Category Archives: Corruption

How resource companies exploit a corrupt and dysfunctional government

There has been a barrage of media recently about mining companies teaming up with a range of parters to deliver health-care and other services direct to the community.

Newcrest Mining and the Australian government have announced a partnership to improve maternal health, Exxon-Mobil is partnering the Cancer Foundation and The Voice, Barrick Gold is delivering agriculture training in Porgera.

Praise be to the resource companies, willing and able to step in where government fails its people – and no matter the role these same companies play in causing the very diseases, illnesses and other problems they are so happy to patch up with their band-aid PR!

But there is an even more sinister side to these good news stories that further illustrates how mining and other resource companies feed off a corrupt and dysfunctional government.

If government was doing its job and delivering decent basic services to the population, mining and resource companies would not have the opportunity to appear as ‘knights in shining armour’ the good news stories would disappear and, most importantly, customary landowners would not feel compelled to give away their land in the desperate hope that mining and logging companies might provide some basic services.

Resource companies are able to thrive in PNG because of, not despite, a corrupt and dysfunctional government. They rely on bad governance to open the doors to what they most desire – land and the resources it contains.

No matter the environmental and community destruction, their logging and mining cause, no matter the deaths, the violence against women, the unwanted pregnancies, the rape and prostitution, the pollution of rivers and loss of sustainable livelihoods when they can parade their social conscience in the media and have us all believe they are our saviours – just as long as we continue to give them what is most precious to us, OUR LAND!

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Weak Capacity And Lack Of Accountability A Challenge In Mining Sector

Weak Capacity And Lack Of Accountability Remains A Challenge In Implementing Legislation And Policies In The Mining And Petroleum Sector.

Post Courier | June 28, 2017

Weak capacity and lack of accountability remains a challenge in implementing legislation and policies in the mining and petroleum sector.
This is according to the PNG Extractive Industries Transparency Initiative Report 2014.
The report states that lack of transparency also leaves the way open for corruption.
It also noted that a revised Mining Act will be presented to Parliament after 2017 elections.
This will include regulations for offshore mining, mine closure and rehabilitation, resettlement and geothermal resources and standards for employing mine workers.
The Mining (Safety) Act is also under review.
The report also highlighted that the relationship between three different legislation including the Environment Act 2000, Mining (Ok Tedi Agreement) Act 1976 and (Bougainville Copper Agreement) Act 1967, is unclear as the former has not been repealed, nor have the references to it in the mining Act been amended.
It said, the petroleum industry is governed by the Oil and Gas Act 1998, (OGA) and the Oil and Gas Regulation 2002 under the administration and management of the Department of Petroleum and Energy (DPE), headed by the minister for Petroleum and Energy.
“The OGA specifies regulatory instruments for oil and gas development activities such as: licensing, exploration, development, processing, storage, transportation, and sale of products,” the report said.
PNG EITI head of National Secretariat Lucas Alkan said: “It is only fitting to have such a robust legislative and policy framework for a resource rich country like ours.”
“The PNGEITI has already capitalised on such fiscal and legislative setting”.

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MRDC Joins PNG EITI Multi Stakeholder Group

The Mineral Resource Development Company has joined EITI – but the last Annual Return MRDC filed with the Registrar of Companies was for 2012 – and even that was done five years late! 

Shows their commitment to transparency and good governance!

What a joke EITI is!

Post Courier | June 1, 2017

Mineral Resources Development Company (MRDC) has joined the Papua New Guinea Extractives Industry Transparency Initiative (PNGEITI) multi-stakeholders group (MSG).

MRDC acts as a trustee shareholder for beneficiary landowners and provincial governments as per provisions under the Oil and Gas Act, and the Mining Act.

“MRDC joined the MSG in 2016, following recommendations in the PNG EITI Report 2013.”

“As a result of increased engagement in the EITI process, MRDC provided data for the PNG EITI Report 2014.”

“Given the importance and value of the assets they hold for the people of PNG, we congratulate them for taking this step towards greater transparency,” PNG EITI head of secretariat Lucas Alkan said.

Mr Alkan in noting the important role MRDC played in managing revenues for landowners and provincial governments in resource projects said the public should to be made aware of the processes and channels that are involved in the disbursement of benefits.

“One way MRDC can become transparent on how much it receives and manages is through its active participation in the EITI process as a reporting agent as well as a MSG member,” Mr Alkan said.

“Landowner concerns over benefits from resources are sometimes topical and as a result misunderstanding arises from these.”

“We see that the MSG is becoming robust in its discussion and activities towards coming up with best options on improving the EITI reporting process.”

“And we see that this can make way for greater transparency in the revenue management in the country,” Mr Alkan said

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Another ‘world class’ mine embroiled in controversy

Report blasts Antofagasta Minerals’ Los Pelambres mine in Chile

Valentina Ruiz Leotaud | MINING.com | 22 May 2017

An 18-pages long report released today by the London Mining Network slams Antofagasta Minerals’ 60%-owned Los Pelambres copper mine, located in the central-northern of Chile in Coquimbo Region.

In a move that comes just a couple of days prior to Antofagasta’s annual general meeting in London, the document titled In the Valley of the Shadow of Death? A Report on Antofagasta Plc, Minera Los Pelambres and Los Caimanes, highlights allegations of corruption, environmental damage and water depletion caused by the project’s waste tailings dam.

According to the report, the El Mauro tailings dam, with a capacity of 1,700 million tonnes of mine waste, is the biggest in Latin America, surpassing Brazilian Samarco dam by 100 times. The magnitude of the dam, the dossier reads, is a cause of concern for both environmental groups and local residents, who think a similar the disaster to that that took place at Samarco in 2015 could happen in their own community.

Samarco’s breach was linked to small earthquakes and El Mauro’s facility not only is located in a highly seismic region, but it is also expected to grow in size as part of the Los Pelambres’ plans to expand production. “People living in the village of Caimanes would be expected to evacuate their homes within ten minutes of a breach at Antofagasta’s El Mauro dam,” the report states.

Los Pelambres has published a government-approved emergency plan, however, “residents’ attempts to access this plan using the Transparency Law have not been attended to,” today’s report adds.

Community concerns have resulted in a series of actions that date back to 2006 and that have delayed the company’s idea of building two new grinding mills and a desalination plant.

One of the major actions against the El Mauro tailings dam took place in July of 2013 when the Chilean Supreme Court ruled the tailings dam a “danger to human life” and made Minera Los Pelambres officially liable for any loss of human life in the event of a collapse of the dam.

El Mauro dam. Photo from Los Pelambres’ website.

Such ruling highlighted that the dam is constructed to withstand an earthquake of between 7.5 and 8.3 magnitude with an epicentre 80 km away, when the actual closest epicentre is just 60 km away. Thus, the company was ordered to submit the aforementioned emergency plan to reinforce the dam in case of an earthquake.

Later on, in May of 2014, Los Caimanes residents won a case against Minera Los Pelambres in the court of Los Vilos Province. The tailings dam was ruled a “Ruinous Work” (Obra Ruinosa – which asks for the demolition of the facility), in reference to the risk of the dam’s collapse in the event of an earthquake. However, the ruling was appealed in April of 2015, the company presented a safety action plan and a strategy to reduce the dam’s liquid content and, in the end, Los Pelambres won the appeal.

In October of that same year, in a case relating to the ongoing construction of the dam wall (“Obra Nueva”), the Chilean Supreme Court ordered Minera Los Pelambres to restore the free flow of uncontaminated water to the Pupio basin, where the tailings dam is located, and to do this by demolishing the tailings dam or by executing other actions that would help solve the situation. The company was permitted one month to present such alternative option.

In August of 2016, following an appeal of a prior decision against it by the Supreme Court, Los Pelambres was permitted to leave the dam in place, while improving its safety features and providing access to water in the area through pipes and tanks, rather than restoring the natural water flows.

The latter decision came following a May 2016 “Agreement of understanding and cooperation between the mining company and the residents of the Pupio valley,” which lays the groundwork for the expansion of the mine and tailings dam, or possible construction of another tailings dam in the area.

This agreement, says London Mining Network’s report quoting researchers and residents, had a lot of influence in the August of 2016 appeal and was led by lawyers that later on withdrew from the case. The document stated that families who signed would receive around £35,000 which, says LMN, wouldn’t sustain them for long. The activist group also says the money wouldn’t guarantee many of them the amount of land, or the standard of living, they had prior to the construction of the tailings dam.

On top of this, the report adds, the agreement would not compensate for the water scarcity caused in the area by the dam.

“Residents now rely on deliveries of bottled water for use in agriculture as well as human consumption. The river in the Pupio basin has had groundwater diverted away from El Mauro dam into wells; less water is readily available, and this water supply is likely to be contaminated.”

When it comes to claims of pollution, the document cites a 2012 independent investigation undertaken by Andrei Tchernitchin from the University of Chile, who found high levels of manganese, mercury, iron, nickel and molybdenum in water sources in the area, caused by permanently occurring leakages into the groundwater channels in the area.

The report also quotes a Chile’s environmental regulator 2016 charges against Los Pelambres for extracting water from unauthorized sites, building unapproved wells and failing to reforest some areas as required by law.

Minera Los Pelambres produces levels of around 400,000 tonnes of copper and 8,000 tonnes of molybdenum per year.

The company did not respond to MINING.com‘s request for comment by closing time.

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Locals threaten armed campaign against PNG seabed mine

Credit: Alliance of Solwara Warriors

Radio New Zealand | 1 May 2017

Locals are prepared to take up arms if a seabed mining project in Papua New Guinea goes ahead, according to a anti-deep sea mining campaigner.

A campaigner against deep sea mining says locals have threatened to take up arms if a seabed mining project in Papua New Guinea goes ahead.

Canadian company Nautilus Minerals was given an Environmental Permit by the PNG government in 2009, to develop the the Solwara 1 Project, but work is still to begin.

Helen Rosenbaum from the Deep Sea Mining Campaign said locals in New Ireland province and the Duke of York Islands were feeling so desperate that they would consider taking up arms against the project.

“They know they can get access to explosives, it’s incredibly easy to get access to arms in a country like Papua New Guinea through the police, through the army,” she said.

Ms Rosenbaum said the mining project would be the first of its kind and would set a dangerous precedent in the Pacific.

HELEN ROSEBAUM: Well there’s quite different layers of risk. There’s of course environmental which is well documented by our own reports which are direct risks to the hydro-thermal vents that are being mined and the unique eco systems that are there. There’s also the risks that will result from the mining process and the plumes that are generated that are likely to contain metals and other toxics and the risk of those things getting into the food chain – the marine food web effecting marine species and of course effecting the communities that rely on those marine species for their substance and their quite thriving local economy. There’s also economic financial risk to the company which we’ve been outlining to Anglo American and other investors, their economic returns for Soera 1 are totally unknown and Nautilus are clear about this in documentation that this is a huge experiment from all perspectives. They’re clear they don’t know what the environmental impacts are going to be.

Last year I visited the Duke of York islands, New Ireland province and communities and provincial government in East New Britain as well. People are very concerned about the impacts. They’re already facing impacts from climate change, they’re already losing land on their islands due to sea level rise. They’re facing increasing frequency of storm event so their already feeling quite threatened, so this is the last straw for them. On top of  all of that they were saying now we have to deal with this, they were already facing a very uncertain future and because of losing land to sea level rises they’re feeling like their future is going to depend more on the marine environment for their nutrition and their livelihoods and they’re wondering how they’re going to exist and how are their children going to exist.

TG: What ways have they told you they might respond?

HR: Well, they are working with local groups over there to support them, to use political power means. It is PNG elections time in June and July this year. We’re looking at how they can hold candidates accountable for their policy platforms and ask them that hard questions about their positions on Sowara 1 project, but a lot of people are feeling quite desperate and because of  the high level of corruption and not feeling that in PNG that a candidate says something that  that sounds good to them on Nautilus they won’t change their minds later on. And one can see this happening all the time with Sir Julius Chan who is the governor of New Ireland province and he just flip-flops. Sowera 1 is in the water of New Ireland and last year he was voicing serious concerns about the Sowera 1 project and wondering whether it should go ahead, but this week a press release came out saying he has resigned to the Sowera 1 and he’s going to make the most of it. Goodness knows what’s going on behind the scenes in terms of money changing hands. Local people are feeling so desperate they are saying that they would even take up arms against the project. Many of them work at mining companies, or have worked at mining companies in the past. They have access to explosives and they know it’s incredibly easy and it’s only a matter of money to get arms in a country like PNG through the police of through the army. And they have the experience of Bougainville, many of them worked at the Bougainville mine prior to the civil war in Bougainville what was caused by impacts of the civil war – for them making this threat is no idle threat . Many people in the Duke of York Islands and the New Ireland province have married into Bougainville. They understand want it means to have conflict, and they not saying this loosely.

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Filed under Corruption, Environmental impact, Financial returns, Human rights, Papua New Guinea

Lack of opportunities cause of illegal mining at Porgera

See also: Yet Another Two Local Indigenous Porgerans Shot by Barrick Hired Security Personnel at Porgera Gold Mine

Mark Haihuie | The National aka The Loggers Times | April 20, 2017
ILLEGAL mining in Porgera, Enga, is the result of a lack of opportunities for locals to participate in small to medium enterprises, according to Porgera Chamber of Commerce and Industry.
President Nickson Pakea was responding to questions from The National on locals taking part in illegal mining activities.
He said the ineffective government presence in the district in creating business opportunities, had created a dependency on the Porgera joint venture for basic services and business opportunities.
“According to the business perspective, the mine area is the land in which the seven clans gave to the developer. It’s the property of the company,” he said.
“If someone enters into this prohibited area then it is criminal.
“The cash flow in the district is mainly from the Porgera mine.
“The Government institutions within the district responsible for the growth of small to medium enterprises and the avenues is all moving backwards.
“The Porgera Development Authority was misused and was closed for more than three years.
“Paiam Hospital closed as well.
“Porgera Health Centre closed with no reflection of government services except the Barrick Porgera joint venture that people of Porgera rely on. The service delivery there is minimal. The non-government organisation groups need to represent the bulk of population on such corruption affecting many lives.”

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IRC raises tax concessions issue

Who is it persuades politicians to grant tax concessions without consulting relevant government departments?

Is it the mining companies directly influencing Ministers to make decisions against the national interest, disadvantaging ordinary people?

The National aka The Loggers Times | April 20, 2017

DECISIONS to grant tax concessions and incentives to resource projects should be made with the involvement of government entities and relevant organisations as well, an official says.

Internal Revenue Commission commissioner-general Betty Palaso told the meeting of department heads in Mendi, Southern Highlands yesterday that the Government should consider the other entities.

“An important factor that we can factor into preparations for the new parliament is how government deals with tax concessions and tax incentives, etc,” Palaso said.

“A lot of time, submissions go directly to Cabinet, approving certain tax concessions and incentives before coming to IRC, Department of Treasury or Papua New Guinea Customs. And we are then told to implement it.

“For example, LNG has a lot of tax incentives.

“Therefore, we have not been able to get revenue in terms of corporate income tax for a long time.

“And that is because decisions were made to allow these kind of incentives to large multi nationals.

“We have to seriously think about it. And then we have another developer in the same sector coming in to say we want the same concessions given to this particular developer given to us as well.”

Palaso said once that was done, it reduced the country’s revenue base.

“So when that is done again, the revenue base is much more reduced,” she said.

“Now we can see the impact of the reduction in the commodity prices which is now impacting on how much revenue is being generated and coming into the Government to date.”

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