Companies leave communities to grapple with mining’s persistent legacy

John C. Cannon | Mongabay | 28 February 2020

• The destructive legacy of mining often lingers for communities and ecosystems long after the operating companies leave.
• Several large, multinational mining corporations have scrubbed their images — touting their commitments to sustainability, community development and action on climate change — but continue to deny accountability for the persistent impacts of mining that took place on their watch.
• A new report from the London Mining Network, an alliance of environmental and human rights organizations, contends that these companies should be held responsible for restoring ecosystems and the services that once supported communities.

The scale of excavation for copper and gold in the 1970s and 1980s at the Panguna mine, then one of the world’s largest open-pit mines, was massive: It swallowed up surrounding tracts of forest and farmland and wiped out wildlife populations on the island of Bougainville off the coast of Papua New Guinea. The company that operated Panguna, a predecessor of London-based mining giant Rio Tinto, dumped the mine’s contaminant-loaded wastewater into local streams for more than a decade and a half, killing off fish and rendering them too polluted for human use.

A mill at the Panguna mine, Bougainville. Image by Robert Owen Winkler

Neither the Papua New Guinea government nor the company stepped in to protect the environment, even after local communities, reeling from the impacts, sounded the alarm on the mine’s effects on their health, lives and livelihoods. Those tensions festered, and soon a war for Bougainville’s independence began. Fighting throughout the 1990s killed some 20,000 Bougainvilleans, and though a 2001 peace treaty granted Bougainville a measure of autonomy, the effects of the conflict and the mine still linger.

The company abandoned the mine in 1990, leaving it under the control of the Bougainville Revolutionary Army, and in 2016, Rio Tinto officially handed over its shares in the mine to Papua New Guinea and Bougainville.

“There is, in my personal view, an obligation of Rio Tinto to come back and to contribute to cleaning up the mess they left behind,” Volker Boege, who has studied the conflict and co-directs the Peace and Conflict Studies Institute Australia in Brisbane, said in an interview. “The effects of mining will be with the people on the ground long after [the] mining ceased.”

Holding Rio Tinto and other corporations accountable once they’ve relinquished their control of mines remains a difficult task, according to a new report published Feb. 19 by the London Mining Network, a consortium of environmental and human rights groups.

Equipment at the Panguna mine in the early 1970s. Image by Robert Owen Winkler

Rio Tinto said in a 2016 letter written by a company executive that the operation of the Panguna mine “was fully compliant with all regulatory requirements and applicable standards at the time.” But for Boege, who wrote the case study on the Panguna mine included in the London Mining Network report, that assertion doesn’t address the company’s ethical responsibility.

“I think it’s not good enough to just say, ‘We followed the legal obligations of the early 1970s or late 1960s,’” Boege said, “because everybody knows that this enables this kind of environmental destruction that people are suffering from even today.”

The report details lays out similar stories throughout Oceania and Southeast Asia. In western Papua New Guinea, BHP, a mining company with headquarters in Melbourne and London, elected to go with riverine tailings disposal — the same waste management strategy that polluted waterways around Panguna — for the Ok Tedi mine, a gold and copper deposit that BHP excavated until 2002. Situated amid forested mountains, the mine has been blamed for a 95% drop in fish numbers in the Ok Tedi River and degrading 2,000 square kilometers (772 square miles) of forest. Researchers figure that Ok Tedi has affected the livelihoods of around 40,000 people who depend on fishing, hunting and gardening.

Hannibal Rhoades, head of communications for the London-based NGO Gaia Foundation, said that companies like BHP often lobby governments for less stringent regulations. In Ok Tedi’s case, BHP persuaded the government to go along with riverine tailings disposal in the early 1980s.

The Ok Tedi mine in western Papua New Guinea. Image by Ok Tedi Mine CMCA Review

Papua New Guinea, like many resource-rich countries, has struggled to develop economically. As a result, leaders are often amenable to legal conditions favored by the company so they don’t lose a possible source of revenue.

While that’s a familiar pattern, said Rhoades, who wrote the Ok Tedi case study, it shows that governments too must be held accountable for protecting their citizens and the environment.

In addition to the companies’ role, he said, “It’s a game of power influence at the state level.”

Across the border in Indonesia’s half of New Guinea Island, the massive Grasberg gold and copper mine sidles up to the flanks of some of the region’s tallest mountains. Nearby, rare (and shrinking) equatorial glaciers cling to the summit of Puncak Jaya, towering 4,884 meters (16,024 feet) above sea level.

Still in operation today, the mine pumps an estimated 200,000 metric tons of waste into the Ajkwa River every day, contaminating a source of drinking water for local communities. Rio Tinto had been involved in the mine from 1996 until 2018, when it sold its stake to Indonesia’s state mining company, PT Indonesia Asahan Aluminium.

The Grasberg mine as seen from space. Image by ISS Crew Earth Observations Experiment and the Image Science & Analysis Group, Johnson Space Center

An investigation by The New York Times in 2005 found that Rio Tinto’s partner, U.S.-based mining company Freeport-McMoRan, had been paying tens of millions of dollars for Indonesian military and police to protect the operation’s employees. Local residents, such as Yosepha Alomang of the indigenous Amungme people, say that these government security forces in fact were there to deter local communities through intimidation from voicing their concerns.

But Rio Tinto says that when it sold its stake for $3.5 billion in 2018, its responsibility to address the problems for the local environment and communities that the mine has created ended as well, according to a case study written by Andrew Hickman, a researcher with the London Mining Network.

Hickman, Boege and Rhoades agree that challenging such contentions by companies that were once involved is an uphill battle. The success of using the courts varies. Several lawsuits against BHP for its operations of Ok Tedi yielded a settlement with the company, but BHP didn’t stop dumping waste in the river. In 1996, Alomang and other leaders sued Freeport unsuccessfully in the United States.

The London Mining Network advocates for the continued development of a United Nations treaty on transnational corporations that would codify protections for human rights.

Boege said that such “globally applicable guidelines” were necessary. But “they are not a panacea,” he said. “The problems can only be solved in the specific local context.”

Another tactic has been to bring local leaders like Alomang to the annual general meetings of companies such as BHP and Rio Tinto so they can speak with executives and shareholders about the problems their communities face.

Requests for comment from Mongabay to BHP and Rio Tinto went unanswered.

The Grasberg mine in 2007. Image by Alfindra Primaldhi

Companies have responded in their approach, however — at least as far as changing the narrative around the impacts of resource extraction. Rio Tinto, for example, says that a future “low-carbon economy” will rely on the minerals it produces, and touts its moves toward carbon neutrality in its operations.

Hickman calls such moves to scrub a company’s image “window dressing.” He also said that, when confronted with the testimony of leaders such as Alomang, these companies “have learned to be polite, but underneath the politeness is a fist of steel.”

That’s because the changes to operations, whether to make them more environmentally friendly or to ensure that communities are better informed, often lag behind the rhetoric put forth, the Gaia Foundation’s Rhoades said.

“It’s great that there’s that narrative and the investors are more active,” he said. But across much of their operations, he said, “their PR still far outstrips the genuine efforts on the ground to change practices.”

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The inside story of a gas deal gone bad

Australian Financial Review | February 15, 2020

Along the Fly River in the remote Western Highlands province of Papua New Guinea, a region best known for coffee plantations and tribal headwear, a gas boom was taking hold.

Chancers and prospectors mixed it with the world’s oil majors, all seeking to transform this region of waterfalls and dense jungle into a new jurisdiction for liquefied natural gas (LNG).

ExxonMobil, France’s Total and Australia’s Oil Search had all staked a claim as the new decade began in 2010. Less well known, but no less ambitious was the ASX-listed Horizon Oil, which was looking to thread together a series of smaller development licences to support a new pipeline and LNG plant.

The pay-off would run to at least eight digits, at a time when natural gas billionaires were being minted from central Queensland to south Texas. For a company like Horizon, which saw its market value hit $550 million as the gas boom peaked, getting to first production in the Pacific nation was always going to be a sizeable task.

Then the politics of PNG intervened.

After early attempts to resist “the bad guys”, as one of its lawyers put it, Horizon chose to engage with the then minister for petroleum and local powerbroker, William Duma – a decision that has come back to bite it nine years later.

The company, which saw its stock price drop 30 per cent this week, is now confronting allegations it repeatedly ignored corruption warnings and paid $US10.3 million ($15.4 million) to a politically exposed shell company.

That company, Elevala Energy Ltd, listed its sole director and shareholder as Simon Ketan, a man with close personal and business links to Duma.

The documents, obtained by The Australian Financial Review and which reveal in granular detail how Horizon operated in PNG, are now being examined by the Australian Federal Police, which said it takes “allegations of foreign bribery very seriously”.

See also: WILLIAM DUMA: FROM MANU MANU TO HORIZON OIL

Point of no return

Horizon has also stood aside its chief executive Michael Sheridan, a 17-year veteran of the company, as it conducts an independent investigation.

It has all the makings of a grubby little scandal.

But at the same time, it’s hard to see how it could have played out any differently from the moment Horizon wrote to then petroleum minister Duma, in November 2010, saying it was “open to any suggestion” on how the “current tension might be defused”.

At that point there was no turning back.

The files document in tropical colour the narrow line Horizon was already walking in PNG, with a seemingly endless list of paid political consultants and community affairs managers, who were chasing rumours about shifting power structures, seeking “per diems” for provincial staff and arranging drinks with the then prime minister Sir Michael Somare and his daughter Betha at Port Moresby’s Airways Hotel.

Then came the task of managing warring villagers, joint venture partners, feasibility studies, and chartering helicopters for access to remote locations.

It was high finance and geoscience meets local politics and the everyday challenges of PNG, a country the World Bank ranks as poorer than Sudan.

Into this environment strode the former investment banker Brent Emmett, who had taken over as Horizon chief executive in 2000 and been joined three years later by Michael Sheridan, as chief financial officer.

Together they had refocused the company’s attention on PNG and by mid-2008 were running hard at this emerging LNG jurisdiction with stakes in three prospective oil and gas licences.

Their timing was good.

By 2009 Morgan Stanley was reporting that land under lease in PNG had increased fivefold over the previous seven years and it predicted a rush of deals and ballooning asset values.

But Emmett was unsure how best to play this boom.

Tricky terrain to navigate

In one email he pondered whether he should prove up the resource and commercialise slowly or go for the land grab.

To make such a call, Horizon, which also had assets in China, New Zealand and the United States, needed to better understand the local political terrain, which was notoriously tricky around licence transfers and renewals.

In an attempt to smooth out these wrinkles, Emmett organised to introduce himself to Duma, while Sheridan was charged with meeting Sir Michael Somare and daughter Betha at the Havanaba bar within the Airways Hotel, famous for its leather armchairs and antique cabinets.

“It was a pleasure to meet you and welcome you as yet another investor in our country even though you have been here before,” Betha wrote to Sheridan in June 2008.

From that point, Horizon began to get serious: the company set up an office in Boroko and hired a country manager.

By October 2008, Morgan Stanley’s prediction was already being realised when AGL sold its 3.6 per cent interest in the giant pipeline and processing plant known as PNG LNG for $1.1 billion.

It was a reminder of how much was at stake.

Vulnerable to political pressure

By May the next year, Horizon was also in on the action – selling half of its interests in two licences, PRL4 and PRL5, to Thailand’s P3 Global Energy Co for $US55 million, almost three times more than analysts believed the assets to be worth. The company’s share price soared.

But things weren’t as rosy as they appeared.

Behind the scenes, the Thais were questioning their investment, and Horizon was working overtime to get someone else – Canada’s acquisitive Talisman Energy – on the hook.

At the same time, with increasingly larger amounts at stake, the local politics started to get complicated. And unlike the big diversified players, Horizon couldn’t simply threaten to walk away. Its big bet was in PNG.

The company’s big pay day was contingent on firming up its gas resources to build its own pipeline and LNG-processing plant or tap into one of the existing projects. Even then its resources were on the marginal side, which meant any loss of acreage was potentially fatal for its ambitions.

That left it exposed to political pressure and everyone knew it. Enter PNG’s former petroleum minister and deputy prime minister, Sir Moi Avei, who Horizon hired as an adviser to the board, despite one industry contact warning he may be “implicated in some dubious licence deals etc”.

Those claims were never tested, but the public record shows just a year earlier, Sir Moi was found guilty on three counts of “misconduct in office”. He was fined $1500 and forced out of parliament.

‘You scratch my back …’

That was apparently no obstacle for Horizon as Sir Moi set about working the corridors and securing the company’s licences. In outlining his role to Emmett and Sheridan, he stressed the importance of face-to-face meetings and not stepping on the “turf” of other fixers, managing relationships within the department and at the village level. And when it came to handling Duma, he was clear how the minister operated.

“I’ve been helping Minister Duma out for the past 6 weeks because the LNG project is in my backyard. You know how the system works ???you scratch my back and I’ll scratch yours’,” he wrote.

But Sir Moi, who one source described as the epitome of PNG’s “big man culture”, quickly came to see the political winds shifting against Horizon.

“With regards to the minister [Duma] I can sense he is up to something. He did call me two weeks ago but somehow we have yet to meet in person. I’m still chasing him,” he wrote in November 2009.

He was right. Duma was indeed “up to something”. The trigger for the minister to make his play was a move by Horizon‘s joint venture partner, the South Australian energy giant Santos, to sell out of its interest in one licence. That suddenly became a road-block.

Sir Moi characterised these as “basic” issues, that could be untangled once Horizon understood the “process”. He warned the company’s failure to stay with the “process” would see it become a “political pawn”.

“We need to avoid [this] at all cost. I will elaborate when I see you and Brent,” he said.

Licence in jeopardy

By July, those fears were out in the open, and rumours were swirling. One engineer warned Duma “has done this before”. “[He] rescinded a licence and resold to someone else,” the company was warned. “Duma has a buyer.”

As the reality of losing a licence worth more than $100 million grew, a series of heated emails were exchanged. The Department of Petroleum and Energy accused the operators of failing to keep the site in “good standing” and not having spent the agreed amount.

Horizon and joint venture partner Santos responded with strongly worded legal letters. But on June 28, 2010, Duma served a notice that PRL5 was to be cancelled. Horizon countered by taking the unprecedented step of suing the minister, the department and the Petroleum Advisory Board for an unfair loss of licence. It was taking on a corrupt and broken system.

“I want to convey a message to Minister Duma, that’s he’s got a real dog fight in [sic] his hands,” Sir Moi emailed.

Horizon‘s lawyers at Blake Dawson said the company had strong support in the industry for its stance. “The good guys are all pretty stirred up by these goings on,” the company was told.

Then the company abruptly changed tack with a grovelling letter.

“Minister, we very much regret that this issue [the revoked licence] has led to the current situation [the litigation],” Emmett wrote to Duma. “As always, we remain open to any suggestion from you as how the current tension might be defused.”

The message got through and by March 2011, a sealed settlement had been negotiated and approved by the court. Horizon would keep 70 per cent of PRL5 (now known as PRL21), and the minister would award the other 30 per cent at his discretion.

From the minister’s discretion a 10 per cent stake in PRL21 would be given to the shell company Elevala Energy Ltd, a company without the experience or capital to develop such a complex asset and whose sole shareholder, Simon Ketan, had close personal and professional links to the minister.

In the weeks following this grant, Horizon would ignore repeated corruption warnings and buy out Elevala for $US10.3 million, a price tag which was revealed on Monday by the Financial Review after remaining secret for nine years.

PNG Prime Minister officially takes on Horizon Oil

• A saga of corruption and bribery allegations continue for Australian company, Horizon Oil
• Papua New Guinea’s (PNG) Prime Minister, James Marape, has now publicly taken aim at the scandal — making the issue a priority
• The scandal involves a AU$15.4 million transaction to a small shell company, reportedly linked to former PNG Petroleum and Energy Minister, William Duma
• Duma continues to work in the PNG Government and James Marape has denied calls for an immediate sacking
• Marape and Duma are expected to make a formal statement on the scandal
• Shares in Horizon Oil continue to devalue on the Australian market, falling 3.61 per cent on Tuesday for a worth of eight cents each

Fraser Palamara | The Market Herald | 19 February 2020

Prime Minister of Papua New Guinea (PNG), James Marape, has publicly taken aim at Australian company Horizon Oil (HZN).

The pacific island leader is backing an investigation into the Australian explorer — spiralling from reports of ‘missed corruption warnings’ and a suspicious multi-million-dollar payment.

News of the saga first reached headlines earlier this month, including allegations of bribery.

Now the investigation has reached all the way to the top order of Papua New Guinea’s Prime Minister, James Marape.

“If there is corruption involved, then find the evidence and due action will take its course,” James Marape said publicly on Tuesday.

“I have sent a request to the highest levels in Australia. I am interested in this matter.”

“The Ombudsman and the police have every right to establish a file on this matter.”

Marape was elected as Prime Minister last year, running a campaign on promises to clean up corruption and hold foreign companies more accountable. He has commented that domestic investigations into Horizon Oil could begin.

The Horizon Oil allegations of corruption spawn from a payment made in 2011, following a denied petroleum licence application in 2009.

Horizon Oil then made a AU$15.4 million payment to an ‘unknown shell company’ — reportedly linked to PNG’s Minister for Petroleum and Energy at the time, William Duma.

Duma’s department was shown in documents to award a 10 per cent stake in a development licence to the same shell company. This company was listed in ownership under Duma’s personal lawyer at the time.

William Duma still works within the PNG Government, but Prime Minister Marape has denied calls for an immediate sacking.

However, Horizon Oil’s Chief Executive Michael Sheridan has faced fallout — being suspended as of last week.

Share prices in the publicly traded Australian explorer also fell 30.8 per cent at the time, lowering to a valuation of 8.3 cents each.

James Marape said on Tuesday that he and William Duma will make a formal statement on the matter in the very near future.

Shares in Horizon Oil continue to shrink, lowering an additional 3.61 per cent on Tuesday. They last closed at eight cents each.

Horizon Oil denies Financial Review’s $15m bribery scandal allegation, launches independent investigation

The allegations had an immediate impact, with Horizon Oil’s share price closing out the day down over 28% to $0.086.

Lorna Nicholas | Small CAPS | February 10, 2020

In response to an Australian Financial Review article alleging a $15 million “bribery scandal”, Horizon Oil issued an ASX statement saying it “has no actual knowledge” of any wrongdoing.

However, prior to market close today, the company revealed it had initiated “an independent investigation” into the matter, due to the “seriousness of allegations” made in the AFR article.

According to the AFR, Horizon “repeatedly ignored” corruption warnings and paid US$10.3 million ($15.4 million) to a shell company in Papua New Guinea nine years ago.

The AFR purports the payment was made 10 weeks after Horizon secured a development licence in PNG after an ongoing legal dispute with PNG’s Minister for Commerce and Industry William Duma.

In documents the AFR obtained including emails, faxes, letters and legal briefs, the deal revealed links between the company and Mr Duma, with lawyers warning investigations would be “likely” if the transaction was “scrutinised”.

The revelations have pressured Horizon chairman Mike Harding, who joined Horizon’s board in 2018, to investigate the allegations.

Although the deal was before Mr Harding’s time, the AFR claims Horizon’s chief executive officer Michael Sheridan is “named extensively” in the files along with former chief executive officer Brent Emmett.

Both Mr Sheridan and Mr Emmett have declined to comment on the allegations. Meanwhile, Mr Duma told the AFR the allegations amounted to “political witch hunting and malicious intent” to make him look bad.

Background

The situation arose in 2010 when Mr Duma accused Horizon of breaching its licence.

In an internal email leaked to the AFR, Horizon’s then chief executive officer Mr Emmett said it “smells like someone is setting the scene for a handout for a problem that doesn’t exist”.

By the end of 2010, Horizon and Mr Duma were embroiled in a legal battle, with Mr Duma opening up a tender process to develop the gas field.

The AFR noted that Horizon then wrote to Mr Duma stating it was “open to any suggest” on resolving the issue, which was the trigger for a settlement which eventually occurred in March 2011.

Horizon’s response

The allegations involve the $15.4 million payment to acquire an interest in Petroleum Retention Licence 21 in PNG’s Western Province, which is known to be in an area hosting condensate and gas discoveries.

According to Horizon, it and its co-venture partners applied for renewal of PRL 5 in PNG, which was not granted.

“Horizon commenced judicial review proceedings in respect of the Minister’s decision to protect its commercial interests,” the company stated.

“As announced on 31 March 2011, the proceedings were settled including on terms providing for Horizon to be granted a 70% interest in a new PRL 21, covering the same area as the former PRL 5,” Horizon explained.

PRL 21 was subsequently awarded to Horizon and two local PNG companies – Elevala Energy and Dabajodi International Energy.

Under a pre-existing contract, Horizon then transferred a 35% interest in PRL 21 to a subsidiary of Talisman Energy.

Horizon then acquired a 10% interest in the PRL from Elevala for US$10.5 million and a further 5% stake from Dabajodi.

“Following these transactions in 2011, PRL 21 was held by Talisman (40%), Horizon (45%) and Kina Petroleum, which was formerly Dabajodi (15%).”

AFR’s allegations

The AFR has pointed out that PNG lawyer Simon Ketan became the sole director and shareholder of Elavala four days before the licence was granted.

Ashurst lawyers that worked on the deal under the legal firm’s previous name of Blake Dawson noted “close connections” between Mr Ketan and government officials, with sources informing the AFR Mr Duma and Mr Ketan were “associates”.

Mr Ketan told the AFR the files for a “private commercial deal” were closed as they occurred more than seven years ago.

He added he “did not recall” any “alleged concerns”.

The AFR’s probe has unearthed no record of Elevala operating any business, providing grants or dividends, or employing staff.

At the time, Elevala’s registered capital was just $0.88.

Horizon’s share price plunged on the news – with the company closing out Monday at $0.086 – down 28.3%.

AXIOM STANDS BY CLAIMS

Solomon Star | 5 December 2019

AUSTRALIAN mining firm Axiom Ltd has insisted the Prime Minister’s Chief of Staff Robson Djokovic attempted to solicit funds from them for his personal benefit.

“Around the time when Robson Djokovic became Chief of Staff, he approached Axiom’s Australia-based chairman,” a statement Axiom’s Community Affairs Manager Philemon Kesaka issued yesterday said.

“Upon their first meeting, Djokovic presented a document signed by Prime Minister Sogavare to confirm that Djokovic was on business for Sogavare,” the statement added.

“Djokovic was promoting his personal services to Axiom to deal with the Government including seeking money for himself.”

The statement said Honiara-based private legal practitioner Wilson Rano and a Fiji-based lawyer recommended that millions of dollars be paid to a company jointly controlled by Rano and Djokovic so that they could provide services to Axiom. 

“Rano and Djokovic were the directors of this company at the time, including from 2015 and also when Djokovic became Chief of Staff to the Prime Minister.

“Later in meetings in Fiji, with Rano, a Fijian lawyer, Axiom’s Australian barrister and Ryan Mount, Rano wanted to provide services to Axiom claiming he would work with Djokovic and also that he would manage all landowner issues because he claimed he is the only person the Isabel landowners will listen to.  

“Axiom refused to further engage any further with these parties because what they have proposed was not to Axiom’s ethical standards and nor did it satisfy Axiom’s legal and probity standards. 

“Axiom also did not want to engage with Djokovic because he was a government official and obviously as a mining company, Axiom could not engage with a convicted criminal. 

“In fact at the very start of the meeting, Axiom’s barrister made it very clear to Rano that Axiom could not engage him (Rano) because due diligence and investigations had revealed problems with his professional background, including allegations of forgery and his association with a convicted criminal Djokovic. 

“Understandably Rano was upset at being told this. 

“At no time has Rano ever represented Axiom.” 

The statement said despite this farce and the ongoing attempts by Djokovic and the government to deny the San Jorge landowners their benefits and slow Axiom’s progress, the company maintains that it will always abide by the laws and will never deviate from doing what is legally right and important for the benefit of the landowners which the company has partnered with.

“Axiom is determined that it will continue to move towards a sustainable nickel mining project on San Jorge from which landowners can benefit and moreover is free from environmental disasters and a project that all Solomon Islanders can benefit from and be proud of.”

Earlier Rano confirmed meeting with Ryan Mount, and Mr Stratton (a well-known Australian Lawyer) representing Axiom Mining Company Limited at Nadi, Fiji in 2016. 

“He said this was after Axiom KB Ltd was licking its wounds from the SMM v Axiom Case which the  Court of Appeal dismissed both Axiom’s Licence and SMM’s licence and found that the Commissioner of Lands with the help of Axiom KB Ltd and Ryan Mount illegally registered a lease over Takata/Kolosori tenement.

He claimed the meeting in Fiji was purposely to come up with a legislation in which they will try and push through Parliament to secure the San Jorge and Takata Tenements for Axiom Mining Co Ltd. 

“It is an idea which Mount was championing in light of his position that the Mines and Minerals Act simply failed to recognize investors like Axiom and how Axiom is the only company capable of properly mining San Jorge and Takata.

“As a professional, my position has always been that I would be willing to do all legal means possible to do the work in consultation with Mr. Stanton and Axiom if Axiom is prepared to put its money where its mouth is. 

“I drafted a consulting agreement between Axiom Mining Co Ltd and myself and stated that my consulting fees is AUD$700,000 and payable on installments upon achievement of each stage of the proposed legislation.

“Of course in doing so I would have needed the assistance of people I trust and who can help in pushing these agendas forward. 

“I remember discussing this with Djokovic who at the time was a freelance consultant and was not yet employed by Solomon Islands Government. 

“Because of his skills and connections, Djokovic would have been instrumental. 

“By the end of October 2016, Djokovic joined the Government as Chief of Staff and has advised that he could no longer be involved.

“Because Axiom could not afford this the matter we could not take the matter further. 

“It is not, however, because Mount discovered that Djokovic was a partner in Echelon Consulting Ltd,” Rano said.

Axiom mining claims Solomon PM’s Chief of Staff sought $700,000

Axiom had its foreign investment licence cancelled by the Solomon Islands government in October this year and has been told that its expatriate workers were no longer able to stay in the country.

Solomon Times | 4 December 2019

The Australian newspaper reports that the Prime Minister’s chief of staff (prior to his appointment in October 2016) had sought payments from Axiom to smooth over problems with the government at the time.

Axiom mining chief Ryan Mount said Robson Djokovic, who is Mr Sogavare’s nephew and has a criminal record in Australia, had sought AUD$700,000 “consultancy” through a Fijian lawyer to allow the company to hold on to its Isabel Nickel project.

“When we looked at the company records, it was half-owned by Robson Djokovic,” Mr Mount said.

He said he refused to pay, and the ASX-listed company was being forced out of the country in favour of a Chinese company that caused the Solomon Islands biggest environmental disaster.

Mr Mount has pleaded for Australian government assistance, telling senior advisers to Scott Morrison and Foreign Minister Marise Payne that the company, which has 8000 shareholders, was being denied due process by the Solomon Islands government.

Amid moves to strengthen relations with Pacific governments, Mr Mount said he was told by a senior official at the Australian high commission in Honiara that it was “time to pack your bags” and leave the country.

Mr Djokovic, an Australian citizen, told The Australian via text message that the allegations against him were “a smear”.

He said his criminal convictions for burglary, fraud and drug offences “are no longer relevant but have been used for political convenience” by Mr Mount and others seeking to undermine him.

Wilson Rano, a well-known lawyer in Solomon Islands, posted on social media that he was in fact the person referred to in the article by The Australian.

“I recall having a meeting with Ryan Mount, and Mr Stratton (an Australian Lawyer) representing Axiom Mining Company Limited at Nadi, Fiji in 2016. This was after Axiom KB Ltd was licking its wounds from the SMM v Axiom Case which our Court of Appeal dismissed both Axiom’s Licence and SMM’s licence and found that the Commissioner of Lands with the help of Axiom KB Ltd and Ryan Mount illegally registered a lease over Takata/Kolosori tenement,” Rano explained.

He said that the meeting in Fiji was purposely to come up with a legislation that could give clarity to the whole mining process and help secure the San Jorge and Takata Tenements for Axiom Mining Co Ltd.

“It is an idea which Mr Mount was championing in light of his position that the Mines and Minerals Act simply failed to recognize investors like Axiom and how Axiom is the only company capable of properly mine San Jorge and Takata.

“As a professional, my position has always been that I would be willing to do all legal means possible to do the work in consultation with Mr Stanton and Axiom if Axiom is prepared to put its money where its mouth is. I drafted a consulting agreement between Axiom Mining Co Ltd and myself and stated that my consulting fees is AUD$700,000 and payable on instalments upon achievement of each stages of the proposed legislation.”

Rano says that having received instructions from Axiom he sought the assistance of Mr. Djokovic, at the time was a freelance consultant and was not yet employed by the Solomon Islands Government. Rano says that by the end of October 2016, Mr Djokovic joined the Government as Chief of Staff and advised that he could no longer be involved.

“Because Axiom could not afford to, we could not take the matter further. It is not however, because Mr Mount discovered that Mr Djokovic was a partner in Echelon Consulting Ltd. Echelon Consulting Ltd was a registered company I registered in 30 January 2015 and has nothing to do with Mr Djokovic,” said Mr. Rano.

“The only connection between Mr Djokovic and Echelon Consulting Ltd is me. It is no secret that Mr Djokovic and I have been business partners for many years which on his part has been disclosed in full to the Leadership Code Commission.”

Axiom had its foreign investment licence cancelled by the Solomon Islands government in October this year and has been told that its expatriate workers were no longer able to stay in the country.

Mr. Mount continues to argue that the country’s pro-China Minister for Mines, Bradley Tovosia — a key figure in the campaign to sever diplomatic relations with Taiwan — was a leading figure in moves to deny the company an export permit.

The move — a month after the Solomons switched diplomatic relations from Taiwan to China — follows the denial of an export permit to Axiom and the assignment of one of its prospective tenements to the Hong Kong-based Bintan Mining.

Bintan sparked a massive Australian government-funded clean-up earlier this year when one of its bauxite ships spilled 80 tonnes of heavy fuel oil on an environmentally sensitive reef on Rennell Island, South of the Solomon Islands.

Canadian Mining Company Torex Gold Resources Inc; Archetype of Violence in Guerrero

REMA | October 4, 2019

Since 2010, in the heart of the municipality of Cocula in the state of Guerrero, Mexico, Canadian mining company Torex Gold Resources Inc. has been operating through its subsidiary Minera Media Luna S.A. de C.V.. Its Limón-Guajes project is an open pit and underground gold and silver mine. Since the company’s arrival, it has been one of the spoiled favourites of diverse political operators in the state of Guerrero, especially the governors of the day, as well as having received repeat visits from the Canadian diplomatic mission in Mexico. This has allowed Mr. Fred Stanford, Torex Gold Director, President and CEO, to move freely with complete impunity, despite hundreds of harms committed by the company and its violent operators, particularly in the communities of Nuevo Balsas, La Fundición, Real de Limón and Atzcala.

Since which time the company has been in the area, its operations have been shut down various times as a result of actions taken by mine opponents and workers. On each occasion, some sort of violence has been perpetrated against them by workers affiliated with the Confederation of Mexican Workers (CTM by its initials in Spanish, a “protection union” that does not legitimately represent workers) and organized crime, which has for years operated openly in the area in favour of the company, controlling who comes and goes, offering jobs and suppressing the population at its whim. The list of harms that have taken place is just as long as the impunity that operates in the country, starting with the people who were displaced from the community La Fundición who had to flee the country or move to other states to avoid being assassinated. The appearance of false land titles used to dispossess the original owners of their land and the forced relocation of around 170 families from La Fundición and Real del Limón. The mine has also contaminated water supplies, which has permanently affected the economic activity and health of fishers in the community of Nuevo Balsas. The University of Guerrero distorted the information about the contamination as if the company had no role, which is hardly surprising given that the university has received funds for years from Torex Gold, as well as from Goldcorp when it was still operating [the Los Filos mine] in Carrizalillo, Guerrero.

In addition, there have been multiple cases of extorsion, people being picked up and either threatened or disappeared, and kidnappings. We recall what took place to the three brothers Victor, Miguel and Modesto Rebolledo Salinas, members of the community Real del Limón who were picked up shortly after their other brother, Eligio Rebolledo Salinas, was shot and seriously injured. Another pair of brothers were assassinated, Victor and Marcelino Sahuanitla Peña, who had been workers opposed to being exploited by the company and the CTM. The most remarkable aspect of their assassination is that it took place in sight of so-called “military officials” assigned to patrol #0827327, which several days prior had installed a security checkpoint in the area. The checkpoint was in response to a 600-strong worker strike that shut down mine operations as part of their struggle for the freedom of association, freedom of union representation and freedom to collective negotiations as fundamental rights. Shortly later, another leader in this worker struggle was murdered, Mr. Quintin Salgado Salgado. This cleanup that the company and its assassins undertook to get rid of people struggling for their rights also included – of course – individual and mass dismissals of workers. Meanwhile, others have continued to be persecuted in a grotesque manner, considering the disappearance of opponents such as Oscar Hernández Romero on September 23 of this year. Since this time, over a hundred people have gone looking for him in different parts of Cocula. His disappearance is retaliation for the legal action that 200 workers who were unjustifiably dismissed have taken against the company. Now, the pseudo-community police, made up of assassins who operate in favour of the company, have decided to shut down their search, issuing death threats against the friends who are looking for their leader.

Below we share a brief outline of the recurring harms that have taken place in connection with the violent Canadian mining company Torex Gold Resources Inc. We do so in order to shed light on a story that has not been told and that has been little analyzed, except perhaps by the publication Diario El Sur in Acapulco.

Since the [2017] closure of the company’s operations as a result of the 600-strong worker strike demanding that the company refuse to recognize the collective agreement with the CTM union any longer, there have been a series of violent events gradually taking place, making an increasingly notorious case. In response, there were attempts at a solidarity visits by diverse actors, who were also detained by groups of assassins on their way to the area. High ranked state representatives also appeared, along with Canadian diplomats, the state and municipal police, the gendarmerie and the army, as well as representatives of the National Union of Mine, Metal, Steel and Allied Workers of the Mexican Republic (STMMSRM by its initials in Spanish), led by now Senator Gómez Urrutia who, using the influence that he has in Canada, brought the United Steelworkers (USW) into the fray. The USW urged Prime Minister Justin Trudeau to intervene with Mexican authorities to stop the repression against the worker strike. The Canadian union also issued a press release denouncing that the subsidiary of Torex Gold Resources had struck an alliance with the CTM union to associate all of its workers to that union without their consent, stating that this is a “corrupt practice” that is illegal both in Canada and the U.S. Support from these unions soon led to a case before the Federal Board for Conciliation and Arbitration where at least two public hearings took place to determine the date when a vote would be held to select a union, which clearly pointed toward the creation of a section under the STMMSRM.

In the press, a date for the vote was announced to finally determine the change in union. However, one day prior to the date set by the Federal Board of Conciliation and Arbitration, the company widely distributed a communiqué in which it expressed its pleasure at an internal agreement that had been reached by the parties, with which the strike was lifted and – with the stroke of a pen – the conflict, the assassinations, the kidnappings and the cases of extorsion were all forgotten. Nothing further was known of the national or international support that mine opponents had received from the STMMSRM and the USW. The repressive Mr. Fred Stanford, President and CEO of Torex Gold Resources Inc., heaped exuberant praise on himself, lauding his good business sense. But it was all a lie because the testimonies of the opponents state that it was organized crime acting in favour of the company who suddenly ended the strike with their arrival and threat to kill everyone if the strike did not stop. All the support for the workers was withdrawn without a word from the national and international unions, the state and municipal governments, the Federal Board of Conciliation and Arbitration, the Canadian diplomats, or the state and federal armed forces. Meanwhile, Mr. Stanford was widely celebrating “the great agreement” that had been reached.

This summary helps to explain that the violent reality that the communities in the municipality of Cocula and surrounding municipalities live with has not changed one bit. The federal government continues to be absent in the area, despite the effect created by the case of the young men from Ayotzinapa. As a result, impunity continues to be at the centre of corporate power that has every political operator in the state suppressed, submissive and bought out. Mining “progress and development”, as REMA has documented and denounced ad nauseum, is – to put it lightly – an atrocity. 

REMA expresses our solidarity with the struggle of the men and women who are living with systemic violence throughout the area known as the “Guerrero Gold Belt”. We know that this is a struggle that you are fighting in complete solitude because, for some time, the state has been fully in the pockets of organized crime and the mining companies. In this context, we recognize the tremendous efforts you are making to hold your heads high and continue to fight for life.

When will the simulation and impunity end?

If the Fourth Transformation fails to get clarity about this root issue, everything that is said in the daily morning press conferences will be totally irrelevant

We demand the appearance with life of Oscar Hernández Romer 

For Territories Free of Mining 

Mexican Network of Mining Affected People

Axiom sues Tovosia and Solomon Islands mining board

Solomon Star | 3 October 2019

AXIOM Mining Limited (AML) says it has initiated legal proceedings at the High Court over the government’s handling of its export permit application.

General Manager Dr Phil Tagini said they’ve filed a claim for judicial review against the decision of the Minerals Board, as well as a misfeasance claim against the Minister of Mines Bradley Tovosia and Director of Mines Nicholas Biliki for failing to properly exercise their powers under Regulations 70 and 71 of the Mines and Minerals Regulations pertaining to the company’s export permit application. 

“Furthermore there are subsequent requests for materials by the Ministry of Mines which the law does not require for the consideration of an export permit,” Tagini explained.

He said the application has met the requirements of the Mines and Minerals (MM) regulations and thus the company should have been granted an export permit to ship out its nickel ore products to its United States-based buyer, Traxys.

However, Tagini said Minister Tovosia in a letter dated July 18 this year informed Axiom that the Minerals Board following its extra-ordinary meeting on July 5, had decided to reject the company’s export permit application on the basis that it did not possess a business licence from the Isabel Provincial Government (IPG). 

The Board had maintained that this is a requirement even though it is not required in the Act or Regulations. 

Tagini explained that Axiom’s non-possession of a business licence was not deliberate on its part but was rather due to failure of the Isabel Provincial Government to respond positively to its numerous applications and attempts to obtain a business licence.

He said Axiom has come to a stage where it could no longer tolerate the overreach of the Board and must bring the matter for an independent interpretation by the Courts.  

He added Axiom’s nickel mine project on San Jorge is projected to contribute up to 15 to 20 percent of Solomon Islands Gross Domestic Product (GDP) when in the full exportation phase. 

“We are surprised that with the current state of our economy that a company that has been granted a Mining Lease and has been mining for a year is being refused to export their ores for reasons that we believe are not according to law. 

“We have complied with all requirements under the law so it is very concerning to us that this situation is preventing more employment opportunities for Solomon Islanders and much needed tax revenues into our government coffers.   

“It is unfortunate that every citizen and the landowner and our loyal suppliers have to suffer for this poor governance. 

“Axiom is left with no other option but to have the matter rectified in the courts,” Tagini said.

Pressure on MRDC to come clean on LNG revenue

Isaac Lupari chairs MRDC where “everything it does is shrouded in secrecy”

Mekere Morauta | PNG Attitude | 25 September 2019

The Mineral Resources Development Corporation (MRDC) needs to publish up-to-date audited details of its group finances since PNG LNG gas production began in mid-2014.

MRDC manages landowner equity interests in both mining and petroleum projects and is chaired by chief secretary Isaac Lupari.

It is estimated that almost K1 billion in landowner royalties has flowed into its coffers since then, but virtually none of that money has reached its rightful owners.

And, contrary to claims by MRDC last week, I am advised that the company has not paid any dividends on the investments it has made on behalf of landowners from their royalty payments.

Hundreds of millions of kina have been invested, but are these profitable, sound investments?

MRDC can make flowery statements, empty promises and false and irrelevant denials, but the fact is that, without publishing its accounts, it cannot prove what it says is true.

It cannot demonstrate that it is operating according to the law, or that landowners are receiving a fair return on their funds.

MRDC’s independent auditors have refused to sign off financial statements. The auditor-general has refused to sign off financial statements. And MRDC has not supplied financial statements to the auditor-general or the Investment Promotion Authority as required.

This is why it is so important that the public inquiry into MRDC proposed by prime minister James Marape goes ahead as soon as possible. In the meantime MRDC should immediately come clean on the state of its finances.

It is in the landowners’ interests that current information verified by independent auditors and the auditor-general is made available.

Failure to supply that information will only heighten public suspicions that all is not well at MRDC. Has there been waste, abuse and mismanagement? The public, as owners of this state corporation, has a right to know.

The information required includes details of trust accounts and other accounts holding landowner funds, the cost and current value of MRDC’s investments, returns on those investments to landowners, withdrawals of landowner funds and details of board approvals for them, payments to all directors and management, fees charged by MRDC to subsidiary companies, and payments to suppliers.

A media release issued last week by MRDC consisted of spin and misinformation. The dividends the company claimed to have been paid are not dividends from MRDC’s investment of landowner funds. They are dividends paid from underlying resource projects as a result of equity participation negotiated by the State.

Nor can MRDC legitimately claim any increase in asset values because its financial statements have been called into question by its independent auditors and the auditor-general.

The value of MRDC’s investments using landowner funds is singled out for criticism by its auditors and the auditor-general. There are other question marks over short term deposits, receivables, related party balances, income tax and financial statement disclosures.

Other comments made by MRDC have an equally unsound basis – none of the documents or processes it refers to in its media release are open to public scrutiny. MRDC, unlike most other state-owned enterprises, does not even have a website.

Everything MRDC does is shrouded in secrecy. It has not provided up-to-date information or full information or even correct information for years.

Now is the time to provide it.

Pruaitch Says PAC Faces Daunting Task On KPHL

Post Courier | September 23, 2019

National Alliance Party leader Patrick Pruaitch says the Parliament’s Public Accounts Committee will face a daunting task when it looks into the financial a airs of Kumul Petroleum, which holds the government’s 16.57 per cent stake in the PNG LNG Project.
Mr Pruaitch said the Marape government has taken a responsible stance by rejecting claims by Kumul Petroleum that it is not answerable to the PAC inquiry chaired by Sir John Pundari.

“I have raised several issues with regard to the financial affairs of Kumul Petroleum, which is the only state-owned enterprise that operates as though it is not accountable to anyone even though every toea that it has rightfully belongs to the people of PNG,” he said.

“The financial accounts released by Kumul Petroleum, covering the period from 2014 to 2017, indicates that it has been in receipt of over K5 billion as a result of government equity in the PNG LNG Project. Only a tiny portion has been returned to the government as dividends and corporate tax.

“It has now come to my attention that the 2017 annual accounts of Kumul Petroleum, which have been endorsed by the Auditor-General, discloses that total revenue it received from PNG LNG in 2017 was US$411 million, or approximately K1.37 billion.

“However, the 2017 annual report from the Government’s Extractive Industries Transparency Initiative (EITI) shows that it received K2.097 billion from PNG LNG, suggest- ing under-reporting of 2017 revenue by over K700 million.

“Has there been an accounting problem or has this money simply vanished? An additional discrepancy is that the Kumul Petroleum 2017 accounts show the company paid US$56.74 million in corporate tax in 2017, while EITI only records a payment of K13.3 million, as confirmed by the Internal Revenue Commission.”

Mr Pruaitch said it was notable that key agencies that have not cooperated with the government mandated EITI process have been Kumul Petroleum and the Bank of Papua New Guinea, which has been recipient of landowners’ royalty payments from the PNG LNG Project.

Mr Pruaitch, who recently left his position as opposition leader to join government, said it was praiseworthy that Prime Minister Marape has shown a determination to ensure that government bodies, such as Kumul Petroleum and Mineral Resources Development Company, were transparent and accountable.
Former prime minister Sir Mekere Morauta has raised a series of issues regarding the operations of MRDC and Prime Minister Marape has agreed to hold a public inquiry into MRDC.

The National Executive Council has also instructed Kumul Petroleum to appear before the PAC inquiry.