SYDNEY, October 6 (Reuters) – Plans to reopen one of the world’s biggest copper mines, shut by a civil war on the Pacific Island of Bougainville in 1989, have run into trouble.
The quarter of a million people of Bougainville are tentatively scheduled to vote on independence from Papua New Guinea in June 2019, and revenue from the reopening of the Panguna mine is essential for the otherwise impoverished island to have any chance of flourishing if it becomes the world’s newest nation.
But there is now a struggle over who will run the mine between Bougainville Copper Ltd – the previous operator now backed by the Autonomous Bougainville Government and the Papua New Guinea government – and a consortium of Australian investors supported by the head of the landowners who own the mineral rights.
The dispute is opening old wounds – and is almost certainly going to delay any reopening. That could help to drive copper prices higher as many forecasters expect that demand for the base metal will exceed supply in the next few years.
The battle lines have been hardening on several fronts, Reuters has learned.
Papua New Guinea has told airlines that Sydney businessman Ian de Renzie Duncan, who set up the consortium, is banned from entering the country until 2024, according to a Papua New Guinea government document reviewed by Reuters.
The request for the ban was made by the Bougainville government, three sources with knowledge of the document said.
The consortium has also acknowledged for the first time that it is paying some landowners a monthly stipend and has pulled in some big backers that have not previously been disclosed.
They include Richard Hains, part of a billionaire Australian race-horse owning family which runs hedge fund Portland House Group.
In a sign of how ugly the row is getting on the ground, local opponents of BCL becoming the operator – and some who are opposed to the mine reopening altogether – blocked Bougainville government officials from entering Panguna in June.
They had hoped to get key landowners to sign a memorandum of agreement that would have endorsed BCL as preferred developer, according to a copy of the document reviewed by Reuters. The proposed agreement also stipulated the mine would be re-opened by June 2019, ahead of BCL’s own timeframe of 2025-26.
The Papua New Guinea government didn’t respond to requests for comment for this story.
Bougainville’s main political leaders say getting the mine reopened is critical. “If the independence of the people is to be sustained then we need Panguna to run,” Bougainville Vice President and Mining Minister Raymond Masono told Reuters in a phone interview.
He said he believes BCL has first right of refusal to operate the mine under laws passed three years ago, and only if BCL declined to take up that right should an open tender take place.
The abandoned copper and gold mine contains one of the world’s largest copper deposits. During its 17-year life until the closure in 1989, Panguna was credited for generating almost one-half of Papua New Guinea’s gross domestic product.
The civil war was largely about how the profits from the mine should be shared, and about the environmental damage it had caused.
There was deep resentment among the indigenous Bougainville people about the amount of the wealth that was going to Papua New Guinea and to the mine’s then operator, Conzinc Riotinto of Australia Ltd, a forerunner of Rio Tinto.
The mine was forced to shut after a campaign of sabotage by the rebel Bougainville Revolutionary Army.
The conflict between Bougainville’s rebel guerrilla army and Papua New Guinea forces left as many as 20,000 dead over the following decade, making it the biggest in the region known as Oceania since the Second World War.
A supplied image shows locals taking shelter from rain under a local administrative building at the former Bougainville Copper Limited’s (BCL) Panguna mining operation located on the Pacific Ocean island of Bougainville, Papua New Guinea, March 29, 2017. Picture taken March 29, 2017. BCL/Handout via REUTERS
Rio Tinto divested its stake in BCL in 2016, and the listed company is now just over one-third owned by the Bougainville government and one-third owned by Papua New Guinea.
Papua New Guinea Prime Minister Peter O‘Neill said last year his government would gift the shares received from Rio, or 17.4 percent, to the people of Bougainville, although that is yet to take place.
The challenge from the Australian consortium that now includes listed gold and copper explorer RTG Mining was made public in June. Duncan and his fellow investors have joined forces with a group of Panguna landowners, the Special Mining Lease Osikaiyang Landowner Association (SMLOLA) led by Philip Miriori.
Miriori was in the Bougainville Revolutionary Army as the private secretary to the late Francis Ona, the former BCL mine surveyor who became leader of the resistance.
Ona had declared that BCL should “never again” be allowed to run the mine and Miriori, Ona’s brother-in-law, still supports that stance.
“They have caused a lot of damage, they don’t have the money and they are not telling the truth and so I wouldn’t accept them,” Miriori said in a telephone interview from the Bougainville town of Arawa.
PAYOUTS TO LANDOWNERS
Duncan, a former barrister with a background in mining law, heads an entity called Central Exploration that has a half share of the consortium.
Duncan’s consortium has been paying money, described as a stipend, to some of the landowners, but denies this amounts to bribery.
“We are really talking about people receiving a couple of thousand kina ($608) a month,” said Duncan, who added that the money helps the landowners to travel and find accommodation in towns where Panguna negotiations take place. “It’s not bribery, it’s business,” he said.
BCL claims to have the support of eight other landowner groups in Bougainville with an interest in the project. They have land rights covering access roads and the port site, among other areas, though crucially not the mine site itself.
BCL chairman Robert Burns, who formerly worked for Rio Tinto, said Bougainvilleans were the ones being impacted by Duncan’s attempt to gain control of the mine. “Everyone is being frustrated and impeded by this issue,” Burns told Reuters in a phone interview from the PNG capital, Port Moresby.
The uncertainty is going to make it difficult for either group to raise the capital that will be needed to get the mine restarted.
In 2012, BCL estimated the cost of re-opening at $5 billion. With few of its own assets, the company would need to secure the mining rights before tapping capital markets.
The Australian consortium may be in a stronger position, according to Hains, who is a 15 percent owner of RTG. He said the consortium has strong access to the North American capital markets and could re-develop Panguna in a “highly timely fashion”.
As it stands, BCL has no mine without the support of the owners of the minerals, and Duncan’s group has no project without road and port rights as well as government support.
Anthony Regan, a constitutional lawyer at the Australian National University and an adviser to the Bougainville government, said the immediate outlook for the mine is bleak. “The need of Bougainville to have a significant source of revenue if it’s to be really autonomous or independent has become hopelessly enmeshed with the future of Panguna.”
Reporting by Jonathan Barrett in SYDNEY; Editing by Martin Howell
Government research conducted across Bougainville has laid the foundation for more targeted public awareness.
The Autonomous Bougainville Government has released a report on people’s access to media and communication channels to better target awareness activities on the peace agreement and upcoming referendum.
The report is based on a survey of over 1,000 people across Bougainville. It found that the varying, but generally low access to government information required new approaches with greater attention to presentation of information.
The report recommended tapping into new channels people are using such as mobile phone and video, but a general need to focus on the content of information with clear, simple and consistently repeated messages, designed with the target audience in mind – whether they be youth, women or people of different levels of literacy.
The survey was an initiative of the Bureau of Media and Communications and was
conducted by the Centre for Social and Creative Media , University of Goroka.
Chief Secretary Joseph Nobetau thanked Bougainvilleans for their participation in the survey and assured them that the government was listening to their voice.
“This survey has gone down to the grassroots level to find out why awareness of the BPA and government remains low”, Nobetau said.
“It has found the penetration of traditional media: radio, newspapers and television, and newer internet channels is very low, especially outside Buka and Arawa. This creates a major challenge for a government to communicate with its people.”
The research showed there was still confusion about key aspects of the Bougainville Peace Agreement.
People said they wanted the government to come down to their level, invest in radio, but also suggested new ideas, like using mobile phone for information dissemination.
Mr Nobetau said while the survey showed there is a lot of work to do to prepare people for the referendum, it also gave many good ideas about how to do things better.
“The lack of a good understanding of the Peace Agreement is evidence that we cannot rely on using the same old awareness approaches of the past. We must look at presenting information more clearly, more consistently, more often, and use a variety of different ways to get a two-way flow of information happening. This will create greater impact and greater understanding.”
The head of the Bureau of Media and Communications Adriana Schmidt, said they were already responding to the findings.
“We are currently working with the Department of Peace Agreement Implementation to prepare multi-media information kits for our Members of Parliament, producing video and investigating mobile-phone based awareness,” Ms Schmidt said.
“With this report, the government has listened to the views of people and we are now better placed to plan and implement improved awareness.”
The Chief Secretary called upon all government agencies and communication partners to use the report to improve engagement with community.
“The task ahead is to better target our awareness campaigns and we will continue to survey and measure our activities in this regard.”
The Bougainville Audience Study asked people about their access to radio, mobile phone, TV, newspaper and the internet, their most trusted sources of information, and preferred ways of receiving government news. The research also asked people about their level of understanding of the three pillars of the Bougainville Peace Agreement: weapons disposal, autonomy and referendum, and other issues.
The survey was an initiative of the Bureau of Media and Communications,
conducted by Centre for Social and Creative Media , University of Goroka, with funding support from the governments of Papua New Guinea, Bougainville, Australia and New Zealand. Over 1,114 people were surveyed, and 200 in-depth interviews conducted.
” The push to reopen a controversial copper mine on the island of Bougainville has suffered a setback, with opposition groups stopping the region’s government from going to the mine site and signing a new agreement with landowners.”
“I don’t want mining to be opened, no BCL, no mining. Because land is owned by the women, not the men,” said Regina Erengmari, one of the women in the blockade.
Many of the protesters are specifically opposed to BCL returning, because they blame it for the crisis.
But others, like Bernardine Kama, are opposed to any company reopening the mine.
“I grew up within the damages and the destructions of the mine and I know much destruction has been done,” she said.
But there are many people from the area who want negotiations about reopening the mine to begin.
Panguna’s nine landowner associations were expecting to sign a memorandum of agreement with the Autonomous Bougainville Government to say the mine would reopen and that BCL would operate it.
Theresa Jaintong, who chairs one of the landowner associations, said signing the agreement is important.
“It’s important to me because I have issues to address with BCL and also the government, all other landowners and also representing my own people, and we were looking forward to sign and then open the door to other outstanding issues,” she said.
“June 15, is a very symbolic occasion. It marks the anniversary of the day when Bougainville’s political aspirations were recognized with the formal establishment of the Autonomous Bougainville Government, in this sense Bougainville Day captures the hopes, dreams and aspirations of all Bougainvilleans.
The last twelve years have been some of the most challenging, yet fruitful, for the Autonomous Region of Bougainville as we continue to forge ahead to decide our ultimate political future.”
Happy Bougainville Day and God bless you all.
Chief Dr. John L. Momis GCL, MHR President
” As another Bougainville Day arrived and passed us by we continue to contemplate, celebrate and share the belief, hope and faith that with the right efforts and proper use of resources Bougainville will continue be a resilient society among its Melanesian brothers in the country and in the Pacific Islands.
What are Bougainville’s greatest resources?”
Simon Pentanu asks in Part 2 below
Part 1 The President
The Autonomous Bougainville Government has made significant progress in strengthening its faculties through passing important laws in the Bougainville House of Representatives and revitalizing the Bougainville Public Service into a lean and effective service delivery mechanism.
We have passed many new and important laws such as the Bougainville Mining Act 2015 which is one of the very best in the world as it gives Bougainville resource owners more control over their land and resources. The recent partial lifting of the Mining Moratorium on Bougainville is a clear indication of the ABG’s drive to foster fiscal self-reliance in the region.
Over the years our public service has been plagued by corruption; it is a deeply rooted problem that continues to hamper our development but we have since made efforts to curb this problem.
The setting up of the Auditor’s Office and the recent opening of the Ombudsman Commission’s office in Bougainville has provided us with the necessary means to tackle the corruption problem head on, not just in the public service but throughout Bougainville. The recent developments in the public service shows that the ABG will no longer tolerate corrupt practices.
We have set the indicative date for the referendum to be held on June 15, 2019. The ABG is already preparing for this very important event and the newly created Department of Peace Agreement Implementation will be taking the lead on this.
I would like to remind you all that our people are a people highly favoured. We have been blessed with the right to self-determination and this right we have paid for with the blood, sweat and tears that we shed through the darkest hours of our history, and that was the Bougainville Crisis.
We will not go quietly into the night, we must stand firm and stand united and make our voices heard, for at this juncture, unity is our greatest bargaining power on the eve of the referendum.
Today I ask all Bougainvilleans to reflect and to consider what you can each do to help Bougainville achieve its true destiny and dreams.
All of us have a role to play – our farmers, industrialists, students, teachers, health workers, public servants and our elected leaders.
By working together and moving ahead with a common goal there is much that we can achieve.
My challenge to you is to embrace this change and contribute to the journey. Together we can achieve greatness and as your President that is my ultimate goal – for a proud, united Bougainville.
Happy Bougainville Day and God bless you all.
Chief Dr. John L. Momis GCL, MHR
Part 2 Simon Pentanu
Not everyone will agree with me, but I believe they are our environment, our cultures and our people.
When we think about how to transform Bougainville into a developing, progressive region in the modern world, it’s important we do so by harnessing and protecting these resources.
Our environment, cultures and people are the things that have sustained us for countless generations past – and they can continue to do so today and into the future if we are smart.
Keeping our natural environment healthy while transforming Bougainville into a modern, progressive region is something the ABG can achieve only in close consultation with communities – the land owners and culture custodians.
Wherever we look around the world, there are lessons we can learn. Some communities and their environments have become victims of progress, not partners in development.
Think about the Melanesian people of West Papua. In the past 40 years vast quantities of their gold, copper, timber, palm oil and other resources have been mined, chopped down, extracted and exported, but few impartial observers would say this has been to the benefit of West Papua’s environment, cultures and people.
Of course, the vast majority of the resource extraction that has happened in West Papua has been undertaken with little or zero community consultation.
We have the opportunity to do things differently. To this end Bougainville’s mining legislation and policies address this. Let us hope it works in practice so that all parties involved in this industry and any such investment which harnesses resources are equal opportunity benefactors.
When we consider the various options open to us, I believe a CGP (community government partnership) is a more sustainable choice than a PPP (public private partnership).
CGP has the community as its starting point. CGP is a partnership that regards and protects the environment as enduring capital for sustainable humanitarian development.
A PPP is fine if it regards resource owners in communities as equal partners. But too often PPPs see resources merely as disposable commodities and consumables in a profit-oriented business model.
That way of thinking ends up depleting our strongest long-term assets for short-term gains that are here one year and gone the next.
Bougainville’s greatest resources – our environment, our cultures and our people – deserve so much better than that.
We can learn from the lessons from the past – some of which have been the most profound insofar as they have affected our society more than any other society in Melanesia, and the whole of the Pacific for that matter.
” HAVING lost much of their precious land and rivers, landowners in and around Panguna do have grievances. But welcoming the culprit back into their midst to remedy some conflicts is a goal they see as paramount to the progress of Bougainville as a whole.
Thus the communities of the Upper Tailings prepared for almost a month for the day when the mining company, Bougainville Copper Limited (BCL), would pay them compensation outstanding since 1990 – 27 years before.”
BCL had a cordial welcome from the people of my home Enamira Village in the heart of the Upper Tailings area of the Panguna District.
A short traditional ceremony to mend broken ties and restore relations with the community of the Tumpusiong Valley, as it is known widely today, began the day. This was followed by speeches that emphasised concord, collaboration and remediation of all the issues attached to the Panguna mine.
It was a go-forward for Bougainville because BCL was giving the mine-affected people a sign that the physical destruction of their land and life by mining no longer meant they had been deserted by the company responsible for their destitution.
BCL, the Autonomous Bougainville Government (ABG) and other stakeholders were led by BCL manager Justin (Ted) Rogers.
Their mission was to verify and help locals finalise legal documents and bank accounts for title holders of land areas leased by BCL all those years ago.
The money ought to have been paid in 1990 but the Bougainville conflict of 1988-97 got in the way. Thus only now the people of the Panguna District queued to get what was owed to them by BCL.
This prevented possible eruption of conflict and maintained harmony within the Upper Tailings lease and its community members.
The tailings of the Panguna mine is in three sectors: the Lower Tailings (South Bougainville’s Bana District), the Mid-Tailings (Jaba to Konnuku Village) and the Upper Tailings (Tonanau Village to Dingumori).
In money terms there was a great variation in compensation depending on the size of the land blocks subject to royalties. The Lower Tailings, geographically a vast plain stretching from the Mid-Tailings to the coast, received a massive amount of K1 million-plus. The Mid-Tailings took about half-a-million while we in the Upper Tailings get something less than K50,000.
According to sources, the Special Mining Lease land title holders from areas directly around the mine will get close to a million kina.
BCL spent four days in the Upper Tailings with the people. Where disputes arose amongst people over land titles, BCL directed them to share the benefits. Thus peace prevailed.
Happy faces came out of the buildings where people were interacting with BCL and ABG officials. Above all, BCL manager Rogers was everywhere chatting and smiling with the people.
As BCL and its entourage left, the people stood by feeling relieved. What some of their elders had long waited for had materialised.
Many in the Upper Tailings are now telling themselves to make good use of the BCL money so it will have some lasting positive impact on their lives and the community as a whole.
They are telling themselves not to be like the Arawa Villagers who received K3 million from the national government for the lease of the land in the Arawa township but hardly have seen any tangible development.
They say the whole of Bougainville is watching us – and peace is intact as my people flock into Arawa, where the bank is, to get and use that BCL money
” Every picture tells a story. Every story a picture tells may not be a perfect story but, as another saying goes, there’s more to the picture than meets the eye.
There is a certain poignancy about this picture – and many other images connected with the multitude of matters surrounding Panguna.
Panguna is not merely a history of mining, minerals, money, maiming and the nastiness of the conflict. It is not only a story of lost lives, lost land and lost opportunities.
This photograph shows a woman, leading her male counterparts in the early days of the dispute involving one group of Panguna landowners voicing, in a very public way, early warnings of what might follow.”
Article by Simon Pentanu
Panguna is a story of many individuals and groups; of men, women and children of the forest, the valleys, the ravines, the hills and mountains, the rivers and creeks and sacred sites – all of which people called home, before mining arrived.
Perpetua Serero and Francis Ona both passed away relatively young. The effervescent Damien Dameng – the one with reading glasses studying his notes in this photo – lost his life under dubious circumstances only in recent times.
Francis Bitanuma with the white cap and overgrown beard in this photo, is still around, raising his voice and picking and choosing his fights but with fewer and fewer local allies in tow.
Perpetua Serero had remarkable poise and presence. Had her voice as Chairlady of a splinter Panguna Landowners Association (PLOA) been heeded when she spoke (either with or without the aid of a hand-held loud hailer), some of the fiasco and hurt amongst the landowners could well have been mitigated, if not largely avoided.
Instead, the very early feuds over Panguna over benefits accruing from the land under various leases to BCL were between landowners themselves. Only a dishonest landowner would deny this was the case.
Disputes and differences over land sharing, land use and land tenure preceded the arrival of mining in Panguna. But these were localized and tended to be confined within households, extended families and clans. Agreements were brokered to resolve issues or at least keep them to manageable levels. There were ways for everyone to move on, living and communally sharing the land, rivers, creeks, the environment and everything that more or less made life worth living and dying for.
Differences and feuds over the benefits accruing from the mine such as RMTL (Road Mining Tailings Lease) payments and other payments added fuel to existing disputes between clans, families and relatives. Some of the disputes became vexatious with the advent of mining.
Mining catapulted Panguna women like Perpetua Serero, Cecilia Gemel and others to the forefront as they took on much more active and pronounced roles as mothers of the land in a society that is largely matrilineal.
This photograph shows a woman, leading her male counterparts in the early days of the dispute involving one group of Panguna landowners voicing, in a very public way, early warnings of what might follow.
The significance of her message was either lost to or not taken seriously by most leaders from central Bougainville, BCL, PLOA and relevant authorities in the national Government at the time.
That men are on the periphery of the photo – in stark contrast to the lead role being played by Serero at the front – wasn’t just symbolic. It was real. Her position at the front, with the support of men such as Francis Bitanuma, Francis Ona, Damien Dameng and others was neither incidental, coincidental nor accidental. Her role at the forefront of this dispute over land was natural and logical, because in most of Bougainville it is through the women that land is inherited and passed down the generations.
That more and more landowners became willing to front up in crowds such as this, emboldened by the willing maternal leadership of someone who stood up to carry the mantle of those that bore grievances against their own PLOA, led by men. Serero, and the landowners who stood with her, made a brave and significant statement.
As the differences grew, the younger Panguna generation – alongside women like Serero and Gemel and the emerging, vociferous Francis Ona – turned their attention to Rio and BCL.
Increasingly they saw BCL and the old PLOA as having all the control and influence over what happened in special mining lease (SML) area. The injustice felt in not having much say weighed heavily and became a rallying point as captured in this photo.
All of us observing, reading and writing about the upheavals over Panguna, the mounting dissatisfaction, the criticism of the Bougainville Copper Agreement (BCA) and the rebellious response that shut down the giant mining operations, may find some satisfaction in the common truism that hindsight is a wonderful thing.
The BCA was a document familiar mostly to lawyers, investors and bankers and, of course, to the mining fraternity. It was not until well after the first power pylons fell, after deployment of the security forces and after the mine was closed that interest increase in reading the fine print of the BCA. Coming, as they did, from a paperless village life, many landowners and Bougainvilleans in the community at large found little compulsion to read, let alone understand and appreciate legal agreements.
When the going was good everything was hunky dory. The landowners were getting their lease payments, social inconvenience compensations, royalties etc. The provincial government was doing well and was financially better placed than others in the country. Employees couldn’t really complain about the job opportunities, good salaries and wages.
The majority of the landowners the BCA was purported to serve turned against it, despised and rebelled against it.
It is a story new generation of Panguna landowners is born into. It is not a story restricted to past or the future. Rather, it is a story that evokes timeless lessons and has some relevance for all of us forever throughout our lifetime.
It is true, hindsight is a wonderful thing.
I have heard a lot about Perpetua
Serero. I never met her. I will never meet her in person because she has passed on.
She served her calling with tremendous support from men and women of the land. She had faith in customs and traditions that gave equal opportunities to women. These customs and traditions gave her the mantle and legitimacy to lead protests against the male dominated RMTL executives in the Panguna Landowners Association.
She faced an awful amount of pressure because of intense feuding over control of PLOA and RMTL in Panguna. She took the baton and ran her lap hoping to influence and change some of the male dominated status quo in the old PLOA.
The Australian Liberal and Labor colonial governments clearly saw what was going on and regarded Panguna mine as the Achilles heel of a future, independent PNG.
Men like Ona, Bitanuma, Dameng and women like Serero, Gemel and others gradually realised that unless they stood up and were counted, taking a stand against the inequities they saw, they would be swamped and inundated by the complacency that was prevalent, accepted, and that supported a Panguna that seemed all normal driven by profits and benefits of mining.
There are lessons Rio and BCL learnt out of the land dispute. Some of these lessons are harsh. Some even the best legal agreements cannot address, avert or fix, for they are based in customs and culture, not common law.
Panguna may be most uncommon dispute or problem of its time that a foreign mining company has had to face and deal with. Its repercussions and reverberations spread through Bougainville and indeed around the world very quickly.
It has unearthed lessons that go well beyond issues normally associated with mining.
The Bel Kol approach initiated by the landowners shows traditional societies also have ways, means and mechanisms by which to resolve seemingly intractable disputes. These ways are local, restorative and win-win in their approach, not adversarial, competitive and foreign.
Some of the continuing pain, ill effects and trauma over lost land and lost dignity over Panguna are more destabilizing and debilitating than the crisis and conflict that landowners and many other Bougainvilleans endured.
Everyone that has lived through the crisis on the Island or has been affected one way or another, directly or indirectly, has had to deal with the horrors of crisis, war and conflict. Rebuilding lives, normalcy and returning to a resilient society is a longer journey that will take many generations over many lifetimes.
Little wonder people are prepared to protect their rights and defend the land with their lives. It is true, isn’t it, that one cannot fully understand and appreciate peace and freedom unless you either lose it or you have been suppressed.
I hope looking back we can pass on to the next generation the genuine benefits of hindsight.
The PNG National Research Institute as part of its work in researching and analysing strategic issues for national development, consider the Referendum and Bougainville to be of a significant national event that will impact the well-being of the people of Bougainville and the people of PNG.
The PNG NRI therefore independently plans to undertake a set of research projects that will generate information to inform discussions in preparation for the referendum so that the outcome is credible and respected by all parties and ensuring a peaceful outcome for the people of Bougainville.
The PNG NRI research project proposes to inquire and inform stakeholders on three key central questions:
What is a Referendum and why is it being held?
How can the Referendum be effectively administered?
What are possible outcomes and how can the outcome of the Referendum be effectively managed and implemented?
The Institute seeks applications from qualified candidates to develop the Communications Strategy for the project. This is a critical piece of work that will provide a foundation for dissemination of the research generated by the Project.
The strategy will be developed on a consultancy basis. Applications are due by Friday 26 May 2017.
The Bougainville Referendum Research – Communication Strategy
1.1. The Bougainville Referendum
The people of Bougainville will vote in a Referendum before June 15 2020 to determine their political future; – a choice between whether Bougainville remains a part of Papua New Guinea under an Autonomous Governance Arrangement, or to become a fully Independent State, an option to be included in the Referendum.
This is an important milestone as part of a Peace Agreement reached in 2001 following a brutal Civil War between 1989 and 1999.
The conflict was initially triggered by issues over redistribution over landowner benefits from the Bougainville Copper mine, then fuelled by long held secessionist sentiments mobilised into a civil war against PNG Government forces, that later flared into localised conflicts between different factions after the government forces withdrew and maintained a blockade around the islands of Bougainville.
The war resulted in more than ten thousand persons estimated to have been killed and destruction of major infrastructure as well as social disruptions leaving half the population of Bougainville displaced.
Cessation of fighting in 1998 led to negotiations for a Peace Agreement.
One of the key stickypoints in the negotiations was a call by factions of the Bougainville delegation on a Referendum for Independence. This was finally agreed to, but deferred to a period after fifteen years following the establishment of an autonomous Bougainville Government but before the end of twenty years.
Reports and findings from recent studies done on Bougainville indicate a lack of general information about what is a Referendum and its purpose.
It is important that the people of Bougainville are clear about the purpose of the referendum, the choices available and the implications of their choice of a political future when they cast their vote.
The Referendum outcome also has implications for the wider PNG as it challenges the essence of the PNG Nation State for maintaining a unified country of a diversified people, yet ensuring that a peaceful outcome is achieved for Bougainville.
It is therefore also critical for robust informed discussions that would lead to informed decisions and outcomes over Bougainville’s future as well about autonomous governance arrangements in PNG.
The Autonomous Bougainville Government has made an historic announcement in the lifting of the Mining and Exploration Moratorium on Bougainville.
ABG President Chief Dr John Momis made the announcement on Friday April, 28 2017 after the Bougainville Executive Council carefully considered the implications of developing the capacity of the government to manage exploration applications and the needs of the people of Bougainville.
This allows for applications for the areas of Tore, Isina and Jaba only and does not include Panguna, places which have large ore deposits.
Since the development of the Panguna Mine more than 40 years ago the rest of Bougainville has been covered by the moratorium until the announcement was made.
In 2006 the ABG requested the National Government for the Mining, Oil and Gas powers and functions to be drawn down as the priority powers in its notice to the national government.
In 2008 both the ABG and the National Government signed the Alotau MOU that established the road map for the transfer of the Mining, Oil and Gas powers and functions from the National Government to the ABG.
Although the process was slow the ABG enacted its own Mining Act in 2015 and this paved the way for the ABG to regulate its own mining sector.
“The Bougainville Constitution and the Bougainville Mining Act 2015 clearly define the people as the owner of all the mineral found on all the land in Bougainville,” President Momis said.
“It is significantly important that the people’s consent must be given before any mine is developed and the Mining Act,” Momis said.
Momis also added that the Bougainville Mining Act gives the ABG the opportunity to preserve and reserve certain areas in Bougainville from mineral exploration and mining to strategically harvest mineral resources for the current and future generations.
The Bougainville Executive Council has the final authority to grant mining licenses in Bougainville and in this way it will scrutinise every would be investor well to ensure only genuine investors invest in Bougainville before a license is granted.
“We have learnt our lessons from the Panguna experience and now we have the opportunity to do a better job this time,” President Momis said.
“On behalf of the people of Bougainville I invite and welcome applications from prospective applicants to invest in our mining sector; Bougainville is open for business and I look forward to the development of long term economic partnerships to allow Bougainville to fulfil the economic potential she rightly deserves,” he added.
The Bougainville Mining Registrar will start accepting applications from 10am Bougainville Standard Time, Tuesday 9 May 2017.
“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.”
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.
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.
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.”
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.
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.
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.
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.
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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“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.