Tag Archives: Ok Tedi

Tuke yet to receive mining audit report

The National aka The Loggers Times | July 4, 2019

MINING Minister Johnson Tuke says a report on an internal audit into one of the trust accounts that keeps the funds from the proceeds of the Ok Tedi mine for the people of Western is yet to be furnished to his office.

Tuke said these in response to questions from Western Governor Taboi Awi Yoto in Parliament yesterday.

Tuke said the previous government under the leadership of Peter O’Neill had put a moratorium on one of the trust accounts to undertake an audit after allegations of corruption and misuse of funds.

“There are two trust accounts – the Community Mine Continuation Agreement (CMCA) Trust Account and non-CMCA,” he said.

“Under CMCA 12 projects have been identified and they were being done. It comes under Ok Tedi Development Foundation (OTDF).

“The other one is non-CMCA and projects were endorsed before I became the minister.”

Tuke said there were 148 projects endorsed and funded under non-CMCA Trust.

“These projects were done already but we don’t know, whether these projects were actually delivered on the ground or not.

“For this reason, the previous government authorised a project audit to be done so that the people would know whether these funds were actually used to deliver projects and programmes to benefit the people of Western or not,” he said.

“The audit report was done already but I have yet to receive it.”

Tuke said once he received the report he would act on its recommendations with the relevant authorities.

He also clarified that the balance of that funds under the non-CMCA Trust would be given to the Mineral Resource Development Company (MRDC) as per a Cabinet decision.

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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.

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Marape holds Singapore talks over PNG trust fund

Radio New Zealand | 19 June 2019 

Papua New Guinea’s prime minister has led a delegation to Singapore to find a way in to a trust fund the government has been locked out of.

In his first overseas trip since taking office last month, James Marape met with officials from the PNG Sustainable Development Program on Sunday.

The company manages about $US1.4 billion of assets through a long term fund which was set up to hold profits from the Ok Tedi copper mine in Western Province.

Since the government of Peter O’Neill expropriated the mine from the SDP in 2013, it had been in a protracted court fight to gain control of the long-term fund parked in Singapore.

Singapore’s High Court ruled against the government’s claim in April. Following this, and a change in government leadership, PNG’s new prime minister Mr Marape is seeking a different approach.

He said on Facebook the aim of his trip was to find common ground with the company managing the fund.

The prime minister was accompanied by MPs from Western Province whose constituents are intended to be direct beneficiaries of the SDP’s projects and long-term fund.

Mr O’Neill, who indicated that the government would appeal the Singapore court ruling, portrayed the government’s aim in the case as being to ensure the company’s funds were given to the people of Western Province.

It remains to be seen whether that appeal will proceed, with Mr Marape advocating a discourse-based approach to dealing with Sustainable Development Program.

The SDP was established in 2001 when BHP Billiton divested its majority share in the lucrative Ok Tedi copper mine in Western Province to SDP.

The divestment followed legal action by Western Province landowners over extensive and long lasting environmental damage caused by the mine operations, particularly its riverine tailings disposal system.

April’s court decision was welcomed by the four Western MPs, who said it would ensure SDP was protected from political interference and that its assets went to the people.

However, the money in the fund is intended to be disbursed by SDP within Western Province when the Ok Tedi mine closes. The mine is still operational.

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Academic Urges Govt To Revisit Tax Regime

Post Courier | May 28, 2019

The recent political tussle in PNG has emerged due to inconsistent resource development policies, mainly the disagreements on local fiscal contents associated with the extractive sector, explains an academic.

Senior Lecturer Dr Ken Ail Kaepai of PNG University of Technology said from Lae that PNG needs to critically revise the minerals taxation regimes to develop sound policies and innovative ways of capturing a significant share of the mineral wealth without placing tax burdens on the industry.

“The political tussle between the government and opposition is not new. During the mineral boom periods, Australia had its share of high political turnovers due to arguments over resource rent tax and royalty policies.”

“The idea of national ownership of resources has been People Progress Party’s (PPP) policy platform for maximizing the mineral wealth for PNG.

However, PPP has not pursued it for a policy shift. Currently, the political mindset thinks that equity participation is one way to accommodate national interests com- pared to allowing 100 per cent foreign ownership of PNG’s mineral resources,” he said.

He said that the lack of capital for exploration and project developments restrict the national ownership of mining, oil and gas. The State and landowners do not have the equity capital for procuring equity interests in resource projects.

Dr Kaepai explained that given the limitation, the State has agreed to acquire 22.25 per cent interests in the Papua LNG through a deferred payment of the equity capital, which includes the landowner’s 2 per cent interest.

“The State will bear landowner’s financial burden of their equity interest through KPHL. It means that the landowners will be free-riders at the expense of the State and the society at large.”

“Under this arrangement, the dividends will be delayed over more extended periods required for allowing the State to repay the equity capital sourced from external lending institutions or will enable the investor to recoup its equivalent equity capital cost internally using future positive cash flows from the project.”

Dr Keapai said that the deferred payment of the equity capital shifts the financial burden of providing the upfront capital cost of equity to the investor.

The State’s market capitalization of equity participation in minerals, petroleum and LNG is not clear, and landowner equity participation has been problematic,” he stressed.

Dr Kaepai said that the Panguna was the only mine that consistently paid equity dividends until its premature closure in 1988.

“Local equity participation in Porgera and Lihir gold mines have been problematic and unsustainable, while free-carried interest was offered to OK Tedi landowners under exceptional circumstances associated with the riverine tailings disposal system.”

Dr Kaepai said that a former mining minister, the DMPGM and the MRA misled the GoPNG to take the 30 per cent equity in the failed Nautilus Minerals’ under-sea mining development.

“It is a significant loss of public funds that could have been used to develop the deteriorating health and education infrastructures in rural PNG.”

“It appears that the GoPNG provides tax holidays as compensation for equity participation, and at the pretence of attracting foreign direct investment. “This strategy causes a fiscal dissipation where both tax concession and equity participation could lead to wasteful resource extraction.

“The State and landowners need to critically assess the financial viability of equity participation in Papua LNG, Wafi-Golpu and Frieda projects.

This includes the renegotiation of the Porgera gold mine on a case by case basis.

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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.”

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The human cost of globalization

Barzil’s latest mining tragedy should be a wake-up call for citizens at both ends of the supply chain. Photograph: Douglas Magno/AFP/Getty Images

Eric Silverman | Metro West | 17 February 2019

Last month, a massive dam holding back a lake of waste from an iron ore mine collapsed in rural Brazil. The exact toll from the tsunami of metallic sludge is still unknown. At least 130 are confirmed dead but, as one elderly woman said, “It’s easier to count the living.” Hundreds remain missing. Some bodies will likely never be exhumed from the muck. Surely you heard about the disaster, expressed momentary horror, then went about your daily life as if such matters did not concern you. They do.

Like it or not, your hand – all of our hands – helped breach that dam. Those who benefit most from the global economy have equally global moral responsibility.

If you’re reading this newspaper in Massachusetts, glance outside your window. See any mines? Count yourself lucky. The largest such chasm in Boston was the Big Hole formerly occupied by Filene’s Basement. Actually, we’re not lucky at all, just rich. Most of us in MetroWest don’t want mining. We prefer other, far safer jobs, never mind backyards unblighted by large-scale resource extraction. And we have the affluence and power to make corporate and government leaders take heed. Not so the poor souls recently entombed in the mud.

Most Americans look to nature for rest and relaxation. We sojourn in the forest, like Thoreau, to “learn what it had to teach.” Others sell their woods and hills to survive. It is far better to be on the buying end of consumerism than the giving end of iron ore and other raw materials. Just ask the people of Vila Ferteco, the community downstream from the shattered dam.

Or ask anybody at the fringes of the world system. I know some of them well, having lived and studied as an anthropologist in a community along the Sepik River in Papua New Guinea. They have little political voice, less money, and no position of privilege that would cause corporate directors or public officials to take notice. That’s why their society is at risk from one of the largest gold and copper deposits in the Asia-Pacific region, the Frieda River mine, now under development by an Australian company, PanAust, which is a subsidiary of a Chinese government entity. Many people along the Sepik River are speaking out against this mine. Few seem to care or listen, especially shareholders and consumers on the other side of the world who will someday reap the lion’s share of the mine’s benefits.

There are few opportunities for a paycheck in the developing world, never mind a job that would pass muster by the workplace safety regulations that protect your own labor. More than 750 million people, mostly in the Global South, have less than a $1.90 a day in their pockets. What they have, however, are the natural resources – minerals, timber, oil, and gas – that are fed to factories in Nigeria, India, and Guangzhou, then shipped as the myriad products that arrive by Amazon on our doorsteps. It’s not so far from Bangladesh or Brumadinho to the local mall.

Nobody gives up their land because they find pleasure in open-pit mining. They do so because they have as much choice in the matter as they do clout in the boardroom or parliament. Corporations know this well, and so do as they please in distant places beneath the palm trees, at least those that remain standing after clearcutting for palm oil plantations. The end result is what just happened in Brazil.

The Global South is the resource Wal-Mart for the industrialized world, only with worse wages and no health care benefits.

The poisonous sludge that murdered a town last week came from a mine owned by a Brazilian company, Vale SA. The same firm, together with the Anglo-Australian giant BHP Billiton, owned another Brazilian mine where a collapsed dam killed more than a dozen in 2015. BHP Billiton once operated the Ok Tedi Mine in Papua New Guinea that discharged 90 million tons of waste into the local river system – about 500 square miles – for more than a decade. Half the river, reported The Australian Conservation Foundation, was “almost biologically dead.” The cultural survival of its indigenous communities remains at risk. Across the border in the Indonesian province of Papua, the U.S.-based company Freeport-McMoRan runs the world’s most profitable gold mine. Some of those profits, reported by The New York Times, went into the pockets of military and police officials to ‘secure’ the site.

Needless to say, major Western banks and investment firms, such as Vanguard, Blackrock, State Street, Fidelity, Citicorp, Bank of America, and John Hancock, pour assets into these mines, maybe even some of your own retirement funds, just as the mines pour their toxic waste down nearby hills and waterways.

There is no shortage of blame. Corrupt politicians. Greedy Wall Street financiers. Multinational corporations and the glossy PR firms they hire to promote ‘global citizenship.’ But most of the blame rests with you and I – everyday people content with our own lives and things, and thus unwilling to consider the human cost of globalization and to demand a more ethical capitalism. It’s time we did. Before another town in a far-flung place most of us can’t find on a map is buried beneath indifference.

Eric Silverman, a former Research Professor of Anthropology, lives in Framingham. He is now affiliated with the Women’s Studies Research Center at Brandies University.

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Environmental audit set for mines: Pundari

Ok Tedi. Photo by Glen Barry/Greenpeace.

Don’t hold your breath, CEPA and its predecessor, DEC, have been asleep for decades…

Luke Kama | The National aka The Loggers Times | February 4, 2019
MINISTER for Environment Conservation and Climate Change John Pundari says an independent environmental audit on Ok Tedi mine in the Western, Porgera in Enga and Ramu Nickel in Madang will be undertaken this year.
Pundari said this in Parliament on Thursday when responding to a series of questions raised by Gulf Governor Chris Haiveta on the new Ok Tedi Environment Management Bill (OTEMB) that was passed by Parliament on Wednesday, and pollution caused by the Ok Tedi Mine to Fly River and the surrounding environment.
“The Ok Tedi Environment Management Bill was crucial to regulate the Ok Tedi mine, which is in its advanced state of operation, to protect the environment and the livelihood of local communities,” he said.
“The mine will be issued an environment permit under Section 13 of the Ok Tedi Environment Management Act (OTEMA).
“That enables the Conservation and Environment Protection Authority (Cepa) to require the company to carry out periodic monitoring of the river systems to ensure that the environmental values defined in the permit are maintained.”
Pundari said any new activity that would take place outside the areas covered under the would be regulated through the Environment Act 2000.
“These activities are considered new activities and would require full environment impact assessment to be done on the proposed activity, before a decision is made under the Environment Act 2000,” he said.
Pundari said with respect to concerns on pollution in the Gulf of Papua, and other environmental concerns, Cepa would undertake an independent audit of Ok Tedi this year.
“Cepa will undertake an independent audit of the Ok Tedi mine this year, as it is necessary to determine the state of the environment, particularly with respect to the defined environmental values,” he said.
“Cepa will also conduct an independent environmental audit into Porgera mine, as the mine life comes to a closure, and as well for the Ramu Nickel Mine with report made to the public.”
Pundari said the audit would also assist to determine the areas of focus and future areas of environmental management and monitoring.

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