Tag Archives: Mekere Morauta

Ok Tedi Mining Ltd damaged by O’Neill

O’Neill may have turned the Ok Tedi mine into a corporate disaster, as Morauta claims below, but Morauta can hardly claim that under his leadership the outcomes for the poor people of Western Province were any better…  

Mekere Morauta | 14 June 2017

At a rally in Kiunga today, the former Prime Minister and current chairman of PNG Sustainable Development Program Ltd, Sir Mekere Morauta, told Western Province people the sad story of the Ok Tedi mine since Prime Minister Peter O’Neill took it in 2013.

He told them that the latest annual financial results are a disgrace, and confirm his worst fears about Mr O’Neill’s expropriation without compensation in 2013.

“They show that a well-managed and very profitable company under PNGSDP’s majority ownership has been turned into a corporate disaster under Mr O’Neill, as I predicted,” Sir Mekere said.

“OTML made a loss of K350 million in 2015, by far the largest in its history and far outstripping the K15 million loss caused by the very severe drought in 1997. The company never made a loss under PNGSDP majority ownership.

“This is Mr O’Neill’s dirty little secret. He and the OTML Board micro-managed by Dr Jacob Weiss have tried to hide the loss by not publishing OTML’s 2015 Annual Review, or its 2015 and 2016 quarterly financial results.

There is no explanation anywhere in the latest 2016 Annual Review to account for a loss of this magnitude.

“The only explanation can be the waste and mismanagement we have come to expect of the O’Neill Government.”

Mr O’Neill has decimated OTML profits. Under PNGSDP, average annual profits were almost K1.2 billion a year; under Mr O’Neill they are just K100 million.

OTML used to be the biggest taxpayer in PNG, which helped the national Government pay for education, health and infrastructure maintenance.

Under PNGSDP average annual taxes were K640 million; under Mr O’Neill they are just K100 million. OTML paid practically NO company tax at all in 2015 and 2016.

PNGSDP’s profitable and well run mine delivered large dividends: K288 million a year was paid on average to the State and the people of Western Province. A further K426 million a year went to PNGSDP.

After administration costs (which are capped), two-thirds was saved in the Long Term Fund and one-third went to the Development Fund to support programs for the people of Western Province and PNG.

Under Mr O’Neill total dividends have fallen to just K68 million a year on average, and no dividends at all were paid in 2013 and 2015. Only K150 million was paid in 2016 compared to K723 million in 2012, PNGSDP’s last full year of ownership.

PNGSDP received K5.5 billion in dividends from OTML between 2002 and 2012. Two-thirds of these dividends were invested in the Long Term Fund to be used after the mine closes. The balance of the LTF at the end of March 2017 had grown to K4.3 billion ($US1.36 billion).

Moreover, the LTF remains safe and well protected from the tentacles of the octopus.

One-third of these dividends (about K1.8 billion) were used for development programs in PNG and especially Western Province.

In total Western Province received more than K4.7 billion in direct benefits from OTML and PNGSDP: K2.0 billion in royalties, CMCA and other payments, K1.7 billion in dividends from OTML, K400 million for Kiunga-Tabubil road maintenance and more than K600 million in development projects from PNGSDP.

In October 2013, shortly after the expropriation of PNGSDP’s shares in OTML, Sir Mekere warned that OTML faced the same fate as the Tolukuma gold mine under state ownership:

State ownership “would spell disaster for Ok Tedi. Tolukuma has been ruined since it was turned into a State-Owned Enterprise, and instead of an asset it has become a huge liability. Ok Tedi will suffer the same fate. It will die a long and painful death. There will be risks to jobs and wages. There will be a lower standard of operations, including in workplace health and safety. The quality of environmental management will fall. Transparency and accountability will be compromised, especially in the area of contracts.”

Sir Mekere said his predictions had come true. “Mr O’Neill has killed Western Province’s Golden Goose.”

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Locals Call For Leaders To Stop Politicising On PNGSDP

Post Courier | April 28, 2017

LEADERS from the special mining Lease area in Ok Tedi in the Western Province have called on intending candidates to stop politicising the PNG Sustainable Development Program (PNGSDP).
They said they were making the call after concluding the signing of the heads of agreement for the transfer of 33 percent of the mine to them this week.
They said the road to the finalisation of the deal had been long and challenging after suffering years of neglect and marginal benefits from the mine.
They said this had been the status quo since closure of the Panguna which offsetting opening of OK Tedi which had been the country’s economic backbone for a long time.
“We particularly are very concerned that the matter of the Long Term Fund under the PNGSDP has been used as an issue for people with vested interest to score political mileage at the expense of the very people who are entitled to benefit from this fund,” CMCA region core group chairman Richard Zumoi said.
He also called for the immediate resignation of Sir Mekere Morauta as Chairman of the Board of PNGSDP to remove all possible political interference and influence on the organisation because he should not be politicising the issue in the elections.
He said outside of politics it was time for the people of Western Province to be in control of their own development destinies adding there should be two representatives from their people appointed onto the PNGSDP board.
“We are now demanding that there should not be any more statements relating to the PNGSDP issue unless there is a sincere intention and will to reform the program charter and rules to ensure that the people of Western Province receive full benefits in the form of tangible and sustainable
infrastructure and services because we the people gave the social license for the mine to continue to operate,” Mr Zumoi said.

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Ok Tedi Trust funds frozen by court case: OTML

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Gynnie Kero | The National | January 17, 2017

TRUST funds for Community Mine Continuation Agreement (CMCA) villages in the South Fly district of Western are still frozen by a court case, according to Ok Tedi Mining Ltd (OTML).
But despite that, OTML continued to contribute money into the trust every year, deputy chief executive officer and general manager employee and external relations Musje Werror said.
As at December last year, the company paid more than K9.8 billion in benefits to the people of Western since 1982.
He revealed that 50 per cent of these funds were currently tied up in court.
Addressing people at a village in South Fly last Friday, Werror said the village was among others in the district whose projects would be delayed.
The Sepe/Auti village in South Fly was the final village in the CMCA corridor to sign the CMCA Extension Agreement (CMCAEA) last Friday.
“Your benefits start today (last Friday) after signing of the agreement.
“But your name (Sepe/ Auti) is among all South Fly villages, project delivery will be delayed. Until the (court) case is over, we cannot draw down from the trust,” he said.
Werror also told the locals that the compensation package for the 158 CMCA communities in Western was reviewed over the years.
“In 2001, the compensation package at that time was K175 million.
“That was revised in the 2006 memorandum of agreement (MOA) to close to K1.2 billion and now the CMCA extension agreement nearly K600 million.”
Werror urged Sepe/ Auti locals to cooperate with the miner and the Ok Tedi Development Foundation and the provincial government if they wanted to see real change in the village.
“To achieve sustainable development is not easy but it can and will happen if we all work together. I encourage the people of Sepe/Auti through your leaders to work closely with OTML, OTDF and the Fly River Provincial Government (FRPG),” he said.
“There will be disagreements along the way but we must never lose focus of our dream and our desire to develop our village, our region and our province.”
Ok Tedi Mining Ltd also presented two outboard motors and sporting equipment worth K70,000 to the village last Friday.
It is understood that two 23-foot dinghies would be delivered to Sepe/Auti later.

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PNGSDP case against State underway in Singapore

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Gorethy Kenneth | Post Courier | October 04, 2016 

THE Papua New Guinea Sustainable Development Program case against the State started yesterday in the High Court of Singapore and will run for two weeks.

The Attorney-General’s office confirmed last Friday that the case was scheduled for this week but did not provide dates. But Koh Swee Yen, one of the lawyers for the plaintiff, which is the State in an email last week, said the case was scheduled to October 3 and was anticipated to run for the next two weeks.

The case, HC/Originating Summons (OS) No 234 of 2015, which was last heard in July and August will be heard in the Singapore High Court this morning with its Coram Judith Prakash J and counsels Koh Swee Yen, Yin Juon Qiang and Joel Quek (Wong Partnership LLP) for the plaintiff and Nish Shetty, Joan Lim-Casanova, Jordan Tan, Lim Chingwen and Sarah Hew (Cavenagh Law) for the defendant.

In this originating summons, the State, sought a declaration that it was entitled to inspect and take copies of all true accounts, books of account and/or records of PNG Sustainable Development Program Limited. This OS was an offshoot of the action in suit 795 of 2014, having been started after a summons in S795, which had applied for the same relief, was dismissed on the ground that the relief applied for, being final, had to be sought by way of an originating process rather than by an interlocutory application.

PNGSDP mounted a root-and-branch attack on the State’s alleged right of inspection. Its argument was that the State was not entitled to the relief it sought which was threefold. First, it was inappropriate to commence this action by way of an originating summons. Secondly (and this is the most hotly contested ground), the State did not have and may not enforce any alleged right of inspection. In particular, it refutes the State’s three arguments, which are based on the Memorandum and Articles of PNGSDP, an alleged collateral contract incorporating the same, and stopped. Thirdly, even if the State had an enforceable right of inspection, it does not extend to the documents listed in the schedule to OS 234.

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Minister Zeming Calls for Sir Mekere Morauta to ‘do the right thing’ and step down from PNG SDP

Mao Zeming

The Minister for Fisheries, Hon. Mao Zeming MP, has called on Sir Mekere Morauta to do the honourable thing and relinquish control of the PNG Sustainable Development Fund to the people of Western Province after yet another court ruling went against Sir Mekere.

On Friday the Supreme Court dismissed Sir Mekere’s challenge relating to the government’s decision to acquire shares belonging to the PNG SDP.

“The time has come for Sir Mekere Morauta to walk away from the PNG Sustainable Development Program and give the people of Western Province access to their money,” the Minister said.

“Mekere has again been shown the door in the Papua New Guinea Supreme Court and continues to lose cases before the Singapore High Court.

“There has to be a time when Sir Mekere admits that he has no claim over these billions of Kina belonging to the people of Western Province.

“This money has to be given to the men, women and children of Western Province.

“PNGSDP ceased all development projects three years ago, before moving its operations offshore, where it continues to incur millions of dollars on administration, legal and professional fees.

“This is all money that could be used for development projects that will directly help the people of Western Province.

“In the latest Supreme Court ruling, Sir Mekere’s application was described as incompetent and an abuse of the process of the court.

“Mekere is a former Prime Minister and he should behave with the dignity that is expected of someone who once held the highest office in the land.”

Minister Zeming said a massive change in attitudes is taking place around the nation in respect accorded to the rights of landowners, and this must take place in the PNG SDP.

“Last week the Prime Minister stood up in Parliament for the interests of the landowners of Western Province and other areas where resource development activities are taking place around the country.

“As PM O’Neill said, for too long the rights of landowners had been ignored, and this is now changing.

“The Government will not let up in its efforts to regain rightful oversight and control of PNGSDP and its assets.

“The State will continue to pursue the Singapore High Court action against PNGSDP to ensure that the interests of the people are safeguarded,” Minister Zeming said

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Mekere’s Sustainable Development Program Bid Rejected

Vasinatta Yama | EMTV News | August 19, 2016

The Supreme Court today rejected an application by Chairman of the PNG Sustainable Development Program, Sir Mekere Morauta, regarding the PNG SDP shares in Ok Tedi Mining Limited.

A new Mining Act was passed in 2013, which allowed for all the shares belonging to PNG SDP to be transferred to the state.

The application was for the court to interpret the Act, called the Ok Tedi Tenth Supplemental Agreement or TSA, on whether or not it is unconstitutional.

The Supreme Court ruled out the application based on two factors.

Firstly, the application is not of public interest, but for the commercial interest of the PNG Sustainable Development Program.

Secondly, the applicant, Sir Mekere Morauta, failed to clarify to the court if his application was of the public’s interest.

Following these two factors, the Supreme Court ruled that PNG SDP, which is a foreign owned company, was mostly affected and Sir Mekere was used to come to the court for their benefit.

Following the passing of the TSA in 2013, PNGSDP shares in Ok Tedi were cancelled and transferred to the state.

The TSA Act provides for compensation to be paid as property by the state.

Sir Mekere, who is also the Chairman of SDP, sought relief to have its shares returned.

He filed this application for the court to interpret if the TSA Act was unconstitutional, invalid and of no force or effect.

However, the Supreme Court was in favour of the PNG government, arguing that Sir Mekere was acting solely for foreign interests. The Supreme Court found that Sir Mekere does not have the standing to bring this matter to the court.

The court ruled that his application is incompetent and is an abuse of the court’s processes.

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BHP can be sued for damage: PM

BHP-Billiton-Logo

The National aka the Loggers Times | August 11, 2016
BHP Billiton can still be sued by landowners for environmental damage it has caused in Western through the Ok Tedi mine, Prime Minister Peter O’Neill says.
He said that yesterday when answering a question from NCD Governor Powes Parkop on whether BHP could be sued.
Parkop said the “real culprit” behind all the environmental problems in Western was BHP.
“We must deal with BHP,” he said.
Parkop said in 1990, Western landowners, at their own cost, engaged scientists and lawyers and got a court decision for BHP to dredge the Ok Tedi and Fly rivers right down to the Great Barrier Reef.
He said BHP would have spent so much money on this – more than the long-term fund of the PNG Sustainable Development Programme – “but sadly, and to our shame, the government at that time passed the supplementary bill or act to give BHP immunity from prosecution and not to comply with that court order”.
“They then set up this PNGSD,” Parkop said.
“PNG Sustainable Development is intended to compensate our people, especially the people of Western province, but more particularly the exit plan of BHP.
“BHP is supposed to exit, but instead, they cleverly manipulated the trust deed to set up PNGSD and got the majority on the board.”

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