Monthly Archives: March 2015

Government admits agencies failed in Sinivit disaster

Papua New Guinea government agencies prove once again they lack the resources and skills and professionalism needed to manage large-scale mining. As a result foreign mining companies are able to operate with complete impunity and local communities suffer the consequences…

Call for action on mine issue

The National aka The Loggers Times

DEPUTY Prime Minister Leo Dion has admitted the failure of provincial authorities and relevant national line agencies to prevent environmental damage at the abandoned Sinivit gold mine in East New Britain.

Dion, the East New Britain regional MP, said rather than just talking about the issue, all responsible authorities must take action to protect people’s lives while at the same time ensure that the responsible company was held accountable for its actions.

He said it was believed the ENB provincial government has requested K5 million from the National Government to address the situation.

He  believed that if there was an existing technical committee, with an agreement between the developer – Niugini Gold and the provincial government, as well as routine inspections done, then the company would have been prevented from going  overboard or not complying with the agreement.

And because of this failure, the province was now asking the national government for another K5 million to correct something that was supposed to have been amended in the past.

He further stated that he was convinced that if the state agencies and line departments carried out their mandated responsibilities, the affected people would not be suffering like this. However, he said that rather than playing blame games, he would be taking up the issue with the  Mining Minister to ensure that people’s lives were protected, and urged government officers to learn from mistakes and become more proactive by planning ahead for disasters.

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President Momis left red faced over Jubilee attack

Concerns have been raised by Jubilee Australia over the Bougainville Mining Act, legislation which was written by the corporate outfit Adam Smith International from their London office, which is just a short walk from Rio Tinto’s headquarters.

Shortly after this those concerns appeared on this blog site, President Momis issued a press release slamming Jubilee. Jubilee originally earned the President’s anger when their 2014 report brought to light landowner voices from Panguna that seriously undermined the credibility of claims made by the President and his Australian advisor, on widespread local support for Rio Tinto’s return.

In Momis’ most recent attack he alleges: “With reference to my letters to you dated 26th October, 2nd November and 1st December 2014, on behalf of the elected Autonomous Bougainville Government, I am deeply concerned by your failure to have the courtesy of responding to the issues that I raised with you, the questions that I asked you”.

Momis continues “you and the organisation you head are demonstrating shameful degrees of ignorance and arrogance” . The President even alleges Jubilee has acted illegally in publishing the report, a worrying sign of Momis’ growing ambition to criminalise all forms of dissent (e.g. the new mining law criminalises a range of landowner protest actions, including the removal of marker pegs and obstructing bulldozers, both of which are now punishable by prison terms).

In response, Dr Kristian Lasslett who was involved in the 2014 report stated on Bougainville News in response to Momis’ claims,

“This is simply not true – three letters have been sent to the President of Bougainville by Jubilee Australia. The first letter is dated 26 October 2014, the second letter is dated 18 November 2014, and the third letter is dated 6 January 2015”.

Indeed, Jubilee’s response to Momis has even been online since 27 October last year!

It looks as if President Momis has misled the public again, seemingly in a vendetta against an NGO whose only ‘crime’ was to share voices from the mine affected region. By lying to the public, President Momis is bringing his office into disrepute. The people deserve better than such clumsy deceit…

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Chinese government bid to take control of Frieda river mine

With the Chinese government already responsible for pumping millions of tonnes of toxic tailings into the sea in Madang, what future for the Sepik river if the Chinese get their hands on the Frieda mine?

frieda river

PanAust feels heat of $1.1bn Guangdong bid

Barry FitzGerald | The Australian

Laotian copper/gold producer PanAust has again come under the takeover gaze of its biggest shareholder, China’s state-owned Guangdong Rising Assets Management (GRAM).

The cash offer of $1.71 a share is down heavily from last year’s indicative and non-binding offer of $2.30 a share (increased from an earlier offer of $2.20) that never eventuated. But this time at least, the offer is for real, with PanAust shares soaring 49.5c, or 40 per cent from five-year lows to $1.72.

The bid values PanAust at $1.1 billion, with GRAM already owning 22.5 per cent, most of which was acquired in September 2009 when PanAust was in need of a cornerstone investor in the wake of the global financial crisis.

The unconditional cash bid came as PanAust shares struggled in response to the crash in copper prices, and the looming need to finance the development of the 80 per cent-owned Frieda River gold/copper project in PNG.

Credit Suisse analyst Michael Slifirski said the offer was “highly opportunistic’’ given GRAM’s $2.30-a-share indicative offer 12 months ago. He said it took advantage of the equity market’s obsession with short-term earnings and cashflow, and disregard of long-term value.

Credit Suisse values PanAust at $2.11 a share that includes only 25 per cent of its assessed value of an assumed 55 per cent interest in Frieda River (the PNG government can take up to a 30 per cent interest in the project).

“The GRAM offer is too low in our view,’’ Mr Slifirski said.

BT Investment Management portfolio manager and analyst Brenton Saunders said that ignoring Frieda River (PanAust acquired its stake from Glencore last year), the bid was probably not that far from what the existing operations are worth.

“But we can’t ignore the fact that this company has very consciously chosen to go down a path to buy Frieda River, and to develop it — and that is a strategic game-changing decision for the company,’’ Mr Saunders said.

He added that it would be interesting to see how PanAust responds to the bid. “It is beyond me how the board could contemplate recommending this offer given that they were very quick and were very emphatic, in turning down the $2.20, and then a $2.30 offer, as being almost insulting in terms of what it implied in terms of valuation. For them to now come back and recommend anything less than the last one they knocked back seems implausible,’’ Mr Saunders said.

Fred Hess, PanAust’s managing director since November, was asked at a recent investor briefing if management and the board reflected on knocking back last year’s $2.30 indicative offer. “Well I am not. I am not. I am looking forward to the future and I look at the greater certainties we now have with 80 per cent ownership of Frieda River,’’ Dr Hess said.

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Ramu mine suffers as Mother Nature bites back

Dumping millions of tonnes of toxic waste into a pristine marine environment was bound to have consequences. Maybe severe rains and flooding was not what was expected – but Mother Nature moves in mysterious ways…

Damaged roads hit nickle-cobalt miner hard

The National aka The Loggers Times

THE COUNTRY’s only nickel-cobalt mine developer in Madang is hard hit as a result of damage to roads and bridges along the Madang-Ramu highway.

Ramu NiCo Management (MCC) Ltd buys its diesel  supplies, machinery parts, vegetables and food for its Kurumbukari Mine in the Usino-Bundi electorate from Lae. Since the disaster hit the Madang-Lae section of the highway recently, the company has been resorting to Madang for supplies.

However, supplies in Madang are insufficient.

While this is likely to continue as the Government and responsible agencies wait for floods to subside so reconstruction of roads and bridges can begin, Ramu NiCo and other business houses and the public may have to pay more for transport.

Works Minister Francis Awesa assured the people of Usino-Bundi and Madang last week that the damaged roads and bridges connecting Madang and Lae and the Highlands region were priority matters for the Government to attend to.

Prime Minister Peter O’Neill  visited the disaster-hit areas in the Usino-Bundi and made a commitment of K1 million for relief supplies.

Vice-president of Ramu NiCo (MCC) Wang Baowen visited the Aumia disaster site, the worst affected section of the Ramu-Lae highway, and saw the severity of the destruction.

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ABG considering large scale mining on Bougainville

 John Momis making his usual superficial and disenguous mining = development pitch…

panguna

Troy Taule | PNG Loop

President of the Autonomous Region of Bougainville (ABG), Dr John Momis says the ABG is considering allowing large-scale mining again on Bouganville because of its need for revenue.

Momis was speaking after the ABG passed a new long-term Bougainville Mining Law on Thursday.

“We lack even the most basic acceptable standards in essential services, like health and education. We lag behind the rest of the world. Without significant ABG revenue, that situation will never change,” said Momis.

He went on to say he wanted the best possible hospitals, early childhood centres, schools, clean power, and good roads to all accessible areas and good shipping services for Bougainville.

He said these things are the essential basics for Bougainville to gradually develop a sustainable economy where all share in the benefits.

“True autonomy, or true independence, will only come when we have our own sources of revenue, capable of providing the best possible services to our people.

“It is an unfortunate truth that the only way any of us can see of generating this revenue is mining.

“But we need to approach this with great care. Mining itself is not a sustainable activity, as the minerals are a finite resource. So the key will be to use the mining revenue wisely, to promote and generate sustainable economic growth,” said Momis.

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‘Catastrophic’ impact as Barrick sells assets

Jane Goldsmith | The Australian Mining Review

Porgera-gold-mine-tailings1-300x200BARRICK Gold has been hit by allegations of “irreparable” social, economic and environmental change as it flags intentions to offload a majority stake in the iconic Porgera mine, north-western Papua New Guinea (PNG).

Porgera landowners representative the Justice Foundation for Porgera (JFP) is seeking billions in compensation from Barrick Gold and its subsidiary Barrick Niugini, alleging that the venture breached agreements relating to environmental standards, the relocation of displaced landowners, and the number of fly in, fly out workers in the area.

In late February, Barrick and Barrick Niugini released a statement of intention to sell its PNG interests, which could offload any pending legal claims from landowners to potential buyers.

Mineral Resources Enga holds a 5 per cent share of Pogera in trust for the landowners with the Enga Provincial Government.

MRE chairman and director Kurubu Ipara said that Barrick intended to sell its interests without proper notice.

“[It will] exit PNG, leaving the landowners with a new owner who will not provide restitution for the damage left behind, or that MRE, the landowners or citizens of PNG will be left with an insurmountable bill to remedy the social and environmental damage,” he said.

The allegations against Barrick date back to 2011, after a Human Rights Watch report found Barrick Niugini mine guards had detained women found trespassing on the mine site and “gave them a choice of submitting to gang-rape or going to prison”, Mr Ipara said.

“Barrick has responded with dismissive hostility to concerns about its human rights record at Porgera,” the report stated.

MRE is a subsidiary of the government-owned Mineral Resources Development Company, which has battled allegations of corruption and mismanagement of its own.

Barrick’s move from PNG is a part of a greater debt reduction plan, which also includes the sale of assets in Australia.

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Jubilee Australia reveals flaws in new Bougainville Mining Law

In February, Jubilee Australia with Bismarck Ramu Group and the International State Crime Initiative wrote to Mr Stephen Burain, the Minister for Mining in the Autonomous Government of Bougainville, commenting on the Bougainville Mining Bill 2014 which was passed into law this week.

The analysis lays bare some of the flaws in the controversial new Act drafted by the World Bank and neo-liberal consultancy firm, Adam Smith International

Mr. Stephen Burain
Minister for Mining
Autonomous Government of Bougainville

Dear Mr Burain,

As part of our enduring commitment to the mine affected communities in the Panguna region we would like to comment on the Bougainville Mining Bill 2014 drafted by Adam Smith International at the direction of the Autonomous Bougainville Government (ABG).

We gratefully received a copy of the draft mining legislation and regulations from the ABG in December. Our understanding is that the legislation is slated to be voted on in March. As the window is limited for commentary on the documents – which come to 508 pages in length – we have decided to enumerate below some preliminary feedback on the legislation, and the consultation process preceding its proposed approval by Bougainville’s parliament.

1)      Consultation and Independent Assessment

Given that the legislation will lead to the temporary alienation of customary land, with wide ranging effects on the social, economic, cultural and physical life of impacted communities, it is important that the draft mining bill and regulations are subject to a widespread and thorough process of consultation, discussion and independent scrutiny, as affirmed in international treaties, as a principle of international law, and in international best-practice reporting. As the final draft of the mining bill was delivered during November by Adam Smith International, it would seem appropriate to allow a significant period for consultation and revision, in order to give communities across Bougainville adequate time to organise themselves, seek independent expert advice, discuss the legislation, and prepare their response. While a prolonged consultation period would not be appropriate for all draft bills, given that mining has historically been a highly contentious issue on Bougainville, building a legislative framework over which all communities feel a sense of ownership is vital. Coupled to this, the legal complexity of the draft mining bill and associated regulations, make such a prolonged consultation period necessary, so that communities are afforded the time and space to appreciate all the relevant provisions and their long-term implications.

2)      Financial Support to Impacted Communities

It is important that financial resources are made available to those communities who reside on or near mineral resources that are likely to be affected by the bill in the foreseeable future, so they may acquire independent expertise to help them evaluate the draft and share their concerns with the ABG. It is critical that communities are empowered to choose their own sources of independent expert advice, while observing relevant good governance procedure.

3)      Free, Prior and Informed Consent

More specifically on the contents of the draft Bougainville Mining Bill 2014, in light of mining’s contentious history on Bougainville it is especially important that the legislation should encompass best practice with respect to free, informed, prior consent, and echo the standards set out in key international covenants including the International Covenant on Civil and Political Rights, International Covenant on Economic Social and Cultural Rights, UN Declaration on the Rights of Indigenous Peoples, and ILO Convention 169. In this respect we would like to highlight a number of preliminary concerns to take into consideration:

A. Access to Information

In order to conform to best practice the legislation must empower traditional landowning communities by inscribing them with a number of positive rights, including the right to access independent sources of information and expert advice, coupled to a right to receive adequate financial support to seek this advice. By independent sources of information and expert advice, we mean recognised experts who are not linked with the extractive industries or government, whether it be through position or financially, and who can be relied on to act in the best interests of the contracting community. It is concerning that the current draft bill does not appear to afford communities these fundamental positive rights.

B. Independent Community Consultation

There needs to be more robust mechanisms included in the bill assuring the comprehensibility and independence of the community-consultation process, preceding a mine’s initiation. As it stands, the bill places responsibility on mining companies holding an exploration license or mining lease to develop and enact community engagement plans. While mining companies, of course, have a legitimate place in the consultation process, it is essential that the plan and strategy is implemented by an independent arms-length organisational actor, with an overarching responsibility to act in the best interests of landowners and the public.

C. Inclusive Consent Processes

More robust measures of consent should be set out in the bill which ensure a clear majority of adult aged landowning community members, whose social, economic, cultural and physical life will be seriously impacted by the project, support the venture, after receiving comprehensive, independent advice on the project’s economic, social, cultural and economic impacts. At the moment, a landowner association approved by the Bougainville Executive Council, can consent to exploration licences and mining leases on behalf of the communities they represent. In light of historical examples in Bougainville, there is serious risk that without further safeguards landowner associations will not be inclusive of vulnerable groups and customary leaders, particularly if association processes and procedures are in a language and cultural form which are inaccessible to a large section of the affected population. Therefore, this current model does not appear to offer a robust mechanism for assuring community-wide participation in the consultation process or when measuring consent. We believe the legislation needs to adopt more robust mechanisms for measuring consent that ensure mining projects are supported by a clear majority of adult-aged landowning community members, whose social, economic, cultural and physical life will be seriously impacted by the project, after receiving comprehensive, independent advice on the project’s economic, social, cultural and economic impacts. It should also include measures that help communities build cooperative, culturally inclusive organisational frameworks that will empower them to participate in the consultation and negotiation process.

D. Access to Remedy

There need to be independent grievance and accountability mechanisms inscribed into the legislation that empower communities to seek remedies for abuses of rights or legal procedure, whether by a private or governmental actor. This grievance mechanism and body must be at arms-length from all mine stakeholders. Currently no such mechanism exists in the draft bill.

E. Human Rights Due Diligence

The draft bill needs to include robust human rights standards that mine operators must observe or face serious sanction, with remedies in place for violations of these standards. Not only have mining operators on Bougainville participated in human rights abuses, this behaviour may also be witnessed across Papua New Guinea. Currently the bill does not offer a robust framework for addressing this enduring issue.

As you will appreciate, these comments are based off a preliminary reading of the draft bill. Nonetheless, we hope you find this feedback useful, and we welcome a continuing conversation on the issues raised within.

With sincere regards,

Brynnie Goodwill, CEO Jubilee Australia

Co-signed: Bismarck Ramu Group
Co-signed: International State Crime Initiative

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