Tag Archives: PNG development

Save the Sepik from mining: learning from the past

Visiting the Sepik River and its people. Photo supplied.

Ken Golding | Echo Net | 21 September 2018

The people of the Sepik River in Papua New Guinea understand the threat to their lives and culture from the Chinese-owned copper and gold mine that is currently being proposed to be built on the Frieda River, a tributary of the headwaters of the Sepik River.

My partner Raine Sharpe, myself and Keith O’Neill have just returned from the remote Sepik River in Papua New Guinea. We were part of the Northern Rivers Folk Choir that responded to invitations from the people of The Sepik to live with them, share their culture and help alert the world to the threat to their lives from the copper and gold mine being proposed.

Rich culture

We were welcomed into their homes, their daily life and their rich and colourful culture. Sepik people are warm, generous, and intelligent with a great sense of humour. They are renowned for the quality of their artistic cultural expression and live an ecologically aware life described by PNG ABC journalist Sean Dorney as ‘affluent subsistence’.

The Sepik River is 1,200 kilometres long and is the largest uncontaminated freshwater system in the Asia Pacific region. Rising in the Central Highlands it winds its serpentine way through mountains, rainforest and wetlands to the ocean. People have lived on the Sepik for many thousands of years.

Poisoned river

The second-largest river in PNG is the Fly River. In the 1970s Australian mining companies built Ok Tedi, a huge copper and gold mine on the river’s headwaters. This mine became the scene of what is now recognised as the biggest ecological disaster in the world.

Discharging 80 million tonnes of contaminated tailings and mining erosion into the river system each year has caused 1,300 square kilometres of the river to be irrevocably damaged. People of the Fly River now suffer serious health problems with their main sources of food and water subjected to heavy-metal poisoning.

No social licence

I’m drawing the comparison between these two magnificent river systems because the mine proposed by the Chinese-owned Australian mining company PanAust that is preparing to build a gold and copper mine on the Sepik river system is as big, if not bigger than, Ok Tedi mine.

The people of the Sepik fear for their future and their way of life. They know about the damage to the Fly River and its people and are deeply fearful that the Freida mine is another Ok Tedi in the making. So far there has been minimal community consultation and the Sepik people consider the mine does not have a social licence to go ahead.

We have a deep sense of shame that an Australian company recklessly inflicted damage on the Fly River and its people.

The Sepik River is the lifeblood of its people. The children of the village we stayed with are healthy and vibrant. Their delight and laughter melted our hearts.

Professor Tim Flannery says he cannot think of a worse place for a copper mine. Surely we cannot allow an ecological disaster to happen again.

Raise awareness

To raise awareness and funds in support of the people of the Sepik we are holding an evening event Tales of the Sepik River in Mullumbimby on Saturday September 29 at 6.30pm.

If you want to know more about this event email raines@australis.net.

If you want to know more about the people of the Sepik, and the Frieda mine, go to Save the Sepik River and its people on Facebook.

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Resource Agreements Unfair: Haiveta

Mayur Resources managing director Paul Mulder signing an agreement in 2017 with Gulf Provincial Governor Chris Havieta 

Post Courier | September 18, 2018

GULF Governor Chris Haiveta has told his people that current agreements for oil, gas and forestry were not negotiated in their favour.

Delivering his independence message in Kerema last weekend, Mr Haiveta said he wants all agreements under the UBSA and LBSA re-visited and re-negotiated.

He said he felt his people – the majority resource owners – had been short changed and robbed of their resources.

Mr Haiveta and his people hosted Governor General Sir Bob Dadae over the Independence long weekend.

He said: “Our province recognises that current resource agreements in oil and gas and forestry have not been negotiated in the province’s favour.

“This has meant that essential and strategic infrastructure like ports, towns and roads in the project areas have not been built, leaving the province, Kikori district where the projects are located, particularly to miss out completely.

“Therefore we are moving in this term of parliament to ensure that all these agreements are revisited and they are legally compliable and enforceable by all parties.

“We have resolved the UBSA and LBSA agreements including the Gulf landowners and Provincial Governments benefits from the existing Oil and LNG Pipeline to Caution Bay be re-negotiated.”

He said that for the future, ‘we will ensure that resources agreements are properly negotiated and drafted to include all necessary and possible infrastructure needs for the project areas, including the upcoming LNG, coal mining, limestone, mineral sand mining and timber harvesting’.

Mr Haiveta said: “We are glad the national government has started the process of devolution of powers from Waigani to provinces, and Gulf Province is poised to receive decentralisation of powers soon.

“As a step forward to this, we will be signing the Service Delivery Partnership Agreements soon which will pave the way for a synchronised delivery of services between the two open electorates and the provincial government.”

He said his people have abundant renewable and non renewable natural resources both on the land and in the seas.

“Our sea boundaries encompass an area that is twice our land mass, we have significant marine resources with reef systems such as Pocklington and Eastern Fields that remain unexplored commercially and for tourism.

“We also have the largest prawn fishery in the country which is exploited directly from Port Moresby.

“Our forestry industry composed from Port round logging exports brings little benefit to the province as it is a nationally controlled activity.”

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‘Reform PNG’s Resource Ownership Laws’

Henzy Yakham | Post Courier | September 12, 2018

The conversation on ownership of natural resources has intensified in recent times with the issue moved from the simmer-back to hot-and the front-burner.

In the forefront and pressing for revolutionary reforms in the resource ownership regime are two of PNG’s founding statesmen – Sir Julius Chan and Sir Mekere Morauta.

Both Sir Julius and Sir Mekere played very significant roles during pre-independence years as architects to craft the foundations of PNG’s currency, banking and financial institutions, which in succeeding years underwent further reforms to improve their service delivery.

Today, the two former prime ministers are calling for changes to the resource ownership laws so that the original inhabitants of land and sea where the natural resources are found have fair and equitable benefits. In November 2013, despite not attending a Madang meeting of governors from maritime provinces due to prior confirmed official engagements, Sir Julius provided a brief paper to his colleagues on the development of PNG’s extractive industries, ownership of natural resources and related issues. Included in the brief was Sir Julius’ stance that land/resource owners’ rights to own natural resources on and under their land and sea as his proposed remedies in the mining industry.

The brief highlighted a number of aspects in which PNG has failed to structure the mining industry for maximum value to PNG and its citizens. With the brief were comparisons of mineral royalty rates of PNG (which are among the lowest in the world), and other countries which include:

Poland: 10 per cent contained metal value
Ghana: 3 -12 per cent sliding with price
Canada: 15 per cent (British Columbia) taxable income; 18 per cent (Ontario) of taxable income 20 per cent; (Quebec) of taxable income
Mozambique: 10 -12 per cent diamond; 5-8 per cent precious metals
Mexico: 8 per cent gold
Botswana: 10 per cent diamonds; 5 per cent precious metals
United States: 12.5 – 16 per cent Oil; 8 – 20 per cent precious metals
Papua New Guinea: 2 per cent gold; 2 per cent copper

Sir Julius maintains that PNG’s mining regime is grossly distorted and unfair because billions of kina are earned, but the real land, and resources owners simply do not realise their fair share of the benefits.

In a nutshell, he has been pushing for among others:

– Royalties raised to 10 per cent f.o.b. annual revenues;
– SSG raised to 10 per cent f.o.b. annual revenues and SSG payments should be made directly from the company to the province;
– Tax Credit raised to 10 per cent of assessable income and funds should be placed in an account the year of eligibility with no time limit on the use of funds;
– The State receive at least 30 per cent equity in all mining projects free of charge, and should convey a significant portion of this equity to the province, the LLG and the landowners;
– Twenty per cent (20 per cent) of all royalties, special support grants, tax credit and dividends from equity holdings be placed in a separate account to be used for development projects in non-mining provinces; and
– The Mining Act 1992 be comprehensively reviewed and amended, specifically such that ownership of all minerals on and below the sea is vested in the province in whose waters minerals are located.

PNG’s Mining Act 1992, states that all minerals existing on, in, or below the surface of any land in PNG, water lying in any land in PNG, are the property of the State. During colonial rule, the mining and petroleum laws of PNG were adopted based on Australian precedents, giving the powers of ownership of resources in the Administrator. Under the common law of England, minerals belong to the owner of the land under which they are found.

The British Common Law, inherited by Australian colonies upon white settlement, included a presumption that the owner of the land is entitled to all that lies above and below the surface.

Natural resources such as minerals were regarded as part of the land in which they naturally occurred and accordingly passed into private ownership upon Crown grant of the land. Despite these arguments, in the end the Australian Statutory Law in place during colonial times prevailed over both PNG law and British Common Law, this was formalised in the Mining Act 1992. However, it is very clear that State ownership violates both traditional PNG law and British Common Law.

In April 2013, Sir Julius told the Parliamentary Referral Committee on Minerals and Energy inquiry into the review of Mining Act 1992 that under current laws, PNG simply gives away all its wealth and then buys it back at an exorbitant price.

On August 19, 2013, Sir Julius was the Keynote Speaker at the Department of Mineral Policy and Geohazards Management (DMPGM) organised regional consultation meetings in Kokopo, East New Britain Province on the proposed changes to Mining Act 1992. There, he outlined the way in which the mining regime in PNG has failed the people and the way it should be changed for the greater benefit of the people and provinces.

On May 14, 2009, Sir Julius proposed reforms in natural resource ownership laws in a motion tabled in Parliament.
The underlying intention of the motion was for the transfer of the resource ownership to landowners of where the resources are found. As well, the motion proposes for increased benefits for landowners, provincial governments and the country in general.

Sir Julius argues that as a direct consequence of the arrogation of all mineral, oil and gas reserves on land and below the land and sea by the State have been a massive give-away of the national wealth of PNG.

On September 4, 2018, Sir Mekere asked Prime Minister Peter O’Neill a series of questions based on important national issues raised by Sir Julius in his reply to the inaugural address of the Governor General in opening this Parliament.

Sir Mekere prefaced his question to Mr O’Neill by quoting Sir Julius “to remember that in our democracy the final power is the power of the people. We are here for one reason only – to serve the people”.

“I want to take a wider view of the challenges we face. For though we have some short-term problems to tackle, I fear there are even more grave problems looming over us.

“I have never known a time when our country was in greater peril.”

After quoting Sir Julius, Sir Mekere asked Mr O’Neill what the government position on Sir Julius’ recommendations among others to:

– Increase the level of royalties from the current 2 per cent to 10 per cent;
– Increase the level of Special Support Grant and the Tax Credit Scheme;
– Establish a Trust Fund in which 20 per cent of revenues of mining provinces would be paid to distribute to non-mining provinces;
– Revise the Mining Act 1992 and the Oil and Gas Act 1998 to vest ownership of resources in the people;
– Introduce a Derivation Grant for mining and petroleum provinces of 5 per cent of the value of resources originating in that province;
– Increase Autonomy of Provinces, provinces “that demonstrate capacity to manage their own affairs. The autonomy was to cover administrative and financial autonomy and autonomy over non-renewable and renewable resources.

Answering Sir Mekere’s questions, Mr O’Neill said “the Mining Act is under review at present and I will not pre-empt the discussions and the outcomes of that review that is taking place.

“The Mining Minister and his team are already well advanced in those discussions. There will be an opportunity for this Parliament to look through that review and the new Mining Act, which will address all these issues, including royalties, the powers of the provinces with respect to the mining activities in those provinces and the management of the trust funds.

“There has been a gross abuse in the management of some of the trust funds and we are all aware and are trying to correct that as we move forward.

“I can assure you, that the people of Papua New Guinea, particularly the landowners will get a better share of the benefits of the resource development in this country.

“That is the priority of this government and we will continue to pursue it through the mining review which is now being conducted and is still continuing.”

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Group wants Wafi-Golpu mining town at home

The National aka The Loggers Times | September 12, 2018

The people of the Mumeng local- level government in Bulolo district, Morobe, do not want Wafi-Golpu’s mining town to be in the Huon Gulf district. They want it at home.

The group called Pikinini Mumeng made their stand known during a forum held on Saturday at Gurakor.

Spokespersons Max Giamati and Toksy Mon told The National the people of Mumeng were fighting for the rights of their children and they did not want their children to miss out on any benefit from the Wafi mine.

Giamati said the forum was for the developers, the Morobe government and the State to explain the benefits the Mumeng community would gain from the mine, the mining township, and the formation of Mumeng Landowners’ Association.

“Just because the pipeline will run through Huon Gulf they want to build the township there, but we are against the idea,” he said.

“We are not saying no to the pipeline but because of the future of our children we want the township and service to be in Bulolo District.

“A good example is the Hidden Valley Mine where the services and township should be in Bulolo District but has been moved down to Lae. We do not want to see this process repeated with Wafi-Golpu.”

The Pikinini Mumeng group said that further exploration on their land would not be carried out unless there was discussions with the people of Mumeng on what benefits Wafi-Golpu would provide.

The group will have another meeting on Saturday at Kumalu Dust Market and the Mumeng LLG president and Bulolo MP Sam Basil are being invited to attend.

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Bougainville: To mine or not to mine?

Jubilee Australia | 12 September 2018

As Bougainville plans for its long-awaited inde­pendence referendum scheduled for the middle of next year, the Panguna mine – which was once one of the largest copper-gold mines in the world until the Bougainville civil war forced its closure in 1989 – remains at the forefront of debates about Bougainville’s economic future.  

Jubilee Australia’s report Growing Bougainville’s Futureexamines the choice facing the people of Bougainville and asks the question of ‘to mine or not to mine’?  

The political consensus that large-scale mining offers the only feasible developmental path for Bougainville has led to a scenario in which there has been an insufficient analysis of potential alternative eco­nomic strategies. Jubilee Australia aims to redress this imbalance.  

The report reflects on the possibilities and realities of an extrac­tives-led development path for Bougainville and examines the availability and viability of an alternative path. In short, we conclude that alter­natives to large-scale mining do exist and that many Bougainvilleans are already participating in and developing these alternatives.  

Some of the conclusions in ‘Growing Bougainville’s future’ are:

  • Land is of central importance to Bougain­villeans, and along with Bougainvillean’s history, knowledge, social institutions, cultural assets and traditional economy, can provide a vital foundation on which Bougainville’s future can be built.
  • Land supports a way of life that most rural Bougainvilleans are already living. Land allows people to operate within a mixed economy that blends the non-cash contributions of the traditional economy with cash earned from small-scale income generating activities.
  • Agriculture is the single most important source of livelihoods for Bougainvilleans, and an economy based on agriculture has the potential to benefit all Bougainvilleans – both women and men – and not just a small minority
  • The Panguna mine is unlikely to be a significant source of government revenues, at least in the short to medium term.
  • An over-reliance on the mining oil and gas sector is likely to distort Bougainville’s economymaking it harder for non-resource sector exports – particularly in agriculture – to bring in revenues, as is the case in Papua New Guinea.

This report is being published along with a short film, Bougainville: Long Han Blong Yumi (Bougainville: It’s In Our Hands). The film has been made for a Bougainvillean audience and explores many of the same issues explored in the report.

Dr Ruth Saovana-Spriggs, from the Bougainville People’s Research Centre said:

“Re-opening the Panguna mine is not the solution. The people of Bougainville are hungry for alternative and sustainable development paths, and an informed and balanced debate about Bougainville’s future.”

Christina Hill, Acting Executive Director of Jubilee Australia said:

“Properly supported, innovative approach­es that build on what is already done have the potential to support inclusive economic growth in Bougainville and with it increase government reve­nues.”

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Churches want to ban seabed mining

Benny Geteng | Post Courier | 4 September 2018

THE PNG Council of Churches has called for a total ban on seabed mining in the country.

The Council of Churches representatives from the United, Anglican, Catholic, Lutheran, Salvation Army, Seventh Day Adventist, Evangelical Alliance Church of Manus, Baptist and Body of Christ made their stance known after considering the seriousness of the activity on the seabed.

The representatives said in a joint statement that the seabed mining will only bring destruction to the ocean life; and people are being forced by developed industrialised countries to go along.

“The world is watching PNG and it will be a joke to the world if PNG says yes to this destructive monster in the absence of a relevant national policy and legislative framework on off-shore seabed mining.

“Following the Madang Guidelines concluded in 1999, we call on the National Government to ensure a separate policy and legislation is developed before off-shore mining including deep seabed mining activities is commenced in the country,” they said.

The representatives said the government should also clarify to the churches and the people of PNG as to what consultation processes have been undertaken to develop relevant policy and legislation governing off-shore mining.

Extractive Industries Transparency Initiative reports have highlighted that PNG is not getting its fair share of resource revenue and as such the churches have expressed concern that the States equity participation in the Solwara 1 project will be a waste of taxpayers’ money.

“We call on the government to be more focused on people development rather than profit development when making crucial decisions.

“The government must consult the people, ensuring citizens and the public are aware of the benefits and the negative impacts of these developments and allow them to make informed decisions on what the people think is best for them,” they said.

Nautilus Minerals Company is the developer of the Solwara 1 project located in the Bismarck Sea which will cover provinces such as New Ireland and East New Britain.

The National Government had obtained a loan of K400 million in 2014 from Bank South Pacific to acquire 15 per cent equity in the project.

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Tuke Calls For Transparency On K92 Deal

Mining Minister Johnson Tuke

Post Courier | August 22, 2018

Mining Minister Johnson Tuke has appealed to parties to the K92 mining project memorandum of agreement to be transparent when negotiating benefits of the project.

The Minister was speaking to parties on Tuesday during the review of the MOA which is taking place in Lae this week.

“Mi laikim state imas tok tru, mi laikim line agencies blo gavman mas tok tru, kampani mas tok tru na ol landowners tu mas tok tru (I want the State to tell the truth, government line agencies to tell the truth, the developer company must tell the truth, and the landowners must tell the truth).”

Tuke said it was important to be upfront on issues and in that way, all stakeholders could achieve their objectives in a timely manner.

He urged all parties to have understanding and respect for each other during the negotiations.

The Minister raised issues with the fact that Kainantu District has not seen development as a result of the mine’s operations so far.

Mr Tuke said as long as he is the Minister for Mining, he would try to ensure that all parties, especially landowners of all mines in the country, receive benefits through their various MOA.

He said the National Government has reviewed the Mining Act 1992 in efforts to better the way government regulates the mining industry in the country.

“This is part of the government’s intervention to ensure that the country’s aspirations and interests are captured sufficiently,” Mr Tuke said.

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