The Chinese government wants to build a $3.6 billion copper and gold mine in the middle of one of Asia/Pacific’s largest pristine wild river systems.
The proposed Frieda River mine in Papua New Guinea’s Sepik region has alarmed local people and international scientists but the mining companies involved are using unfounded promises and lies to muddy the debate.
PanAust is the Australian registered, Chinese State owned company that wants to build the mine, along with another Australian company, junior partner, Highlands Pacific.
Fred Hess, PanAust’s managing director, has been quoted on ABC news saying:
“The main driver for us is the economic benefit to an enormous number of communities who are deprived of any opportunity to gain better education or medical services because of their subsistence lifestyle.”
While we might all love this compassion from the international mining industry not only is the statement completely preposterous and highly misleading it is also legally and factually incorrect.
PanAust shares are owned by Guangdong Rising Assets Management Co. Ltd (GRAM), a Chinese State owned company. PanAust and its directors are under a legal obligation to deliver as much profit as possible to their shareholders – that is their primary legal duty. To claim the “main driver” for PanAust and its directors is the economic welfare of people living in the Sepik is not just plain nonsense it is untrue!
It is also completely false to suggest people in the Sepik are denied access to basic education and medical services because of their subsistence lifestyles. The reason people in the Sepik lack decent basic services is that as much as half of the PNG government’s annual budget is stolen by politicians, bureaucrats and lawyers in the nation’s capital. This corruption is denying people a decent standard of living and it is their subsistence lifestyles that provide them with their only incomes and social security. Destroy that lifestyle with mining and then people will really be plunged into poverty!
Even if the welfare of the people living in the area around the proposed mine is a concern to the Chinese government and the various mining companies involved, PNG provides plenty of evidence that large-scale mining is not going to help the locals and there is NO documented evidence to the contrary.
The same promises of economic benefits to local people and environmental stewardship were made by Rio Tinto to the people of Bougainville before the company’s Panguna mine destroyed the Jaba river and incited a war that killed as many as 20,000 people.
The same promises were made by BHP Billiton before its Ok Tedi mine destroyed the Fly river system and the company belatedly confessed it should never have opened the mine in the first place.
Anyone who has visited the Southern Highlands would be hard pressed to make the case that Barrick Gold’s Porgera mine has raised living standards and the same is true of New Ireland where there is the huge Lihir mine, owned by Newcrest, and the Simberi mine.
Perhaps given this history, to which we should also add Misima, Tolukuma, Sinivit and Bulolo, it should not be a surprise that there are NO published studies which make the case for large-scale mining being of benefit to rural people in PNG. Indeed, whenever the returns to rural people are subject to investigation, it is found that while a few ‘fat cats’ may capture some benefit, most people surrender their environment for not very much at all and many suffer some terrible social consequences.
The PNG government has been involved in two substantial evaluation reports on the economic impacts of mining for local people, one by the National Research Institute and one conducted by the United Nations.
A 2012 NRI case study on economic benefits from the Porgera mine [pdf file], concluded that:
“Much of the financial benefits are thought to be consumed in Port Moresby (at the Crowne Plaza), with only a few individuals having access to a large slice of the wealth”
And, after 20 years of mining, “it is almost impossible to see where the money has gone”.
Papua New Guinea’s 2014 Human Development Report states:
“Papua New Guinea’s 40 year history of Independence has been dominated by the extractives sector. Large-scale mine and oil production … [have] provided significant improvements in incomes and livelihoods for some. At the same time however, this production has sparked civil strife, caused massive environmental damage, arguably distorted the economy, and brought about a range of negative impacts on communities.”
“Despite 14 consecutive years of economic growth, there has been little change in poverty levels in the country. In fact the level of inequality in the country has increased.”
Given the evidence, the onus must be on the Chinese government, PanAust and Highlands Pacific to come up with some hard evidence to support their claims that not only will the mine be environmentally safe, it will bring economic benefits to a huge number of people and communities.
Until they have that evidence they should shut up with their lies and misinformation.
Meanwhile in evaluating the mine’s likely impacts the PNG government and the local communities should trust history rather the rosy predictions of corporate scientists and company officials.
What is at risk is the Sepik River which flows 1,100 kilometres from the mountains in the centre of PNG, across a wide wetland-dotted plain to the northern coast and the lives of 100,000 plus people.