The high-stakes world of Papua New Guinea mining

Ian Bickis* | The Northern Miner

Rising out of the sea at the collision of the Pacific and Indo-Australian tectonic plates, Papua New Guinea is the stuff of legend for both its geological potential and punishing working environment.

For miners and explorers, PNG has long presented a tough trade-off between the two, requiring major commitments to access the rich deposits.

In the early 1930s the rugged island was the site of the world’s first major air-supported mining project, when Canadian miner Placer Development used modified Junkers planes to fly in dredge equipment to its Bulolo gold project. With individual payloads of less than 3 tonnes, the Junkers hauled in almost 36,000 tonnes of gear. The determination paid off, with the company pulling out some 1.3 million oz. gold from the river over the next 10 years.

Fast-forward to today and logistics is still one of the biggest barriers to operating in PNG. The whole country has about 3,000 km of paved roads, plus roughly 6,000 km of dirt ones in varying states of repair. (Compare that to Sweden, which has 573,000 km of roads squeezed into the same-sized country.)

The PNG government is aware of the barrier, with Prime Minister Peter O’Neill committing to improve the transportation network in a speech to Australia’s National Press Club last year.

“One of our greatest needs is to repair, upgrade and most certainly expand our economically vital infrastructure,” O’Neill said.

But the lure of riches has been a strong motivator for miners to overcome such challenges independently and develop some of the world’s biggest deposits. These include epithermal deposits like Newcrest Mining’s Lihir mine, which has already produced 9 million oz. gold and still has 33 million in reserves, and Barrick Gold’s Porgera mine, which has produced over 17 million oz. gold and has over 6 million oz. in reserves.

The copper-gold porphyry systems are equally impressive, with the Wafi-Golpu joint venture between Newcrest and Harmony Gold sitting on 28.5 million oz. gold and 20 billion lb. copper; Xstrata’s Frieda River project hosting 14.8 million oz. gold and 20.7 billion lb. copper; and the Ok Tedi mine, now owned by the PNG government, already producing over 11 million oz. gold and 27 billion lb. copper since 1984, with years of mine life left.

Numbers like these put PNG as the third most geologically prospective place on earth in the Fraser Institute’s 2012 annual mining survey, at least when setting aside regulations and land-use policies.

The huge, untapped potential is what drew Marengo Mining) to the country in 2005.

“It was really just born out of looking for an opportunity for a junior company to do something quite exciting and have a project of significant value,” Dean Richardson, Marengo’s investor relations representative, said by phone.

In a few years the company has turned its Yandera copper-gold-moly project into a 4 billion lb. copper resource, with 486 million measured-and-indicated tonnes grading 0.37% copper. Marengo plans to release a feasibility study on the well-advanced project in March, with a development capital expenditure of around US$1.8 billion and anticipated annual production of 200 million lb. copper.

“We’re talking about a project somewhere around 30 million tonnes per annum. It really is a project that a number of medium- to large-size companies would be happy to get their hands on,” Richardson says.

Marengo has several years on PNG Gold, which only started exploring in the country in 2011. But already PNG Gold has pulled some intriguing gold hits, and it plans to have a resource out later this year. Results from the company’s Imwauna project, sitting on an island just off the southern tip of PNG’s mainland, include 6 metres grading 111.97 grams gold per tonne, 4 metres of 49.86 grams gold and 6 metres of 36.16 grams gold.

The company found it rough-going at the start with slower-than-expected drilling, but it is now managing 4,000 metres a month with four of its own rigs, and is well on its way to a resource.

“We had some real teething pains at the beginning,” PNG Gold president Neil Halldorson says.

He adds that the company has had to carry a lot more spare parts and be careful about planning heavy equipment moves, as poor planning with either can set a project back.

“Over time we’ve learned to work with those issues, and with every month we get better at it,” he says.

But Halldorson embraces the challenge, because it keeps a lot of competing juniors away and gives any company that can overcome these challenges a real advantage.

“There are very, very few juniors in Papua New Guinea, and a good deal of that has to do with cost and logistics, and everything else. So it really does act as a barrier,” Halldorson says.

Explorers WCB Resources and Vangold Resources have also made an entrance, with active exploration programs in the country.

But some haven’t fared so well with the high costs, with New Guinea Gold shuttering its small Sinivit gold mine last year after it ran out of money. The company is trying to get itself going again, but with its shares trading at a penny, raising money isn’t easy. Papuan Precious Metals, hovering around 2¢, has also struggled in the country.

Size helps when developing projects in PNG: Newcrest and Harmony are running the Hidden Valley gold-silver mine despite a few operational issues; Metallurgical Corp. of China opened its Ramu nickel-cobalt mine last year despite years of environmental delays; and Newcrest is finishing up a US$1.3-billion expansion of its Lihir mine to expand designed output to a million oz. a year after spending A$9.5 billion buying the mine in 2009.

These projects, plus Exxon Mobil’s US$19-billion natural gas project, have helped keep PNG’s economic growth rate at close to 8% for the past decade.

And while growth has been strong in recent years, the country could see much more investment, thanks to sizeable projects in the pipeline. Australian bank ANZ released a study estimating that PNG’s natural resource sector, including mining, oil and gas, could quadruple by 2030, with some US$25 billion in annual export revenues, or as much as US$38 billion, using more optimistic assumptions. Achieving such an increase in output would require US$130 billion in capital investment.

But those estimates rest on projects going forward, even as several major miners have signalled plans to exit PNG, as companies worldwide look to contain costs and focus on core assets.

In mid-2012, Xstrata signalled its intention to offload its Frieda River project, while a feasibility study on the project at the end of last year added US$300 million to project capex, which totalled US$5.6 billion. In 2011, Inmet Mining bowed out of PNG after selling off its 18% interest in Ok Tedi Mining for US$355 million.

On a smaller scale, Newmont Mining told its junior partner Triple Plate Junction that it would end its search for big porphyry systems at Morobe after spending US$15 million to earn 75% of the project.

And Barrick informed joint-venture partner Coppermoly in mid-2012 that it was looking to sell its 72% stake in three tenements after spending US$22 million to earn-in on the properties.

And some smaller skirmishes with companies may make others wary of PNG. Last year Aldridge Minerals pulled out of PNG after the government declined to renew the junior’s Kili Teke copper-gold licence. And more publicly, Nautilus Minerals  has been stymied in its efforts to advance the world’s first major deep-sea mining project after getting embroiled in licensing and financial disagreements with the government. The company suspended construction of the $450-million project late last year.

While cost and operational risks worry some, mining analyst Cathy Moises of Evans and Partners, who tracks several operators in the country, said by phone that:

“as long as you do your groundwork in PNG, you’ve got the locals on side, and have done things the right way — then it’s actually a very good place to work.”

Good relations with locals are important in PNG, as landowners control 97% of the country, and there are no large tracts of government land.

Companies big and small have had trouble with landowners, with Barrick’s Porgera, Newcrest’s Lihir mine and New Guinea Gold’s ailing Sinivit mine all shut down by locals last year.

But Moises downplays the problems with landowners.

“It’s not a major issue. If the mine is shut down it’s usually short in duration, and minor,” she says. “PNG tends to be fairly stable.”

Moises still likes what she sees in PNG, even if it’s a country that doesn’t give up its deposits easily.

“I still think there are some big projects to be found. The terrain and working over there is difficult, so it certainly hasn’t had the attention of some other countries where it’s nice and flat, and you’re much closer to civilization.”

*Ian Bickis is a freelance writer and multimedia editor based in Southeast Asia, and a former staff writer at The Northern Miner. He can be contacted by email at ibickis@gmail.com.

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Bougainville Mining forum updates leaders

Winterford Toreas | Post Courier

THE 2nd regional forum concerning the possible reopening of the Panguna Mine in Central Bougainville is currently underway at the Hutjena Secondary School Hall in Buka.

The forum, which was officially opened by the ABG President Chief Dr John Momis was attended by participants from the four districts of Selau/Suir, Tinputz, Kunua and Torokina Districts in Bougainville.

ABG Ministers Michael Oni (Mining), Rev. Joseph Nopei (LLG and Media Communications) and constituency members from the above four districts were also present during the forum.

The forum started on Monday and ended yesterday, and is aimed at engaging and updating various stakeholders and the wider community in the above districts on the progress of preparing the ABG and the landowners to participate in negotiations.

This forum will also be used to gauge the views of people in these four districts regarding the possible reopening of the Panguna Mine.

Before officially opening the forum, Mr Momis said many people always get worried about the outcomes, without thinking about the process to achieve these outcomes.

“When people are worried about the outcome, I say to them ‘do not worry about the outcome, worry about the process.’ Get the process right and the outcome will be delivered,” Mr Momis said.

Mr Momis also pointed out during his speech some of the decisions and processes which had led to the outbreak of the Bougainville crisis, saying that if there were proper consultations with the landowners and the wider communities this crisis would not have happened. He then said that the reopening of the mine would successfully take place following  proper consultations being carried out.

The President also added that the ABG believes in consultative and conceptual approaches to
decision making between the landowners, and stakeholders and the ABG.

The forum is spearheaded by the Office of the Director for Panguna Negotiations and will be facilitated by the ABG Mining Department, Division of Law and Justice and the Office of Panguna Negotiations.

The first regional forum was held in November last year and was attended by various stakeholders from Buka, Nissan and the  Atolls districts in North Bougainville.

Many of those that attended the first forum had expressed that they supported the idea of re-opening the Panguna Mine. This was because they saw that once the mine is reopened, it will help generate revenue for Bougainville.

Consultations with the mine affected and impacted landowners and other stakeholders like the former combatants have also been completed.

Resource owners adamant to have input in PNG’s Panguna plans

Radio New Zealand

A representative of resource owners in the Panguna region of Papua New Guinea’s Bougainville says they want to ensure they have control of the province’s new mining policy.

The deputy head of the Bougainville Resource Owners Representative Council, Chris Damana, says this week’s forum in Buka is invaluable for airing concerns about a possible re-opening of the huge moth-balled mine.

He says they have been critical of Canberra’s apparent involvement in drawing up the province’s new mining policy which he says brings back memories of what happened more than 40 years ago when the controversial mine was started.

But Mr Damana says the resource owners have been assured it is only a draft and they will have input.

“We, the resource’s owners are trying to take some control on this. I mean we want to make this mining policy as ours, because it will bless us or it will affect us in the future.”

US giant using SOPAC and illegal Fiji regime to access seabed minerals in international waters

The illegal government in Fiji is being squeezed by the American corporate giant, Lockheed Martin, to sponsor its search for seabed minerals in international waters. To that end, Lockheed is pushing the Fiji regime to fast track legislation and is being assisted in this endeavor by the Deep Sea Minerals Project (run by SOPAC,  part of the Secretariat of the Pacific Community) and its British lawyer, Hannah Lily.

Fiji’s cabinet is expected to approve a new Decree on seabed mineral management by March the 5th. Consultation on the draft Decree has been fast tracked with relevant stakeholders given less than 3 days to make submissions whilst US giants Lockheed were consulted well in advance.  The new law is required before Lockheed will enter into a formal joint-venture with the Fiji regime. Lockheed will then apply in April to the International Seabed Authority for a new exploration licence.

The new law, which SOPAC, has assisted in drafting, makes vague statements about applying a precautionary approach and best environment practices and requiring Environment Impact Assessments but without specifying where or how Fiji is suddenly to get the expertise to manage and enforce these.

Lockheed has already been granted approval by the International Seabed Authority to explore for polymetallic nodules in one area in partnership with the UK government. It now wants to join Fiji as its official national partner for further exploration licences – but first Fiji needs to have the necessary laws to allow seabed mining in place.

The proposed legislation covers the various aspects and issues arising out of experimental seabed mining operations, including establishing a regulatory authority within Fiji, and introducing a licensing regime, provisions on the protection of the marine environment, and delineating Fiji’s and the company’s duties and responsibilities.

Hannah Lily, employed as a legal adviser by SOPAC, seems to have been advising on the drafting process directly on behalf of Lockheed (LH). Here are some of her comments on a draft version of the new law:

• “LH would not accept the jurisdiction of the courts of Fiji, in case of dispute. The sub-contract would specify that the parties would be subject to UK law and courts. LH therefore suggest section 14 be deleted to avoid confusion. However UNCLOS Art 235 requires that: “States shall ensure that recourse is available in accordance with their legal systems for prompt and adequate compensation or other relief in respect of damage caused by pollution of the marine environment by natural or juridical persons under their jurisdiction”. the ITLOS Advisory Opinion summarises this as ‘requiring the sponsoring State to establish procedures, and, if necessary, substantive rules governing claims for damages before its domestic courts’. Whether the proposed Fiji / LH model can navigate this requirement and LH’s requirement for UK arbitration remains  a point to be explored”
• “LH consider it unfair both to be charged the admin fee and to require the Company to cover its application costs. They suggest it should be one or the other, not both.  “LH would expect a standalone non-disclosure agreement to cover Fiji’s handling of their commercial data”
• “Query whether there is a reason Fiji would like this notice period to be so lengthy? LH would prefer this to be shorter, or if that is not possible to clarify that they would not be penalised for failure to conduct activities during that 6-month notice period”
• “LH request to delete, otherwise Fiji could unilaterally revoke the licence after 2 years’ inaction, which creates too great an uncertainty for the company”
• “LH request that  these specific figures are removed from the Decree and replaced with a provision permitting  the Government to negotiate financial terms in a Sponsorship Agreement. NB The suggested fees are too high for LH. The UK rates (GBP 10k for application, 15k for first year, 25k after 6 years , 25k on each extension), which use an actual cost recovery mechanism would be more feasibl for LH –  perhaps with some small room for negotiation, given that this  is a developing country”
• “LH would require that the contract stipulates the UK as the prevailing law and dispute resolution mechanism”

The International Sea Bed Authority (ISBA) which regulates the leasing of seabed deposits have not yet developed a mining code to regulate the exploitation of minerals in international waters.  NGOs have raised serious concerns about the experimental nature of the industry as well as its relevance as a development option for island nations.  In addition NGOs have raised concerns about the need to protect the marine environment, prevention of pollution from seabed activities and whether states such as Fiji have the ability to monitor the environment impact.

New Dawn updates from Second Panguna Forum

SECOND FORUM OPENS

Aloysius Laukai

The second forum on Panguna negotiations for North Bougainville, that covers Bougainville mainland from Tinputz, Kunua, Kereaka,Selau and Suir officially opened this morning at the Hutjena Secondary School hall on Buka island.

The first forum was held last year at the same location but covered areas in North Bougainville starting from Tasman islands, Nissan district, Atolls and Buka district.

The aim of all these workshops is to gauge the views from all Bougainvilleans on the upcoming Bougainville Copper Agreement negotiations.

Other districts that are yet to stage these forums are Buin and Bana in South Bougainville and Panguna and Kieta district in Central Bougainville which are scheduled for March this year.

In his welcome remarks this morning, the ABG Mining Minister, Michael Oni said that it was an opportunity again for all stake holders to meet and discuss issues affecting the region today in terms of the Panguna negotiations.

The meeting is being attended by leaders from both the Mekamui faction led by its President Philip Miriori and his deputy Philip Takaung and other leaders from Central Bougainville.
ABG President Dr John MomisS is also attending this forum with ABG Ministers and members of ABG.

The two-days forum will end tomorrow afternoon.

OPENING DEBATED

Aloysius Laukai

There are interesting debates coming out from the second mining forum on the future of the Panguna mine, one of which included the President of the Mekamui Government of Unity, Philip Miriori who has commented that at present he opposes the reopening of the Panguna mine until and after all outstanding issues amongst the Panguna landowners and the people of Bougainville are sorted out.

Mr. Miriori said that there are alot of issues that needs to be addressed before the Panguna mine can be re-opened.

His presentation was supported by his deputy Philip Takaun, Lyned Ona and Lord Blaise Iruinu.

All the ABG members who did their presentations all called on the people of Bougainville to complete all outstanding issues and look at the economy that was not able to sustain the Autonomous arrangement which Bougainville is entangled in.

The members that talked this morning were the Member for Torokina, Steven Suako, the member for Suir, Luke Karaston and the member for Taunita Teop MICHA MOSE.

Mr. Mose said that if Panguna is difficult to address then the ABG must fast tract its policy on mining so that other areas can open one mine to support the economic recovery efforts of the ABG.

LERA WANTS PEOPLE’S PARTICIPATION

Aloysius Laukai

The Regional Member for Bougainville, Joe Lera wants Bougainvilleans to unite and discuss the economic recovery of Bougainville.

He made these remarks at the second forum that is discussion the future of the Panguna mine in Buka today.

MR. Lera also praised the ABG for initiating the forum which has gathered all factions of the Bougainville conflict to come and discuss important issues that continues to affect the development of the region.

The Regional member said that it was healthy for the people to debate issues that continues to disturb the peace process.

Mr. Lera also announced that he has already established education institutions on Bougainville starting this year to train Bougainvilleans to work if the mine or any other big business activities resume on Bougainville.

The Regional member said that the Prime Minister of PNG, Peter O’Neil was very supportive of the rebuilding process on Bougainville.

He also announced other projects that could be developed to help support the economy of Bougainville, with projects like Tourism, Education programs, Fisheries and other activities.

Australia warned to stay out of Bougainville affairs

PACNEWS

Former Bougainville Revolutionary Army commander Sam Kaona has warned Australia not to meddle in Bougainville affairs.

He said the first policy draft on mining in Bougainville was no different from the colonial policy that caused the crisis.

“The Australians have taken control of mining policy in Buka and the first policy draft by ABG legal unit headed by Tony Regan is no different from the previous policy,” Kaona, who is chairman of the recently formed Bougainville Resources Owners Representative Council, said.

He added that the proposed policy, sponsored by AusAID and drafted by Regan, risked Bougainville’s first constitutional crisis.

“Since the constitution is the supreme law of Bougainville, section 23 of the Bougainville constitution, which restores ownership of resources on Bougainville to the customary landowners, is the only option that is constitutionally legal.

“So any attempt to impose any other resource ownership system would be invalid and ineffective – they are risking a constitutional crisis.”

Resources rights activist Simon Ekanda shared similar sentiments.

“Bougainville mining policy does not belong to Regan, BCL (Bougainville Copper Ltd) or the Australians, it belongs to the resource owners and the people of Bougainville.

“This is to be a Bougainville mining policy written by Bougainvilleans in Bougainville for the Bougainville resource owners and people.

“

Section 23 of the Bougainville constitution returning the resource ownership to the customary landowners is to be the foundation of that policy.

“Let me be absolutely clear – there will be no compromise on this.

“The Panguna landowners must determine that their interests will be best served by securing a special mining lease over their resource and then to entertain qualified mining companies with the view to putting Panguna back into production.

He also cautioned ABG President John Momis to be careful with the new mining policy.



“Both PNG and Bougainvilleans have died and it is unwise if Momis allows colonial administrators to rewrite Bougainville mining laws.”.

CLRC asks: ‘Should river and marine tailings dumping be banned?’

PNG to canvass views for mine tailings law

Radio New Zealand

Officials from Papua New Guinea’s Constitutional and Law Reform Commission will be interviewing people most affected by the practise of marine disposal of mine tailings in order to help formulate a law.

Despite ongoing calls from locals to regulate the practice, PNG still has no law on mine tailings.

The commission is still reviewing environment and mining laws, but its secretary Dr Eric Kwa says it also wants to prioritise consultations with communities near various mining sites.

“Two of the questions that we are asking is that the first one is should mine waste tailing into the river system be banned in Papua New Guinea. And the other one is should mine tailings dumping in the sea be banned. So those are straight forward questions that we’re after. So it’s a bit of a challenge for us, but we’ll get there somehow.”

Public hearings on experimental seabed mining in Alotau next week

The Warden Hearing on an allocation by Nautilus Minerals to explore the seabed in Milne Bay Province is scheduled for 5th and 7th March,  in Alotau.

Members of the public are invited to attend to have their say on Nautilus’s experimental seabed mining plans.

Fiji’s draft law on experimental seabed mining – to be ratified tomorrow

GOVERNMENT OF FIJI

__________

INTERNATIONAL SEABED MINERAL MANAGEMENT DECREE 2013

(Decree No… of 2013)

IN exercise of the powers vested in me as the President of the Republic of Fiji and the Commander in Chief of Fiji Military Forces by virtue of the Executive Authority of Fiji Decree 2009, I hereby make the following Decree –

TO GOVERN THE RIGHTS AND OBLIGATIONS OF PERSONS ENGAGED IN SEABED MINERAL ACTIVITIES IN THE AREA BEYOND NATIONAL JURISDICTION UNDER THE SPONSORSHIP OF FIJI, AND THE ASSOCIATED ADMINISTRATIVE FUNCTIONS OF THE STATE

PART 1: PRELIMINARY

Short Title and Commencement

1. This Decree may be cited as the International Seabed Mineral Management Decree 2013, and shall come into force on a date appointed by the Minister by notice published in the Gazette.

Interpretation

2. In this Decree, unless the context other requires –

 “The Area” – means the seabed and ocean floor and subsoil thereof beyond the limits of national jurisdiction, as defined in Article 1(1) of the UN Convention on the Law of the Sea.

“Contract Area” – means any part of the Area in respect of which there is in force a contract between a Sponsored Party and the ISA for the conduct of Seabed Mineral Activities.

 “Exploitation” – means the recovery within the Area for commercial purposes of Seabed Minerals and the extraction of minerals therefrom, including the construction and operation of all mining, processing and transportation systems for the production and marketing of metals, insofar as these activities take place at-sea.

“Exploration” – means the –

(a)  search within the Area for Seabed Mineral deposits with exclusive rights;

(b)  the sampling and analysis of such deposits,

(c)   the testing of systems and equipment, and

(d)  the carrying out of studies,

for the purpose of investigating whether those minerals can be commercially exploited.

“Fiji” – means the Republic of Fiji.

“The Fiji International Seabed Sponsorship Authority” shall be the Ministry of Foreign Affairs of the Government of Fiji.

An “Incident” occurs when –

(a)  any ship or installation or other similar item or structure while engaged in Seabed Mineral Activities is lost, abandoned, capsized or incurs significant damage;

(b)  loss of life or injury requiring hospitalisation occurs on board any ship or installation while engaged in Seabed Mineral Activities, except in the case of a loss of life that is certified by an independent medical practitioner as being the result of natural causes;

(c)   the conduct of Seabed Mineral Activities results in significant adverse impact to or unlawful pollution of the Marine Environment; or

(d)  the ISA issues an emergency order in connection with the Seabed Mineral Activities.

“The International Seabed Authority” or “ISA” – means the International Seabed Authority established by Part XI Section 4 of the UN Convention on the Law of the Sea as the organisation through which States Parties to the UN Convention on the Law of the Sea shall organise and control Seabed Mineral Activities in the Area.

“Marine Environment” – means the environment of the sea, and includes the physical, chemical, geological, biological and genetic components, conditions and factors which interact and determine the productivity, state, condition and quality of the marine ecosystem, the waters of the seas and oceans and the airspace above those waters, as well as the seabed and ocean floor and subsoil thereof.

“Marine Scientific Research” – means any lawful study, research or other related scientific activity within the Area, whether fundamental or applied, intended to increase knowledge about the Marine Environment for the benefit of all mankind, and not undertaken directly for industrial or economic purposes, and not significantly altering the surface or subsurface of the deep seabed nor significantly affecting the Marine Environment.

“The Minister” and “the Ministry” – means the Minister of Foreign Affairs and Ministry of Foreign Affairs within the Government of Fiji.

“The Official Working Group” means the official working group on deep sea minerals established by the Government of Fiji’s Cabinet Decision CP(11)316 of 11 October 2011, as further elaborated by Part 2 of this Decree.

“Person” – means any natural person or business enterprise and includes, but is not limited to, a corporation, partnership, cooperative, association, the State or any subdivision or agency thereof, and any foreign State, subdivision or agency of such State or other entity.

“The Precautionary Approach” – means that, in order to protect the environment, where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.

“Prescribed”– means prescribed by Regulations or other subordinate legislation made under this Decree.

“Public Official” –means a person in the permanent or temporary employment of the Government of Fiji.

“The Qualification Criteria” – means the criteria that must be met before a Sponsorship Certificate can be issued, as stipulated in section 20(2) of this Decree.

“Rules of the ISA” – means any rules, regulations, or procedures adopted by the ISA pursuant to powers conferred on the ISA by the UN Convention on the Law of the Sea that are from time to time in force, and any contractual terms contained in a contract between the ISA and a Sponsoring Party relating to Seabed Mineral Activities.

“Seabed Minerals” – means the hard mineral resources of any part of the Area, including those in crust, nodule or hydrothermal deposit form, which contain (in quantities greater than trace) metalliferous or non-metalliferous elements.

“Seabed Mineral Activities” – means operations for the Exploration or Exploitation of Seabed Minerals within the Area under contract with the ISA, and under Fiji’s sponsorship under this Decree.

“Sponsored Party” – means a person who holds a current Sponsorship Certificate validly issued under Part 3 of this Decree, that person’s representatives or officers, and any person or persons to whom the Sponsorship Certificate may lawfully have been assigned.

“Sponsorship Applicant” – means a person applying for a Sponsorship Certificate under this Decree.

“Sponsorship Application” – means a Sponsorship Application made by a person for a Sponsorship Certificate under this Decree.

“Sponsorship Certificate” – means a certificate validly issued by Fiji under Part 3 of this Decree.

“Sponsoring State” – means a State Party to the UN Convention on the Law of the Sea, sponsoring a person to carry out exploration or exploitation in the Area in accordance with Article 153(2)(b) of the UN Convention on the Law of the Sea.

“The UN Convention on the Law of the Sea” – means the United Nations Convention on the Law of Sea of 10 December 1982 entered into force on 16 November 1994; the 1994 Agreement Relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982, and any Annexes thereto.

Scope of this Decree

 3.

(1)  The objectives of this Decree are to –

(a)  establish a clear and stable legal operating environment for persons sponsored by Fiji to undertake Seabed Mineral Activities in the Area;

(b)  ensure that Seabed Mineral Activities are carried out under Fiji’s effective control, and in a manner that is consistent with the Rules of the ISA and Fiji’s responsibilities under the UN Convention on the Law of the Sea, and other applicable requirements of international law.

(c)   implement measures to maximise the benefits of Seabed Mineral Activities for present and future generations of Fijian people.

(2)  In order to achieve its objectives, this Decree inter alia –

(a)  Identifies the responsible regulatory authority within Government to manage Fiji’s involvement with Seabed Mineral Activities.

(b)  Establishes a system for the Sponsorship Application for, and grant of Sponsorship Certificates under which Sponsored Parties will be authorised to engage in Seabed Mineral Activities under specific and enforceable conditions.

(c)   Provides for the payment to Fiji of fees, royalties, and taxes in respect of Seabed Mineral Activities.

(3)  This Decree is made on the basis that the Rules of the ISA and the ISA’s monitoring and enforcement capacity will be developed in an appropriate and timely manner with for the purpose of securing that Seabed Mineral Activities will comply with relevant standards and obligations of international law.

Jurisdiction

4. By the enactment of this Decree, Fiji recognises

(a)  The seabed resources of the Area to be the common heritage of mankind;

(b)  That the rights to the Area are governed by the UN Convention on the Law of the Sea and the Rules of the ISA;

(c)   The ISA’s responsibility under the UN Convention on the Law of the Sea to organise and control activities in the Area on behalf of mankind as a whole, including to:

(i)    Process Sponsorship Applications for approval of plans of work for exploration and exploitation in the Area;

(ii)  Monitor compliance with plans of work, approved in the form of a contract, including through a staff of inspectors;

(iii) Adopt rules, regulations and procedures necessary for the conduct of exploration and exploitation in the Area; and

(iv) Adopt rules, regulations and procedures incorporating applicable standards for:

(a)    the protection and preservation of the natural resources of the Area and the prevention of damage to the flora and fauna of marine environment,

(b)   the prevention, reduction and control of: pollution and other hazards to, and the interference with the ecological balance of, the marine environment.

(v)  Exercise such control over activities in the Area as is necessary for the purpose of securing compliance with the UN Convention on the Law of the Sea and the Rules of the ISA by contractors carrying out activities in the Area

(d)  The responsibility of States Parties to the UN Convention on the Law of the Sea, including the Republic of Fiji, to assist the ISA in exercising the duty outlined in section 4(c)(v) of this Decree; and

(e)   The duty of a Sponsoring to effectively control any person engaged in activities in the Area under its sponsorship, in order to ensure conformity of those activities with the UN Convention on the Law of the Sea and the Rules of the ISA.

PART 2 – FIJI’S ADMINISTRATION FOR SPONSORSHIP OF SEABED MINERAL ACTIVITIES

The Ministry as Fiji’s International Seabed Mineral Sponsorship Authority

 5.

(1)  The Minister (acting through the Ministry) shall be responsible for Fiji’s sponsorship and regulation of Seabed Mineral Activities.

(2)  In undertaking this role, the Minister shall be known as the Fiji International Seabed Sponsorship Authority (or the ‘FISSA’) and shall have all reasonable powers required for the performance of any of its functions, including a power to appoint such persons qualified for the purpose, to assist in the discharge of the FISSA’s functions.

(3)  The FISSA shall:

(a)  solicit and take into account in its decision-making any recommendations from the Official Working Group,

(b)  Act in a way that is compatible with principles of best regulatory practice, including that regulatory activities should be proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed.

Consultation

10. The FISSA may at any time and in any way that it sees fit consult with persons of relevant expertise, interest groups, or the general public before taking a decision or action under this Decree.

Objectives of the FISSA

6. The FISSA has the following objectives –

(a)  To provide a stable, transparent and accountable regime within Fiji for the sponsorship of Seabed Mineral Activities;

(b)  To maintain effective control of Seabed Mineral Activities and the protection and preservation of the Marine Environment, by securing compliance by Sponsored Parties with relevant rules and internationally agreed standards;

(c)   To ensure that the conduct of Seabed Mineral Activities maximises benefits to Fiji and its people.

Functions of the FISSA

12. The FISSA has the following functions, to –

(a)  Receive and determine Sponsorship Applications, and prepare and issue Certificates of Sponsorship for successful Sponsorship Applicants;

(b)  Liaise with the ISA and any other relevant international organisations to facilitate a Sponsored Party’s  application to the ISA for a contract, and Fiji’s and its Sponsored Parties’ understanding of and compliance with relevant international laws, standards and rules;

(c)   Assist the ISA in its work to establish, monitor, implement, and secure compliance with the Rules of the ISA;

(d)  Undertake any advisory, supervisory or enforcement activities in relation to Seabed Mineral Activities or the protection of the Marine Environment, in the event this is required in addition to the ISA’s work in order for Fiji to meet its obligations as Sponsoring State;

(e)   Require and review relevant reports and information, and maintain appropriate records, pertaining to Seabed Mineral Activities.

The Official Working Group

 13.

(1)  The Official Working Group shall, upon the FISSA’s request, provide technical and policy advice and recommendations to the FISSA to assist the FISSA in the performance of its functions.

(2)  The Official Working Group shall be composed of officials and other members as shall be determined by the Minister from time to time.

High Court Jurisdiction

14. The High Court may conduct –

(a)   judicial review of administrative decisions, determinations or inquiries taken under this Decree, or

(b)  proceedings to establish liability and to provide recourse for compensation from a Sponsored Party in the event of unlawful damage caused by Seabed Mineral Activities, in accordance with Article 235(2) of the UN Convention on the Law of the Sea.

PART 3 – SPONSORSHIP APPLICATION AND APPLICATION TO THE ISA

Invitation for Sponsorship Applications

15. The FISSA may in any manner it sees fit invite Sponsorship Applications, or entertain discussions with Sponsorship Applicants or potential Sponsorship Applicants.

Eligibility to Perform Seabed Mineral Activities

16. To be eligible to perform Seabed Mineral Activities a person must first –

(a)  obtain a valid Sponsorship Certificate from the FISSA, and

(b)  obtain a valid contract from the ISA,

pertaining to those Seabed Mineral Activities.

The processing of Sponsorship Applications

17. The FISSA –

(1)  Must deal with Sponsorship Applications promptly, and in accordance with this Decree;

(2)  May request further information from a Sponsorship Applicant, or request the Sponsorship Applicant to amend any part of its Sponsorship Application, at any time before making a recommendation under section 21 of this Decree and/or may return an Sponsorship Application without a decision if the Sponsorship Applicant fails to comply with a request under this sub-section.

Evidence

18.

(1)  In making a recommendation under section 21 of this Decree, the FISSA may take into account any or all of the information submitted by the Sponsorship Applicant, and any relevant information in the public domain, received from the Official Working Group or other consultation, or otherwise held in the Government of Fiji’s records.

(2)  A previous decision by the ISA to grant a Sponsorship Applicant a contract for activities similar to those that are the subject of a Sponsorship Application may be considered by the FISSA as evidence in relation to any of the Qualification Criteria for that Sponsorship Application.

Content of a Sponsorship Application

19. A Sponsorship Application must be made in writing to the FISSA and must –

(1)  provide evidence that the Sponsorship Applicant meets the Qualification Criteria, and

(2)  include –

(a)  the same content that is required by the Rules of the ISA for an application for approval of a plan of work to obtain a contract for the proposed Seabed Mineral Activities,

(b)  written undertakings that the Sponsorship Applicant –

(i)    will fully comply with its obligations under the Rules of the ISA and this Decree;

(ii)   warranties that the content of the Sponsorship Application is true and accurate to the best of its belief, and

(iii) intends to apply for a contract with the ISA to conduct Exploration or Exploitation in the Area under sponsorship by Fiji;

(c)   Copies or summaries of any studies conducted by the Sponsorship Applicant or other data in relation to the potential of the site or sites within which the proposed Seabed Mineral Activities will be conducted;

(d)  Copies or summaries of any studies conducted by the Sponsorship Applicant or other data in relation to potential impact of the Seabed Mineral Activities on the Marine Environment;

(e)   A financing plan and evidence of actual or intended ownership or lease of vessels and equipment required for the operation of the Seabed Mineral Activities;

(f)    A list of employees required to operate the Seabed Mineral Activities, and an indication if any of these will be recruited from Fiji;

(g)  A capacity-building programme providing for the training of personnel of Fiji;

(h)  Evidence of insurance or contingency funding adequate to cover damage that may be caused by the Seabed Mineral Activities or the costs of responding to an Incident;

(i)    The fee required by section 38(1) of this Decree;

(j)    A statement as to whether the Sponsored Party or any of its Directors has previously been found on reasonable evidence to have:

(i)    breached a material term or condition of the Rules of the ISA,

(ii)  been convicted of an offence or incurred a civil penalty pertaining to the conduct of Seabed Mineral Activities or similar sea or land based activities in another jurisdiction; or

(iii)  been convicted of an offence involving fraud or dishonesty;

(k)   Any further matters as may be Prescribed.

Qualification Criteria

 20.

(1)  The FISSA may recommend the issue of a Sponsorship Certificate if it is satisfied that the undertakings required by section 19 have been given and the Qualification Criteria are met.

(2)   The Qualification Criteria are that –

(a)  the Sponsorship Applicant:

(i)    is an existing body corporate, registered in Fiji;

(ii)  has, or will have at the commencement of the proposed Seabed Mineral Activities,  sufficient financial and technical resources and capability, to:

(a)   properly perform the Seabed Mineral Activities in compliance with the Rules of the ISA; and

(b)   to cover damage that may be caused by the Seabed Mineral Activities or the costs of responding to an Incident

(iii) has paid any applicable fees;

(b)  That  the proposed Seabed Mineral Activities are consistent with the Rules of the ISA in relation to environmental management;

(c)   Compatibility of the proposed Seabed Mineral Activities with applicable national and international laws, including those relating to safety at sea;

(d)  That the proposed Seabed Mineral Activities will not unduly affect:

(i)    the rights other legitimate sea users, or

(ii)    international peace and security; and

(e)   That the Seabed Mineral Activities  will not result in irreparable harm to any community, cultural practice or industry in Fiji, and would be generally in the public interest of the country, taking into account the potential for capacity-building and/or local employment and the long-term economic benefit to Fiji.

Sponsorship Certificate Recommendation

21. The FISSA must make a recommendation to the Cabinet whether to issue the Sponsorship Applicant with a Sponsorship Certificate or deny the Sponsorship Applicant a Sponsorship Certificate.

Notice of Sponsorship Certificate Decision

 22.

(1)  Within 10 days of a Sponsorship Certificate decision having been taken by the Cabinet the FISSA will inform the Sponsorship Applicant, and where the decision is to deny the Sponsorship Certificate, will at the same time provide a written statement of reasons for that decision.

(2)  Where a decision is taken by the Cabinet to issue a Sponsorship Certificate, public notice of the decision will be given by the FISSA within 30 days of that decision.

Terms of the Sponsorship Certificate

23. A Sponsorship Certificate, signed by the Minister, shall be issued to the Sponsored Party and shall be in a form necessary to satisfy the Rules of the ISA, and shall contain –

(a)  the name of the Sponsored Party;

(b)  a statement that the Sponsored Party is –

(i)    a national of Fiji; or

(ii)  subject to the effective control of Fiji or its nationals;

(c)   a statement by the State that it sponsors the Sponsored Party;

(d)  the date of deposit by the State of its instrument of ratification of, or accession or succession to, the UN Convention on the Law of the Sea;

(e)   a declaration that the State assumes responsibility in accordance with article 139, article 153, paragraph 4, and Annex III, article 4, paragraph 4, of the UN Convention on the Law of the Sea;

(f)    the period of time for which the Sponsorship Certificate shall remain in force unless otherwise terminated in accordance with this Decree;

(g)  any other content reasonably required by the ISA or that the FISSA considers fit to include.

Application by Sponsored Party to ISA

 24.

(1)  A Sponsored Party may, on the basis of the Sponsorship Application, submit an application to the ISA for a contract to Explore or Exploit in the Area under Fiji’s sponsorship.

(2)  The FISSA will provide all reasonable cooperation with the Sponsored Party to facilitate the preparation, submission and support of the application to the ISA.

(3)  The costs of presenting that application to the ISA, including any costs incurred by Fiji in supporting the application before the ISA, will be met by the Sponsored Party.

PART 4 – OBLIGATIONS OF SPONSORED PARTIES

Duties pertaining to Seabed Mineral Activities

25. Any person engaging in Seabed Mineral Activities is required, inter alia, to:

(1) Adhere to the provisions of the Rules of the ISA and this Decree.

(2)  Comply with, and provide sufficient training, supervision and resources to employees, agents or officers so as to ensure compliance with the Rules of the ISA and any other instructions or requests of the ISA.

(3)  Facilitate the ISA’s and the FISSA’s monitoring of Seabed Mineral Activities in accordance with the Rules of the ISA and this Decree and comply with the reasonable requests, directions or orders of ISA inspectors or FISSA observers.

(4)  Apply the Precautionary Approach, and employ best environmental practice in accordance with prevailing international standards in order to avoid,  mitigate, or remedy the adverse effects of Seabed Mineral Activities on the Marine Environment;

(5)  Offering to Fiji opportunities for training in relation to, and participation in, the Seabed Mineral Activities;

(6)    At all material times maintain appropriate insurance policies that provide adequate cover for identified risks and costs of damages that may be caused by the Seabed Mineral Activities, or otherwise satisfy Fiji of its financial and technical capability to respond to potential Incidents;

(7)  Report to the ISA and the FISSA immediately in the event of an Incident occurring or appearing reasonably likely to occur; and respond efficiently and responsibly to the Incident, including by seeking and following the ISA’s, and the FISSA’s directions where appropriate.

(8)    Submit to the ISA and the FISSA immediately in writing notice of any new information arising or data collected that materially affect:

(a)  the Qualification Criteria,

(b)  the programme of work, or

(c)    the Sponsored Party’s ability to adhere to the terms of the Rules of the ISA;

(9)    Not dump mineral materials or waste from any vessel except in accordance with relevant international law or the Rules of the ISA.

(10) Not proceed or continue with the Seabed Mineral Activities without obtaining prior written consent from the ISA to proceed, if evidence arises that to proceed is likely to cause significant adverse impact to:

(a)  the Marine Environment that was not anticipated in any environmental impact assessment previously conducted,

(b)  the safety, health or welfare of any person, or

(c)   other existing or planned legitimate sea uses including but not limited to Marine Scientific Research, navigation, submarine cables, fisheries or conservation activities.

(11)  Upon submitting data, reports or other information to the ISA in relation to the Seabed Mineral Activities, ensure that the content of these documents are true, accurate and comprehensive, and provide copies of the same to the FISSA;

Liability of Sponsored Party and indemnity against third party claims

 26.

(1)  A Sponsored Party shall be responsible for the performance of all Seabed Mineral Activities carried out within the Contract Area, and their compliance with the Rules of the ISA; and will be liable for the actual amount of any compensation, damage or penalties arising out of its failure so to comply, or out of any wrongful acts or omissions in the conduct of the Seabed Mineral Activities.

(2)  A Sponsored Party shall at all times keep Fiji indemnified against all actions, proceedings, costs, charges, claims and demands which may be made or brought by any third party in relation to its Seabed Mineral Activities.

PART 5 – ROLE OF FIJI AS SPONSORING STATE

Duties as Sponsoring State

27. Fiji, via the FISSA, will

(1)  ensure that its conduct in relation to the ISA, the Area and Seabed Mineral Activities adheres to the requirements and standards established by general principles of international law;

(2)  take all appropriate means to exercise its effective control over Sponsored Parties, seeking to ensure that any Seabed Mineral Activities are carried out in conformity with the UN Convention on the Law of the Sea, the Rules of the ISA and other requirements and standards established by general principles of international law;

(3)  do all things reasonably necessary to give effect to its sponsorship of a Sponsored Party, including undertaking any communications with, and providing any assistance, documentation, certificates and undertakings to the ISA or other relevant party required in respect of the Sponsorship;

(4)  avoid imposing unnecessary, disproportionate, or duplicate regulatory burden on Sponsored Parties;

(5)  not impose requirements upon a Sponsored Party under this Decree or Regulations to be made under this Decree except insofar as these are consistent with, and take into account existing requirements imposed by, the UN Convention on the Law of the Sea, the Rules of the ISA and other applicable standards of international law;

(6)  Promote the application of the Precautionary Approach.

Monitoring powers

28. The FISSA reserves the power to make such examinations, inspections and enquiries of Sponsored Parties and the conduct of Seabed Mineral Activities as are necessary to meet its responsibilities under international law as a Sponsoring State, which may include the sending of an observer to the site of the Seabed Mineral Activities and vessel or premises of the Sponsored Party from time to time, upon giving reasonable notice to the Sponsored Party.

Administrative action

29.

(1)  In the event of the FISSA determining that a Sponsored Party has materially breached, or is at serious risk of materially breaching, the Rules of the ISA, or this Decree, the FISSA may:

(a)  issue written warnings, including warnings in relation to possible action the FISSA may take in the event of future breaches;

(b)  enter into a written agreement providing for the Sponsored Party to undertake a programme of remedial action and to mitigate the risk of re-occurrence;

(c)   issue a written notice requiring the Sponsored Party to take specified action, or not take specified action, aimed to stop, remedy or mitigate the risk of occurrence or re-occurrence of breach;

(d)  in the case of actual breach,

(i)    impose upon the Sponsored Party monetary penalties proportionate to the seriousness of the violation and in any case not exceeding [$amount], which amount excludes any compensation payable for damage or harm.

(ii)  commence a process under section 34 of this Decree to revoke the Sponsorship Certificate.

(2)  Action taken under subsection 29(1) of this Decree must be commensurate with the gravity, frequency and other circumstances of the breach or anticipated, including the Sponsored Party’s previous conduct under Fiji’s Sponsorship.

PART 6 – REGISTER, TERMINATION, TRANSFER, EXTENSION OF SPONSORSHIP

Records

30.

(1)  The FISSA must retain up-to-date and accurate records of Sponsorship Applications received, Sponsorship Certificates issued, and all ensuing communication, reports or other information created or received.

(2)  The FISSA shall ensure that all such records shall be held with appropriate confidentiality, and will not disclose commercially sensitive information unless agreed otherwise with the Sponsoring Party.

Security of Tenure

31. A Sponsorship Certificate shall remain in force unless and until it is terminated in accordance with section 32 of this Decree

Termination

32. A Sponsorship Certificate terminates if, pursuant to this Decree –

(a)  It is made for a specified term and that term expires without renewal,

(b)  It is surrendered by the Sponsored Party in accordance with section 33 of this Decree,

(c)   It is revoked by the FISSA in accordance with section 34 of this Decree,

and upon termination all rights granted by Fiji shall cease and determine,

Surrender of Sponsorship

33. A Sponsored Party may at any time surrender a Sponsorship Certificate without penalty by giving to the FISSA not less than six  months’ previous notice in writing to that effect.

Revocation of Sponsorship

34. The FISSA may revoke its Sponsorship Certificate under this section—

(1)  in any case, with the consent of the Sponsored Party;

(2)  upon consultation with the Sponsored Party, where the Sponsored Party is prevented for a continuous period exceeding two years from the date of signing the contract with the ISA from undertaking the Seabed Mineral Activities despite taking all reasonable measures to do so, because of events outside of the Sponsored Party’s control;

(3)  where no material efforts have been made by the Sponsored Party to undertake the Seabed Mineral Activities for a period exceeding five years from the date of signing the contract with the ISA;

(4)  where there has been a serious, persistent or wilful breach by the Sponsored Party of the Rules of the ISA, the requirements of this Decree, or a final binding decision of a dispute settlement body applicable to it; and such breach either cannot be remedied or has not been remedied upon the giving of reasonable notice by the FISSA;

(5)  where the Sponsored Party knowingly or recklessly provides  the ISA or the FISSA with information which is false or misleading in a material particular, or fails to retain or wilfully alters, suppresses, conceals or destroys any document which is required to be produced to the ISA or the FISSA; or

(6)    where, following at least two written reminders from FISSA, any payment or deposit required under section 38 or 42 of this Decree is in arrears or unpaid for six months following the day on which it ought to have been paid.

Notice of revocation

35. Before making a decision under section 34 of this Decree the FISSA must –

(1)  give to the Sponsored Party at least 30 days’ written notice of the FISSA’s intention to make the decision, setting out details of that proposed decision and the reasons for it, and inviting the Sponsored Party to make a written submission to the FISSA about the proposed decision within a specified timeframe, if there are any objections,

(2)  take into account in the decision any submissions received, and

(3)  where the decision taken in pursuance with section 35(2) is to revoke the Sponsorship Certificate, give the Sponsored Party no fewer than 6 months’ notice before that revocation takes effect.

Renewal

36.

(1)  A Sponsored Party can apply to the FISSA for a Sponsorship Certificate or Seabed Minerals Agreement to be renewed for a period of up to five years, provided the application for renewal is received at least 9 months before the expiry date of any initial term.

(2)  The FISSA will inform the Sponsored Company of whether the renewal has been granted or refused within 3 months of the receipt of the application for renewal, and until that decision is communicated the Sponsorship Certificate shall be deemed to continue in force.

(3)  Where the renewal is to be refused, the FISSA will follow the processes contained in  sections 3635(1)-(3) of this Decree.

Ongoing liability after termination

37. A Sponsoring Party shall remain –

(1)   subject to any ongoing obligations, including requirements to submit reports and to make payments to the FISSA; and

(2)  responsible for any damage from its wrongful acts or otherwise arising from its Seabed Minerals Activities in accordance with this Decree, notwithstanding that its Sponsorship Certificate has terminated.

PART 7 – Fiscal Arrangements

Payments by Sponsored Parties

 38.

(1)  Sponsorship Application fee – A Sponsorship Applicant shall pay to the FISSA upon submission of a Sponsorship Application, a non-refundable fee of US$100,000.

(2)  Administration fees –

(a)  The holder of a Sponsorship Certificate shall pay to the FISSA an administration fee of US$150,000:

(i)    within six months from the date of the issue of the Sponsorship Certificate, and

(ii)  every year after that, on the anniversary each year of the date of the issue of the Sponsorship Certificate.

(b)  During the fifth year of the Sponsorship Certificate term, the FISSA may review the amount of the administration fee required each year for the remainder of the term of the Sponsorship Certificate.

(3)  Seabed Minerals royalties

(a)  The holder of a contract for Exploitation under Fiji’s sponsorship shall pay to the FISSA such sums by way of royalty for the commercial extraction of Seabed Minerals as shall be agreed and specified in a written agreement between Fiji and the Sponsored Party at least one year prior to the commencement of Exploitation by the Sponsored Party.

(b)  The royalty amount will be based on a percentage of the latest market value of the metal content contained in the Seabed Minerals extracted by the Sponsored Party through the Seabed Minerals Activities.

Tax Exemption

39. [A Sponsored Party will be exempt from the payment of corporate tax within Fiji in relation to its profit from Seabed Mineral Activities – this provision to be confirmed].

Financial payments to the ISA

40. A Sponsored Party will be responsible to make prompt and full payment of any sums due to the ISA, under the Rules of the ISA.

Recovery of payments owed by Sponsored Parties

41. A sum of money payable pursuant to section 38 of this Decree, is a debt due to the State, and may be recovered in a court of competent jurisdiction; and

(1)  in any such proceedings a certificate of the FISSA certifying that a specified sum of money is so payable, shall be received as evidence of that fact;

(2)  any royalty unpaid by the Sponsored Party may at the court’s discretion be recovered from any security deposited by the same Sponsored Party under section 42 of this Decree; and

(3)  interest on the amount outstanding may additionally be charged at a Prescribed or otherwise reasonable rate.

Security

 42.

(1)  The FISSA may within one year before Exploitation is due to commence require a Sponsored Party to deposit security as a guarantee of performance of the obligations attaching to the Seabed Minerals Agreement.

(2)  The form and value of any such security required, and the terms upon which it will be held, will be specified in a written agreement.

(3)  A security deposited in accordance with this section may be used by the FISSA to take steps towards fulfilling any obligations that the Sponsored Party fails to fulfil under this Decree, or to rectify any damage of loss caused as a result of such failure.

PART 8 – MISCELLANEOUS

Inquiries into Incidents

43. The FISSA may hold or may commission inquiries into Incidents.

Nothing to authorise unlawful interference with other sea users

44. Nothing in this Decree authorises the unlawful interference with the freedom of the high seas or the conduct of Marine Scientific Research by other persons or nation under the general principles of international law.

Rights of other States

45. Nothing in this Decree shall in any way affect the rights of coastal States in accordance with Article 142 and other relevant provisions of the UN Convention on the Law of the Sea.

Interference with Seabed Mineral Activities or the FISSA

46.

(1)  Unless authorised under this Decree or Regulations made under this Decree, any third party who interferes with –

(a)   Seabed Mineral Activities, or

(b)  The FISSA or its representative in the performance of duties under this Decree,

or incites another person to so behave,

shall commit an offence and shall be liable to a fine not exceeding [$amount] or to a prison term not exceeding [X] years or both.

(2)  For the purposes of section 46(1), “interfere” includes physical interference, intimidation, or the filing of vexatious claims whether in Fiji or any other nation and any other activity designed to harass, or having the effect of harassing, obstructing, putting at risk or delaying any representative of the FISSA or person conducting Seabed Mineral Activities.

Public Officials prohibited from acquiring Seabed Mineral rights

47.

(1)  No Public Official shall, directly or indirectly, acquire any right or interest in any contract for Seabed Mineral Activities, and any document or transaction purporting to confer any right or interest on any such officer shall be null and void.

(2)  No Public Official engaged by the FISSA or the FISSA shall directly or indirectly acquire or retain any share in a private company carrying on Seabed Mineral Activities.

Offence committed by a body corporate

48. Where an offence under this Decree that has been committed by a body corporate is committed with the consent or connivance, or is attributable to the neglect, of any Director or officer of the body corporate, that officer as well as the body corporate is guilty of that offence.

Disputes

49.

(1)  Any dispute arising between Fiji and another State in connection with Seabed Mineral Activities shall be resolved pursuant to the provisions of the UN Convention on the Law of the Sea

(2)  Any dispute between Fiji and the Sponsored Party arising in connection with the administration of this Decree shall be dealt with by:

(a)  the parties attempting to reach settlement by mutual agreement or mediation, and in the event this is not successful then

(b)   by referral to arbitration to be conducted in accordance with the Arbitration Act.

Regulations

50. The Minister may under this Decree make (and when made vary, alter, amend, revoke or cancel) Regulations, with the Cabinet’s consent, prescribing anything required or authorised to be Prescribed under this Decree or generally for carrying this Decree into effect, and any such Regulations shall be consistent with the UN Convention on the Law of the Sea, the Rules of the ISA, and other applicable standards of international law.

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Bougainville: Rio Tinto faces war crimes allegations in bid to reopen mine

Kristian Lasslett* | Green Left Weekly

British-Australian mining giant Rio Tinto is seriously contemplating reopening its Bougainville copper and gold mine, Reuters reported on February 7.

Situated on Papua New Guinea’s (PNG) eastern border with the Solomon Islands, the company’s Bougainville operation was forcefully closed down in November 1988 by traditional landowners who objected to the mine’s environmental and social effects.

A bloody civil war ensued, which took up to 20,000 lives on an island of 175,000 people. The war crimes committed by government security forces in the conflict were horrific.

Bougainvillean nurse, Sister Ruby Mirinka, recalled:

“One of the victims was a 24-year-old pregnant woman. Shot dead by the PNG soldiers, her abdomen was then cut open to remove the foetus. The dead foetus was then placed on the chest of the dead mother for all to see — as a warning.”

Rio Tinto stands accused of being complicit in these atrocities. In a US class action launched under the Alien Tort Statute, Bougainvillean landowners maintain that Rio Tinto’s subsidiary, Bougainville Copper Limited (BCL), supplied the military with trucks, fuel, accommodation, storage facilities, mess halls, communications equipment and secretarial services.

These allegations were featured in a hard-hitting Dateline report aired on SBS TV in 2011.

In response, company executives adamantly denied complicity. They claimed Rio Tinto’s equipment was commandeered by the defence force after the mine had been abandoned.

BCL director Sir Rabbie Namaliu told The Australian on July 16, 2011:

“To suggest that Rio did it deliberately is factually wrong. When I heard about those claims, I thought the whole thing was rather unfair.”

Namaliu was prime minister of PNG from 1988 to 1992. Amnesty International said PNG forces stationed in Bougainville during this period took part in extra-judicial killings, village burnings and the rape of women.

Namaliu is hardly an uncompromised source.

There are other problems with his account. For example, I interviewed eight senior managers who worked for BCL during 1987-1992. They were confident the company did supply the defence force with the aforementioned equipment.

One manager told me:

“We did everything they [PNG security forces] asked of us to make their life more comfortable, and better able to manage through, with transport, communications, provisions, whatever, fuel.

“You know, we gave them everything, because as a far as we saw it we were hoping that they were going to solve the situation, so we could start operating again. So we supported them every way we could.”

Perhaps BCL was unaware of the ends to which this logistic support would be applied? Well, its executives seem fairly cogent on this front too.

One manager recalled:

“These guys [PNG security forces] were ignorant thugs with guns. Frightened ignorant thugs with guns. Frightened, ignorant thugs with guns a long way from home.”

Another executive remembered surveying the destruction inflicted upon local villages by government forces during April 1989:

“Forty, 50 villages, and the crops [were destroyed]. The villages were varying from five or six houses to 20 or 30 houses.”

Naturally, Rio Tinto wants to take advantage of skyrocketing copper and gold prices by dusting off its old South Pacific jewel. I am sure they are attracting a degree of community support from war-weary Bougainvilleans looking to rebuild their shattered island.

That said, communities on Bougainville have yet to be fully briefed on Rio Tinto’s role in defence force operations during the bloody years of 1988-1990. So it would be difficult to argue that this support is based upon informed consent.

Until Rio Tinto commits to full disclosure, any attempt to reopen the Bougainville mine will be another corporate blight on the deeply scarred people of this Melanesian island.

* Dr Kristian Lasslett is an executive board member of the International State Crime Initiative. The International State Crime Initiative’s multi-media presentation on the Bougainville conflict, which includes BCL memorandums and meeting minutes, can be accessed here.]