Bougainville Mining News : Rio Tinto walks away from environmental responsibility

When BCL had to leave the site in 1989, we believe BCL operated Panguna in compliance with applicable laws and standards until 1989 when it was required to leave the country…..Given the lack of access since then, it has not been possible for Rio Tinto or BCL to confirm the nature, extent or cause of any alleged damage or pollution,”

 A spokesperson for Rio Tinto at their London headquarters told Mongabay

“In terms of the environmental damage and social disruption, it is a moral negligence on the part of Rio Tinto to have caused so much damage to the environment and to people’s lives, and to now walk away,”

Chief Dr. John Momis, president of the Autonomous Region of Bougainville.

Wherever possible we prevent – or otherwise minimize, mitigate and remediate – harmful effects that our operations may have.”

Rio Tinto claims on its website that “respect for the environment is central to our approach

British-Australian mining giant Rio Tinto was for 45 years the majority-owner of the Panguna copper mine in Bougainville, an autonomous region in Papua New Guinea (PNG). But now it has given up its 53.8 percent stake in the mine’s operating company, Bougainville Copper Ltd (BCL), and announced it rejects any corporate responsibility for environmental damage wrought during operations from 1972 to 1989.

Originally Published HERE

The company believes it no longer has any obligation to address the mine’s environmental legacy because it adhered to PNG’s laws of the day and was forced to abandon the extraction venture due to armed conflict.

“When BCL had to leave the site in 1989, we believe BCL operated Panguna in compliance with applicable laws and standards until 1989 when it was required to leave the country…..Given the lack of access since then, it has not been possible for Rio Tinto or BCL to confirm the nature, extent or cause of any alleged damage or pollution,” a spokesperson for Rio Tinto at their London headquarters told Mongabay.

The controversial open-pit mine, once one of the world’s largest, hit world news headlines almost three decades ago when indigenous landowners forced it to shut down. Angered about tailings and mine-waste contamination of agricultural land and nearby waterways, as well as inequity in revenue and benefit-sharing, landowners used a campaign of sabotage to halt operations in 1989, subsequently precipitating a decade-long civil war.

Silent rusting mine machinery litters the Panguna mine site, abandoned 28 years ago. Photo by Catherine Wilson.

The mine’s social and environmental legacy

Now, rusting mine trucks and machinery litter the long-abandoned mine site in one of Bougainville Island’s remote mountain valleys, while gutted mine buildings have been resourcefully adapted and reoccupied by local villagers as dwellings.  But rivers and streams in the vicinity remain contaminated, tailings dumps have become unstable and chemical storage areas are deteriorating.

“In terms of the environmental damage and social disruption, it is a moral negligence on the part of Rio Tinto to have caused so much damage to the environment and to people’s lives, and to now walk away,” said Chief Dr. John Momis, president of the Autonomous Region of Bougainville.

Rio Tinto claims on its website that “respect for the environment is central to our approach. Wherever possible we prevent – or otherwise minimize, mitigate and remediate – harmful effects that our operations may have.”

However, the Bougainville Copper Agreement Act of 1967 — drafted when the region was under Australian administration as part of the former Territory of Papua and New Guinea — does not incorporate any significant environmental regulations or liability of BCL for the rehabilitation or restoration of areas affected by mining activities.

“Rio is now deeply hypocritical in its blatant disregard of the higher corporate responsibility standards it says it has adopted,” President Momis declared in a June 2016 media statement, following announcement of the company’s divestment. “Corporate social responsibility means responsible companies accept that their responsibilities go beyond the legal requirements of the day.”

Lee Godden, Director of the Centre for Resources, Energy and Environmental Law at Australia’s University of Melbourne, commented that: “Many of the early agreements between mining companies and the PNG Government did not contain effective clauses for environmental damage remediation….Typically it is not possible to retrospectively amend those agreements in light of subsequent damage or subsequent international law principles that have operated to address some of the balance of power problems in these early agreements.”

The Nasioi people were the first indigenous peoples to force a global mining multinational to flee one of its most lucrative extractive ventures. Photo by Catherine Wilson.

Putting pressure on Rio Tinto

Determined that the mining multinational should not escape accountability for environmental and social legacy issues, President Momis has called for “an international campaign to force Rio Tinto to accept its responsibilities” and sought advice on taking legal action.

However, taking the matter to court requires considerable funds — which the Bougainville Government, still heavily dependent on international aid and financial support from the national government, has limited access to. “We have financial constraints and these financial constraints make it difficult for us,” President Momis admitted.

And while Rio Tinto’s divestment resulted in the Bougainville Government acquiring an extra 36.4 percent shareholding in the Panguna mine and the PNG Government 17.4 percent  (with the latter gifting its shares to “the landowners and the people of Bougainville”), their value is negligible unless the mine is in production.

Even during the 17 years of copper extraction in Panguna, which generated an estimated 1.7 billion kina in total revenue (roughly US$1.44 billion at the time), only 1.4 percent was granted to landowners, while 61.5 percent went to the PNG Government.  Local resentment about the marked inequity of economic benefits was one of the major factors in the escalation of the civil war.

In 1989, indigenous landowners demanded compensation of 10 billion kina for the mine’s detrimental environmental and social impacts, as well as benefit-sharing grievances. When this was not met by Rio Tinto and BCL, they formed a rebel group, known as the Bougainville Revolutionary Army, and used explosives to destroy the mine’s power supply and bring the functioning of the mine to a standstill. In so doing, the Nasioi people of Central Bougainville became known as the first indigenous peoples in the world to force a global mining multinational to abandon one of its most lucrative ventures.

The PNG Government responded by imposing a blockade on Bougainville in 1990 and deployed its armed forces to quell the uprising. A civil war then raged between the national military and armed revolutionary groups, wreaking widespread destruction across the islands and leading to an estimated death toll of 15,000-20,000 lives, until a permanent ceasefire in 1998.

Today the long-term processes of post-conflict peace building, disarmament, reconciliation and reconstruction continue to consume the energy and resources of the government, international donors and local leaders and communities.  And memories of the violence, atrocities and injustices of the conflict are still vivid in the minds of many people throughout the region.

An estimated one-third of men and one in five women who were exposed to violence during the war now suffer from Post-Traumatic Stress Disorder (PTSD), while more than one in three men and women believe there is continuing lack of peace in their communities, according to a recent study by the United Nations Development Program.

The abandoned Panguna mine pit, as it is today. Photo by Catherine Wilson.

Walking away from the mine

For at least the past seven years, Rio Tinto has been engaged in discussions with the Bougainville Government about the possibility of returning to Panguna to recommence extraction of the estimated 3 million tonnes of copper reserves remaining there.

Rio Tinto’s final decision last year to exit Bougainville has been attributed primarily to both the dramatic fall in commodity prices in recent years and investor risks — including substantial opposition to the company’s return by landowners and communities in the Panguna mine lease area and the region’s uncertain political future.

“During the strategic review that led to the announcement in June 2016, Rio Tinto concluded that it would not be in a position to take part in future mining activities at Panguna and that it was in the best interests of BCL and its stakeholders to transfer our 53.8 percent shareholding to those better placed to determine the future direction of the company,” the Rio Tinto spokesperson stated.

However, the massive environmental legacy is still unaddressed and continues to affect the lives of indigenous communities, especially the Barapang, Kurabang, Basikang and Bakoringku clans who own the mine-pit land.  For customary landowners, “the land is like a mother because we feed on the land. It’s nothing compared to money.  I can always go to the land for food and nourishment,” Panguna landowner, Joanne Dateransi, explained.

Rivers and streams in the mine’s vicinity remain polluted and unusable as sources of freshwater or fish. Photo by Catherine Wilson.

There has been no official environmental assessment of the damage since the mine was deserted. But it is known that around 300,000 tonnes of ore and water were excavated every day in Panguna and the mine tailings were discharged down the Jaba River and into the Empress Augusta Bay, while the spoil and overburdens accrued in waste dumps in the Panguna area.  Local communities claim there has been no fish in the local Jaba and Kawerong Rivers for four decades.

The Bougainville authorities also report that: “The levy banks built by BCL to contain the flooding of nearby areas arising as the bed of the Jaba River rose (because of the depositing of vast amounts of tailings) were breached by floodwaters over 15 years ago. River water polluted by acid leached from the crushed tailings now floods huge areas of our people’s land all along the lower Jaba.”

And, further, a mammoth delta of tailings extends 15 kilometers (9.3 miles) into the sea on the west coast of Bougainville Island.

Social impacts include the forced relocation of at least five villages, such as Dapera and Moroni, to land unsuitable for growing crops and supporting livelihoods, while families were provided with cheap, substandard housing, resulting in severe overcrowding and health problems. The original location of the villages is now a barren terrain of waste rock.

Residents of relocated villages, such as Dapera and Moroni, have endured substandard housing and land unsuitable for food production. Photo by Catherine Wilson.

Funding a cleanup

President Momis says the government is keen to facilitate an expert environmental assessment.

“We are having discussions with the United Nations Environment Program (UNEP) about the possibility of organizing such a study and also a social impact study. We are also contacting international NGOs which support third world nations in the interests of preserving history, forests and ecological balance,” he said.

Following this, the most critical question is how a major environmental cleanup, which could cost billions, can now be pursued.

One option, according to the President’s office, is to set up a trust fund with potential contributions sought from the PNG and Australian Governments, as well as Rio Tinto, although, to date, Rio Tinto has not indicated any willingness to support such an initiative.

“World Bank or Asian Development Bank funding is sometimes available for this type of cleanup, but often that will mean a loan to what are impoverished governments which need to meet a range of other socioeconomic needs in their countries,” Professor Godden also advised.

President Momis suggests that “the only other way to fund a cleanup is through the resumption of mining. It [BCL] is now majority owned by the landowners and the Autonomous Bougainville Government and we believe the cleanup could be done concurrently with the reopening of the mine. During our discussions with them so far they have been conscious of their responsibilities.”

However, the capital investment required to reconstruct and reopen the Panguna mine is estimated to be about 20 billion kina ($6.3 billion) and securing investment of this magnitude will be a challenge in the current investment climate.

Gutted mine buildings in the forested mountain valley are now being reused by local communities. Photo by Catherine Wilson.

Recommencing large-scale mining is also seen by the authorities and some landowner groups as a way to acquire the sizeable revenues needed to generate economic self-sufficiency ahead of a referendum on Independence from PNG. A major provision in the 2001 Bougainville Peace Agreement, the referendum is planned to take place by 2020. At present, only 10 percent of the Bougainville Government’s annual budget of about 300 million kina derives from internal revenue.

Two years ago, the Autonomous Bougainville Government, which was established in 2005, passed its first mining law, thus paving the way with a legal framework for large-scale mining to be reconsidered in the region. The Bougainville Mining Act (2015 ) requires mining-lease applicants to protect the environment and comply with environmental policies and regulations, and stipulates that customary landowners have ownership of mineral resources found on their land. But, while they are entitled to consultation about exploration and mining interests, as well as related benefits and employment, the Bougainville Government retains exclusive powers over the granting of mining tenements and distribution of revenues.

Nevertheless, because of the unique history of the Panguna mine and the fact that its territory is controlled by the local Mekamui Tribal Government, comprising many former rebel leaders and combatants, any development or exploitation of Panguna’s resources will require the final consent of local chiefs and landowners. And reports in recent years have highlighted that a significant proportion of landowners in the Panguna mine lease area oppose large-scale mining on their customary land in the near future.

“We don’t need Rio Tinto or BCL,” Lynette Ona of the Bougainville Indigenous Women’s Landowner Association and a Panguna landowner declared. However, she added that a meeting was being planned in the near future so that people across Bougainville, not only local landowners, could voice their views on the question of mining.  If there is majority consent for this to happen, “then we have to bring in a new company after Independence, so that we can fund the economy, but we don’t want mining now,” Ona emphasized.

The “new BCL,” without Rio Tinto, has only begun articulating its future plans. Any provision, in this context, for an environmental cleanup is very unclear, but will come under severe scrutiny by those most affected, given that the history of the Panguna mine, to date, is a lesson in the shortcomings of corporate social responsibility.

 

Catherine Wilson is a journalist and correspondent reporting on the Pacific Islands region find her on LinkedIn.

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Bougainville #BCL Mining News : Seven reasons why : BCL no longer the ‘devil-we-know’, but the ‘devil-we-own

 

“As the ‘devil-we-own’, and one that is subject to the very tough requirements of the Bougainville Mining Act, BCL is now required to seek new investors into some sort of partnership with BCL, and come up with a deal acceptable to the landowners and to the ABG.

At this stage it is a decision that will be subject to the powers of the mine lease landowners under the Bougainville Mining Act to veto the project if they are not satisfied with the conditions for re-opening.

In addition, it will be subject to the ABG being satisfied – on behalf of all Bougainvilleans – that the project conditions are just and equitable.

As well as other Bougainvilleans may want to understand better why I announced ABG support for BCL. There are several separate but powerful reasons.

ABG President Chief Dr John Momis

The Autonomous Bougainville Government’s decision to support Bougainville Copper Limited’s proposal for reopening the Panguna Mine is only in principle.

ABG President Chief Dr John Momis said that at this stage it is a decision that will be subject to the powers of the mine lease landowners under the Bougainville Mining Act to veto the project if they are not satisfied with the conditions for re-opening.

In addition, it will be subject to the ABG being satisfied – on behalf of all Bougainvilleans – that the project conditions are just and equitable.

“As well as other Bougainvilleans may want to understand better why I announced ABG support for BCL. There are several separate but powerful reasons,” Momis said.

Momis explained that the first is that BCL is no longer owned by Rio. Rather, the ABG holds over 33 per cent of BCL shares, and the National Government has promised that the 17.4 per cent shares it received from Rio will be transferred to ownership of Bougainvilleans, including Panguna landowners.

This means that BCL is now a different company. It is not a subsidiary of Rio Tinto. Instead it is majority owned by Bougainvilleans.

“As a result, as stated recently by the new Vice President, BCL is no longer the ‘devil-we-know’, but is instead the ‘devil-we-own,” Momis said.

“As the ‘devil-we-own’, and one that is subject to the very tough requirements of the Bougainville Mining Act, BCL is now required to seek new investors into some sort of partnership with BCL, and come up with a deal acceptable to the landowners and to the ABG,” Momis said

Without such a deal, BCL will have little option but to cease existence – to liquidate and to distribute its remaining funds to its shareholders. At that point, Bougainville will be able to seek other potential developers.

A second reason why the ABG supports BCL is that BCL still holds an Exploration Licence over the area of the former Special Mining Lease. While it holds that licence, we must deal with BCL.

A third reason is that BCL is a reputable company, with reputable board members and management.

A fourth reason is that BCL still holds all the drilling and exploration data for the ore body at Panguna.

A fifth reason is that BCL shows willingness to deal with the legacy issues left by the operation when it closed in 1989.

A sixth reason is that BCL has shown responsibility over the past 5 years in working closely with the ABG and the 6 relevant landowner associations to gradually develop responsible and workable arrangements for making the payment of the 1990 land rents and occupation fees etc.

The seventh and final reason is that the leaders of the combined landowner associations have almost unanimously consistently indicated their support for BCL as the preferred company to become involved in re-opening Panguna.

“I emphasize, however, that despite all these reasons for supporting the BCL proposal, there are as yet no guarantees that it will be BCL that re-opens the mine,” Momis said.

“I must repeat the point already made that everything will depend on whether the ABG and the landowners are satisfied with the proposal that BCL eventually puts forward – provided of course that BCL is able to get the funding partners it will need to put forward a viable proposal,” Momis added.

Bougainville Government News : First 100 days Achievements of Chief Secretary Joseph Nobetau

 ” The challenges that we face are immense. As Chief Secretary I am honoured to be able to serve Government and commit to maintaining the full degree of energy, integrity and direction required to help the Government achieve its objectives.

Whilst much has already been done, it is incumbent on all public servants, both senior and junior, to ensure we deliver the public services that all Bougainvilleans so richly deserve.

Challenges and Upcoming Priorities

Despite some achievements it is clear that much more needs to be done. Key priorities include:

  • Enhancing engagement to ensure a more joined up approach to Government service delivery;
  • Ensuring effective coordination of donor support so that we can maximize the value of existing international development assistance whilst harnessing new and emerging development opportunities;
  • Ensuring effective community engagement so that our people understand what it is that the Government is doing for them;
  • Ensuring that corporate plans are adhered to and remain reflective of Government objectives;
  • Ensuring that the BEC remains well supported and that submissions reflect whole-of-Government considerations and priorities;
  • Continuing work to undertake urban and town planning activities to enhance infrastructure and housing to address need;
  • Getting the new integrated financial management system in place to deliver more effective, transparent and accountable financial management practices across Government;
  • Continued work on the draw-down of powers to support autonomy;
  • Convening the Revenue and Taxation Summit; and
  • Ensuring that the Bougainville Referendum Commission is fully established and that important stakeholder and community engagement work commences.

Joseph Nobetau Chief Secretary ABG

Download a PDF Copy of this report :

Media_Statement_-_Achievements_Joseph_Nobetau_Chief_Secretary_2017

Following my appointment to the Office of Chief Secretary on 17 October 2017, I have been engaged in a process of reform aimed at enhancing the capacity of the Department of President and the BEC and the broader public service.

As Chief Secretary I have engaged extensively with key stakeholders including Ministers, Secretaries, donors, the private sector and civil society. Through this work I have gained valuable insight into the workings of the public sector and the need for change and reform.

The purpose of this statement is to provide the general public with an update of the work that has been undertaken since my appointment, outline the challenges that I see moving forward and to canvass the priorities that are ahead.

Consultations

Ministers

Since commencing as Chief Secretary I have been able to meet with all Ministers. Through these discussions I have gained valuable insight into key ministerial priorities which has in turn informed my work with portfolio Secretaries and keystake holders. These discussions have been invaluable in informing my Department’s broader reform agenda and have assisted with some critical organisational change decisions.

Secretaries

As Chief Secretary I see it as an important part of my role to provide leadership and guidance to Secretaries. Since commencing as Chief Secretary I have convened Senior Management Committee meetings and met one on one with all Secretaries.

In my discussions I have emphasised the President’s key messages around organisational capability and the need to deliver meaningful outcomes with respect to service delivery and public service reform. These discussions have been positive, and whilst there will continue to be some challenges I will continue to ensure that all public servants remain mindful of their need to be accountable and responsive to Government and the people that we serve.

Parliamentary Services

As Chief Secretary I consider it essential that clear lines of communication be in place with the Office of Parliamentary Services. To that end, I have developed a strong working relationship with the Speaker of Parliament with a view to ensuring better links between the public service, the BEC and parliament.

This work is already showing dividends through more effective coordination of public service policy development and programme delivery and parliamentary business.

Community Government

I have been working with the Secretary for Community Government to make changes to Executive Manager arrangements to ensure more responsive community government across Districts. In that context, some immediate changes have already been made to realign resources so that we can better meet the needs of local communities. I will continue to work with the Secretary to ensure that resources at the District level are appropriate so as to enable effective community engagement and service delivery.

International Engagement

International engagement is a critical part of the Chief Secretary role. With significant donor representation in Buka I have reached out to key bilateral and multilateral partners to discuss how donor activities support the work of the ABG and to explore opportunities for more effective engagement and aid coordination. This has included my work as chair of the Australian and New Zealand funded GIF (Governance Implementation Fund) and work with the Australian Funded PNG Governance Facility.

Advisory Support and Donor Engagement

The ABG continues to receive support from a range of donors in relation to the key areas of governance, peace building, health, transport, law and justice and election support. As Chief Secretary I acknowledge the value of this support with a number of key advisers providing advice to my office and across government to progress important initiatives in areas including: recruitment, legal advice and support, draw down of powers, election preparations, media and communication, strategic and corporate planning, economic development, revenue and taxation, urban planning, monitoring and evaluation, financial management and strategic engagement. While in the longer term it is my hope that the ABG will develop the internal capacity to manage these important issues independent of donor support, the support we currently receive has been a critical part of our recent progress.

Aid Coordination

In terms of aid coordination, I continue to engage with key donors regarding how we can target support to get the best possible outcomes. I am of the view that any support must be clearly aligned with ABG priorities and be based on ensuring meaningful capacity building where ABG officers are able to learn from the support provided and manage issues independently in the future. A key future priority will be developing an effective aid coordination mechanism within my Department to ensure the most efficient use of donor support.

Bilateral and Multilateral Engagement

In February 2017 my office coordinated briefing for the visit by NZ Minister for Foreign Affairs the Hon. Murray McCully. The meeting provided a valuable opportunity to talk with a key development partner and friend, with the Foreign Minister committing to ongoing support to the ABG in the lead up to the referendum and beyond.

Vice President Masono hosted a visit by a delegation from the European Union which comprised of the EU Ambassador to PNG, the French Ambassador to PNG and senior officials on 20 February 2017. The visit provided a valuable opportunity to reinforce the ABG’s development priorities and for delegation members to see firsthand some of the challenges that face our young and emerging democracy.

Feedback from the visit was positive, with the EU Ambassador indicating a very strong desire to provide support to Bougainville in key areas including infrastructure, water sanitation and vocational education (amongst others). These are consistent with priorities identified through the PNG-EU dialogue and present opportunities for the ABG to partner with the EU in a number of short to medium term high impact areas. It is hoped that in the near future a delegation led by the Vice President will travel to Port Moresby to meet with senior National Government Officials and the EU Ambassador to explore how this commitment for support can be translated into meaningful action.

Community Engagement

At the community level I have engaged widely with non-Government and volunteer organisations and the education sector. I consider these stakeholders to be essential from a social development perspective.

In December I was honoured to be asked to deliver the keynote address at the Hutjena High School graduation. This was an excellent opportunity for me to deliver a key message on leadership and the value of quality education. My message was that as emerging leaders high school graduates are well placed to make a long term contribution to our economic, social and development goals.

In February I was honoured to speak at the Public Service Dedication Service. I used this as an opportunity to reinforce the need for a responsive public service, noting that planning is the cornerstone of success.

I continue to work with local mainline churches to progress aerial surveys of available land to enhance housing and community infrastructure. This work has included undertaking aerial surveys in Buka, Arawa and Buin to aid town planning, including the potential development of a teachers college in Buin and new housing development in Arawa and Buka.

Organisational Reform

Communication

Communication is the cornerstone of any well-functioning public service. As Chief Secretary my primary aim has been to enhance communication within Government and to our key stakeholders. I have achieved this by chairing Senior Management Committee meetings, engaging with Secretaries and senior leaders, connecting with Districts through radio programmes and working with our civil society partners.

This process is now starting to show results. Department Heads are becoming more engaged and my office has increased visibility of key public sector initiatives.

Despite this it is clear that much more needs to be done, particularly with respect to communicating initiatives to the broader community. In that context I am working with officials in my Department, including my Deputy Secretary, to enhance our media and communication strategy. Whilst there has been some good work in this area many of the initiatives that we need to enhance community awareness have stalled. With the referendum fast approaching this is not acceptable, and a key future priority will be to enhance mechanisms to more effectively communicate with the people.

Corporate Planning

A functional public service requires well thought out policy measures that respond to the needs of Government. This has been lacking in the past. It is clear to me that the public service must be more accountable and responsive.

To that end I have commenced a process to put in place departmental corporate plans. I see these documents as being key to addressing issues of accountability and ministerial expectations. By having in place well thought out plans that reflect Government and ministerial priorities the public service has a means by which to measure whether or not we are meeting core goals and responsibilities. It is my hope that these plans will be finalised in the coming month and that they will in turn help inform the development of a longer term strategic development plan that maps our key development priorities over the years to come.

Recruitment Processes

Open and merit based recruitment processes are an essential part of ensuring that we attract the best and brightest to our public service ranks. I have therefore taken a very close interest in recent recruitment rounds with a view to ensuring that the public service fully adheres to the principles of fair, open and transparent recruitment.

Retrenchments

In late 2016, in consultation with the Secretary for Personnel Management and Administration, arrangements were made to retire a number of officers who had reached the mandatory retirement age. This process was undertaken to ensure compliance with the Public Service Management Act and as part of a broader strategy of ensuring the appropriate resourcing of the public service in the longer term.

Senior leaders Training

As Chief Secretary I have participated in the Australian Government funded senior leaders training which is being conducted by the Queensland University of Technology. I see this training as being a valuable tool through which principles of management can be reinforced, whilst providing an ongoing opportunity for senior leaders to work closely with Ministers.

Overarching MoU on Draw Down of Powers

Work is currently underway to enable the signing of the overarching MoU on the draw-down of powers by the ABG and National Government Public Service Ministers. This will be a critical enabling step in achieving further autonomy.

Financial Management and Elimination of Corruption

Financial Management Systems

In line with the President and Government’s expectations I am heavily focused on financial management and accountability. As Chief Secretary I am conscious of my role in ensuring whole-of-Government financial accountability and working with the Secretary for Finance to enhance our financial management accountability frameworks. In particular, I am actively engaged in work to fast track implementation of the new Integrated Financial Management System within the ABG.

Revenue and Taxation Summit

For some time now it has been proposed that the ABG convene a Revenue and Taxation Summit to review existing revenue raising capacity and to explore means through which the ABG can enhance and consolidate our revenue base.

I am pleased to advise that work in the area is now progressing and that I am working with the Secretary of Finance to convene the summit in the coming months. The summit will provide an opportunity for key stakeholders and subject matter experts to convene.

Referendum Preparations

Bougainville Referendum Commission

On the 24th of January 2017 I travelled to Port Moresby to co-sign the enabling agreement with my national Government counterpart to establish the Bougainville Referendum Commission. The Commission will be an essential mechanism through which the operational management of the referendum will be conducted, and importantly, through which stakeholder and community engagement can occur. I am currently working with the Secretaries for Peace Agreement Implementation and Law and Justice to ensure that all constitutional and organic law requirements have been met prior to the final charter establishing the Commission being signed off by the Governor-General.

Challenges and Upcoming Priorities

Despite some achievements it is clear that much more needs to be done. Key priorities include:

  • Enhancing engagement to ensure a more joined up approach to Government service delivery;
  • Ensuring effective coordination of donor support so that we can maximize the value of existing international development assistance whilst harnessing new and emerging development opportunities;
  • Ensuring effective community engagement so that our people understand what it is that the Government is doing for them;
  • Ensuring that corporate plans are adhered to and remain reflective of Government objectives;
  • Ensuring that the BEC remains well supported and that submissions reflect whole-of-Government considerations and priorities;
  • Continuing work to undertake urban and town planning activities to enhance infrastructure and housing to address need;
  • Getting the new integrated financial management system in place to deliver more effective, transparent and accountable financial management practices across Government;
  • Continued work on the draw-down of powers to support autonomy;
  • Convening the Revenue and Taxation Summit; and
  • Ensuring that the Bougainville Referendum Commission is fully established and that important stakeholder and community engagement work commences.

 

 

 

Joseph Nobetau

Bougainville Mining News : President Momis announces support for the new Bougainville Copper Limited (BCL)

President of the Autonomous Bougainville Government Chief Dr John Momis has announced his support of the new Bougainville Copper Limited (BCL) .

The new BCL is step away from the post-colonial and pre-crisis arrangement that had Bougainville at a disadvantage; it is partly owned by the Autonomous Bougainville Government, the National Government, Panguna Landowners and people of Bougainville to develop the defunct Panguna Mine with the landowners for the benefit of Bougainville.

President Momis said the ABG as regulator will work together and support BCL explore alternative Panguna development options that will accommodate the interest of project stakeholders to fast track the development of the Panguna resources.

“Since BCL was invited to formally re-engage in discussions in Bougainville in 2012, the landowners have consistently stated their preference to work with BCL as the developer,” Momis said.

This was recently reaffirmed by the nine (9) Landowner Associations in Buka on 23 February 2017 after the BCL team led by Chairman Rob Burns made presentations to the ABG leaders and the nince landowner association executives and representatives on the new BCL’s development proposal for Panguna.

During that visit the Chairman present to the ABG leaders and the landowners a staed development proposal outlining how different the new Panguna approach will be under the new BCL hich now owned by the ABG, the Panguna landowners, people of Bougainville and the National Government.

Due to the recent majority of shares transferred by the Rio Tinto to ABG and the National Government, the ABG and the landowners now view BCL as not the devil we know but the devil we won.

The ABG and the landowners will now have to take advantage of this scenario and work out a positive strategy for an outcome that will be equitably beneficial for all stakeholders especially the landowners.

The ABG and the landowners have also committed to addressing the immediate challenges to progressing the Panguna project and looks forward to working in partnership with BCL through the project development cycle.

During discussions held this week between the BCL and the ABG, the two parties reaffirmed their commitment in which a way forward can be agreed for the immediate addressing of stage 0- Removing impediments under the BCL proposed staged development proposal presented during 23 – 24 February visit.

In those discussions it was also mentioned for BCL’s consideration to find ways and opportunities in its exploration to project development financing phase to support the ABG’s immediate development agendas as a way of building a long term unwavering development in Panguna.

 

Bougainville Investment News : “We the people own the resources ” Momis promotes investment

 “We the people own the resources, our land however we don’t have the capital.

“The waves of globalization are at our shore , I urge everyone to become part of the worldwide community of globalization.

President Grand Chief Dr John Momis welcomes any interested credible foreign investors who wish to play a pivotal role in the development of the Autonomous Region of Bougainville’s economic growth.

By Tanya Lahies ABG Media

It is becoming a growing concern for the Autonomous Bougainville Government (ABG) to seek ways to grow its economy thus, becoming a self-reliant region.

See previous Bougainville News :

Bougainville Mining News : BCL proposes a re-opening mine start up by 2020

The ABG is currently working on an ad-hoc basis to run the nation’s affairs without the needed funding required from the Government of Papua New Guinea (GoPNG) as per the Bougainville Peace Agreement (BPA) to restore the region according to the dreams and aspiration of the government.

President Momis explained that the government had plans it would like to see prosper through the Economic Ministry which had an important role to implement important activities.

However, due to no funding from ABG, the region was dependant on funds from the National Government through the Restoration Development Grants; Fisheries; DSIP and PSIP.

Bougainville, functions differently from the GoPNG and Provincial Governments. Many of its functions are governed by the BPA and the National Government has still yet to recognize that.

Momis said that becoming a self-reliant region means, that money received from the national government can recover the economy of the region and that it is able to be independent financially, thus become fiscal self reliant however, to date, there is no funding.

But if we continue to depend on the GoPNG finance, then we are not fiscal self reliant said Momis.

As time becomes another pressing concern, Momis is calling for all Bougainvilleans to be true patriots and be part of the spirit of economic growth by working with the government. “We the people own the resources, our land however we don’t have the capital.”

“The waves of globalization are at our shore.” Momis urged for everyone to become part of the worldwide community of globalization.

The ABG is now leaning towards promoting investment and working with credible Investors who can bring in capital based on good understanding and agreement that can benefit both the ABG and the people thus, can create capital that is very essential at the moment.

Law and order is an impediment to encouraging good investors but we can overcome and find a way to overcome it, Momis added.

Another issue that needed the attention of the people was the paying of tax by business operators. Momis also urged for all business houses in the region to pay their tax, as it was an important contribution towards building economy.

The Ministry of Economy will now work on creating a new policy that would benefit the people in rural areas therefore helping people to create their own economy.

Bougainville Mining News : BCL proposes a re-opening mine start up by 2020

panguna

  ” Bougainville Copper Limited (BCL), under a new regime, is keen on re-opening the Panguna mine with promises of more equitable sharing of wealth with landowners and the Autonomous Bougainville Government.

Company chairman Robert Burns was in Buka last week and met with Bougainville cabinet ministers and landowner groups to put forward BCL’s proposals for start-up by year 2020.”

Panguna talks re-open Source: Post Courier
Date: March 01,2017, 01:39 am BY SEBASTIAN HAKALITS Image Axel Mosi

According to BCL’s proposals on full operations from 2020 and beyond, it will inject US$350 million (K1 billion) a year to the Bougainville Government.

BCL has projected to pay about US$25 million (about K70 million a year) to the nine landowner associations to distribute among themselves.

The details of the BCL forward plans for Panguna were made at a presentation by the company recently.

BCL operated the Panguna mine for 18 years as a subsidiary company of Rio Tinto until it was shut down by the infamous Bougainville crisis from 1988 to 1999.

But the company was under a new regime after Rio Tinto left and during the process, off-loaded its majority of 53 per cent shares, of which a majority of 36 per cent belongs to Bougainvilleans, to the ABG.

The National Government owns 19 per cent, Panguna landowners 17 per cent and the rest other shareholders in Europe.

Mr Burns said in his presentation that BCL would engage with the ABG and landowners to fast-track and remove the impending issues to “create something very special for Bougainville”.

He said the company was ready and very much interested and committed to access Panguna and carry out the activities of feasibility and environmental studies before re-developing the mine. But he insisted that the ABG must support the company in its endeavours to remove any impediments so that it can have easy access to the Panguna mine area.

Article 2

Source: Post Courier
Date: March 01,2017, 01:39 am

BY SEBASTIAN HAKALITS

BOUGAINVILLE Minister for Minerals and Energy Resources Robin Wilson says Panguna mine is the single largest project that can move Bougainville forward.

Mr Wilson said it would ease financial hardships for landowners of Panguna and Bougainville, therefore, it was in their interest to re-open the mine. He was speaking during the presentation by Bougainville Copper Limited (BCL) of its future plans for Panguna mine. Mr Wilson urged the landowners re-open, adding. “you have the veto power and whatever decision you make must be for the good of the whole of Bougainville”.

“Let’s have one voice and move forward,” Mr Wilson said at the BCL presentation that was later graced with the initial payment of K5 million to two landowner associations in outstanding 1989 to 1990 compensation payments.

The other seven groups will be paid after completing the compiling and verifying names of families. They will be

Comments

Peter Quodling

With all due respect to the original author Article 1 above

there is a glaring technical inaccuracy in this.

Firstly, There was no “new Regime” at RIO that saw it divest it’s sharing holding.

Secondly, it didn’t “offload” them, it gifted them equally between GovPNG and ABG. and 36% is not a majority.

Thirdly the statement “The National Government owns 19 per cent, Panguna landowners 17 per cent and the rest other shareholders in Europe.” is wrong – the national government no longer owns just the 19% it was originally gifted, It now owns 36.4% of the BCL Shareholding, exactly the same as the ABG.

Fourthly, The Panguna Landowners do not own 17% at all (there might be some residual token individual shareholdings),

Fifthly. “the rest other shareholders in Europe” – well, that is just as wrong – while there are some vocal European shareholders that made some speculative investments in BCL stock, they certainly do not comprise the “rest” in fact, in the top 20 shareholders (a matter of public record) the lion’s share are institutional investors (JP Morgan, Citicorp, HSBC, ABN-AMRO), with the only significant European holding being a german chap, with a shareholding of about 1.1M shares (or 0.29% of the total)

There are issues in relation to the ownership/equity and operation of mining operations that could be structured to give the people (and government) of bougainville significant leverage moving forward in this. I have offered (through channels) to consult to Pres Momis on this, but he chooses to ignore.

Bougainville Mining News : PNG Panguna decision under ” mines “Bougainville’s autonomy say Momis

Momis

Prime Minister, the reasons for your decision on the equity suggest that you believe that you know better than the ABG about Bougainville’s mining policy needs. You substitute your views for ours. Yet under the Bougainville Peace Agreement, responsibility for Bougainville mining policy has been transferred, so that these are now matters solely for the ABG.”

Letter from Bougainville President to PM of PNG

Dear Prime Minister,

I refer to your Government’s decision to allocate the 17.4 per cent equity in BCL (recently received from Rio Tinto) to ‘Panguna landowners and the people of Bougainville’. The decision must be rejected by the Autonomous Bougainville Government (the ABG).

PNG Panguna decision under mines Bougainville’s autonomy say Momis

You are reported as telling the Parliament on Thursday 18 August 2016 that you:

  • ‘deliberately’ decided that the ABG should not be majority shareholder in BCL,
  • ‘wanted a separate vehicle that the landowners can meaningfully and directly participate in BCL’, and
  • do ‘not believe’ that the 5 per cent interest for landowners in mining operating companies provided under the Bougainville Mining is ‘sufficient enough to compensate some of the suffering the people of Bougainville had’.

Prime Minister, the reasons for your decision on the equity suggest that you believe that you know better than the ABG about Bougainville’s mining policy needs. You substitute your views for ours. Yet under the Bougainville Peace Agreement, responsibility for Bougainville mining policy has been transferred, so that these are now matters solely for the ABG.

We have given careful attention to mining policy. We give landowners veto power over ABG grant of mining licences, giving them real and direct involvement in decision-making. They must be satisfied with conditions and benefits before a project proceeds. A minority 17.4 per cent BCL equity that you propose will not give them any control over decision-making.

ABG policy also guarantees landowners 5% free equity in any mining operating company. If Panguna does re-open, that will be worth much more than 17.4% in the current BCL. Because re-opening will cost about K20 billion, a new developer will definitely be needed. The new capital requirements would then dilute all present BCL equity shares to tiny percentages. So 17.4 per cent in the existing BCL will only make landowners etc. minority shareholders in a company now worth very little.

By comparison, our Act guarantees they will have valuable equity in the fully funded project, if it re-opens. Our act also guarantees separate 1.25 per cent royalty shares each for: 1) mine lease landowners; 2) projects for those landowners; 3) adjacent landowners; and 4) infrastructure development for Bougainville generally.

It also guarantees landowner preference in mine employment and business opportunities. So our law offers very real financial benefits especially to landowners, but also to all Bougainvilleans.

The ABG believes that you are making ill-informed decisions about a complex situation that you clearly do not understand, and which do not bring real benefits to landowners. The decisions undermine autonomy, and are bad for Bougainville.

As the government of all Bougainvilleans, the ABG needs majority BCL shareholding to give it clear decision-making authority about Panguna in the interests of all Bougainvilleans, both landowners and others.

Bougainvilleans ask why you interfere in our mining policy. Do you fear that ABG control of Panguna could provide the revenue needed for Bougainville independence? In fact, no one knows if the agreed process under the Peace Agreement will lead to independence. More important, interfering in mining issues only causes deep anger in Bougainville. That is likely to cause increased support for independence. The only way you can now reduce support for independence is to work in cooperation with the ABG to make people see that autonomy really meets the needs of Bougainville. Supporting our mining policy is an essential start.

The ABG cannot allow your bad decisions to stand. I now offer you a final opportunity to resolve this issue. I request you to direct transfer of the 17.4 per cent to the ABG.

If you refuse to do so, the ABG must use other means to keep clear control of decisions on Panguna. In particular, we will cancel BCL’s exploration licence under the Bougainville Mining Act (notice to show cause why it should not be cancelled has already been given to BCL). We will then seek a new developer by inviting tenders using powers under our Mining Act.

That licence is BCL’s major asset. So cancellation would probably make all BCL shares almost worthless, including the 19.2% BCL equity PNG has held since 1972. Until now the ABG has been open to PNG retaining that equity. If Panguna re-opens, the National Government could then keep equity involvement. But if interference in ABG control of mining continues, we have no choice but to cancel the licence and completely end PNG involvement in Panguna.

That will not reduce landowner involvement in decisions about Panguna, or their sharing fairly in revenue, for the Bougainville Mining Act ensures their full involvement in both.

I await your response.

Yours sincerely,

John L. Momis

President, ARoB

 

 

Bougainville Mining News: Minister Miringtoro responds to the attacks on PNG National Government by President Momis

timthumb

As the member for Central Bougainville elected by the people of Central Bougainville into the National Parliament of Papua New Guinea, am concern about the continued media attacks by the ABG President John Momis regarding the transfer of 17.4% shares to landowners and people of Bougainville, by the National Government. As far as I know during his meeting with the Prime Minister which was attended by the Regional Member for Bougainville and Minister for Bougainville Affairs, Joe Lera, the President Momis agreed to the share distribution to the Landowners and ABG. “

The 17.4% BCL share equity in effect were gifted to the National Government by Rio Tinto. It was therefore was the prerogative of the Prime Minister to give the shares to the landowners as a token of goodwill.

ABG on the other hand was offered 36% percent by Rio Tinto through the National Government, making it a majority shareholder.

I don’t see any logic in the President’s Statement that such a move is a threat to the Peace Agreement. In my it is a step in the right direction in strengthening the peace by addressing one of root causes of the Bougainville Crisis, by giving shares to landowners who had been deprived of proper compensation, for permanent damage to their land and their environment.

Hon. Jimmy Miringtoro, OBE MP Press Release

This distribution of shares was tabled and approved by the cabinet on the 11th of August 2016.

Even any attempt by BCL to clean up the mess will not restore it to it’s original state. Firstly let me remind the good President that in the 20 years when the mine was in operation during his terms in office as a Senior Minister and Statesman, he never made any effort to negotiate for equitable benefits to landowners from the proceeds from the mine through ownership of shares in BCL.

Needless to say that during that time Panguna mine was one of the most profitable mines in the world and the shares were worth their weight in gold. Today we have to put up with childish bickering from the President over shares that are worthless unless there is mining operations churning out profits.

The President goes on to say that the ABG Mining Law gives landowners full decision-making involvement and good revenue sharing opportunity if mining resumes. That is untrue. Firstly the mining law was written by an organization that has a reputation of undermining rights of indigenous people and liberalizing economies in the Third World for take over by large corporations. Secondly, the Mining Law violates the United Nations Charter on the Rights on Indigenous People especially the concept of “Free Prior Informed Consent” or FPIC.

The Mining Law should have gone under the scrutiny of the landowners via independent legal consultations. The whole matter was virtually dropped on the people in the mine-affected areas of Central Bougainville and also the people of Bougainville at large. As the mandated Member of the National Parliament, representing the landowner of Central Bougainville, I have consulted with the Prime Minister prior to making the decision to give the shares to the landowners. It is the only way justice can be served to people who have not lost their land, their environment which is their livelihood, but also their lives.

The President’s outbursts are shameful because he was the one who stirred up the landowner sentiments to cover up his failures at the national level, in securing better outcomes for the landowners in the mine affected areas.

He verbally attacked BCL in 1989 and came up with a dream he called “The Bougainville Initiative” in which he tried to bring in another company to replace BCL as the miner at Panguna. The President can start to make peace with the people of Panguna and Bougainville by admitting that he had failed them. He should apologize to them for the sufferings and miseries they faced when they chose to take up arms because he did not hear their cries as their leader and representative in the National Parliament.

He could have prevented the war if he had been honest right from the start. The President must now talk with the Landowners about the shares instead of making unnecessary attacks on the National Government, which has done its part. The giving of shares to landowners and ABG is an indication that the Government has a genuine concern for the welfare of the landowners. It anticipates further negotiations and discussions with ABG and landowners to decide how best to work together for the benefit of all parties.

However, up till now President Momis has proven that he is incapable of running a Government which is struggling with the delivery of services to the population and the management of funds given to it. His Mining Law has proven ineffective in preventing BCL from exiting without meeting it’s obligation to clean up the mess it left behind.

The only option left now is to make the landowners shareholders of mine, as they cannot be compensated for the loss and damages they have suffered. Court battles that the President is hinting at can take years and there is no guarantee that they will be won and may meet the similar fate to the class action previously lodged in the USA. In addition, it is highly questionable at this point in time who will meet the legal costs of the legal challenge against Rio Tinto.

The Bougainville Peace Agreement deliberately steered clear of the mining issue because it was a very sensitive and emotional issue owing to the fact that it was viewed by many as the root cause of the conflict that led to loss of many lives and properties. ABG’s premature effort to reopen mining in Bougainville when the wounds of the war were still fresh and people are still deeply divided was always going to create problems for ABG and the National Government

. Over the years, ABG has been crying for money which it cannot manage as it was indicated in audit report from Auditor Generals Office. Currently we have complaints from the President about the shares. How can his inappropriate Mining Law protect landowner interests when the law gives ultimate power back to ABG and not the landowners.

A law which carries jail terms and monetary penalties against landowners who disrupt mining operations if the mining company did not respond to their grievances. Is this the sort of law to protect rights of the landowners?

I recommend that the President cede control of Bougainville to someone who has the energy, commitment and vision to move Bougainville forward instead of wasting time trying to kick up a dead horse. I see nothing wrong with building wealth for the landowners who can then contribute meaningfully to Bougainville’s economy instead of them being spectators all the time. Our people are tired of vague idealism by those who live in utopia that has brought no tangible benefits to us but continued exploitation by foreigners.

Hon. Jimmy Miringtoro, OBE MP

 

Bougainville blames PNG’ s PM O’Neill for ‘most serious dispute ever’

PNG ON

“In relation to Bougainville Copper Limited, there has been a great deal of discussion, some very unhelpful, some spiteful claims suggesting the Government was taking over the mine.

After many months of discussion, Rio Tinto has decided that they will gift its shares to the people of Bougainville and the people of Papua New Guinea.

That is the best outcome that we could gain.

With this transfer, the people of Bougainville will own a combined shareholding of 53.8 per cent of BCL.

Mr. Speaker, this Government and this House knows that this is the right thing to do.

This will ensure that for the first time in history of BCL, the landowners will be given a direct say and direct participation in the operation of the BCL mine.”

PNG Prime Minister Peter O’Neill | August 17, 2016  

Extract from Ramumine

The Bougainville Government is furious at statements by Papua New Guinea’s Prime Minister Peter O’Neill that he has transferred his government’s shares from Rio Tinto to the province’s landowners.

The Rio Tinto shares had been controversially gifted to the national government in June by the multi-national, and on Wednesday Mr O’Neill told parliament he was transferring them on to Bougainville.

On Thursday he clarified this to say the shares would go to the landowners and people of Bougainville and that he had no intention of giving them to the Autonomous Bougainville Government.

The shares are in Bougainville Copper Ltd which had run the long closed Panguna mine and the ABG wanted them to give it a controlling interest in the mine.

The ABG President John Momis told Don Wiseman the future of Panguna is the most sensitive issue in Bougainville.

See Full interview Below

Text of PM Speech

Mr Speaker,

I wish to make a statement in respect to my commitment to this honourable house last week that I intended to announces some of the decisions that our Government has taken in respect to the relationship that our Government has with landowners, the provincial governments and the resource development in the country.

These decisions will have a direct bearing on future resource developments that will take place in the country.

The decisions that we have taken are because of the direct interest that the Government has in these particular projects.

Mr Speaker,

Land, and its connection our people is at the heart and soul of our country and our communities.

Our land gives us life and supports livelihoods, it gives us a place for communities to live, and land ownership provides certainty for our children and their children.

But too often in the history of our country – our landowners have been let down.

Our landowners and their communities been made to be bystanders as their ownership has been taken away from them.

This includes both foreign and national companies, and this has been supported by successive Governments.

However, Mr Speaker, our Government has committed itself to empowering our people – and this commitment is embedded in our Alotau Accord when we formed Government in 2012.

We are committed to giving direct participation in resource developments in our country so that our landowners can take ownership, and build capacity in order to sustain their own livelihoods and their communities.

I wish to announce to the House today a series of decisions by our Government that relates to the interests of landowners and the people specifically in Western Province, in the provinces where LNG and oil are being produced, and the Autonomous Region of Bougainville.

These decisions are milestones in the history of our country, they will continue to empower and give confidence to many landowners and communities throughout the country.

Ok Tedi

The first of these Mr Speaker, concerns the direct equity in Ok Tedi Mining Limited.

This decision gives Fly River Provincial Government and Mt Fublian Landowners more say in the development of that mine.

The National Executive Council has endorsed the decision of our Government to transfer 33 per cent, one third of Ok Tedi Limited equity, to the people of Western Province – including landowners, affected villages and the Provincial Government.

This is a totally different approach to the past where the people of Western Province only received dividends of up to 6.1 per cent that was held by the State.

Today we are providing direct equity participation for the people of Western Province and the landowners, and this will further allow for participation at the management and the board level.

The people of Western Province to come to their own agreement about the distribution of the shares among themselves between the Provincial Government, the landowners and communities surrounding the mine.

It has been agreed in Cabinet that the shares will be held in trust by the Mineral Resources Development Corporation, through their managing of the mineral resources Ok Tedi and the mineral resources Star Mountain on behalf of the provincial Government and the land owners as well.

Mr Speaker, the value of the resources in Western Province is enormous and the people of that province and communities around the mine must benefit meaningfully from these resources.

When we took over the mine it was worth less than 500 million dollars.

The current assets of Ok Tedi will be valued at over 3 billion US dollars in twelve months time.

I note the former chainman of that mine has made a public advertisement today, but our Government is not going to engage in a war of words and we will allow the courts to make those determinations.

But one thing is very clear, after all of these years of operating this mine, under BHP and under PNG Sustainable, it is evident that our people and our provincial governments have received limited benefits and for that reason we are making this decision.

Since taking ownership of the Ok Tedi mine, and through new world class management, we have seen a total turnaround.

Mine equipment has been upgraded, and the way the mine operates has changed, including better management of the environment making sure our communities can be safe, and improve their lives.

Because of the management, re-tooling and enhanced production processes, the mine’s efficiency has improved making it more profitable, and able to operate in a low commodity price environment.

The the commodity prices improve that will make the mine even more profitable in the long term.

Mr Speaker,

In broader terms, these arrangements will see that the people of Western Province will have total assets, including the stake that they have in PNG Sustainable fund, valued at well over 2.4 billion US dollars.

Making them one of the richest provinces in the country.

I am hoping that through the landowners and the Provincial Government, that they will continue to manage these funds well for the benefit of future generations in the coming years.

We are aware of the issues that we have with PNG Sustainable, our Government will continue to fight for the rights of the people of Western Province.

Again I stress clearly, that our Government has no intention of taking over that particular fund for the people of Papua New Guinea.

That fund belongs to the people of Western Province.

They must have their say and they must take ownership of that fund and manage it themselves.

They must continue to do that and this is why we are in the court in Singapore, and I will allow the courts to make their decision.

But so far we have won every argument that has been presented to the High Court of Singapore, and we are confident that we will have a better outcome for the people of Western Province.

We are making these decisions giving close to 5 billion Kina back to the people of Western Province and this is a commendable decision that our Government has made for our people.

LNG Producing Provinces

Mr Speaker,

In terms of the LNG and oil producing provinces, they are an important part of our economy.

This is now the Government trying to implement the decisions that the previous Government has taken including the distribution of equity and the benefits that are due to the people of Hela, Southern Highlands, Gulf, Central and Western Provinces.

As I said in Parliament last week, since the production of oil began in our country, our landowners and our provinces have received close to one billion Kina in benefits, but as you look into these provinces there is nothing to show for it.

We must have better management of these funds and we intend to work closely with the landowners and the Provincial Governments in ensuring that the every MOA that we have signed, every IDG grant that we have promised, every business development grant that we have promised, and all the commitments under the LBSA and the UBSA, we intend to honour.

These are done by various Governments since oil production began in the early 1980s, but we intend to honour every commitment that has been made.

Since the sale of the gas, we have now 135 million Kina in the central bank in royalties, 130 million Kina in development levies, and 200 million Kina in equity for these five provinces.

These funds are placed in trust accounts with the Bank of Papua New Guinea.

Mr Speaker,

To dispel false information, that has been circulated by people with a political agenda and their own interests, I have yesterday directed our officials to travel up to the landowners and show them the bank statements with the actual bank balances in the accounts.

They will have no doubt whatsoever that their money is safe and in trust for their use.

The State has not mortgaged those funds, they are available and waiting for the clan vetting exercise to progress, and once that is done I have directed the Minister for Petroleum and Energy, and his department, to within 30 days after this Parliament rises, they must complete their clan vetting exercise.

After 30 days we will start distributing these funds that are rightfully due to the landowners, and rightfully due to the provincial Governments, and all the stakeholders that we have committed to.

The equity represents almost 2 percent of the project, which is free carry, and through the Umbrella Benefit Sharing Agreement which was signed in Kokopo in 2009, the Government at that time decided that we will give a further 4.27 per cent in Kroton, now Kumul Petroleum, as indirect equity in the PNG LNG project.

Under this agreement, the landowners and Provincial Government were to pay the State close to 1.1 billion US Dollars for 4.27% equity in PNG LNG.

The Hela Provincial Government took charge of raising those funds, but we are unable to conclude as the landowners continue to face challenges in arranging finance to fund the acquisition.

Govern current market conditions, where the oil price has collapsed from US$110 per barrel down to US$27, it is quite impossible for the landowners and Provincial Government to raise that money.

That is why NEC has approved that it will extend the time, that expired on the 30th of June, to be extended to 31st December 2016, so they can have the opportunity to raise more funds over the next few months.

Mr. Speaker,

We also decided that we would renegotiate the pricing given that the price of oil has dropped, so that it becomes affordable so that they are able to go and raise that money at a new discounted price.

This is only fair that they are given the opportunity to raise money to pay the Government for these shares that they are to receive.

Our officials, the landowners and the officials of the provincial government will work through it in due course I will inform Parliament when those agreements are put in place.

Bougainville Copper Limited

Mr Speaker,

In relation to Bougainville Copper Limited, there has been a great deal of discussion, some very unhelpful, some spiteful claims suggesting the Government was taking over the mine.

After many months of discussion, Rio Tinto has decided that they will gift its shares to the people of Bougainville and the people of Papua New Guinea.

That is the best outcome that we could gain.

This Government has shown a greater commitment to Bougainville that any other Government.

I want to tell the people of Bougainville that this position has not changed, and the Government will continue to work with the ABG, and the people of Bougainville, to achieve the best outcomes for them.

This includes the continued roll-out of services.

We continue to work to restore basic services, build more roads and other infrastructure and to work day and night with our friends in the ABG to advance the peace process.

The people of Bougainville have been through too much pain over the past thirty years, and should not face further frustration and confusion because of politics.

So today, I wish to make an announcement that should put to rest the rumours and misleading information.

This is an historical announcement that will affect every man, woman and child in Bougainville.

Rio Tinto decided to transfer, of its own accord, its 53.8 per cent controlling interest in BCL to ABG and the State.

Rio Tinto has transferred 17.4 per cent to the National Government, and the remaining 36.4 per cent to the ABG without costs.

These shares have now been transferred to the Government of Papua New Guinea, to our trustee under the Kumul Mineral Holdings Limited.

This was aimed by Rio Tinto to give an equal shareholding between the National Government and the ABG.

The National Government already has a 19 per cent direct interest in BCL, so with the 17.4 per cent it was intended to take this to 36.4 per cent, and the transfer of 36.4 per cent direct to ABG was meant to balance the ownership of that mine so that we can continue to work together.

The National Government wants to ensure that we make the right decision for the people of Bougainville.

We are aware of the pain and torment that the people of Bougainville have gone through, and the importance of land.

They felt very strongly that they were disempowered and they did not have participation in the mine itself.

Our Government is concerned about the health, wellbeing and prosperity of the people of Bougainville.

Today, Mr Speaker, we are announcing to this House that the Government of Papua New Guinea will transfer this 17.4 per cent, to the landowners and the people of Bougainville.

With this transfer, the people of Bougainville will own a combined shareholding of 53.8 per cent of BCL.

Mr. Speaker, this Government and this House knows that this is the right thing to do.

This will ensure that for the first time in history of BCL, the landowners will be given a direct say and direct participation in the operation of the BCL mine.

This will help to alleviate some of legacy issues of the past.

This ownership will also give landowners and the people direct control over environmental issues of any future mine development that will take place.

By transferring these BCL shares to the people we are further strengthening the confidence of Bouigainvilleans in the peace process.

We are serious about empowering communities on Bougainville, and we will continue to discuss how they want these shares transferred to them.

These funds must be utilised according to the wishes of the people of Bougainville for their community benefit.

Conclusion

Mr Speaker,

In conclusion, the landowner issues that I have raised in relation to Ok Tedi, the PNG LNG project and BCL are very important for our nation.

They are important for our people, many of them are villagers who have nothing else but the land under their feet.

These are historical policy interventions by our Government.

Landowners will no longer be bystanders to activities taking place on their own land.

Their land is their heritage, their land is their livelihood and it is their future.

We must restore hope to our landowners who have been disadvantaged for many years.

Our landowners must be able to participate meaningfully, and benefit meaningfully.

They must have a say on how this land is developed and the activities that take place.

These issues I have raised today are not the end of the story.

Before this Parliament concludes, this Government will bring additional policy and legislative changes in the minerals, and oil and gas, and other resources sectors before the House.

These changes will continue to empower our people, enabling them to participate meaningfully in their resources development.

This is the commitment made in 2012 and we intend to fulfil that before we go to the polls next year.

Thank you Mr Speaker.

Interview With John Momis

The Bougainville Government is furious at statements by Papua New Guinea’s Prime Minister Peter O’Neill that he has transferred his government’s shares from Rio Tinto to the province’s landowners.

The Rio Tinto shares had been controversially gifted to the national government in June by the multi-national, and on Wednesday Mr O’Neill told parliament he was transferring them on to Bougainville.

On Thursday he clarified this to say the shares would go to the landowners and people of Bougainville and that he had no intention of giving them to the Autonomous Bougainville Government.

The shares are in Bougainville Copper Ltd which had run the long closed Panguna mine and the ABG wanted them to give it a controlling interest in the mine.

The ABG President John Momis told Don Wiseman the future of Panguna is the most sensitive issue in Bougainville.

Papua New Guinea Prime Minister, Peter O'Neill (left) and the Bougainville President, John Momis (right)

Papua New Guinea Prime Minister, Peter O’Neill (left) and the Bougainville President, John Momis (right) Photo: AFP/RNZI

Bougainville News : Momis says PNG relations are at an all time low

Momi Pon 

The PM fails dismally to respect the Peace Agreement, over mining, grant payments, and transfer of powers. Under his leadership, relations between Bougainville and the National Government are at an all-time low. The future of peace is now truly under threat.

“This is the most serious dispute ever between the two governments. I am offering the PM a last opportunity to resolve the dispute. I want a meeting with him no later than next week.”

Bougainville President, John Momis has expressed fury at the Prime Minister’s announcement

That 17.4% BCL equity recently transferred to PNG by Rio Tinto will be given to landowners and Bougainville’s people. The PM said he deliberately decided that way so that the ‘ABG does not control the shares’.

The President said he was angry because it’s the ABG that speaks for the people of Bougainville, and cannot be excluded by the PM. Further, the transfer of 17.4% the landowners is worth little. The ABG Mining Law gives them full decision-making involvement and a good revenue share if mining resumes.

“The future of Panguna is Bougainville’s most sensitive issue. I have explained to the PM several times why it is vital the ABG holds the Rio shares in BCL. He has rejected my advice. He is interfering in Bougainville. He acts in the same high-handed manner as the colonial administration and BCL when the mine began. That caused the Bougainville crisis.

“The Bougainville Peace Agreement says autonomy aims for Bougainville to find solutions to its own problems. The ABG is the government for Bougainville for all matters where powers are transferred. All mining powers have been transferred. So all mining decisions are matters for the ABG.

“If we cannot resolve the issue, the Mining Minister will use the power under the ABG law to cancel BCL’s exploration licence under the Bougainville Mining Act over the area of the previous Panguna SML. Notice has already been given to BCL to show cause why the licence should not be cancelled.

“That licence is BCL’s only major asset. Cancellation would make all BCL shares almost worthless. That includes the 19.2% BCL equity PNG has held since 1972. If the ABG is to remain in control of Bougainville mining we have no choice.

“Bougainville’s MPs must now show leadership and end their shameful silence on this issue. They must advise the PM to transfer the shares to the ABG.

“ABG action to cancel the licence will not reduce Panguna-lease landowner involvement in decisions about Panguna, or sharing in revenue if the mine does re-open. That’s because the Bougainville Mining Act gives those landowners full power to say no to grant of a mining licence. So they will be fully involved in all decisions on mine re-opening.

“The Act also guarantees landowners 5% equity (free carry) in the mining operating company. That will be worth much more than the PM’s 17.4% because re-opening will cost K20 billion, dramatically diluting all existing equity. Our Act guarantees a valuable share in the fully funded mine. The PNG 17.4% gives a small minority shareholding in a company now worth very little.

“The PM is not telling the truth.”