President Momis’ Panguna policy lies in ruins

panguna trucks

Since President Momis took office in 2010 he has been warned by domestic and international supporters of the ABG, not to rely on Panguna’s reopening. His  government was made aware of widespread landowner opposition. It was also presented with damning evidence on Rio Tinto’s complicity in security force atrocities.  

These concerns were dismissed, often rudely. No attempt was made by the Momis government to join with landowners and victims in their legal struggle against Rio Tinto.

Even when experts argued the mine’s reopening had no business case, such concerns were dismissed.

Now it appears President Momis’ ‘crash or crash through’ gamble on Panguna has gone awry. Now he claims Rio Tinto is walking away, and is refusing to remedy the destructive legacies it has left on Bougainville. This is not a newsflash for many!

Below is his recent address to parliament, with some ‘corrections’ added in red.


Mr. Speaker:

I rise to share with all members of this House the most recent developments in the ABG’s efforts of recent years in examining the options for the future of large-scale mining in Bougainville.

In particular, I am talking today about what is still the very uncertain future of the Panguna mine. Since the Bougainville Mining (Transitional Arrangements) Act in July 2014, the most immediate factor causing uncertainty has been Rio Tinto’s reaction to that Act doing away with BCL’s major mining tenements, replacing them with just an exploration licence over the former Special Mining Lease – the SML.

[BCL’s Special Mining Lease actually expired in 2011, its exploration licenses expired in 2015. The Mining Act has therefore not stripped the company of anything].

[Landowners have been very certain about the future of Panguna, it is to remain closed owing to its disastrous impact on environment, culture and society].

Rio Tinto is the London based giant mining company that since the early 1990s has been the 53.6 per cent majority shareholder in BCL. Rio announced in August 2014 that it would conduct a review into its investment in BCL. That announcement opened the real possibility that Rio Tinto would withdraw from any involvement in BCL.

Withdrawal of Rio would raise major uncertainties about the future of BCL, and what the ABG and landowner organisations had been doing for several years – that is, we had been engaging with BCL about the possible re-opening of Panguna.

[The only landowner organization supporting the return of BCL, was the one set up by the Momis government with support from the Panguna Office of Renegotiations. All other groupings have expressed opposition].

Of course, the engagement process was still in its very early stages. No decisions had been made on the major issues of substance. Further, the Mining Act gave landowners a clear veto over re-opening.

[Detailed legal analysis has demonstrated that the Act drafted by UK aid- entrepreneur Adam Smith International, does not afford landowners a clear veto. To the contrary, it allows approval to be given by a small minority of landowners, with heavy criminal penalties for those who contest sanctioned mining activity].

But with the announcement of Rio Tinto’s review of its investment in BCL, most aspects of our engagement with BCL were put on hold. That is still the position today.

I want to brief you on recent developments concerning Rio’s review because it is obviously a matter of great importance to the future of Bougainville. So all of you, as the elected representatives of the people, have the right to be kept advised of developments on this subject.

Another important reason for me making this statement is that there are still many quite crazy – long long olgeta – stories being spread by a few Bougainvilleans, and by a few of our more crazy international critics, that the ABG is under the control of Rio Tinto and BCL, and is selling out the interests of Bougainvilleans to big mining interests. When such stories are still being spread, by either self-interested liars or deeply misguided people, it is important that accurate information is available that allows you, as the people’s representatives, to make your own judgments about what is happening.

[Critics have raised serious concerns that the Momis government has risked meaningful autonomy or independence, by placing its economic eggs in the Panguna basket, when there is widespread opposition to reopening on the ground. It has also been pointed out, no business case has been made that reopening would be viable, or would produce the revenue flows predicted by President Momis and his foreign advisers].

Honourable Members may recall my statement to the House about the future of Panguna, made on 22nd December 2012. I then advised of the latest in a series of attempts that the National Government has made since at least 2014 to purchase Rio Tinto’s 53.6 per cent equity in BCL. This latest attempt was made from late November.

The Member of the National Parliament for Central Bougainville, Hon. Jimmy Miringtoro met me to tell me that National Government Minister, Hon. Ben Micah, wanted to discuss with me and Panguna landowner representatives the urgent need for the National Government to purchase the Rio Tinto equity. I subsequently met Mr. Micah, and then Mr. Micah together with the Prime Minister, Hon. Peter O’Neill.

In brief, they said it was an urgent necessity for the National Government to purchase the equity as soon as possible. Initially we were told we had to give our agreement by 7 December. The reason given was that if PNG did not purchase the equity, there was a grave risk that Rio would sell the equity to an un-named third party. Mr. Micah emphasised how much that would be against the interests of both Bougainville and PNG.

A major concern for me was that Mr. Micah emphasised that it would be far too sensitive to even mention or discuss environmental clean-up of Panguna with Rio Tinto. The sale of the shares was the only issue that could be discussed, He said that issues had to be dealt with only as a commercial transaction, without any reference to environmental issues.

I made it clear to both Mr. Micah and Mr. O’Neill that the ABG could not support the National Government proposals. At the same time, I made contact with Rio Tinto to check their position. I was advised that the Rio process to review its investment was ongoing, and that there was no immediate proposal to sell the equity in BCL.

So I then wrote a letter to the Prime Minister in mid-December saying it was not acceptable to Bougainville that the National Government become the major shareholder in, and in control of, BCL. I made it clear that if Rio Tinto does decide to withdraw from BCL, its shares must come to the ABG and the landowners. In addition, I said, Rio cannot be permitted to escape its clear responsibilities for an environmental clean-up, and for other mining legacy issues.

[Since 2001 landowners have attempted to obtain compensation from Rio Tinto for the damage it’s subsidiary caused to the environment, in addition to its logistic support for the military. While President Momis initially supported the case, once he entered office in 2010 the government became a critic of the litigation. A golden opportunity was lost for the ABG  and landowners to join forces in the case and seek collaboratively an adequate settlement from Rio Tinto].

I also decided that because of the ‘strange’ information about Rio received from Mr. Micah and Mr. O’Neill, and the high degree of uncertainty about Rio’s plans, that I should re-establish direct communication with Rio Tinto. I had begun that direct communication in July last year at a meeting I had with their senior representatives in Singapore.

The main issues I raised in that meeting concerned why the Rio review process was taking so long – it had then been ongoing for 11 months. I also communicated to Rio the continued ABG and landowner interest in engaging with Rio and BCL about jointly examining the possibilities of re-opening the Panguna mine.

We achieved no concrete progress at that July meeting. But the ABG did make clear our view that if Rio does decide to withdraw from BCL that the ABG strongly opposes transfer of the equity to the National Government. I also indicated that we would then seek transfer of the equity to the ABG, and an environmental clean-up. Rio indicated willingness to negotiate such issues, but otherwise did not specifically respond to what I raised.

Rio agreed to my December proposal for renewed direct engagement, and we met again in Singapore in February. I was accompanied by the Minister for Mining and the Minister for Public Service.

This time we put a much more specific Bougainville position. I expressed deep concern about both the very long time that the Rio review of its investment in BCL was taking, and Rio’s failure to communicate at all about its progress.

After all, the ABG and landowners are significant stakeholders, and Rio has duties, that it acknowledges in its own published policies about how they do business, to maintain open communication with stakeholders.

[President Momis appears to have forgotten his 1987 description of the company where he compared them to a cancer. Momis also later alleged Rio Tinto through BCL aided military atrocities. Strangely he now expects them to play by gentleman’s rules]

We also emphasised again that the ABG and landowners remain willing to engage with BCL and Rio about jointly examining the possibilities of re-opening the Panguna mine.

[The landowners have and remain deeply opposed to reopening the Panguna mine, were it not this way, wouldn’t we expect to see Rio Tinto personnel welcomed into Panguna with celebrations. Instead they have been denied access to Panguna again and again by landowners, who vocally explain their reasons]

However, I also said that if Rio does decide to end its investment, then the ABG remains completely opposed to any equity transfer to the National Government. Instead, there must be equity transfer to the ABG and landowners, without any payment.

I also stated firmly the ABG position that Rio must take full responsibility for an environmental clean-up, and for dealing with other major mine legacy issues.

[Why should it now? It escaped legal liability in the US courts, owing to strong opposition from the Australian, British and Momis governments. It is free now to cut and run].

I emphasised the history of BCL in Bougainville. Although it may have operated legally, under colonial legislation, the basis for the Bougainville Copper Agreement was clearly deeply unjust. It was not based on anything like the informed consent of impacted landowners, and almost completely ignored the concerns and interests of those landowners, and of Bougainvilleans more generally.

It was the long-term impacts of the injustice that led to action, not just by Ona and Serero, but also Damien Dameng, young mine workers, leaders of the Arawa Mungkas Association and the Bana and Siwai Pressure Groups, and others. Their key goal was NOT the long-term closure of the mine, but instead forcing BCL and the National Government to stop ignoring them. Instead, they wanted to negotiate a new and fair agreement, taking account of the concerns of landowners and the rest of the Bougainville community. Long term mine closure was not their goal, but rather the result of the much wider violent conflict that resulted from the conduct of first Police mobile squads and then PNGDF units deployed to Bougainville.

[Talk to the people, talk to the ex-combatants, they didn’t shed blood for a little extra gold. It is insulting to suggest people lost their brothers, sisters and children merely to get a little extra cash. They shed blood for deep principals that connect generations past, present and future.

Many will recall Prime Minister Namaliu offered equity, compensation payments and all sorts of incentives in 1989, which were rejected. Nothing could compensate for loss of land and culture.]

We stated clearly the need for Rio to honour the lessons that it had learnt from its Bougainville experience, and which it has since applied to its operations world-wide. As a result, widely published and advertised Rio policies emphasise principles of corporate social responsibility, informed consent by impacted indigenous communities, and the need to operate on the basis of terms that are just for all stakeholders.

The Rio officials made no official response. Other than emphasising the complexity of the issues involved, no explanation was offered for the long delay in completing the investment review. When pressed on when it could be expected to be complete, they indicated probably before the end of 2016.

[Is President Momis seriously surprised? This is a company which via its subsidiary, supported mobile squad and PNGDF units, as they killed civilians and destroyed landowner homes, all so an environmental catastrophe could continue.]

In relation to the issues I raised about transfer of equity and Rio being responsible for a clean-up etc., I can understand that they might have some difficulties with what we put to them. Rio might feel, for example, that its majority-owned subsidiary (BCL) operated legally – in accordance with the laws of the day. Yet it lost everything at Panguna as the result of what they might see as a small violent group opposed to mining.

But if that is Rio’s position, then quite apart from the fact that the mine did not close because of Bougainville opposition to mining, in addition Rio would be ignoring its gravely serious responsibilities.

[Is the President serious? Of course the mine closed because of landowner opposition to the mine’s disastrous impact. Even BCL will vouch, each attempt they made to reopen the mine, led to its immediate closure through further sabotage attacks].

Rio Tinto is a foundation signatory to the sustainable development, and other principles of theInternational Council on Mining and Metals (ICMM). Those principles are absolutely clear that the responsibilities of a mining company are not limited to its legal obligations alone – especially its legal obligations under deeply unjust colonial laws.

In today’s world, there is no doubt that Rio Tinto would be subject to intense international public criticism if it tried to walk away from its responsibilities for the environmental damage and other unjust legacies it created, or contributed to.

I presented Rio with a two page statement of the ABG position, and I seek leave of the House to table that document. I will arrange for copies to be provided to all members of the House.

The Rio officers indicated that they would consider the ABG position, and would respond within 2 to 3 months, probably at another meeting in Singapore. I am yet to hear more about such a meeting.

But I can assure this House, the Landowners from the former Panguna lease areas, and all other Bougainvilleans, that under my leadership, the ABG will continue to make it clear to both the National Government and Rio Tinto that Bougainville remains determined to protect its own interests.

[Landowners, victims and the international community would have greatly enjoyed this determination when global efforts were being made to bring Rio Tinto to justice. Sadly President Momis used all sorts of names to smear these different stakeholders. Now after his deals have fallen through, as predicted, he wants justice?]

It is not an option for the National Government to become majority shareholder of BCL.

If, as now seems highly likely, Rio decides to end its involvement in BCL, the equity must come to Bougainville, and Rio Tinto must accept its full historic responsibilities, and honour its obligations to Bougainvilleans. It cannot just walk away from Bougainville, and at the same time pretend to hold itself out to the world as a highly responsible company that learnt from its horrific experience in Bougainville by adopting new and appropriate modern standards of corporate responsibility.

I ask this House, and the people of Bougainville, to support my Government in its ongoing, life and death struggle, to protect the interests of the landowners, and of the wider Bougainville community.

Thank you, Mr. Speaker.



Filed under Environmental impact, Financial returns, Human rights, Papua New Guinea

5 responses to “President Momis’ Panguna policy lies in ruins

  1. Steve Zorn

    So sad. 40 years ago, John Momis was a man of principle and an island of integrity.

  2. Pingback: President Momis’ Panguna policy lies in ruins — Papua New Guinea Mine Watch | Indiĝenaj Inteligenteco

  3. Tomorrow is the annual general meeting for Rio Tinto plc to be held in London on 14 April 2016.
    The annual general meeting for Rio Tinto Limited will be held in Brisbane on 05 May 2016.
    Bougainville Copper Ltd (BCL) will have the Annual General Meeting at the Grand Papua Hotel in Port Moreby, Papua New Guinea, on Wednesday 1 June 2016 at 2pm.
    President Momis is timing his statements with the mining company and their AGM’s.
    It is truly interesting that President Momis thinks that the long term mine closure was not the goal of the Bougainville people. Is he going crazy? President Momis is well aware what BCL and Rio Tinto mining companies did to his people and the environment.
    The death of up to 20,000 people on Bougainville, an environmental disaster from mining operations and President Momis wants to indicate that the international supporters of Bougainville and his people have problems?
    Wake up President Momis, you are alive today thanks to the International supporters and victory to the Bougainville Revolutionary Army (BRA).

  4. Fred Isah

    How embarrassing for poor old Momis. Rio Tinto’s AGM is on Thursday, I guess their only concession was to allow the President to fall on his sword first. Ouch. So we expect on Thursday Rio Tinto will announce disinvestment from Bougainville – and will anyone ask, why the President spent tens of millions aiding these guys … didnt he learn anything from the last fifty years?

  5. Pingback: Momis government must account for Panguna spending | Papua New Guinea Mine Watch

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