Papua New Guinea’s Prime Minister, Peter O’Neill, has called on BHP Billiton to hand control of board appointments to the PNG Sustainable Development Program Ltd, to Papua New Guinea.
ABC | Radio Australia
It is now ten years since BHP left PNG.
When it did so it gave its shareholding in the giant Ok Tedi gold and copper mine to the people of PNG.
That shareholding is still held in a Singapore-based company called PNG Sustainable Development Program Ltd – an organisation that’s mission is to provide infrastructure and development opportunities for Papua New Guineans.
Jemima Garrett reports.
Presenter: Jemima Garrett
Speaker: PNG’s Prime Minister, Peter O’Neill
GARRETT: In the late 1990’s BHP faced a storm of criticism and legal action over the environmental damage caused by its Ok Tedi copper mine.
The mine had been putting millions of tonnes of waste each year into the Ok Tedi and Fly rivers, causing pollution, flooding and dieback along 800 kilometres of waterways.
In 2002, with its reputation at stake, BHP decided to pull out of Papua New Guinea – handing its shareholding in Ok Tedi over to the people in return for a guarantee that it would not be liable for any more environmental claims.
But the company retained the right to appoint the 3 of the 7 Board members of PNG Sustainable Development Program Ltd – the vehicle for the PNG people’s shareholding.
PNGSDP is an influential player in PNG. Since the Canadian miner, Inmet, sold out of Ok Tedi early last year it holds the lion’s share of Ok Tedi – and Ok Tedi is by far the PNG government’s largest single source of domestic revenue.
PNGSDP has assets of US $1.4 billion and its development program includes everything from roads, wharves and airstips through to health and education programs and help for small business.
PNG’s Prime Minister, Peter O’Neill, says is it is time for BHP Billiton to take a step backwards.
O’NEILL: I think BHP should take its leave at some stage. I’d rather it be sooner than later. BHP has to learn that it has to move on.
GARRETT: BHP Billiton appoints 3 Directors to PNG Sustainable Development Program Ltd. All are Australian.
O’NEILL: Papua New Guineans are now capable of managing their own affairs. We don’t need to be managed the affairs of some of our activities like Sustainable to be managed on our behalf from Melbourne. We believe that it is time that after 10 or 12 years of Sustainable being in operation they relinquish the management of that to a Papua New Guinean-based, Papua New Guinean-run organisation.
GARRETT: PNG’s Prime Minister, Peter O’Neill.
BHP Billiton did not have anyone available to respond to Mr O’Neill’s comments but in a statement it said the results achieved by PNGSDP to date reflect very well on the Board and all directors in the past 10 years.
Any changes to the governance arrangements, it said, should ensure the ongoing sustainable performance of the company.
In the past couple of years, as PNGSDP’s assets have grown, its development program has accelerated.
With the departure of Inmet, Ok Tedi, is now 100%-owned for the benefit of Papua New Guineans and it, too, has been re-orienting its approach to put more emphasis on environmental and social outcomes.
Independent Writer, Martyn Namarong, is one of many Papua New Guineans who agrees with Mr O’Neill that it is time for BHP Billiton to hand over control its PNGSDP Board positions.
NAMARONG: There is enough skills and experience in PNG for Papua New Guineas to be greater involved in that. And that’s sort of a natural follow on from the fact that the mine and the shareholding is now PNG focussed. I don’t think all Papua New Guineans are thieves, or corrupt people, or incompetent people. There are some very decent people around and they can take up those roles. They are just not given the opportunity to do that.
GARRETT: One criticism that has been levelled at PNGSDP is that it is an ATM for expatriats – I guess they mean there is too many expatriates employed, and too many expatriate contractors and consultants. What is your view?
NAMARONG: Yes, that is a reality and I suppose it is because PNG Sustainable Development is sort of like a bank and it has partners who implement projects and these are mainly foreign-owned organisations or stuff like that. I suppose the fact that the Chairman is an expatriate or an Australian, Ross Garnaut, and stuff like that, so maybe he has staff members who are also expatriates. It goes back to my previous comment and that is about greater PNG ownership of that, not just symbolically, but in real terms of Papua New Guineans operating their own affairs with regards to the operation of the mine itself, plus the operations of PNGSDP, and in effect Papua New Guineans determining their own future and moving on from what has been a major environmental disaster.
Papua New Guinea Mine Watch 
PNGSDP Ltd is a success story of which not only mining provinces should follow but at least Agri base also. Although it is registered in Singapore it is PNG managed and owned by PNGans. The fact that the company it is headed by one of PNG’s exemplary leaders, David Sode, it is PNG runned. I don’t think BHP has full control over PNGSDP and I see no problem in BHP Billiton having control over the appointment of the three BOD at all unless they are the sole recruiters of the Chairman. The issue of chairmanship of PNGSDP or any private company should not be raised by any PM as it does not give credibility.
On the other end, to say that PNGan are ready to take control over their own destiny in this context is partial and is not only relevant but it is unbacked given the performance of most SOEs with their BOD headed by so call PNG elits. BHP should continue to appoint three BODs and the company chairman should be headed by an expatriate with the CEO being a PNGan for until next 10 years. If the PM is truly serious about PNG taking charge of their own destiny he should seek counsel form elites of the likes of Sir Mekere Morauta. We should not be arrogant but allow others to assist provide guidance to such important enterprise.
So very wise for all humans to take your advice.
Humility is important.
While the PNG Prime Minister may have a point, I am not convinced by his reasons for the transfer of Board Appointment authority he is seeking from BHPBilliton. The Question he should answer first is; If and when the Appointment Authority is transferred at some point to PNG, will the people be happy to see PNGSDP managed like our SOE’s or will they demand it to be managed the way it is managed currently????
O’Neil should concentrate on his SOE’s, get the simple management basics right and consistently deliver on the outcomes to win the peoples support. O’Neil has consistently flagged that PNG’s biggest problem is NOT money, but Management. Has he fixed that problem in the last 4 months? It’s laughable when he is placing such a demand on an organisation which is well managed and consistently delivering on the promises. Mr. Prime Minister, you better go and get your SOE’s in order and start delivering before you start pushing in this area. Otherwise, your credibility and motive will no doubt be questioned by many in the know. I hope it is your own judgement and conscience that led you to push for a stupid move as such and not by some crook advisors who are good at bluffing and don’t have a clue around what it takes to shape a company to prosper like PNGSDP.
“O’NEIL PLEASE! DON’T TRY TO FIX WHAT’S NOT BROKEN”