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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New report names top British companies responsible for toxic mining legacies

Kalimantan, Indonesia. Coal mining operation. Credit: Daniel Beltrá

BHP and Rio Tinto have a long history of extracting minerals then pulling out, leaving devastation in their wake. Climate justice organisation London Mining Network reveals the extent of this in a new report.

London Mining Network | Feb 19, 2020 

London Mining Network has published a new report entitled ‘Cut and run: How Britain’s top two mining companies have wrecked ecosystems without being held to account’. The report includes examples from Southeast Asia of where the British-Australian multinationals BHP and Rio Tinto have left legacies of conflict and environmental destruction, long after they’ve fled the scene.

Recent examples of mining messes include Brumadinho, the tailings (mining waste) dam owned by Brazilian mining company Vale, which collapsed in January 2019 in Minas Gerais, Brazil. Vale executives, along with its German advisors TUV Sud, were recently charged with the homicide of 272 people; 14 people are still missing. Vale, along with BHP, jointly own the Samarco iron ore mine and tailings dam which also collapsed in 2015, causing Brazil’s worst environmental disaster in history and the deaths of 20 people. The trauma due to loss of life, displacement and job loss and the environmental repercussions of contamination of river systems in both catastrophes will be felt for decades to come. The entire mining industry needs to be held to account for such mining messes, and laws made which demand the cleaning up of messes made by mining companies before they pull out of projects.

Despite the best efforts of the industry, particularly BHP, to greenwash the extraction of fossil fuels and metals, the practice of ‘cutting and running’ when companies close mining operations tells us another story. The harm that extraction causes people and the planet doesn’t end once the companies disappear.

On 10th February, BHP became the world’s top copper producer, but this isn’t good news for the communities affected by their copper mines, and the other metals and minerals it extracts. In 2002, the company walked away from the Ok Tedi copper-gold mine it had controlled since 1982 in Papua New Guinea. For years it had dumped waste straight into the local river system. Eventually the company concluded that it should no longer do that and should not have operated the mine after all. But 18 years later the contamination and mess remains.

Rio Tinto was the majority owner of the Panguna mine in Bougainville, operated by Bougainville Copper Ltd (BCL), for 45 years. It dumped toxic mining waste the copper-gold mine in Bougainville (an island off the coast of Papua New Guinea) straight into the local river system between 1972 and 1988. This caused such outrage that it sparked a war for independence from Papua New Guinea, a war in which thousands were killed and independence was not won. The mine was abandoned. In 2016 Rio Tinto gave the mine to the authorities in Bougainville and Papua New Guinea but they do not have the financial or technical means to clean up the waste.

For shareholders in Rio Tinto and BHP, the deadly legacies of these mines make for risky investments, as the report illustrates.

Co-author of the report, Hal Rhoades, from The Gaia Foundation, said:

“This report shows how British multinationals have profited from destroying ecosystems and people’s livelihoods on vast scales in the Global South, while leaving their mess behind for communities to deal with. These are the same companies who are now trying to convince us that they hold the answers to the climate emergency. We cannot continue to pay lip service to tackling climate change while allowing the world’s largest corporations to devastate ecosystems that help regulate the climate and the communities that care for them. Holding these companies accountable and calling out their greenwashing is a crucial part of climate justice.”

PNG’s Ok Tedi mine disaster money locked in new legal fight

Alex Maun, a landowner who sued BHP in the 1990s, in the dying forest near the Ok Tedi River. CREDIT: ALEX DE LA RUE

Nick Toscano | Sydney Morning Herald | November 3, 2019

A fresh legal dispute has erupted over control of a fund set up to benefit the tens of thousands of villagers affected by mining giant BHP’s environmental disaster at the Ok Tedi mine in Papua New Guinea more than 20 years ago.

The Ok Tedi mine – which BHP co-owned with the PNG government until selling its stake in 2002 – discharged tens of millions of tonnes of mine waste into the local river system during the 1980s and 1990s, contaminating fish and trees and devastating the area’s economy.

A special trust account was created by the mine owners in the late 1990s to accumulate dividends from the Ok Tedi copper and gold mine’s ongoing profits to compensate the 30,000 landowners of the worst-affected communities living downstream of the mine.

Estimated to contain 250 million kina ($106 million), the Western Province People’s Dividend Trust Fund had been managed by PNG government officials until September last year when the Ok Tedi and Fly River Development Foundation, a regional representative group, raised allegations the funds were being “misapplied … causing a diminishment” and won a legal bid to become its trustees.

The newly-formed foundation headed by local leaders claiming to represent 30,000 residents of the villages most immediately impacted by the Ok Tedi mine disaster obtained National Court orders to replace the government as trustees.

But control of the trust is again under a cloud with the PNG government, represented by prominent Australian law firm Corrs Chambers Westgarth, last month obtaining further court orders blocking the ANZ Bank from dispensing the funds.

The Ok Tedi and Fly River Development Foundation has applied to have the injunction set aside, alleging an abuse of process, including claims the PNG government is a vexatious litigant and that Corrs Chambers Westgarth had failed to obtain the necessary certification with PNG’s Investment Promotion Authority to be practising in PNG. The case will be heard in the country’s National Court in December.

A spokesman for Corrs Chambers Westgarth said the firm was “not in a position to comment” as the matter was before the court.

An ANZ spokesman said it would be inappropriate to comment as the matter was before the courts in Papua New Guinea.

BHP, Australia’s biggest mining company, completed its withdrawal from the Ok Tedi mine in 2002, transferring its 52 per cent equity stake to a development fund designed to operate for the benefit of PNG residents, known as the PNG Sustainable Development Program Limited. The fund was to use dividend payments from BHP’s transferred shareholding in Ok Tedi to finance long-term sustainable development projects in PNG, particularly the western province.

The miner also reached an out-of-court settlement with 30,000 landowners represented by Slater & Gordon in a landmark lawsuit in Victoria’s Supreme Court in 1996, which included $110 million in compensation for the affected villagers.

No tangible development in Western despite decades of mining

A father holds his malnourished son in Western Province, Papua New Guinea. Photo: Sally Lloyd

Marape Tells Awi Yoto To Improve Western

Leiao Gerega  | Post Courier | June 24, 2019

For almost 38 years Western province has seen no tangible development taking place despite helping the country generate millions in kina from the Tabubil mine.

The province remains one of the least developed in the country with low health status and lack of basic delivery of service to its people.

Prime Minister James Marape who visited the province on Friday to launch both the provincial and district five year development plans was implored by Governor Taboi Awi Yoto to look at the provinces needs which include;

• Creation of one or two electorate added to the province’s current three electorates;
• Uplift moratorium on the Province’s need to recruit new public servants;
• Fix issues with the province’s dividend trust account through former operations with Ok-Tedi;
• Find common ground on issues regarding WP’s major development program called the PNG sustainable development program;
• Building of a major port to export its resources;
• Request Ok-Tedi and Porgera to compensate middle and south Fly over mining waste pollution;
• Current 33 percent shares in Ok-Tedi be lifted to previous 64 percent and
• Stop fly-in and fly out of Ok Tedi workers to ensure money goes back to the people

Mr AwiYoto admits that the slow progress of development of the province was due to disunity amongst the leaders.

He assured Mr Marape that they are now ready to work together to ensure their people benefit from the money owed to them.

The 2018-2022 development plan under the theme “a new way forward” focuses on three key areas which are health, education agriculture and covers the province and its three districts in the Middle, South and North y.

“This is no easy task….everyone in this country have their own issues,” Mr Marape said while giving examples to how Buka and Lihir have fared poorly over the years despite the huge mining activities.

“Our agriculture and mining resources have been lost over the years while the people are suffering. Waigani is stealing from them and we are here now to turn things around,” Mr Marape said.

“These new work will take years but we want to direct and steer the country in the right path,” he said.

Mr Marape who travelled later to Tabubil to hear presentations from Ok-Tedi mining limited says everything will be discussed in Waigani after which they would strictly ensure monies owed to the people under various areas will be “unlocked.”

Mr AwiYoto says despite giving so much to the country the province has been failed by so many governments over the past years and is confident there is certainly a positive journey ahead.

Around 17,000 people gathered to welcome the prime minister at the Kiunga Township on Friday.

Mr Marape grew up as a child in Western province where his father was a Seventh Day Adventist pastor.

Safety first: Investors take action on mine tailings disasters

A rescue worker walks between destroyed houses after another dam disaster in Brazil.

Payal Sampat | EarthWorks | June 12, 2019

In late January 2019, the collapse of two tailings dams at Vale’s Brumadinho iron ore mine in Brazil killed hundreds of workers and local residents in the state of Minas Gerais. Even more horrifying, the Brumadinho catastrophe was a tragedy foretold, with unheeded prior warnings from mine inspectors and Vale’s own workers. This disaster came on the heels of other tailings disasters, notably at the Mount Polley gold and copper mine in Canada and the BHP-Vale owned Samarco iron ore mine in Mariana, Brazil.

How did one of the world’s largest mining companies, Vale, ignore the risks identified by workers and mine inspectors, and fail to learn from its previous tailings disaster?  How many more ticking time bombs around the world are endangering communities, workers, and ecosystems at this very moment?

Independent research that analyzes decades of data on mine waste dam failures has shown that these catastrophic tailings dam failures are occurring more frequently and are predicted to continue to increase in frequency. This is attributed to multiple factors, including inadequate tailings facilities design, age of facilities, unanticipated weather conditions due to climate change, and mining companies tapping lower grade ores, resulting in larger volumes of mine waste.

And yet, very little is known about these tailings storage facilities (TSFs) – their location, size, scale, ownership, even how many exist around the world.

This is about to change.

In April 2019, the Church of England pension funds and the Swedish Council of Ethics, representing a group of 96 investors with over $10 trillion in assets, launched the Investor Mining & Tailings Safety Initiative.  They sent letters to 683 mining companies, asking detailed questions about ownership, operating status, physical size, construction and independent risk assessment at their TSFs. These companies were given 45 days to respond, and were required to post this information publicly on their websites.

This is the first time that investors have demanded transparency and disclosure of mining companies on this scale – and this may well be the game-changing move that’s needed to understand and mitigate risks at TSFs.

The investor action has lit a fire under some of the world’s largest mining companies, many of whom have swiftly responded, publishing their disclosures to meet the June 7 deadline.  The Swiss mining company Glencore’s disclosure indicated that 14 of its facilities carry “extreme risk” in the event of failure – many in Peru – and another 100 are considered high-risk. Australian miner BHP, the world’s largest mining company, disclosed that five of its tailings dams were at “extreme consequence of failure,” and has set up a tailings task force to improve safety.

In May, the investor group, Principles for Responsible Investment (PRI), took another important action. PRI, along with the United Nations Environment Programme (UNEP), which published a rapid response assessment on tailings dam safety in 2017,  and the International Council on Mining and Metals, an association of 26 of the world’s largest mining companies, launched a Global Tailings Review process. At UNEP’s invitation, Earthworks agreed to serve on the multi-stakeholder advisory panel to the Global Tailings Review, which is chaired by Professor Bruno Oberle, former Swiss Secretary of State for the Environment. Other advisory panel members include IndustriALL Global Union, Munich Re, the International Finance Corporation, and the Columbia University Water Center.

Earthworks believes that the strongest outcomes will result from a process co-governed by civil society members, particularly mining-affected communities and workers representatives. We support processes that embody this commitment to co-equal governance, such as the Initiative for Responsible Mining Assurance (IRMA). But this is an all hands-on-deck moment – and we will willingly pitch in to advance efforts that will shore up tailings dam safety, increase transparency, and protect people and the environment.

The world can no longer bear the costs of dragging feet, making excuses, or putting shareholder returns before people’s lives. Without exception, safety must be the leading priority at tailings dams and storage facilities around the world. Mining companies must act on the findings of their TSF reviews and ensure that risks to communities, workers and ecosystems are mitigated and managed as soon as possible.

BHP reveals five ‘world class’ mine dams at ‘extreme’ risk of causing damage and loss of life

The collapse of a dam co-owned by BHP in the Minas Gerais region of Brazil in November 2015 killed 19 people. Photograph: Ricardo Moraes/Reuters

Company says rating reflects potential extent of damage in event of collapse

Sandra Laville | The Guardian | 7 June 2019 

Five dams used to store mining waste are at “extreme” risk of causing environmental damage if they fail, according to a review by BHP, the world’s biggest mining company.

BHP said in a presentation on Friday that four tailings dams in Australia and one in the US were ranked at the highest level of risk, and had the potential to cause serious damage to the local environment and cause scores of deaths in the case of a collapse.

The company revealed the results of a risk assessment into its dams after two high-profile fatal dam failures in Brazil that collectively killed hundreds of people.

In a presentation to investors, the mining company said 16 of its 67 tailings dams which hold mining byproducts were “high risk”. The risk relates to the damage which would be caused to the environment and to human life if they collapsed.

The company said the “extreme risk” rating given to five of its dams means more than 100 people would be killed and there would be major environmental and economic and structural damage.

In 2015 a dam in Brazil, which was being run with BHP in a joint venture, collapsed killing 19 people and devastating the local environment.

The company said it had a range of controls to manage the risk, including surveillance and monitoring. BHP said in its presentation: “The dam risk review identified no immediate concerns regarding dam integrity. Subsequently we have undertaken dam safety reviews which provide assurance statements on dam integrity.”

O’Neill’s lies show he still wants to get his tentacles on $1.4 billion

War of Words Over PNG SDP Gets Even Hotter

Mekere Morauta | April 25, 2019

The Member for Moresby North-West, Sir Mekere Morauta, said today that Peter O’Neill’s statement that BHP Billiton and I created PNGSDP as a private company with four shareholders, one of whom is me, is a deliberate lie manufactured by a man desperately trying to repair his public face following the comprehensive win by PNGSDP in the Singapore Supreme Court.

“Peter O’Neill also lied to the Singapore Court, through the State’s affidavit, saying he had a document giving the State the power to control PNGSDP,” Sir Mekere said. “He failed to produce the document as evidence to the Court, and the court decision exposed him as the liar he is 

“Why did he not produce such a document? Because no such document exists. He made it up, hoping this would convince the Singapore Court.”

“Why is he still lying? Because he wants to get his tentacles on the $1.4 billion in PNGSDP’s Long Term Fund.”

PNGSDP was established by the State of Papua New Guinea, BHP Billiton and Inmet, the shareholders of Ok Tedi Mining Ltd in 2000, to hold the BHP shareholding (then 52%) gifted by BHP.

The object of PNGSDP was to invest two-thirds of the future dividend flows from the shares into a Long Term Fund to be used after mine closure for sustainable development in Western Province. One-third of the dividend income was spent on development projects throughout the country, including Western Province.

PNGSDP was established as a not-for-profit company, limited by guarantee. It has no shareholders. In such company structures, used by charities, NGOs, sporting groups and other similar organisations, shareholders are replaced by members. I am a member of PNGSDP, not a shareholder.

Members do not derive any benefit from a limited guarantee company, as shareholders would from a limited liability company. The Program Rules, set jointly by the Government of PNG and BHP, prescribe that the benefits from PNGSDP flow only to PNG and Western Province.

Singapore documents purportedly showing I am a shareholder are pro-forma documents that do not provide for companies limited by guarantee. They do not provide for members instead of shareholders, as happens in many jurisdictions.

“The statement that I am a shareholder of PNGSDP is a naked, diabolical lie,” Sir Mekere said.

“Increasingly, it seems that the Prime Minister is fabricating stories to cover his own misdeeds. If he actually believes his own lies, we should all be worrying about not only his level of intelligence, but also his sanity.

“The man is not fit to be Papua New Guinea’s Prime Minister.

 “Peter O’Neill’s ceaseless attacks on PNGSDP and on me are due to his failure to gain access to the Long Term Fund – which is what he wants, desperately.

 “He was not satisfied with the extremely valuable shareholding PNGSDP had in Ok Tedi, which he expropriated in 2013. He also wants the Long Term Fund, which now stands at over $1.4 billion. He wants the lot.

 “I want to assure the people of Western Province that their money in the Long Term Fund is safe, and will continue to be safe, whilst it is managed by an independent PNGSDP. 

“It was my instruction to the advisory team when PNGSDP was established that the company was to be protected from political influence – from the tentacles of octopuses.

“The Singapore Court decision proved the independence of PNGSDP. I am proud that I led the fight and won it for the people of Western Province.”

O’Neill Loses in High Stakes Battle for Control of US$1.4b PNGSDP

Papua New Guinea state fails to wrest control of US$1.4b stake in PNGSDP

K.C. Vijayan | The Straits Times | 5 April, 2019

The government of Papua New Guinea (PNG) has lost its protracted battle in the Singapore High Court to wrest control of an entity with assets worth about US$1.4 billion (S$1.8 billion) that were spawned from a deal inked with the “largest mining company in the world”.

Justice Vinodh Coomaraswamy has ruled in favour of PNG Sustainable Development Program (PNGSDP) company, saying the state of PNG had failed to prove it had a deal with PNGSDP’s co-founder BHP Minerals Holdings, for joint control to develop PNGSDP assets.

It also failed to prove that there was a charitable trust that allowed the state to intervene.

“I have found that neither the agreement nor the trust exists. The pleaded breaches of the agreement and the trust must correspondingly fail,” Justice Vinodh said in decision grounds on Tuesday.

The outcome means PNGSDP is free to carry out its objectives under the control of its independent board according to the 2001 contractual framework, without interference from the state.

Justice Vinodh, in his 149-page judgment, addressed each of the arguments made as he explained why the state had failed in its bid to wrest control of PNGSDP from its independent board.

“I acknowledge I found the state’s narrative compelling and its logic attractive. But the essential problem… is that this narrative stands alone and is unsupported by the evidence,” he said.

The court examined each key plank of the state’s case and found in addition that none of the state’s witnesses pointed to the existence of a partly oral agreement, much less to the terms of that agreement.

The court found that in the context of a “sovereign nation” and “the largest mining company in the world”, it was likely that the parties would have entered into written contracts “definitively and exhaustively setting out the precise terms actually agreed, instead of exposing their minds to the vagaries of memory and ambiguity inherent in a partly oral agreement”.

The high-stakes court battle involved law heavyweights on both sides. Defending PNGSDP was a team led by Senior Counsel Philip Jeyaretnam from Dentons Rodyk & Davidson while WongPartnership’s Senior Counsel Alvin Yeo led the team representing the PNG government.

PNGSDP was incorporated in Singapore in 2001 with two shareholders: the state of PNG and BHP Minerals Holdings and was meant to enable BHP to divest its shares in mining company Ok Tedi Mining to PNGSDP.

Both parties intended PNGSDP to hold BHP’s shares in Ok Tedi Mining and apply the derived income to promote sustainable development in PNG.

BHP owned 52 per cent and the state 20 per cent of the mine, which was rich in gold and copper and highly profitable.

The judge noted there were several reasons PNGSDP was incorporated in Singapore and these include its robust corporate governance regime.

In 2012 and 2013, PNGSDP made material changes to its corporate governance framework which diluted the state’s powers of control and oversight over the company.

The PNG government sued to reverse the changes.

It argued, among other things, that it would not have agreed to form PNGSDP if the company was free to cast off the state’s rights of control and oversight.

PNGSDP countered that the structure of the parties’ written agreement left no scope for such a critical aspect of PNGSDP’s corporate governance framework to be left “entirely undocumented in that suite of contracts and to be the subject of an oral agreement”.

It added that the common intention in PNGSDP’s formation was to eventually make it a self-run and self-perpetuating organisation and the changes made in 2012 and 2013 were the next step in effecting the common intention.

Justice Vinodh said the dispute is “about corporate governance of PNGSDP”.

He added: “For all the reasons set out, I hold the state fails entirely in its claim against PNGSDP. It is not entitled to the relief sought.”

Govt, BHP blamed for damage to Fly River

The Fly River is a “dead river” according to the World Bank

The National aka The Loggers Times | January 31, 2019

THE Government and BHP should be equally responsible for the damage to the Fly River as the result of the Ok Tedi mine, a former mining minister says.

Former mining minister and South Bougainville MP Sam Akotai thanked Minister for Environment and Conservation John Pundari for tabling a bill in respect to environment population.

He said the Act would put Ok Tedi on par with all the environment protection laws and practices with other mines operating in the country.

Akotai said the Act would also give confidence to other mines that the Government was not biased with its operations and conducts in respect to the environmental issues in Ok Tedi.

Akotai said he had experience in the industry for well over 18 years and was qualified to make such statements while Ok Tedi mine brought a lot of revenue for the country.

He said the developer, BHP Ltd, owned the mine but it was in partnership with the government and while there was a lot of talks on the damage in Western, both BHP and the national government needed to be squarely responsible for the damage.

He said damage done to the Fly River and its inhabitants was irreplaceable, with the river being described as a “dead river”.

“It is one of the biggest damages ever, and many times we are happy to receive revenues but we have a population who are faced with the situation where the river is already dead,” he said.

“A World Bank report says Fly River is a dead river. After the mine closes, the people of Western living along the Fly River will face the problem for more than 200 years.

“However, the good news was that the new Act would at least control the operation of the mine and the deposit of the waste of the mine.”

Akotai said waste from the Porgera gold mine in Enga was also washed down to the Strickland River which eventually connects the Fly River that added more to the level of damage.

“That is why I’m sorry for our citizens living along the Fly River in Western,” he said.

Thirty-four years of mining but Western still behind others in development: Yoto

A mother and her malnourished child, Bimadbn Village, Morehead, Western Province, Papua New Guinea. Photo: Penny Johnson

Thirty-four years of mining at the giant Ok Tedi mine but the people of Western Province are still waiting to see the promised benefits

The National aka The Loggers Times | January 28, 2019

Western Governor Taboi Awi Yoto says his province still lags behind other provinces in terms of development, despite 34 years of Ok Tedi mining operations.

Yoto said this when he presented its K308 million 2019 appropriation budget to Treasurer Charles Abel in Port Moresby on Thursday.

“There are no major road networks to connect rural areas to urban areas,” he said.

“My people are still walking long distances, paddling along rivers and swamps to reach the nearest service centres to get medical treatment, attend schools or sell their products at the local market.”

Yoto said the Western Province Development Strategy (2018-22) focused on healthy and educated people with food on the table and income in their pockets.

The Western appropriation budget of K308,050,800 expects K210,831,100 million from National Government grant allocation.

Yoto said the provincial government, through its internal revenue collection, was expected to collect about K97,219,700.

Provincial headquarters will get K171,049,100, South Fly K41,993,900, Middle Fly K49,435, 900, and North Fly K45,571,900.

“The criteria for budget allocation was based on current development and service delivery issues and challenges that confront the lives of over 211,000 people living in rural areas and urban centres across Western,” Yoto said.

Enabling infrastructure got the biggest slice of the budget with K50,764,100 (31 per cent) allocated.

This was followed by education with K36,691,400 (22 per cent)

The health sector was allocated K29,607,000 (18 per cent) while governance sector was allocated K23,372,200 million (14 per cent).