on this one.

Nothing less will cut it with the people of beloved PNG too because we are 45 years old, have come of age and we know it as a matter of fact.

The exploitative extraction merchant in BNL knows that its time is up in Papua New Guinea.

It is not wonder that we have sighted some bad reporting on the Australian media about Ambassador Isaac Lupari (leader of the state negotiating team) and prime minister, James Marape.

We have seen that kind of paranoia and their righteous grandstanding pedestal to build parameters for their "subjects on who they should fear and how low to bow down". That crap is not happening anymore. Hear it.

This nonsense is not cutting with Papua New Guinea.
Our eyes are on the ball.

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