Radio New Zealand | 26 August 2016
The leader of Bougainville’s Me-ekamui rebel group, Chris Uma, says the spat over shares in Bougainville Copper Ltd (BCL) is of no consequence.
A war of words erupted between the governments of Papua New Guinea and Bougainville after multi national miner, Rio Tinto, gave its shares in BCL to them.
PNG later gave its shares to Panguna landowners, a move that infuriated Bougainville President John Momis, who said the shares should all go to his Autonomous Government(ABG).
But the special envoy for Mr Uma, John Jaintong, said it is irrelevant because in Me’ekamui’s view there is no BCL.
“Because in 1989, when the mine was closed, Bougainville Copper walked away, got paid off, [and] large compensation for loss of business and loss of property, and to Me’ekamui, the mine has ceased to exist since 1989 and the land now returned to the people.”
Mr Uma’s special envoy, John Jaintong, said before there can be talk of any mining in Bougainville there has to be a ceremony of reconciliation to acknowledge the 20,000 who died in the civil war.
“That is the only thing that is holding them back. They want to see that that’s done quickly and amicably.” he said.
“Now, give you how they want it played out. They want it hosted by Chris Uma and the Prime Minister on behalf of the paramount chiefs of Bougainville, who own the land, and the Prime Minister of Papua New Guinea. But not by ABG.”
Mr Jaintong said the ABG and President John Momis would be welcome as observers.
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Transcript from Radio New Zealand, 26 August 2016
Bougainville’s Me’ekamui dismiss Rio share spat
JOHN JAINTONG: Me’ekamui’s view is that there is no Bougainville Copper, because in 1989 when the mine was closed, Bougainville Copper walked away, got paid off with a large compensation for loss of business and loss of property. And to Me’ekamui, the mine has ceased to exist since 1989. And the land now returned to the people. To Me’ekamui, which represents the landowners who own the land, there is no company. So why get 17.4% of something that they already have 100% of. Who is Rio Tinto anyway to say OK, I give you back 17% of something that they don’t own?
DON WISEMAN: So would the Me’ekamui look at mining projects, anywhere in Bougainville?
JJ: Well, they’re not saying no to mining. But over the last couple of years, they’ve given [outlined] the process to how to handle the issue, leading up to the reopening of the mine. And leaders, politicians simply ignored it. They’re not against the mine totally. All they want is that the processes must be allowed to complete. Like, OK there were twenty-thousand lives lost. All they want to do is… Me’ekamui has to prepare a traditional feast and that can only be hosted by Bougainville chiefs. Now after that has been done, then they can move towards the next process of talking about the mine, whether with Bougainville Copper or somebody else.
DW: This critical issue for you at this point is the reconciliation?
JJ: That’s correct. And Chris has accused PNG and Bougainville leaders of being insensitive to the situation, the critical situation. And to him I think the peace process, that we all worked hard to put together, has been broken because, to him, the leaders of Bougainville have gone back to bed with the enemy – the enemy being Rio Tinto, or Bougainville Copper, for this matter.
DW: Well, it’s all very well for Chris Uma to criticise but this is the elected government. This is what the majority of people on Bougainville voted for, so don’t they have the right to be making the decisions rather than you guys?
JJ: Yeah, that’s true but Chris runs Me’ekamui – that remains outside of the peace process – so it’s a very critical situation. Now, Me’ekamui has still got 100% of the arms. Now this is a very deadly situation that I’m handling. And I speak for the people that if there’s any leader listening, they must know that the situation is very bad and now Chris is saying that the ABG has broken the peace process by going to be with the enemy, they are not listening to the wishes of the people. And these are the people with the guns, that they’re not listening to.
DW: Now in 2019, the province is to have this vote on possible independence. Is this something that the Me’ekamui under Chris Uma supports?
JJ: Well, first thing first. The way they’re going, it looks like more leaders on Bougainville is worried about the economic factors, soemthing like Bougainville Copper should be re-opened. But for it to reopen we must comply with the customary obligations. Don, I’ll give you a background: on Bougainville, the land is owned by the chiefs, and controlled by the chiefs. Whether you are in government, ABG or not, Me’ekamui under Chris Uma are saying no, ABG has no right to deal with land matters. It’s saying land matters completely remains the power that belongs to the traditional chiefs of Bougainville.
DW: If this reconciliation that you’re talking about was to go ahead and go ahead properly, would the Me’ekamui then allow themselves to be fully re-incorporated back into Bougainville?
JJ: Yes, that’s correct, that’s the only thing holding them back. They want to see that’s done quickly and amicably. Now to give you how they want it played out – they want it hosted by Chris Uma on behalf of the paramount chiefs of Bougainville who own the land and the prime minister of Papua New Guinea, but not by ABG. And Chris has been very vocal on this over the last few days in the media that he has not given John Momis the mandate to negotiate with Rio Tinto.
In all due respect to what John Jaintong is saying, we were always of the impression that “women who customarily are the genuine landowners and stand to support the effects of the mine on their land, culture and the environment” should be heard. Right now, it seems only the voices of men have the right of say about Bougainville.
Bougainville Mining News: Rio Tinto exit from Bougainville and Panguna landowners
Panguna, 27 August 2016
Until Rio Tinto announced its decision to exit Bougainville, extensive consultations over the past 6 years helped develop broad consensus amongst Panguna lease landowner communities, the wider Bougainville community, and the ABG on working towards re-opening the Panguna mine, with majority Rio Tinto owned BCL as the mine operator.
Significant new issues now arise because of the way that Rio Tinto has decided to exit Bougainville. This note deals with some key issues arising from:
Rio Tinto dividing its 53.8% equity between ABG (36.4%) and PNG (17.4%),
the Prime Minister announcing that the 17.4% PNG received from Rio should be transferred to ‘landowners and the people of Bougainville’, but retained by PNG until agreement on how it should be distributed;
Rio Tinto deciding it is not responsible in any way for Panguna legacy issues
Value of the Shares in BCL The only way the shares will ever have significant value is if three condition are met:
1) A new and technically qualified developer must agree to participate;
2) That developer must be able to provide the approximately K20 billion needed to re-open the mine;
3) The mine needs to be re-built and operate profitably. Because of the need for the K20 billion investment, the percentages of all existing shareholder will be diluted to very little if the mine re-opens.
In that case, the real value for landowners will not come from those existing shares, but instead from the guarantees in the Bougainville Mining Act for mine lease landowners to share in mine benefits through: free equity; royalties; and preference in employment and business opportunities.
What is Happening with the 17.4% Now Held by PNG?
Many major uncertainties exist here. In particular:
The NEC decision of 4th August only approved ‘in principle’ transfer ‘to the landowners and the People of Bougainville including the Panguna Mine landowners’. In Parliament on 18 August the Prime Minister is reported (in Post Courier, August 19) to have said that it is ‘up to the landowners, the people and the government to decide on the percentage allocations’. The PNG Government will continue to be ‘custodian’ until ‘landowners, the people and ABG resolve their differences’.
Determining a monetary value for the BCL shares is difficult. It can be measured in various ways. When PNG was considering buying the 53.8% from Rio, it was discussing a price of $100 million. Informal information suggests this was a reasonable valuation. However, Rio’s exit, its divesting of its shares in BCL, the growing uncertainty about ownership of the 17.4%, and the overall reduced certainty about the future of Panguna all makes the BCL shares less valuable.
The main value that exists in BCL involves:
1) money and securities (about K135 million, some of it already committed); 2) Panguna drilling and exploration data ‘translated’ by BCL into a modern mine planning program; 3) the exploration licence over the former Panguna SML area granted under the ABG Mining Act.
What is meant by ‘the landowners’ and ‘the Panguna Landowners’? how shares would be held by landowners (e.g. as individuals, as clan groups, as representative association), and how distribution/allocation between them will be decided.
Suggestions are being made that the 17.4% will be the compensation for legacy issues. Minister Lera has been reported to say the goal is for landowners to become millionaires.But the value of the shares is uncertain, and undoubtedly quite low, and it is very uncertain who the shares might be transferred to or when they might be transferred. Without the mine re-opening, there will be very little if any money from the shares for the landowners.Even more important is the fact that even if the shares are transferred, that will do nothing to meet the huge expense involved in dealing with environmental damage and the impacts experienced by relocated village communities.
Dealing with Environmental Damage and Impacts of Relocated Villages
In the seven weeks since Rio Tinto first advised the ABG of its decision to exit from Bougainville, the ABG has already initiated steps to get action and funding in relation to the terrible problems caused by the mine and by Rio Tinto failing to accept responsibility for the damage done. In particular, we have acted to:
At this stage, the ABG is aiming to see Rio Tinto, and the Australian and PNG Governments commit significant funds to a Trust Fund to meet the costs of action in relation to mine legacy issues.
Bougainville, and the mine-lease landowners, cannot wait to see if a new developer can be found, and the mine actually re-opens. The earliest possible action is needed in relation to issues such as chemical stock-piles, the breaches to the Tailings levy banks and the flooding of neighboring areas, the damage to the Kawerong and Jaba rivers, and the conditions in which relocated village communities live.
Can the 17.4% be a Basis for Compensation for Mine Legacy Issues?
So no one knows what proportion of the 17.4% shares would go where, and how long it would take, under the Prime Minister’s proposals.
create international awareness of injustice and breaches of human rights;
get high level advice about action taken, in relation to these problems; and
obtain legal advice about possible legal action against Rio Tinto.(a) Awareness: (b) High Level Advice:
The ABG has made direct approaches to numerous organisations seeking advice and assistance. They include:
Much more work is needed to create media awareness. But international awareness can also be contributed by other action and contacts.
Getting international community awareness of the issues involved is a first major step towards putting pressure on Rio Tinto.
After we supplied a senior Australian journalist with extensive information on the issues, he interviewed the President and wrote a major article published in the main Sunday newspapers in Sydney, Melbourne and Canberra on 21 August. Several stories appeared in The Australian newspaper after the Prime Minister’s announcement about transferring shares to landowners and the people of Bougainville.
Numerous stories have been broadcast on Radio Australia and Radio NZ International. In July story was broadcast on Australian ABC TV news. The resident ABC journalist is planning a 4 day visit to Bougainville to develop a major television story for Australia. A journalist from The Australian newspaper is also planning a visit to Bougainville.
The United National Environment Program;
Human rights and corporate social responsibility monitoring organisations, including:
Human Rights Watch;
Shift (a US-based organization that monitors the UN Guiding Principles on Business and Human Rights);
Some NGOs and consultancy organisations that deal with corporate social responsibility and businesses and human rights;
The German-based Catholic Church development organization, Misereor, in relation to business and human rights issues (a focus of that organization).
Initial legal advice has been obtained from Professor James Otto (mining lawyer and mining economist who assisted the ABG develop its mining policy and mining law). A senior officer in Misereor with experience in corporate social responsibility and human rights has this week provided additional contacts with lawyers who work in this field in Germany and the United Kingdom, and these lawyers will be contacted in the coming days. The initial suggestions are that court action should be initiated, and the various options will be evaluated.
It includes dealing direct with groups of ethical investors with a view to persuading them to withdraw investment from Rio Tinto in protest at their treatment of Bougainville. The aim is to make Rio concerned that their share price will fall if they fail to act fairly in relation to Bougainville. Similarly, we have been advised to enter discussions with organisations that maintain indexes of corporate social responsibility and corporate performance in relation to human rights. Reduced ranking in such indexes can also result in share prices dropping.
We are still in the early stages of obtaining advice and sorting through the information and suggestions being received.
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