Tag Archives: Hidden Valley

Under-MINING Morobe: Wafi Golpu and the struggle for Morobean sovereignty

Martyn Namorong | December 19, 2018

I have a strong affinity for Morobe province. Although I am not from the province, my surname -Namorong- is Morobean. I won’t bore you with the long tumbuna stori but it has something to do with a young Lutheran pastor from Tapen in the Rai Coast climbing the “hundred mountains” of the Finisterre Range and working with the people of Teptep in the 1970s.

The first time I entered the debates on the extractive sector in Morobe, was in 2012, when communities along the Watut and Markham rivers reported fish and eels dying after what they believed to have been related to a cyanide spill from the Hidden Valley mine (Same miners now involved in Wafi-Golpu).

Last year, with assistance from generous development partners, I ran a workshop in Lae bringing together government officials and community leaders from mining communities associated with the Hidden Valley and Wafi Golpu projects. My interest as well as that of the funders was to educate and empower sub-national leaders on PNG’s extractive sector. An overview of PNG’s mining regulatory framework was presented by the Mineral Resources Authority.

I have since had the privilege of meeting and listening to landowner and provincial government representatives. One such meeting ironically happened at the 8th floor conference room of Treasury building, where landowner representatives were lobbying for the Open Book Financial Modelling of the Wafi-Golpu project.

Katim na skelim Pik

One of the hot topic discussions of any resource project is benefit sharing with local stakeholders, colloquially referred to has “katim pik”.

For a faction of Wafi-Golpu landowners, having access to the Open Book Financial Modelling is critical to them in informing their decision making regarding the project.

What the Open Book Model does is it mathematically models the “size and weight of the pig” so to speak and then predicts the financial implications of “cutting the pig” in a certain way.

Say for instance, it predicts how much profit or loss the project will make depending on an upper and lower limit of the World Market price of copper.

During the Wafi Golpu Memorandum of Agreement (MOA) discussions held in the middle of this year, Treasury Officials told local Morobean parties that they had access to the Open Book Model.

Landowners and Morobe Provincial Government officials have since been pursuing that model from Treasury.

Now under PNG Mining and Petroleum laws, the Development Contract for a resource project is negotiated by the National Government and the company wanting to exploit the resource.

The Provincial Government, Local Level Government and Landowners only come into the picture after the Development Contract is signed. Their participation is only at the Development Forum stage where benefit sharing agreements are signed between the National Government and sub-national parties.

This procedure exposes a fundamental flaw – landowners and provincial governments are not party to discussions on how the pig is cut.

So what happens in PNG is that by law the government and a foreign corporation cut the pig and then the government redistributes its share with the sub-national stakeholders. If government officials negotiate poorly as they have notoriously done previously, provincial governments and local governments including landowners are given the “pig skin” instead of “meat”.

Free Prior Informed Consent and Contract Transparency on Wafi-Golpu

Morobeans, under the international principle of Free Prior Informed Consent (FPIC) that is aimed at protecting the rights of vulnerable ingenious communities, have a right to information that will help them make informed decisions about the Wafi-Golpu project.

Access to critical financial modelling information is important even if PNG law doesn’t cater for their interests at this stage of project negotiations.

National authorities have historically failed in their fiduciary duty to protect the interests of local authorities and landowners. The Morobeans therefore have every right to be sceptical about whether Waigani will protect their interests during negotiations of the Wafi-Golpu Development Contract.

Contract transparency following the principles of the Extractive Industries Transparency (EITI) that the government of PNG has signed up to are therefore crucial in building understanding and trust between all stakeholders and not undermining the interests of the people of Morobe during negotiations of the Development Contract.

Morobeans aren’t naive

Morobeans have had their first mining experience from Bulolo and Wau Gold fields. Today they live with the Hidden Valley mine for better or for worse. They know the same dodgy characters from Hidden Valley are know plying their dirty trade at Wafi-Golpu.

Perhaps for me, the most poignant moment was at the Sydney Mining and Petroleum Investment Conference, seeing highly educated Morobeans urging their governor not to sign the MOA with Wafi-Golpu project partners when rumours were spreading at the conference venue that the Mining Minister and Prime Minister were keen of getting the Governor to sign.

Hats off to the Morobe Governor and Landowners of Wafi-Golpu. I hope that your actions will lead to improvements to how PNG’s natural resource contracts are negotiated and that PNG has broader contract transparency consistent with the EITI global standard.

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

PNG Mining Minister cautious about Hidden Valley Mine Threat

Gabriel Lahoc | NBC News | 26 August 2018

Papua New Guinea Mining Minister Johnson Tuke says he is not aware of issues arising from the Hidden Valley mine and will only respond upon receiving official complaints.

The Minister made this response to Rex Mauri, Chairman of Nakuwi Landowners Association, the traditional landowners of Hidden Valley mine operated by South African company, Harmony Gold Mining Company.

Mauri threatened to shut down the mine as a last resort approach, saying it is unfair that the government failed to review the Hidden Valley mine Memorandum of Agreement, five years after it was due, while now rushing into negotiating a new agreement for the new neighboring Wafi-Golpu project.

Mauri said, he will lead the locals in forcefully shutting down the Hidden Valley mine, after failing to get the national government to review the outdated HiddenValley Mine MoA.

Mauri claimed the state agencies responsible for agreement review is the Mineral Resources Authority, Department of Mining, Department of Environment and Conservation, Office of State Solicitor, Department of Mineral Policy and Geohazzards Management, are responsible in dragging the review process.

As a result, this has given room to the developer in abuse some operational matters, especially overlooking its obligation in prioritizing the landowners in employment, contracts and other spin-off activities.

“This government is not playing the right thing, no,” Mauri, who initially got into the mining industry 36 years ago as a young local, guiding gold explorations teams into the jungles of what is now the Hidden Valley mine, said.

The minister, who is also Kainantu MP, said there are procedures in place for landowners grievances.

He added that he has not yet received any formal complaints from Mauri, who is also president of all mine landowners associations around the country, and will only respond to accordingly.

“I only talk about what is before my table and nothing of such nature has reached my table,” he said.

“But again, we are guided, the mining industry is a guided industry, we’ve got sets of laws and acts,” Minister Tuke said.

“I will only respond as and when a letter of complaint come forth to my office but at this point in time I am fairly ignorant,” he said.

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Mine LOs Upset Over Change In Meeting Venue

Jerry Sefe | Post Courier | August 17, 2018

The landowners of Yanta and Hengambu in the Wafi-Golpu mining have agreed to work with the district and province to do what is right for the benefit of the mine.

The landowners, who did not attend the consultative meeting in Kokopo, described the forum as political maneuvering that was not in their interest.

Landowner representative Being Sombe alleged that there were suspicious deals made during the meeting.

Mr Sombe said since the closure of the meeting, they were not briefed or informed by their landowner association leaders on the discussions at the meeting.

“We are waiting for them to tell us why the meeting was taken to Kokopo and what was discussed and passed for the benefit of the impacted communities,” said Mr Sombe.

The landowners also questioned Bulolo MP Sam Basil and Morobe governor Ginson Saonu on why the consultative meeting was moved.

The leaders told landowners they were not happy with the move in meeting venue.

The leaders after discussions on the Kokopo forum assured the landowners to work with the provincial government to protect their interests.

Mr Basil said the authorities in mining areas will be engaged as stakeholders to represent the landowners’ issues and spearhead positive drive for landowners benefits in the mine.

They also admitted they were not properly consulted on the meeting to be held in Kokopo but were surprised to be invited.

“We must not repeat what has happened at Hidden Valley, whatever meetings for Wafi-Golpu mining in future must be held in Lae,” the leaders said.

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Basil wants Wafi-Gulpu not to repeat Hidden Valley mistakes

“Are they [Harmony Gold and Newcrest Mining] willing to admit the mistakes they have done up at Hidden Valley?” – Minister Sam Basil

Junior Ukaha | The National aka The Loggers Times | 13 July 2018

BULOLO MP Sam Basil says he does not want to see a repeat of problems faced by landowners of the Hidden Valley Mine to happen at Wafi-Golpu.

The Mineral Resources Authority, however, countered that the fault was with the landowners themselves.

Basil was speaking yesterday during the second day of the Wafi-Golpu Project Development Forum in Lae.

Basil, whose district hosts Hidden Valley Mine, said despite the mine operating for a number of years, living standards of the mine-area landowners had not improved.

He said the Biangai and the Watut people, traditional landowners of Hidden Valley, had not seen any tangible developments and benefits from the mine.

“We have not fixed the problems of Hidden Valley and now we are talking about Wafi,” Basil said.

“These two same companies that have mined Hidden Valley now want to mine Wafi. Are they willing to admit the mistakes they have done up at Hidden Valley?

“Is the Mineral Resources Authority willing to shoulder the blame so that we can forge a new way forward?

“Our landowners in Biangai and Watut are still walking around without money.

“They have not been given much.”

Basil said there was also the issue of environmental damage at Hidden Valley, which is now before the courts.

He said the two per cent royalty given to mine landowners was not enough and should be increased to five per cent.

“Before you present this document to us, you have to tell us the failures of the past mines,” Basil said.

“MRA needs to outline them and find a way forward.

“The benefits of the past projects, you have to tell us now?

“What steps are we going to take from here on?”

Basil urged landowners not to quickly sign the mine memorandum of agreement (MoA) but ensure they understood how it would affect their lives and those of their children.

Sean Ngansia, MRA’s executive manager of development coordination, said the problem was not with the authority but the landowner leaders.

Ngansia said Basil was referring to how royalties from Hidden Valley had been managed.

“We don’t necessarily manage royalties on landowners’ behalf,” he said.

“It (royalties) is usually given directly to the landowners through their landowner associations.

“The issue now is really about how these monies are managed.

“You will find that in Hidden Valley and all the other mines, the landowner association leaders are not managing their royalties well.

“There’s a lot of misuse and mismanagement. These leaders also do not report to their people and that’s where the problem is.”

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Mining Activities In Bulolo Raises Social Issues

Hidden Valley mine has already led to increased HIV infection rates and more illegal settlement

Jerry Sefe | Post Courier | June 21, 2018

There is an increase in HIV/AIDS and illegal settlements in Bulolo as a result of mining activities.

Bulolo district administrator Tae Gwambelek said this last week Friday at the Team Morobe Wafi-Gopu Mine project development forum held at the Sir Ignatius Kilage indoor complex conference hall.

The forum was held between the Morobe provincial administration, Wafi-Golpu landowners and impacted district representatives to discuss various agendas of project development services for the province and the signing of memorandum of agreement for equal participation.

Mr Gwambelek said with Bulolo becoming the main transit hub for mine workers of Hidden Valley, the town has seen a sudden increase in social issues.

“These mining activities are most likely the main attracting factors that are contributing to the influx of people into Bulolo,” Mr Gwambelek said.

He said as far as health was concerned, the term prostitution or women willingly offer themselves for sex in exchange of money was a major social problem. While that was continuing, illegal settlements were also popping up unexpectedly in town, he added.

Mr Gwambelek told the forum that there was a need for such issues to be addressed in the mine forum to ensure effectiveness of the advantages of mining in the area.

“Wafi-Golpu is a world class mine that will definitely attract investors and other developers to take part in the mine including people from everywhere, therefore it is a must these issues are strategically addressed,” he said.

Bulolo hospital has confirmed the reports of increase in HIV/AIDS victims and said the hospital will be releasing the full statistics for HIV/AIDS.

Forum chairman and deputy provincial administrator economical services Masan Moat when responding to Mr Gwambelek took note of the discussion and said the agenda would be discussed in the next forum.

Mr Moat said the purpose of the forum was to discuss and identify such issues so that they are properly tabled for positive services throughout the process.

He said one of the objectives of the forum was to address social issues to secure social stability for Wafi-Golpu project through information sharing and consultations.

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Extractive Industry Giving Little Yet Enjoying Good Tax Concessions

“the relatively meagre assistance allocated to the village communities they have displaced is quite frankly shameful”

Frankiy Kapin | Post Courier | May 31, 2018

A company owned by mine site landowners of Bulolo district in Morobe province has accused the highly lucrative extractive industry of PNG of giving very little while enjoying the generous tax concessions offered by the government.

General manager of NKW Holdings Limited David Stewart said the extractive industry enjoys generous tax concessions, yet it is providing very minimal benefits to local communities.

The NKW is the umbrella company of the three Hidden Valley mine landowner investment companies of Nauti Investment Ltd, Kwembu Investment Ltd and Winima Investment Ltd in Wau, Bulolo district of Morobe province.

NKW owns almost K90 million in assets and employs approximately 17 expatriates and 500 national staff.

In the last six months, NKW has paid in excess of K40 million as goods and services tax (GST) on every kina spend.

“It is fair to say whilst there is considerable press devoted to the economic benefits of large mine operations and the small community programs they initiate, the relatively meagre assistance allocated to the village communities they have displaced is quite frankly shameful.

“At less than two per cent of revenue is hardly an equitable distribution of benefits,” Mr Stewart said.

He said evidence suggests that benefits to local communities that own the mine lands are minimized or watered down over time.

He said the constitutional landowners in PNG bear the cost of having the mines on their land but revenues will generally revert to the national government.

Mr Stewart said the NKW recognises that the mine has a finite life and generally do not develop the communities that own the land.

“If it was genuinely otherwise; the education and health standards in affected communities would be considerably higher. To quote a former Australian Prime Minister, “the streets should be paved with gold,” he said.

He said if they don’t develop sustainable businesses that will continue after the mine closure as the landowner group then they will have failed their duty.

As part of the company’s sustainable diversification program, NKW Fresh was established in 2014.

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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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