Battle intensifies over Bougainville Copper

By Rowan Callick

CLAIMS that Rio Tinto funded the civil war and fostered atrocities on Bougainville are being resurrected as a hurdle to the reopening there of the copper mine, whose proven reserves are worth at least $50 billion.

Today the opposition to the mine is strongest overseas, especially among Australia’s trade unions and non-government organisations. The Australian Greens have also joined the attacks. This is happening just as the reopening, after a full renegotiation of the terms, is winning overwhelming support on impoverished Bougainville; more than 97 per cent support it, according to Bougainville president John Momis.

The day after SBS One’s Dateline program about Bougainville was broadcast on June 26, the Bougainville Copper Ltd share price slumped 18 per cent.

German investor Axel Sturm, possibly the company’s largest individual shareholder, said “confidence in BCL, which is equated with confidence in Bougainville and its people, has been severely damaged. Months of re-polishing Bougainville’s image [have] been spoiled within a few hours.”

The program hinged on a 10-year-old affidavit signed while he was in opposition by Papua New Guinea’s prime minister Michael Somare, whose family announced this week that he will retire because he is seriously ill in a Singapore hospital.

Somare, who was foreign minister as Bougainville lurched into civil war, signed the affidavit that claimed “the actions taken by PNG to reopen the mine were not done for any public benefit except derivatively as the money the government made in its joint venture with BCL would trickle down to benefit the PNG citizenry”.

The mine provided the PNG government with about 20 per cent of its annual income when it was forced to close 22 years ago.

Somare signed the affidavit that said that Rio “controlled the government” of which he was a part.

It said: “BCL was directly involved in the military operations on Bougainville, and it played an active part. It supplied helicopters, which were used as gunships, the pilots, troop transportation, fuel, and troop barracks. It knew bloodshed was likely to occur because it instructed the government of PNG to reopen the mine ‘by whatever means necessary’.”

It said that although BCL participated in “the atrocities”, “no provision in the peace agreement addresses or resolves any civil liability or international law claim, which I understand are the issues in this litigation”.

However, Rabbie Namaliu, the prime minister during the first four years of the conflict, told Inquirer that the Iroquois helicopters used by the PNG army were deployed under an agreement he signed with Australia’s then-prime minister Bob Hawke in Canberra.

Nicole Allmann, now living in Queensland and who watched the SBS program, said: “The four Iroquois helicopters that were given to the PNG Defence Force by Australia were operated, maintained and crewed by Heli Bougainville for the PNGDF.

“I worked for Heli Bougainville during the crisis and did all of the invoicing. I invoiced the PNG Defence Force for this and not BCL.”

Namaliu said that “under the state of emergency laws, the controller can command access to any logistics support he requires”.

By the time the government deployed troops, BCL’s staff had left Bougainville leaving vehicles behind, some of which were commandeered. “To suggest that Rio did it deliberately is factually wrong. When I heard about those claims, I thought the whole thing was rather unfair. And Sir Michael is not in a position to make any response.”

But after the SBS program Western Australian Greens Senator Scott Ludlam demanded: “Rio Tinto must reveal the full extent of its involvement in the Bougainville war. And the Australian government must also explain its own role, and what it knew about the role of BCL. It’s time for the whole truth behind it to be known.”

Ludlam claimed that the war drove half of the population from their homes, and that “the conflict claimed 15,000 lives”. This total remains guesswork, although many did die who would have survived sickness before the war. Many additional deaths also occurred on mainland PNG because of the impact on health care of the sudden loss of government income.

A report in Socialist Alternative earlier this year said “it is a sign of the madness of capitalism that Rio Tinto did not close down BCL”.

The publication praised union efforts at the Rio Tinto annual meeting in Melbourne last year to oppose the mine’s reopening. The union members included “a delegation of miners from Hunter Valley, maritime workers from the Victorian branch of the MUA”, and the CFMEU (Mining and Energy section). It said that “if you wondered why socialists say Australia is the major imperialist power in this region, here’s your answer”, the Bougainville conflict.

The BCL executive chairman Peter Taylor, who is also now president of the Australia PNG Business Council, denied the allegations made in the affidavit signed by Somare. He recently led a business delegation to Bougainville, in what was the first visit to the island by a BCL chairman for more than 20 years.

Somare’s affidavit is being used in a class action initiated a decade ago in California, being conducted by the famous contingency fee lawyer Steve Berman.

This action, another barrier to reopening the mine, has already been struck out once, but has been reintroduced because it has become a crucial test case for the extraterritorial reach of US courts.

Its original US connection was that it was backed by Alexis Holyweek Sarei, a former Catholic priest and diplomat who married an American former nun, Claire. He said that if he returned to PNG from California, where he was living, he risked “grave harm”.

But he did return, and a year ago was elected to the Bougainville parliament, which strongly backs the reopening. He is one of the 20 people named in the action.

Lawrence Daveona, an executive member of the Panguna Landowners Association that represents the people who own the mine site, has declared the association’s full support of the moves to renegotiate the Bougainville Copper Agreement, and its opposition to the court case. The case, which accuses Rio Tinto — 53.58 per cent owner of BCL, with 19.06 per cent owned by the PNG government and 27.36 per cent by other shareholders — of war crimes, was set up by US lawyer Paul Stocker, now 87, a friend of Somare who once lived in PNG.

Stocker has said: “I can’t think of anything (Rio) did that wouldn’t make Adolf Hitler happy.”

The case claims Bougainvilleans who worked for the mine, “all of whom were black”, operated in “slave-like” conditions.

Mekere Morauta, PNG prime minister when the class action was filed, said at the time that even if successful if would not be enforceable in PNG because of the Compensation Act there.

Bougainvilleans will vote within four years on whether they want to split from PNG. This heightens the stakes for the reopening of the mine, with Bougainville wishing to secure the lion’s share of the revenues, and also possibly some or all of PNG’s equity.

The determination of BCL to reopen the mine itself, underlined by chairman Taylor, creates a formidable obstacle to potential competitors. China is the likely buyer of most of the mine product, and Chinese interests have been associated with Bougainville.

Momis was formerly PNG’s ambassador to China. But last weekend a group of Chinese businesspeople who had expressed an interest in investing in real estate on Bougainville were barred by landowners from visiting the mine site at Panguna. One landowner, former combatant Chris Uma, said: “We did not fight for the Chinese to come over.”