Court’s interference puts Ok Tedi’s future at stake

The National aka The Loggers Times

THE eminent persons’ discussion (EPD) on the future of the Ok Tedi mine may be in jeopardy following the granting of certain orders by the National Court last Friday, according to an inside source.

Deputy Chief Justice Gibbs Salika ordered that Ok Tedi Mining Ltd (OTML) refrain from dumping mine waste and tailings into the Ok Tedi and Fly River systems pending the hearing of the substantive matter on Feb 12. Salika ordered the Government to provide details and records of how it spent the dividends it received from OTML from 2001 to 2013.

The judge ordered a freeze on several trust accounts and for the plaintiffs to engage a reputable environmental scientist or firm to conduct extensive research into the extent of environmental pollution in the Fly River and its social, health and economic impact on the people.

The court granted the orders on an urgent application filed by lawyers Allan Bainyamai and Samson Jubi on behalf of a group of landowners.

The source said the court order could jeopardise the EPD, which aimed to seek a resolution between BHP Billiton and the PNG Government on drawing down long-term funds held by PNG Sustainable Development Program (PNGSDP).

The EPD panel, led by former prime minister Sir Rabbie Namaliu, was initiated in the wake of the O’Neill Government’s takeover of OTML and the dissolution of the previous PNGSDP board chaired by another former prime minister Sir Mekere Morauta.

The source said that BHP could view the court orders as a definitive step towards an environmental damages claim against the Australian-based global mining giant, which had previously operated Ok Tedi.

“BHP could reconsider giving the PNG Government the green light on the Ok Tedi long-term funds if it thinks this matter is heading towards an environmental damages claim,” the source said yesterday.

The source said under the current rules of the Ok Tedi supplementary agreement, the long-term funds worth K2 billion would be released only after the mine closed and BHP’s consent was needed to access the money.

“The National Court orders may be a temporary relief for the concerned landowners but it may jeopardise the long-term benefits under the current agreement unless the PNG Government renegotiates an acceptable package with BHP.”

Mine tussle goes offshore, PNGSDP seeks restitution of shares

Post Courier

The legal dispute between the State and PNG Sustainable Development Program over OK Tedi mine shareholding has now reached international arbitration.

The International Centre for Settlement of Investment Disputes has now registered PNGSDP’s request for international arbitration over the expropriation without compensation of the company’s 63.4 percent shareholding in Ok Tedi Mining Ltd.

This means that ICSID has accepted the case and that it will proceed.

The arbitration hearing is separate to all other litigation relating to the expropriation of the mine, including the latest National Court action.

The chairman of PNGSDP, Sir Mekere Morauta, said PNGSDP is seeking restitution of the 63.4 percent of OTML illegally expropriated by the State, or failing that, compensation for the shares.

“The State’s expropriation of the shares through the 10th Supplemental Agreement Act last year, without compensation, is in breach of international law,” he said.

“It also breaches the normal standards of behavior of a State towards a foreign company. PNGSDP is well within its rights to seek restitution,” he said.

“PNGSDP believes it has a strong case and looks forward to having its property returned to it.”

Sir Mekere said the next step is for an arbitration tribunal of three eminent international jurists to be set up. The members will be appointed by agreement between PNGSDP, the State and ICSID.

It is likely that this will happen towards the middle of the year, with hearings possible soon afterwards.

Sir Mekere said when the mine is returned to PNGSDP, the company will begin talks with the Western province community so that agreement can be reached on the most appropriate arrangements for the future of the province.

Sir Mekere said PNGSDP is very keen to resume its social and economic development program in Western Province.

Prime Minister Peter O’Neill is on a historic visit to Bougainville and cannot be reached for comment, but a government spokesperson said the government was committed to its plan for Ok Tedi and the people of western province.

“Talks between an eminent person’s group led by Sir Puka Temu and PNGSDP and other parties are ongoing and we cannot speculate on an outcome at this stage,” said the spokesperson.

ICSID is an international institution set up under the International Convention on the Settlement of Investment Disputes Between States and Nationals of Other States.

It facilitates arbitration proceedings allowing independent tribunals to decide cases under its rules, and all contracting member states agree to enforce and uphold arbitral awards in accordance with the convention.

PNG became a signatory to the convention with the passing of the Investment Disputes Convention Act in 1978. One hundred and fifty other countries are signatories.

International arbitration by ICSID is available to PNGSDP under section 39 of the Investment Promotion Act.

From its creation in 1965 to 30 June 2012, ICSID has registered 390 investment dispute cases, of which 250 have been concluded.

New Twist In Ok Tedi drama: PNGSDP registers arbitration case

Martyn Namorong | Namorong Report

They say it aint over until the fat lady sings and the battle over the giant Ok Tedi Copper Gold mine in the Star Mountains of Western Papua New Guinea has taken another new twist.

The Chairman of the Papua New Guinea Sustainable Development Program (PNGSDP), Sir Mekere Morauta today announced that the company has registered its dispute with the PNG Government with the International Centre for Settlement of Investment Disputes (ICSID).

Sir Mekere said PNGSDP is seeking restitution of the 63.4 percent of Ok Tedi Mining Limited (OTML) illegally expropriated by the State, or failing that, compensation for the shares.

“The State’s expropriation of the shares through the 10th Supplemental Agreement Act last year, without compensation, is in breach of international law,” he said.

With the filing of the case with the ICSD, it is expected that a tribunal of three eminent international jurists will set up by the ICSD, in consultation with PNGSDP and the Government. The tribunal is expected to be set up by the middle of this year with hearings expected later.

Meanwhile, Fly River landowners from the South Fly District of Western Province have successfully obtained a court order restraining OTML from dumping mine wastes and tailings into the Ok Tedi Fly River Catchment. The court also ordered the payment of K45 million to the landowners to fund independent scientific research into the health and environmental impacts of the Ok Tedi Mine and pay for legal costs.

Despite the court order, it is understood that the Ok Tedi mine continues to operate as the court orders have not been served on the Tabubil Headquartered Company.

The landowners actions have received support from the Opposition Leader Belden Namah.

“This Court action is a head start for affected land owners and communities around the country to getting justice through the Courts against the Government and the Extractive Industry.

Our reaction to the case before the National Court is this. We have adopted a stupid system where the state has got itself tangled up in Mining and Hydrocarbon developments as a shareholder as well as a regulator. When a government becomes an investor in a project, it places itself in a conflict of interest and easily compromises the interests and welfare of the people that it is supposed to protect or promote,” Namah said.

Namah also took a swipe at Prime Minister O’Neill for comments made against the court ruling.

“For the Prime Minister to say, “I hope the courts generally understand the consequences of the claims they are hearing. We don’t just rely on the courts to uphold the law; we rely on the courts to appreciate the consequences of their decisions and rulings”, is in effect suggesting to the Courts not to dispense justice but to support political and economic expediencies of government,” he added.

In 2012, Ok Tedi Mining Limited had total net assets worth K2.6 billion. It’s Managing Director, Nigel Parker described the year 2013 as “just like a tiger”. Last year Ok Tedi suffered operational failures at its mill and mine pit and had to be closed for months on end. Parker also revealed that production for 2013 was around 100 000 tonnes of copper compared to 146 000 tonnes the previous year. Sales from Ok Tedi were also affected when a major buyer in the Philippines was affected by Super Typhoon Haiyan.

Uncertainty brews over the future of the mine, once regarded as World Class copper gold producer. With mine life extension, there is expected to be a smaller mine however the expectations from its various stakeholders run higher than the mountain peaks of the Star Mountains. The mist that shrouds the mine located up in the cloud-lands of Western Province painting a rather ominous sign of the unpredictable path that lies ahead for the mine that underpins PNG’s economy.

PNG takeover of SDP to proceed in international arbitration

Radio New Zealand

The Papua New Guinea government’s move to take over control of PNG Sustainable Development Program Ltd’s majority share in the Ok Tedi mine has gone to international arbitration.

The International Centre for Settlement of Investment Disputes has registered the SDP’s request for arbitration over the government seizure of the company’s 63.4 percent shareholding in Ok Tedi Mining Ltd.

The arbitration hearing is separate to other litigation relating to the takeover of the Western Province mine, including National Court action by landowners against OTML which has been ordered to stop dumping mine tailings into local river systems.

The SDP chairman, Sir Mekere Morauta, says the company is seeking restitution of the share of OTML which he says was illegally expropriated by the State, or failing that, compensation for the shares.

Sir Mekere says that when the mine is returned to SDP, the company will discuss with the Western Province community the most appropriate arrangements regarding the Ok Tedi mine for the future of the province.

Court orders K45 million set aside to pay for Ok Tedi studies and lawyers fees

The National Court has ordered K45 million be set aside to pay for research into the impacts of the Ok Tedi mine and ‘reasonable legal costs’. But the monies are to be held in a National Court account pending further orders rather than being immediately dispersed to Bamiyamai Lawyers as requested by the lawyers themselves.

The setting aside of the K45 million was part of the private (ex parte) orders made by Deputy Chief Justice Salika last Friday in a dispute between a group of disaffected Western Province landowners and the State.

The full ruling by the court can be downloaded here – Ok Tedi ex parte decision Jan 2014 [1.8MB]

The size of the K45 million fund has caused some commentators to call into question the motives of the Plaintiffs and their lawyers.

The order for the payment of the K45 million into the account of the National Court was made in a private hearing with no opportunity for the Sate or the mining company to be heard.

The monies are to be used for a study of the extent of environmental pollution in the South Fly area of the Fly river and its social, health and economic impact. Also a health study on the extent of the environmental impact on the lives of people living in the South Fly area.

The court has also ordered Ok Tedi Mining Limited and the State to disclose all records of dividends paid to shareholders since 2001and provide details of how it has spent those dividends.

Further OTML, the State and PNG Sustainable Development program must disclose details of all payments made with funds from the 2001 and 2007 Community Mine Continuation Agreements.

The orders were made on an application by a group of seven landowners and two local-level government Presidents from the southern Fly area, represented by Bamiyamai lawyers

PNG PM warns landowners of ‘consequences’ over Ok Tedi legal fight

ABC Radio Australia

PNG’s PM warns a court decision against Ok Tedi mine could have ‘massive consequences’ for landowners.

 

The Ok Tedi mine in PNG’s Western Province has been a hot topic in the country’s politics for more than 20 years. (Credit: ABC licensed)

Papua New Guinea’s Prime Minister Peter O’Neill has warned that a court decision against operators of the Ok Tedi mine could have “massive” consequences for landowners and the country.

Last week, a court ordered the company to stop dumping waste into the nearby Fly River and tributaries in the Western Province, citing environmental concerns.

The order could see the giant gold and copper mine grind to a halt.

In a statement, Mr O’Neill said the government is appealing the court decision.

“We respect the courts, but we will fully exercise our appeal rights in relation to this decision, a decision which could well have massive, and unintended, consequences,” he said.

The Ok Tedi gold and copper mine is the biggest single source of revenue for the government, and the only source of income for many landowners.

Paul Barker, executive director of PNG’s Institute of National Affairs, told Radio Australia’s Pacific Beat closure of the mine would have a significant impact on the country’s economy.

“Copper price has been down in the last year or so… the revenue has been coming to the government from a wider range of sources, so it hasn’t contributed as much has [sic] been forecast for 2013-2014,” he said.

“But it would certainly come as a major blow.”

‘Trust the government’

Mr O’Neill said it was clear the legal action was being urged on by lawyers who would end up being “the only winners”.

He appealed to “genuine” landowners to trust the government to address their concerns relating to the Ok Tedi mine.

“We are the first government to honestly address the environmental catastrophe along the Fly River, and its tributaries,” Mr O’Neill said.

“We are the first government to take steps to ensure that the benefit sharing and other agreements benefit genuine landowners.”

The court has also ordered that company bank accounts be frozen after allegations were made that money earmarked for local development had been misused.

Mr O’Neill confirmed he has frozen all landowner and provincial government trust accounts until matters surrounding the mine were resolved.

Tailings from the Ok Tedi mine caused widespread damage to the Fly River in the 1980s and 90s.

In 2001, BHP divested its majority share of the mine to a charitable trust called the PNG Sustainable Development Program, and in return was granted legal immunity.

Last year, the PNG Government passed legislation to take over the trust – effectively nationalising the mine.

The mine has continued to operate with the profits being used to promote development in communities affected by the pollution.

PNG mining company ordered to end environmentally damaging dumping

ABC Radio

PHOTO: A pipe from the Ok Tedi mine pours waste into the Ok Tedi river (Photo: ABC TV)

TONY EASTLEY: Papua New Guinea’s National Court has ordered the Ok Tedi mining company to stop dumping waste into a local river – a move that would effectively shut down the mine.

The court has also ordered that company bank accounts be frozen after allegations were made that money earmarked for local development had been mis-used.

PNG Correspondent Liam Cochrane reports.

LIAM COCHRANE: The Ok Tedi Mine might be 500 kilometres upstream, but local government president, Benjes Kudi Alusi, says pollution has hurt his constituents.

BENJES KUDI ALUSI: A lot of the wildlife and fish is gone and it’s going to be a time bomb before, the people will die and float like fish.

LIAM COCHRANE: Another local government leader, Gedi Dabu, says the damage has also been felt further south, in an area that borders Australia’s territory in the Torres Strait.

GEDI DABU: There are so many of our women giving birth to you know deformed babies in Daru Hospital and this may be part of the effects from the damages caused by the mine.

LIAM COCHRANE: Since the eighties, the Ok Tedi gold and copper mine created billions of dollars of revenue for Australian company BHP, but waste dumped into the river system caused widespread damage.

BHP handed over its majority share to a local trust in 2001 in return for legal immunity.

Last year, the PNG (Papua New Guinea) government passed legislation to take over the PNG Sustainable Development Program – effectively nationalizing the mine.

But now an order from PNG’s National Court could see the mine grind to a halt.

SAMSON JUBI: A court order is a court order and they have to comply.

LIAM COCHRANE: Samson Jubi is the lawyer for the community leaders of the South Fly River area, and he explains the main point of the court order he’s just received.

SAMSON JUBI: The court has ordered Ok Tedi Mining Limited stop dumping anymore mine waste and tailings into the Ok Mine, Ok Tedi, and the Fly River and all of its tributaries, which collectively is known as the Ok Tedi Fly River system.

LIAM COCHRANE: A spokeswoman for Ok Tedi said the company has no comment until after the orders are formally served later today.

The court also includes the freezing of an ANZ bank account and a Bank South Pacific account that hold around $200 million that should go to development projects benefiting those affected by the mine.

Samson Jubi says that has not been happening.

SAMSON JUBI: There are substantial amounts of money in that account have already been misapplied, or misappropriated. And so I will be serving the court order on the two banks to pay immediately what the court has ordered, what the balances of the funds are to be paid into the national court trust account, essentially to protect whatever is left of the peoples compensation monies.

LIAM COCHRANE: Justice Gibbs Salika ordered $19 million of the money held in these two accounts to be used for extensive research into the environmental and health impacts to the South Fly River and the Torres Strait.

Justice Salika wants to see a preliminary report in three months, although that may be difficult given the size of the area and the complexity of the problem.

South Fly people want Ok Tedi mine shut

Melissa Martin | Post Courier

The people of South Fly mine affected communities have urged the Government to shut down the Ok Tedi mine due to vast environmental pollution from mine wastes.

They have raised concerns over the amount of waste being disposed of into the Fly River, which is also affecting the neighbouring Torres Strait islanders, according to their own Australian Government scientific studies.

Pastor Steven Bagari, from Sewerimabu village near Daru,  said they had been liaising with the Torres Strait Islanders who were now affected by the pollution to demand the PNG Government to shut down the Ok Tedi Mine.

“The South Fly people want the mine shut and we do not recognise and allow anyone from another area or clan such as the Community Mine Continuation Agreement spokespersons and their followers to make any decisions for mine extension,’’ he said.

“The CMCA leaders begin supporting Mekere Morauta and PNGSDP then appeared with Opposition Leader Belden Namah giving the state 48 hours to meet their demands with a threat to shut the mine.”

Pr Bagari alleged that during the 48 hours, they were engaging with Ok Tedi Mine Limited (OTML) Management and Board, then on that same weekend, they were happily seated with the Prime Minister  Peter O’Neill at the Crown Plaza Hotel in Port Moresby stating that all misunderstandings were resolved.

“We simply do not recognise and support tedious opportunists who are only after money for themselves without having any serious regard for the vast number of people from PNG, Australia and Indonesia whose lives are seriously affected by pollution from the mine,’’ he said.

“How can anybody, let alone the State, take such people seriously. People who are willing to sacrifice the lives of their own people for money do not deserve any place in our communities.’’

He claimed that it was obvious the CMCA group was under the complete control and direction of the mine and Ok Tedi Development Foundation executives who have given them the instructions to carry out against the affected communities.

“All press statements and paid advertisements are clearly written and paid for and sent to the papers by the company or the Government,’’ he said.

“We have seen the mine extension packages from 2014 to 2025, the State and OTML have reduced all payments by 40 per cent, yet they will dump the most dangerous lot of tailings into the Ok Tedi Fly River systems.’’

Ps Bagari said this posed the highest risk of acid rock drainage in any open cut mine in the last 10 years.

“We have been unjustly deprived of our land without just compensation in breach of section 53 of the Constitution.

PNG PM rejects ’Mugabe’ comparison and defends fund takeover

Radio New Zealand

The Prime Minister of Papua New Guinea has defended the takeover of the Ok Tedi mine and rejected comparisons made between him and Zimbabwe’s Robert Mugabe.

Peter O’Neill says the Ok Tedi mine and the sustainable development fund has always been the property of the PNG people and he can’t understand why he has been attacked for what the Government is doing.

The chairman of the PNG Sustainable Development Program and former prime minister Sir Mekere Morauta denounced Peter O’Neill as comparable to the Zimbabwe dictator for what he called ’pure greed’.

The media advisor of the SDP Mark Davis was deported from the country after a series of critical reports on the Government takeover.

Mr O’Neill says he is not answerable to one or two individuals.

“I think that is a far-fetched comparison but let me reiterate again, this mine has always been owned by the people of Papua New Guinea and of course the people of Western Province. All we have done is to put it in a different structure from that which held the shares on their behalf before.”

PNG Cabinet appoints PNGSDP interim director

Islands Business

The National l Executive Council (NEC) has appointed Paul Yangen as the interim managing director of the Papua New Guinea Sustainable Development Program Ld.

Prime Minister Peter O’Neill said Cabinet had made the appointment.

“Following the recent termination of the PNGSDP Board headed by Sir Mekere (Morauta), Cabinet set up a transitional management team headed by the Chief Secretary to Government, Sir Manasupe Zurenuoc, to oversee the operations of PNGSDP until a suitable candidate is identified and appointed to the position,” O’Neill said.

He said Cabinet had directed the team to identify and recommend a suitable candidate for the position.

The team nominated and recommended Yangen to Cabinet, given his professional and educational credentials for the job, he said.

O’Neill said Yangen was a certified accountant by profession and was formerly the general manager (finance division) and acting managing director of Nambawan Super Ltd.

He had extensive banking experience after working as a financial controller and manager for Westpac, he said.

“The immediate appointment of the interim managing director is vital to restore confidence in the organisation and to ensure continuity of the operations of PNGSDP and its subsidiaries,” he said.

He said Yangen’s appointment would ensure this was accomplished until a permanent appointment was made.

O’Neill said the public was aware of the performance of PNGSDP and the Government’s aim to restructure it to serve the interest of the people of Western.

“This restructure is fully supported by the Western provincial government, its Members of Parliament, landowners and people of the affected areas,” O’Neill said.