Category Archives: Corruption

East Sepik governor dispatches police to arrest rogue miners

Radio New Zealand | 21 February 2018

The Governor of Papua New Guinea’s East Sepik province has dispatched police to detain a company looking to mine without landowner approval.

Allan Bird, who was elected six months ago, said he was trying to improve the governance around resource extractive projects in his province.

He said his administration was ready to support landowners in any action they would like to take in protecting their traditional tribal land.

“Two days ago we had a ship go up the Sepik river with all kinds of equipment to go and mine a gold mine somewhere up in Angoram, in a place called Keram LLG (Local Level Government area). The landowners came and complained.

“Today I dispatched 15 police officers to actually go there and arrest these people and bring them to Wewak and we can figure out what’s what.”

Mr Bird said he checked with PNG’s Mining Minister about the Keram mining concern who didn’t know anything about it.

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Court reinstates case of Tolukuma mine spill

Christopher Yowat | The National aka The Loggers Times | February 13, 2018

THE Supreme Court has reinstated a case filed against the Tolukuma Gold Mine Limited over the alleged spillage of sodium cyanide into rivers in Golilala district, Central, 18 years ago.

The case was filed by James Gabe and others in 2006. it claims that more than K1 million in damages from the mining company was dismissed by the National Court in April, 2014. Gabe then applied to the Supreme Court to review the decision by Justice Sir Bernard Sakora.

The three-man Supreme Court bench of judges David Cannings, Ere Kariko and Jeffery Shepherd, granted the orders sought by Gabe – that the dismissal of the case by the National Court on April 9, 2014, be quashed and that the matter be reinstated.

Justice Sir Bernard had dismissed the proceedings after he had been satisfied that Gabe and the other plaintiffs were guilty of an inordinate delay in prosecuting the case and that there had been no proper explanation for it.

Gabe argued that the decision to dismiss the case was made on an “erroneous factual basis”.

Justice Cannings, on behalf of the Supreme Court panel, said:

“We consider, with respect, that if his honour had closely analysed the events that took place in the six-month period between the failed mediation (in April 2013) and the filing of the respondent’s motion for dismissal (in October 2013), his honour would have formed a different view as to the satisfactoriness of the applicant’s explanation for the delay.”

See also: Disgraced judge Bernard Sakora resigns in latest move to avoid justice

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O’Neill caught out telling lies over Ok Tedi Mine

Bryan Kramer MP | PNG Blogs | February 09, 2018 

Prime Minister Peter O’Neill was caught lying and misleading Parliament during question time when it resumed its first session in 2018 on Tuesday.

O’Neill was responding to a question raised by the Governor of Western Province, Toboi Yoto asking when his people would benefit from Oktedi Mine and when they would receive the share certificates.

Western Governor explained that since the O’Neill Government took over the mine in September 2013 it had failed to transfer the share certificates representing 33% interest in the mine to the Western Province people. Further, still, they had yet to receive their dividends.

In response, O’Neill claimed when his Government took over the mine from BHP, who at the time wanted to shut down the mine for not being profitable. He said the Government inherited a loss-making machine.

He confirmed his Government has yet to transfer 33% interest to the landowners, claiming it was because of stamp duties issue.

Member for Moresby North-West Sir Mekere Mortaua interjected with a point of order. Mekere a former PNG Sustainable Chairman told O’Neill to stop his incurable lies [about the mine]. There was never any plans to shut down the mine it was not making any loss but investing in further explorations, Sir Mereke said.

O’Neil responded telling Mekere that he was only trying to protect his legacy of providing immunity (protection) to BHP, the mines former developer who destroyed the lives and livelihood of the people through environmental damage.

“It was loss-making machine when we took it over but we had to restructure the mine during the drought and paid off all the employees making a profit,” he said (source post courier article – https://postcourier.com.pg/ok-tedi-issue-heats/)

It was at this point I then interjected asking the Speaker to advise the Prime Minister to stop lying and misleading parliament. As I had in front of me 2012 OkTedi Financial Report confirming the mine was, in fact, making a profit.

O’Neill responded I was a busybody from Madang on social media.

So was O’Neill lying when he claimed the Oktedi Mine was a loss-making machine before he took over it?

O’Neill took over the mine in 2013, so let’s review the mine’s profits four years before and four years after from when he took over it.

  • In 2009 net profit K1.5 Billion
  • In 2010 net profit 2.03 Billion
  • In 2011 net profit K1.2 Billion
  • In 2012 net profit of K913 million
  • In 2013 net profit of K181 million
  • In 2014 net profit of K360 million
  • In 2015 net loss of -K347 million
  • In 2016 net profit of K384 million

This confirms O’Neill was lying and misleading parliament.

What O’Neill failed to disclose that soon after taking over the mine companies he held a direct and indirect interest in where awarded substantial contracts to service the mine.

So perhaps he was referring to his own companies being a loss making machines until he took over the Mine and thereafter they started turning over million Kina profits.

It is not the first time O’Neill has unashamedly lied both on the floor of Parliament and in the public arena.

In the height of 2017 General Elections O’Neill made an announcement while on the campaign trail in Tari that his Government had made the decision to transfer the 4.27% Kroton shares to the PNG LNG landowners.

“Today I am announcing that the national government will transfer 25 per cent of Kroton shares, which is 4.2 percent indirect interest in the PNG LNG project,” he said.

“The shares to be transferred to landowners and provincial governments in Hela, Southern Highlands, Gulf, Western and Central province are valued at K3.5 billion,

“Our Government is providing 25 per cent of Kroton shares to landowners and beneficiary groups that should rightfully be receiving benefits from the PNG LNG project.

“These shares will enable the landowners and communities and the provinces to secure a better future and to be more self-sufficient.

“This Government has made it our business to correct bad decisions from the past, particularly when this relates to land ownership.

“I was not a signatory to the initial Umbrella Benefits Sharing Agreement in 2009, but I have made sure that our government does the right thing by our people today.

“This in the same spirit as the transfer of 17.4 percent of BCL shares to the landowners and people of Bougainville by the national government.”

“It is the same as the transfer of 33 per cent ownership in Ok Tedi” O’Neill said. (source https://www.thenational.com.pg/clans-promised-shares/)

So did O’Neill transfer the 4.27% of Kroton shares in the PNG LNG Project to the landowners? Did he transfer the 33 per cent ownership in the Oktedi mine to Western landowners?

The answer is NO.

Such statements maybe construed as undue influence (criminal offence under Section 102) When a person makes a false statement to induce a voter to vote in a particular way knowing the statement to be false.

This explains why O’Neill is commonly referred to as a Pathological Liar – defined as habitual or compulsive lying.

It is certainly embarrassing knowing such a person occupies the office of Prime Minister where his shrewd conduct and poor character reflects on our Nation of 8 million people.

Following the formation of the Government in August 2017 I asked members of the Opposition who previously served under O’Neill why they abandoned his Government – they responded because he was forever lying, making commitments or promises he would never honor. “We got tired of his lies and left” they said.

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Hidden Valley Landowners Want Minister To Intervene

Frank Rai | Post Courier | February 1, 2018

A local landowner group from the Hidden Valley Gold mine in Morobe province have called on the Minister for Lands and Physical Planning to intervene and stop a dubious land deal between a certain group and public servants over the existing mining lease area.
The Nauti Landowners Grievance Committee of Nauti village in Hidden Valley made the call yesterday after several attempts made to the Department of National Lands and Physical Planning and the Registrar of Incorporated Land Group to cease the issuance of an ILG Certificate have fallen on deaf ears.
According to a National Gazette published on March 30, 2016 – a Nautiya Land Group Incorporated was recognised as an ILG of the same demarcated boundaries of Hidden Valley Gold mine.
Committee chairman Ben Joseph said they lodged a formal complaint with supporting documentations with the Registrar of ILG and the Department of National Lands and Physical Planning to halt the awarding of the ILG in question since March 2017 but to no avail.
“The department is not responding or corresponding with us (Nauti Landowners). Our attempts have fallen on deaf ears so we a now calling on the Minister for Lands and Physical Planning Justin Tkatchenko to use his ministerial power to intervene, put a stop and investigate those responsible for the issue of this dubious ILG certificate,” Mr Joseph said.
He said the Nauti landowners Grievance Committee officially wrote to the Minister in September last year (Sept 28, 2017) for his ministerial intervention to launch an investigation and hold those responsible for exploiting and abusing the process of Customary Land Registration.
The chairman said the matter was of grave concern because of the validity on how Nautiya Land Group was awarded ILG certificate despite some iconic landmark features like the Hidden Valley Gold mine and a 1987 Provincial Land Court Decision that has competently identified customary landowners of the mine.
Mr Joseph said the land was owned by Yatavo Family of Nauti village which is from the Northwest part of the mine and the Biangais of Kwembu and Winima villages of Wau towards Southeast part of the mine.
He said the Nauti, Kwembu and Winima were the current beneficiaries and parties to the Hidden Valley Gold mine under the Memorandum of Agreement (MoA) signed in August 5 2005 and the Royalty Distribution Agreement signed in September 15, 2009.
All relevant documentation including correspondence to the Director of Customary Lands Registration, Registrar for Incorporated Land Group, Minister for National Lands and Physical Planning, dating back to March last year were sighted by this reporter.
“There is evident that there was no proper consultation and verification of important detracting features made by the Nautiya Land Group leaders and the designated Government Officers which inevitably is a normal requirement in processing any ILG in the country,” Mr Joseph said.
He added that the oversight of a high government impact project of national interest by government employees and the Nautiya Land Group is completely incomprehensible, unscrupulous and deceptive with intentions to a disrupt major government project.
Mr Joseph appealed to the Minister for Lands to come down hard on those responsible and revoke the issuance of ILG certificate to Nautiya Land Group to avoid further inconveniences.

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Labor plans to force Australian mining companies to disclose taxes paid overseas

Labor says it will make large Australian oil, gas and mining companies disclose the taxes they are paying to governments in every country, including Australia. Photograph: Bloomberg via Getty Images

Exclusive: Mandatory reporting regime would apply to large Australian oil, gas and mining companies working overseas

Gareth Hutchens | The Guardian |30 October 2017

A Shorten Labor government would force Australian mining companies working overseas to disclose the taxes they are paying to foreign governments to extract their minerals.

The mandatory reporting regime would apply to large Australian oil, gas and mining companies, and be designed to ensure that communities in countries such as Papua New Guinea understand how many tax and royalty payments they are receiving and for which mining projects.

Labor says it wants Australia’s resource companies to be “good corporate citizens” and to maintain transparent accounting practices that combat corruption.

It says many of Australia’s neighbours, including Timor-Leste, Papua New Guinea, the Solomon Islands and Nauru, have multibillion-dollar resource projects that are operated by foreign multinationals but are home to some of the poorest people in the world.

Labor will announce on Tuesday an “extractive industries transparency plan” that will require large Australian companies to disclose the taxes they are paying to governments in every country, including Australia, and for every mining project.

Large companies shall be defined as a company that meets at least two of three criteria:

  • Total assets exceeding $50m
  • Annual turnover exceeding $100m
  • The average number of employees exceeds 250

A single or series of taxes and related payments within a financial year would have to be disclosed if the payments were worth at least $150,000.

Payments to be disclosed include: taxes on income, production or profits; royalties; dividends (except where the dividend is paid to a government as an ordinary shareholder); fees including licence fees, rental and entry fees; signature, discovery and production bonuses; production entitlements (such as profit resources) and payments for infrastructure improvements.

The scheme has been costed by the parliamentary budget office at $2.2m over four years. Between 80 and 100 companies would be affected. Subjected companies would be required to begin reporting payments to governments from 1 July 2020.

A multi-stakeholder committee would be established to help the government implement the reporting regime, including defining project-level reporting and establishing an online reporting mechanism to ensure public transparency.

Labor says the legislation would include equivalency provisions so companies captured by other jurisdictions due to cross listing on stock exchanges would only be required to produce one report. The scheme has been modelled on the extractive reporting regime in the UK.

Matt Thistlethwaite, the shadow assistant minister for Treasury, will announce the plan on Tuesday in a speech to the Australian Council for International Development’s national conference in Melbourne.

“Currently Australian companies do not meet world’s best practice for transparency and accountability,” he will say. “Labor is determined to change this.”

Mal Larsen, Oxfam Australia’s mining and extractives policy adviser, has welcomed the policy, saying he has been calling for something like this for a long time.

“This policy could help lift people out of poverty,” Larsen told Guardian Australia. “Australia would join the growing list of countries around the world that require large companies to reveal how much tax is being paid, in which country and for which mine.

“This sort of disclosure will allow the public to hold companies accountable for how much tax they pay and governments for how they spend it.

“Disclosure of tax payments is an emerging international standard. It is key to driving out corruption and building community faith that mining taxes are being spent on essential services like health and education.”

In May 2016 the Turnbull government announced Australia planned to join the Extractive Industries Transparency Initiative, an international standard for increased transparency and accountability in the oil, gas and mining sectors.

It will require Australia to disclose information on taxes and other payments made by companies to the Australian government as well as other information such as licences, contracts, production and exports.

Larsen says Labor’s policy goes further because it would require Australian companies to disclose the payments they are making to foreign governments, not just to Australia’s government.

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High corruption risks in several areas: Mining Report

Cedric Patjole | PNG Loop | October 26, 2017

A Transparency International PNG Country Report has revealed high corruption risks in several areas of the Mining Licences Process.

The report, which was launched today, has highlighted key areas that need to be addressed urgently to minimise the risk of corruption.

The report comes from TIPNG’s participation in a global research initiative called the Mining for Sustainable Development (M4SD) program.

TIPNG says the need to identify risks in the mining licence process is because the awards process is the start of the mining value chain and any effects of corruption there will be passed along, eventually impacting the country’s sustainable development.

TIPNG Chairman, Lawrence Stephens, said regulatory systems should be improved so that the wealth generated from the mining sector should be used for the welfare of Papua New Guinea.

“Through reports like this that we can start to make a difference, start to assist people whose job it is to try to make sure all the people of this country benefit,” he said.

The high risk areas highlighted in the report include cross-institutional capacity; human resources of regulatory agencies; coherence of feasibility studies and MOAs, lack of a national geospatial agency; consultation, representative bodies and associated business entities; lack of CSR reporting requirements; and risks concerning women, vulnerable persons and marginalised groups.

Present at the launch was Mineral Resources Authority Managing Director, Phillip Samar, who said some of the issues highlighted are not new to them but are ongoing.

However, he said the MRA will continue to have dialogue and work with TIPNG to address the issues raised.

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Rio Tinto charged with fraud by US authorities

BBC | 18 October, 2017

British-Australian mining giant Rio Tinto and two of its former executives have been charged with fraud in the US, accused of hiding losses by inflating the value of African coal assets.

It bought the Mozambique assets in 2011 for $3.7bn (£2.8bn) and sold them a few years later for $50m.

The mining company has said it will “vigorously defend” the charges.

The firm was also fined £27m by UK authorities for breaching disclosure rules over the African coal purchase.

Both the US and UK actions relate to the Mozambique investment made by the mining firm six years ago.

A lawsuit filed in the US accuses Rio Tinto, its former chief executive Thomas Albanese and ex-chief financial officer Guy Elliott of failing to follow accounting standards and company policies to accurately value and record the assets.

Thomas Albanese, former chief executive of Rio Tinto

The US Securities and Exchange Commission argues that soon after the deal was completed, Rio Tinto learned that the projects would produce less coal, and of a lower quality, than expected.

“Rio Tinto’s top executives allegedly breached their disclosure obligations and corporate duties by hiding from their board, auditor, and investors the crucial fact that a multi-billion dollar transaction was a failure,” SEC Enforcement Division co-director Stephanie Avakian said in a statement.

By making misleading claims the Anglo-Australian miner – one of the world’s largest – was able to raise $5.5bn from US investors, the SEC said.

Rio Tinto said it “intends to vigorously defend itself against these allegations”.

The firm added in a statement it believes the “SEC case is unwarranted and that, when all the facts are considered by the court, or if necessary by a jury, the SEC’s claims will be rejected.”

As a result of the charges, Guy Elliott has resigned from his new job as non-executive director of oil giant Royal Dutch Shell.

In a statement, Shell said: “We hope he satisfactorily resolves those proceedings and, that in that event, he would like to be considered for rejoining the Board.”

Largest ever UK fine

The miner separately reached a settlement with UK regulators for disclosure failures tied to the Mozambique investment.

It agreed to pay the Financial Conduct Authority £27 million to settle claims that it breached accounting rules in connection with the African coal assets.

The FCA said the fine is the largest ever imposed on a firm for a listing-rules breach.

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