The Guardian (Australia)
BHP Billiton and the Australian federal government have come out swinging in response to suggestions that control of a fund – set up to save face over the Ok Tedi mine environmental disaster – should be put in the hands of the Papua New Guinea government. The story hit the front pages when it was announced outgoing Ok Tedi chairman, the multi-functional Ross Garnault, had been banned from entering PNG after comments he made in a newspaper interview cast doubt on the trustworthiness of PNG authorities to carry out such a function.
The name Ok Tedi would be familiar to many Australians. BHP took over control of the copper mine in PNG’s Western Province in the 1980s. Reports of major pollution from the mine had been hitting the media for some time before a report in 1999 finally spilled all the beans. Chemicals from the tailings had contaminated fish and poisoned the water source for 50,000 Indigenous people living in the villages downstream from the mine. Food crops were also contaminated.
BHP wanted out. World copper prices were low and the Ok Tedi operation was a public relations disaster. The “Big Australian” (as BHP was known at the time) set up the PNG Sustainable Development Program (PNGSDP) in 2002 to collect income from the ongoing mining operation and hold it in trust for remediation and further investment in PNG. The public conscience was massaged and it was off to more profitable ventures! BHP maintain a veto on decisions of the fund’s board and – until recently – the “right” to appoint three of the seven board members from the company’s HQ in Melbourne. The mining transnational was supposedly sorry about its disastrous environmental legacy but not that sorry.
There is another twist to the story. Copper prices have surged in recent times and, rather than winding down, Ok Tedi might actually be expanding. The monies sitting in the PNGSDP are considerable and long term reserves are projected to hit $3.7 billion by 2022. Not surprisingly, the PNG government would like to access some of those locked away funds for cash-starved development projects. BHP enraged PNG Prime Minister, Peter O’Neill, by accusing him of blocking the granting of exploration licences to the mining mega-corporation until control of PNGSDP is ceded to his government.
O’Neill was quoted as saying that BHP must drop its “colonial era mentality” and talk about “ending a role there can be no justification for its continuing to play.” He vigorously denied any improper role in dealings with BHP or damaging the investment climate in PNG.
“Last month I addressed 1,400 mining and oil and gas leaders, and financiers in Sydney at the annual PNG Mining and Petroleum Conference. The claim that this issue has undermined confidence could not be further from the truth,” Mr O’Neill said.
The business pages have rallied to the side of BHP Billiton and the federal government. They note that PNG has a reputation internationally for corrupt government. The Australian Financial Review quoted an unnamed industry source who is concerned PNG will “… end up like Nigeria.” AFR international editor Tony Walker wrote “No purpose is served by trading Australian interests, commercial or otherwise, for bad behaviour.” The visa ban on Garnault was “intemperate and outrageous”. The PNG’s actions were a “serious infringement of free speech.”
Attempts to portray BHP Billiton as thanklessly bearing the “white man’s burden” in its dealings with PNG authorities might succeed with a narrow section of the readership of the business press. They won’t succeed with members of the public who recall the terrible images of destruction caused by the Ok Tedi mine and they certainly wont succeed among the peoples of the region who must also be mightily sick of the paternalistic attitude (at best) of successive Australian governments and the corporate interests they have promoted with foreign policy in the region.