Momis still determined to reopen Panguna – who will be the devil he chooses next?

Even as John Momis cries foul over being dumped by the devil he chose, Rio Tinto, and pleads for compensation, despite obstructing earlier citizen led attempts to hold Rio Tinto to account through the courts, he is already plotting to betray his people once again, casting his net for another ‘devil’ to reopen the Panguna mine despite the strong opposition from the people of Bougainville …

O'Neill and Momis pose

O’Neill and Momis (photo Tony Kaybing)

Rio Tinto’s Withdrawal from Panguna and Opportunities from This Evil Move 

Bougainville News | July 1, 2016

“The evil involved here is that it constitutes completely unwarranted Rio Tinto interference in Bougainville’s affairs, and in the complex relationships between the National Government and Bougainville.

All issues about the Panguna mine are deeply sensitive for Bougainvilleans. The mine was imposed on Bougainville for the benefit of PNG as a whole. But it was Panguna landowners, as well as other Bougainvilleans, who bore the cost, and received very little in the way of benefits.

The second shameful and evil aspect of the Rio decision is its determination to walk away from the Panguna mine without in any way recognising the company’s contribution to the terrible environmental and social impacts of the mine.

At the same time, it is, I believe, possible that in cooperation with the National Government, we can find ways to turn Rio’s shameful and evil decision into something that offers positive outcomes for all major stakeholders.

Here I include Panguna mine-affected landowners, other Bougainvilleans, the ABG, the National Government, and BCL.

The opportunity for a positive outcome arises if the National Government is prepared NOT to take up the transfer of Rio shares in BCL that is now on offer through the Rio Tinto appointed trustee.”

QUOTE from PRESS CONFERENCE President John Momis

Opportunities from This Evil Move?

“Since being informed of the Rio Tinto decision, I have been seeking a meeting with the Prime Minister where we can discuss this proposed way forward. Between us, we are now presented with a unique and historic opportunity to finally end the conflict over the Panguna mine, and the conflict between Bougainville and PNG.

What I propose is fully consistent with the Bougainville Peace Agreement. Under the Agreement, the two governments have committed themselves to resolving our differences and working together cooperatively.

We seek the understanding of the National Government, and of Papua New Guineans generally, of the burning desire of Bougainvilleans to control this, the most sensitive of areas of economic activity in Bougainville.”

Rio Tinto’s Withdrawal from Panguna and  Abdication of its Corporate Social Responsibilities:

Ladies and Gentlemen,

Thank you for coming to discuss issues arising from Rio Tinto’s decision about its withdrawal from involvement in the Panguna copper and gold mine, by transferring its majority 53.8 per cent shareholding in Bougainville Copper Ltd (BCL) to a trust which is required to offer the shares to the Autonomous Bougainville Government (ABG) and the PNG National Government.

The importance of BCL is that although it no longer owns the Special Mining Lease (SML) that allowed it to mine at Panguna, the Bougainville Mining Act passed by the Autonomous Bougainville Government (ABG) in March 2015 granted BCL an exploration licence of the area of the former SML.

The Act gives BCL the right to negotiate for the grant of a new mining lease under the new Bougainville law. Because BCL still has the drilling data for the ore body that was being excavated between 1972 and 1989, its right to negotiate could have considerable value.

The Rio Tinto decision to divest of its shares in BCL is a remarkably unprincipled, shameful, and evil decision. Yet this is a decision by an international mining giant, a company that holds itself out internationally as bound by quite different standards from those that it has demonstrated through this decision.

The shame and evil does of Rio Tinto’s decision does NOT lie in the withdrawal from BCL. Rather, it relates to two key aspects of the way in which Rio has withdrawn from BCL.

First, Rio has directed that of its 53.8 per cent equity, 36.4 per cent should be offered to the ABG and 17.4 per cent to the National Government. When that 17.4 is added to the National Government’s existing minority shareholding in BCL, it too will have 36.4 per cent.

So the ABG and the National Government would be equal minority shareholders in BCL, each with 36.4 per cent. The remaining 27 per cent shares would still be held by small shareholders all over the world.

The evil involved here is that it constitutes completely unwarranted Rio Tinto interference in Bougainville’s affairs, and in the complex relationships between the National Government and Bougainville.

All issues about the Panguna mine are deeply sensitive for Bougainvilleans. The mine was imposed on Bougainville for the benefit of PNG as a whole. But it was Panguna landowners, as well as other Bougainvilleans, who bore the cost, and received very little in the way of benefits. It was resentment about the unfairness of the mine that led to the terrible loss of life and destruction of the Bougainville conflict.

Because of that background, Bougainvilleans are determined that they must control all future decision-making about not only Panguna but also all other mining in Bougainville.

That is why, from the time that the ABG was established in 2005, it has insisted that all powers over mining must be transferred to Bougainville control. So we cannot accept the unilateral Rio Tinto decision to make the ABG and the National Government equal shareholders in BCL.

In two long meetings with senior Rio officials, in July 2015 and February 2016, I made it clear to them that National Government control of Panguna is unacceptable. I insisted that if Rio Tinto was to divest its majority shareholding in BCL, it must transfer the shares to the ABG, at no cost.

But in their arrogance and ignorance, Rio decided that they knew better. They made their decision without ever once discussing with us what they unilaterally decided to do.

What they decided imposes their wishes on Bougainville. But joint control of Panguna with the National Government can never be accepted by Bougainville. Already, I am hearing from Bougainville of deep anger amongst my people about the BCL decision.

The second shameful and evil aspect of the Rio decision is its determination to walk away from the Panguna mine without in any way recognising the company’s contribution to the terrible environmental and social impacts of the mine. It is clear now that the conditions for mining agreed in the 1960s largely ignored the environment.

They also largely ignored the impacts on landowners, especially the many hundreds who were relocated away from their land. Those people now number thousands. They live in terrible and squalid conditions in houses made from scrap materials, without proper water supplies or gardening land.

Yet Rio Tinto, which largely as a result of its Bougainville experience, now says it subscribes to the highest standards of social responsibility and sustainable development, says those standards don’t apply to its involvement in the very mine where their poor operating standards caused the conflict that pushed them into adopting new standards.

This is hypocrisy!

Bougainville cannot accept this. I am writing to the International Council of Metals and Minerals asking them to end Rio Tinto’s membership for failure to adhere to its principles.

In addition, the ABG is seeking legal advice about possible court proceedings against BCL for the environmental and social impacts of the mine.

At the same time, it is, I believe, possible that in cooperation with the National Government, we can find ways to turn Rio’s shameful and evil decision into something that offers positive outcomes for all major stakeholders.

Here I include Panguna mine-affected landowners, other Bougainvilleans, the ABG, the National Government, and BCL.

The opportunity for a positive outcome arises if the National Government is prepared NOT to take up the transfer of Rio shares in BCL that is now on offer through the Rio Tinto appointed trustee.

If it refused the shares, then they would be offered for transfer to the ABG in two months. The ABG would then be able to become the 53.8 per cent owner of BCL. The National Government could continue to be the main minority shareholder, with its existing 19 per cent shareholding.

If the National Government agrees to cooperate with Bougainville in this way, it would go a very long way to consolidating change in attitudes of Bougainvilleans to the National Government.

It would also change the thinking of many Bougainvilleans who have until now opposed the re-opening of the Panguna mine. For if the mine is owned by Bougainville, the choices about mining will be very different.

So since being informed of the Rio Tinto decision, I have been seeking a meeting with the Prime Minister where we can discuss this proposed way forward. Between us, we are now presented with a unique and historic opportunity to finally end the conflict over the Panguna mine, and the conflict between Bougainville and PNG.

What I propose is fully consistent with the Bougainville Peace Agreement. Under the Agreement, the two governments have committed themselves to resolving our differences and working together cooperatively.

It is also consistent with the provisions of that Agreement about the main purposes of the autonomy arrangements. Those purposes include giving Bougainvilleans the ability to solve their own problems and achieve their own aspirations.

A key source of Bougainville’s problems has long been the Panguna mine. That is why the ABG has pursued transfer of mining powers. If the National Government were to have equal control of the Panguna mine, that would be contrary to the ABG gaining control of mining in Bougainville. It would be contrary to the aims of autonomy.

We seek the understanding of the National Government, and of Papua New Guineans generally, of the burning desire of Bougainvilleans to control this, the most sensitive of areas of economic activity in Bougainville.

4 Comments

Filed under Environmental impact, Human rights, Papua New Guinea

4 responses to “Momis still determined to reopen Panguna – who will be the devil he chooses next?

  1. Momis has advised that Rio Tinto and the PNG Government have again conspired against Bougainville as the PNG government company “Petromin” has accepted Rio Tinto shares (17.4%).
    Momis states:
    “There can be no doubt the National Government was involved. Rio officials first advised me of the Rio share decision around 9.00 p.m on the night of Wednesday 29 June. But a subsidiary of national Government company, Petromin, accepted the Rio Tinto shares the very next day – Thursday 30th June.

    I can see no way Petromin could have been ready to jump on 30 June if PNG was not fully involved in Rio’s decision on its BCL shares.”

    This news was revealed yesterday 3 July 2016 on the Bougainville News website.

    • On 30 June 2016, Rio Tinto transferred its 53.8 per cent shareholding in Bougainville Copper Limited (BCL) to an independent trustee.
      It seems PNG’s Petromin (as from today known as Kumul Minerals Holding Ltd) has applied for the Rio Tinto shares for Papua New Guinea.

      Rio Tinto have stated in their media release on 30 June 2016 with a particular Note to editors that:
      The Trust Deed determines that should either beneficiary of the trust not apply for the transfer of the BCL shares attributable to them from the trustee within two months, then those shares will be made available to the other party.

      Petromin changes name
      Source:
      The National,Monday July 4th, 2016
      By Shirley Mauludu
      THE Petromin Holdings Limited has officially changed its name to Kumul Minerals Holdings Limited.
      Managing director Thomas Abe said KMHL would now manage all the mineral investments for the State.
      The change in name followed policy changes carried out by Government last year.
      “This company is a successor to Petromin PNG Holdings Limited. It’s actually a revamp of Petromin Holdings and will focus solely on investments in Papua New Guinea’s mineral sector,” Abe said.
      “It was back in May last year that the Kumul Minerals Act was passed by Parliament consolidating the State’s oil, gas and mining projects and the structuring ownership into two companies. Kumul Minerals will manage the mining assets and the oil and gas assets are already being managed by our sister company Kumul Petroleum Holdings.”
      Kumul Minerals is one of the three Kumul entities created by the Government under its policy of consolidation of its mineral assets and petroleum assets, plus assets held by state owned entities. The other two Kumul entities are already in operation. Petromin was incorporated in 2007. on behalf of the state.
      http://www.thenational.com.pg/?q=node/110959

  2. Sponge Bob

    A very messy situation this one.

  3. Yes, a dirty deal done dirt cheap by Rio Tinto and Bougainville Copper Ltd who have manipulated Papua New Guinea and totally ignored the people of Bougainville.
    Thinking back, you may remember that the PNG Government Jet, KUMUL landed at the Aropa airport in Bougainville on Christmas day last year (25/12/15) to everyone’s surprise including the Police of Bougainville. This news was reported by journalist Aloysius Laukai of New Dawn on Bougainville on 28 December 2015.

    The Bougainville Freedom Movement made a comment on this news report on 5 January 2016 which was:
    “The hidden agenda is the mining company.
    Why did the PNG Government Jet, KUMUL land at the Aropa airport in Bougainville on Christmas day?
    President Momis has admitted that he was invited by the PNG Prime Minister, Peter O’Neill for a meeting with RIO TINTO in Singapore on December 17th, 2015.
    In 2016, the PNG State-owned Kumul Mineral Holdings Limited (KMHL) previously known as Petromin “will continue to operate under the new legislation and will hold the State’s back in right in all mineral projects”.
    (See p57, Petromin 2014 Annual Report)
    Where are the safeguards for Bougainville?

    09 April 2013
    The Kumul Holdings mystery – where are safeguards?
    BLAIR PRICE | PNGIndustryNews.net

    THERE are concerns about the “closed door” nature of recently unveiled Papua New Guinea government plans to consolidate its mining, petroleum and business assets into a state-owned “Kumul structure”, which includes its stakes in Ok Tedi and PNG LNG.

    PNGIndustryNews.net’s exclusive story on the dismantling of Petromin first revealed the Kumul name last week and subsequent media coverage forced prime minister Peter O’Neill to shed more light.

    According to the Post-Courier, O’Neill said all of the state’s mining interests, which includes the Ok Tedi Mining Limited, Ramu Nickel and Bougainville Copper stakes held by Mineral Resources Development Corporation, would be transferred to Kumul Mining Holding Limited.

    As flagged by PNGIndustryNews.net last week, all the government’s petroleum assets will be transferred to Kumul Petroleum Holding Limited including the 16.6% PNG LNG project stake held by Independent Public Business Corporation.

    However, IPBC will reportedly be wound up like Petromin with all of its non-mining and non-petroleum assets to be transferred to a new entity simply called Kumul Holding Limited.
    IPBC is already a storehouse for state-owned enterprises with just some including PNG Power, PNG Ports, Post PNG, Telikom PNG, Air Niugini, PNG Waterboard, Eda Ranu, National Development Bank and Motor Vehicle Insurance Limited.

    While all of the Kumul companies reportedly are “now being developed” and require various legislative changes, there are also plans for an overarching Kumul Trust which will feature previous PMs Grand Chief Sir Michael Somare, Sir Julius Chan and Paias Wingti as shareholders and current PM O’Neill as trustee.

    O’Neill said the restructuring would remove inefficiencies but there is concern about what kind of fiscal management safeguards will be in place under the Kumul structure.

    In the case of IPBC, Institute of National Affairs PNG executive director Paul Barker said it had established mechanisms to provide a degree of accountability even though some were undermined in the last decade.

    “The new mechanisms at this stage certainly leave a lot of questions,” he said of the Kumul structure.

    “They do involve very new and unchartered waters with respect to these constitutional amendments and trusts and the use of various current and past PMs as shareholders and the current PM having veto power in that role.”

    He told PNGIndustryNews.net that the public should be demanding all the details and really “a lot more explanation about this shareholding proposal”.

    “Maybe there is some logic in terms of a rationalisation but there are a lot details that need to be spelt out,” Barker said.

    “And certainly it needs to be very much in the public eye because this seems to have been pushed through – very much behind closed doors – and I’m not sure that many of the cabinet members yet alone the wider public and state entities were aware of all this.

    “It came out of the blue.”

    See http://bougainville.typepad.com/newdawn/2015/12/281215-kumul-flight-to-aropa-questioned-by-aloysius-laukai-bougainville-police-have-no-idea-why-the-png-government-jet-kumu.html?cid=6a011168831e92970c01bb08a765d9970d#comment-6a011168831e92970c01bb08a765d9970d

    As you say Sponge Bob…. a very messy situation this one.

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