Tag Archives: Porgera

Porgera landowners frustrated with State

Chairman of the Resource Owners Federation of PNG, Jonathan Paraia.

Freddy Mou | Loop PNG | July 31, 2018

The Resource Owners Federation of PNG, a landowner company for the people of Porgera in Enga, are calling on the Government to fulfil its commitment in the MoA signed between the landowners in 1989.

The landowners are claiming that breaches in the MOA have caused negative impacts on the social, environmental and economic lives of the Porgera landowners.

Chairman of the Resource Owners Federation of PNG, Jonathan Paraia, said the 1988 proposals sought State approval and issuance of a Special Mining Lease (SML) for the mine to construct mining infrastructure that was capable of processing eight thousand tons of crushed ore through its mill over a mine life of twenty years.

However, he claimed that the State allowed what was called a “minor variation” after five years of the mine operations to double the processing rate to 17,000 tons per day.

“The landowners were deceived by the State since their lodgement of their position statement, failed to address their complaints, resulting in the landowners issuing a Notice of Dispute in April of 2015 which the State also failed to respond to.”

Paraia said the landowners are now planning to invoke the arbitration provisions in the MoA.

He added that the State’s failure to respond to the legal steps being followed by the landowners pursuant to the MoA is unbecoming of a responsible government.

Paraia reiterated that State agencies, especially the Mineral Resources Authority, are negligent of their duty to deal with the dispute in an orderly and responsible manner to ensure that the complaints are properly dealt with.

He further claimed that the State’s continuous ignorance of the issues raised by the landowners will do nothing but increase the frustration and anger of those affected, which could eventually lead to the disruption of yet another resource project in the Highlands region of Papua New Guinea.

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PORGERA MINE DISPUTE UNRESOLVED

“breaches of the MOA, has caused negative impacts on the social, environmental and economic lives of the Porgera landowners”

Resource Owners Federation of Papua New Guinea Inc | 9 JULY 2018

Although the Porgera Joint Venture has recently applied for the renewal of their Special Mining Lease, a majority of the landowners whose lands are the subject of the mining lease, are maintaining a dispute for breaches of various agreements, laws and the constitution of PNG under the previous lease.

On 13th December 2013, the Porgera Special Mining Lease area landowners presented a position statement to the former Minister for Mining, Hon. Byron Chan, after Australian lawyers conducted a review in relation to the compliance of their Memorandum of Agreement (MOA) dated 12th May 1989, with the Independent State of Papua New Guinea. The statement claimed that the landowners were owed more than four billion United States dollars (US$4billion) worth of unfulfilled contractual undertakings by the State.

The position statement claimed that the breaches of the MOA, has caused negative impacts on the social, environmental and economic lives of the Porgera landowners. They claimed that in the period 1994 – 1995, the State allowed the mine to vary its original proposals for development of 1988. The 1988 proposals sought State approval and issuance of a Special Mining Lease (SML) for the mine to construct mining infrastructure that was capable of processing eight thousand tonnes of crushed ore through its mill over a mine life of twenty years. Underground mining was to cease after seven years of operations. Only five years later the State allowed what was called a “minor variation” to the approved proposals to double the processing rate to 17,000 tonnes per day. This meant that the amount of ore mined daily and the waste material produced were also doubled, resulting in the waste dumps which were originally designed to hold less materials, bursting into the river systems causing massive landslides which destroyed homes and gardens owned by the landowners. The mine failed to resettle the landowners from within the Special Mining Lease to unaffected area, even when experts found the need to do so in 1996.

The landowners claim that the State has since the lodgement of their position statement, failed to address their complaints, resulting in the landowners issuing a Notice of Dispute in April of 2015. The State has also failed to respond to the Notice of Dispute which may then force the landowners to then invoke the arbitration provisions in the MOA.

The State’s failure to respond to the legal steps being followed by the landowners pursuant to the MOA, is unbecoming of a responsible government. It is clear that State agencies are negligent of their duty to deal with the dispute in an orderly and responsible manner to ensure that the complaints are properly dealt with. The State’s continuous ignorance of the issues raised by the landowners will do nothing but increase the frustration and anger of those affected landowners which could eventually lead to the disruption of yet another resource project in the Highlands region of Papua New Guinea.

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Porgera Mine Resumes Full Operation And Power

Post Courier | 28 June 2018

Barrick (Niugini) Limited reported that Porgera gold mine in Enga Province has resumed full operations, and power has been restored to the Porgera community.

The resumption comes five months ahead of the original estimated repair schedule, following the 7.5 magnitude earthquake on 26 February this year, which caused substantial damage to the company’s power plant in Hides, Hela Province.

The plant suffered damage to both buildings and equipment, including the gas turbines, and the main control room which required extensive repairs .The mine had been operating on backup diesel generators with limited processing functions, while the Porgera community had been without power since the earthquake, except for a number of critical service providers that the mine had assisted by donating fuel and generators.

Power to the mine was restored on June 1 and the community on June 6.

The Hides power plant provides about 70 megawatt of power to the Porgera gold mine and annually about 2MW is supplied to the Porgera valley community free of charge (FOC) at an estimated cost of US$2.5 million (K8.1 million).

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Women Speak Out About Abuse at Barrick Gold’s North Mara Mine in Tanzania

MiningWatch Releases Video and Critique of the Mine’s Grievance Mechanism

MiningWatch Canada | 26 June 2018

In a video released by MiningWatch Canada, women living in villages around Barrick Gold’s North Mara mine in Tanzania speak out publicly for the first time about the sexual violence they suffered at the hands of private and public (police) mine security at the North Mara mine. They also discuss the inadequacies of the remedy they have received from the mine’s grievance mechanism, and the ongoing hardship they continue to suffer as a result of their rapes.

MiningWatch has interviewed over a hundred men, women, and surviving family members of victims who have suffered violence at the hands of mine security. We have visited the mine site to conduct human rights field assessments yearly since 2014 and have reported on our findings regarding the impacts of ongoing violence and the inadequacy of the mine’s responses. As a result of the yearly substantiated critiques that both MiningWatch Canada and UK-based Rights and Accountability in Development have made public regarding the North Mara mine’s inequitable remedy mechanism, Barrick Gold’s subsidiary Acacia Mining released a new operating procedure for the North Mara mine’s grievance mechanism this year. MiningWatch has reviewed the new grievance procedure and found it to lack independence and not to afford commonly indigent and illiterate victims of the North Mara mine a fair process by which to have their complaints addressed.

We worked with our local partners and some of the women from North Mara who have suffered sexual violence to prepare a video to be presented at the International Gathering of Women Resisting Extractivism. The conference brought together 37 female land and life defenders from some 15 countries around the world to share their experiences and strategies of resistance, as well as to speak out against the threats they are facing because of their work, and to seek common ground and solidarity for continued struggle in defence of life and territory.

This video highlights the ongoing impacts suffered by these victims of sexual assault by mine security and the continued need for equitable and sustainable remedy for the long-lasting harms they and their dependents have endured.

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Armed men threaten Porgera employees

Loop PNG | June 5, 2018

Barrick (Niugini) Limited (BNL), operator of the Porgera Mine in Enga, reports that another firearm- related incident has occurred at the Porgera Mine.

The company confirms that an armed group of intruders attempted to hold up two mineworkers driving a mine vehicle near the Porgera Open Pit on Sunday afternoon.

The mineworkers were travelling between operating sites on the Porgera Mine to move mining equipment during mid-afternoon on Sunday 3 June when they were confronted by a number of intruders, one of whom threatened the employees with a firearm.

When the mine vehicle slowed to avoid the intruders, a number of the suspects jumped onto the back of the vehicle in an attempt to steal mine equipment however, they were unsuccessful due to the quick reactions of the mine employees, who rapidly accelerated away from the area and alerted mine security personnel.

Mine management have confirmed that whilst Porgera mine employees were not injured in the incident, the confrontation was a continuation of the dangerous escalation of firearm-related incidents that have occurred at the mine in recent months.

“This is just the latest in a number of gun-related incidents that have occurred on the mining lease in recent months,” a spokesman for the mine said.

“The fact that violent criminals are prepared to come onto the mine carrying weapons and intending to rob or harm our employees and members of our neighbouring communities is of critical concern, and we are calling on State authorities to provide urgent assistance in bringing this under control.

“It is simply unacceptable that these criminals believe they can behave in this way with impunity – this escalation of violence needs to be stopped before someone is killed or injured.”

Mine management noted that they have advised the relevant authorities about the attempted robbery, and will be working closely with the police and others in responding to this latest firearm-related incident.

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Papua New Guinea’s resource curse

Armed clan near Komo, Hela Province, Papua New Guinea. Photo by Michael Main

Disaster strikes the nation’s massive gas project

Jo Chandler | The Monthly | May 2018

Brisbane, February 17, 2010. A clutch of ExxonMobil executives gathers for a briefing from Papua New Guinea specialists: a geographer, an epidemiologist and an agronomist. All academics at the Australian National University, they’ve clocked up decades of fieldwork in the remote highlands. They’ve assembled some slides that they hope will give the overseers of ExxonMobil’s $US19 billion liquefied natural gas project, PNG LNG, insight into the lives of the people whose resource they are preparing to pump out of the country’s hinterland and ship to markets across Asia.

The specialists’ pitch is a hard-headed evaluation of looming risk. And it is pointedly plain-spoken, assuming little, if any, knowledge of Papua New Guinea’s geography, history or staggeringly complex cultures.

The good news, they say, is that local people, and the provincial and national governments, want the project.

And the bad news? Expectations are perilously high. The desire for PNG LNG is founded on the belief that it will bring not only wealth to landowners in its footprint but also desperately needed services, roads, power, jobs and economic growth to the region. Health care for most locals is a long walk to an aid post that in all likelihood has no health worker or medicines. Child mortality rates are almost 40 times what they are in Australia, and markedly worse than elsewhere within the nation. Education levels are woeful – 64 per cent of men and 77 per cent of women living around the gas source have no formal education.

The PNG LNG operation will be dropping into a landscape in which the state barely casts a shadow. Violence is rife, and police and justice elusive. Tribal conflict, deeply rooted, has waxed and waned over the years in what is today called Hela Province. Now anxieties and rivalries are flaring around who will and won’t benefit from the gas mother lode, the experts say, with the potential to escalate to blockades, sabotage and armed resistance. Colleagues have been warning about the stockpile of heavy weapons in the highlands for years.

While numerous promised works were built into the benefits-sharing agreements wrangled with landowner representatives a year earlier, these PNG specialists in Brisbane urge ExxonMobil to invest deeply in education, health, livelihoods, infrastructure, security and monitoring. They point to the junior project partner, PNG veteran Oil Search, which has long-established health programs that are highly valued by local people – why not piggyback on those relationships?

Next slide. “Contexts: other large resource projects.”

There’s the Porgera goldmine (“Police attack migrants and locals, burn houses, shoot people – company accused of breaches of human rights”) and Ramu Nickel (“Chinese company ignored local social and employment conditions – Riots … Mine closed temporarily”). And then there’s Ok Tedi, which in the ’80s became shorthand for BHP’s international shame after a monumental environmental disaster when a tailings dam collapsed.

At the top of the list is Bougainville, a shattering and multilayered episode distilled thus: “Second generation unhappy with benefits … [Bougainville Copper Limited] said it was the PNG Government’s responsibility to fix … Power supply sabotaged / PNG Defence Force soldiers attacked civilians … Years of civil war result [in] permanent closure of mine and high death rate.”

The PNG LNG operation, however, is touted as a game changer, the biggest resources project in the Asia­-Pacific, with capacity to double GDP. The Australian government has backed it with a $US350 million investment. Compared to the mines in the slideshow, its environmental footprint is light.

But PNG LNG will sit in one of the most culturally fascinating and incendiary landscapes imaginable. The Huli people of Hela Province, keepers of the gas flame, have forever seen themselves at the centre of the universe. For better or worse, the implications of this project – regionally, economically, geopolitically – are seismic.

The last slide is titled “The beginning, not the end”. A small Huli boy is juxtaposed with a barefoot youth crouched by a roadside and nursing a high-powered automatic rifle. “I will be 18 years old in 2022,” says the caption. “And if I have not been educated and I am still a subsistence farmer living in relative poverty, I am going to be really angry! I may be armed and dangerous!”

Tari, capital of Hela Province, February 1, 2018. By the time the Air Niugini Dash 8 drops through the highlands pall we’re almost jumping distance above the forest canopy. It’s broken by the contortions of rivers and the odd road, and clearings occupied by round huts and crops of sweet potato and greens.

Beyond the blur of the propeller, the clouds close like shutters on the distant ranges. There was no world beyond this fortressed horizon for the Huli until first contact in the 1930s. The first permanent colonial patrol post didn’t arrive in Tari until 1951. Then came the missionaries. The prospectors. The oilmen. And then, a decade ago, after a few false starts, the advance guard of PNG LNG.

The ancestors had seen them coming, these “red-legged” men. The Huli knew all about the subterranean power buried within their country, the fire (gas) and water (oil). They navigated around it with ritual. Their lore was selectively enlisted for the PNG LNG hard sell. It was destiny that the underground fire the Huli call Lai Tebo would “light up the world”, bringing in wealth that would transform the nation’s economy and the lives of its citizens.

But as I learnt on a previous visit in 2009, en route to villages with a health outreach team, that account neglected certain critical elements.

“When the white people come to take the power from the earth, there will be terrible fighting and Huli culture will fade away,” Dr Hewali Hamiya, the then CEO of Tari hospital told me. He was at the wheel of a 10-seater troopie, navigating broken roads, expanding on politics (“the poor and illiterate are spectators in our own land”) and explaining Huli Cosmology 101.

In an ancient narrative once described by ANU anthropologist Chris Ballard as “a user’s guide to apocalypse”, the Huli seek to influence the nature of the final event. This apocalypse would be “the terminal point in a long, linear process of moral and ecological decline”. It’s a mythology that has provided fertile ground for fire-and-brimstone Christian missionaries. And it has endured, fuelled by unfolding events.

Much of the mountainous interior of Papua New Guinea is too steep, too high or too wet to produce crops. But the town of Tari, at 2100 metres, sits in a hospitably undulating agricultural sweet spot, a magnet for people and trade from far-flung hamlets. From a window seat on the final approach, it looks like tropical Arcadia. It’s not.

By all accounts, there is a social emergency playing out, one that has ancient heritage but in modern times is enmeshed with both the history and the fate of PNG LNG. The project taps its source in the nearby limestone ridges. Concerned chatter among the Pacific cognoscenti has been gaining volume, the most dismayed among them fearing that Hela could explode. They recall and contrast memories of the Bougainville situation. But PNG pundits know better than to try to anticipate the future in the “land of the unexpected”. The cataclysm that will occur in 25 days’ time is beyond anyone’s control.

By now PNG LNG has been operating for almost four years, dispatching hundreds of shipments worth $US13.9 billion at last count. But none of the estimated $300 million worth of landowner royalties has so far found its way to the people at its highlands source. Indeed, the beneficiary landowners in Hela have yet to be identified. Their dues are meanwhile held by the PNG government.

There’s also no sign of many other promised benefits: the tertiary campuses, an agricultural research centre, roads, water and sewerage projects. The province sends power over the mountains to run the Porgera mine, but its people still have no lights. Even in Tari, power hiccups with the dodgy town generator. Oil Search’s managing director, Peter Botten, says more than $237 million has been paid to government entities and landowner groups to build infrastructure, but “the reality is they haven’t been delivered on the ground”. (ExxonMobil declined an interview, but in a statement said the project had put more than $300 million into projects and programs.)

In a dilapidated church hall in Tari, I meet Janet Koriama, the president of the Hela Council of Women. She is explaining why she declined an invitation to attend the legendary 2009 gathering of thousands of project stakeholders, where benefits-sharing deals worth more than $7 billion over the 30-year life of the project were thrashed out among (overwhelmingly) male landowners after days of negotiations and, infamously, much beer and debauchery.

Koriama thought it was wrong to host the forum in the town of Kokopo, 1000 kilometres away from the project site. (So does PNG law, and so the deal had to then go to a series of local forums.) “And I was a bit scared because of what tradition says.” Koriama is referring to the belief that you can give away “the water” (the oil, which has been pumped out nearby for decades), but not the gas. “They said you give Lai Tebo away, the fire will fuel so many conflicts. The prophecy is fulfilling.”

Downtown Tari comprises the airstrip, roads so fractured that it’s quicker (though not safer) to walk, the heaving open market, the bank (hour-long queues for the working ATM), the hospital, roadside trade stores (bigger Chinese stores have shut down in fright), a handful of tired public buildings, and the bones of several unfinished two- and three-storey structures – relics or promises of the mother lode, it’s hard to tell. It services a population somewhere upwards of 300,000.

Koriama is one of half a dozen leaders who come to me for interviews after I abandon plans to venture out to the project villages – only an hour’s drive away, but too risky. Hela Province is infamously combustible, and things are hot. Fighting flares unpredictably, with guns and bush knives. Police are lying low after two officers were murdered, the shooter accusing them of selling ammunition and weapons to his tribal enemies. Young men in dark glasses and long coats – to conceal their weapons – work their phones, their backs protected by the red-earth cliff that falls away at the edge of the market. Oil Search health workers I’d hoped to meet at Tari hospital have been hastily extracted because of a scare.

One way or another, the trouble is all about money, says Koriama. “The truth is we don’t have funds. No funds – royalties, equities, support grants.”

The project has been shattering for women and children, she says. “Women are the ones who are in the house … we pay for school fees, for the clan compensation [for deaths], all these things. But women are not recognised and we are not benefiting from the LNG … The big money – where is it going?”

Koriama is savvy – politics in PNG is no place for the faint-hearted. She’s dealt with corporates as a landowner in the Mt Kare goldmine. But she can’t get traction with PNG LNG. She travels to Port Moresby and talks to ExxonMobil and the government. “I said, ‘We are the women of Hela, but we are not benefiting’ … I said, ‘How do we do it?’ Do we write a letter? Do we dress up? … But we are not recognised.”

All that said, she declares that none of the problems are the fault of ExxonMobil or its partners, Oil Search and Santos. “They are here to help us.” She sits on the hospital board with Oil Search’s Peter Botten, under whose chairmanship (and resources) that neglected facility has become unrecognisably functional. (The host of my guesthouse has twin baby girls, Faith and Grace, and a dramatic birth story that none of them might have survived without what the hospital has become.)

Koriama lays responsibility for all the disappointments squarely with PNG authorities, the national and provincial governments, and “our own sons, who were educated, who were supposed to put it together, to look into who is owning the area … I am blaming ourselves.”

The distance between what PNG LNG promised and what it has delivered is an issue preoccupying many close observers of the project. ANU economist and PNG specialist Stephen Howes has highlighted concerns about the failure of royalties to flow to landowners, for this and future projects. “The other surprise is that it has generated hardly any revenue for the PNG government.” This is despite outputs being much higher than anticipated. Most of the blame is put on tax concessions criticised by the International Monetary Fund and the World Bank as too generous. But “we still don’t have a complete answer on why tax revenue has been so far below expectations”.

Botten blames a dramatic drop in oil prices. He defends the project’s economic contribution to the country, citing PNG National Research Institute modelling that says PNG LNG “has delivered tremendous benefits to the PNG economy and is expected to do so in the future”.

But a new analysis by the economist Paul Flanagan, an associate of Howes at the ANU Development Policy Centre and a former executive in the Australian and PNG treasuries, catalogues a “yawning chasm between spruiked expectations and outcomes”. Oil prices are not the explanation, he says – they are in line with predictions, “[but] all the other predictions about economic gains were well off”.

His report for Jubilee Australia, an anti-poverty research centre attached to the Australia Institute, found that rather than a doubling of the economy there has been a gain of only 10 per cent, all focused on the largely foreign-owned resource sector. Household incomes were expected to increase 84 per cent but have fallen 6 per cent; jobs were to grow by 42 per cent but are down 27 per cent; government spending on services and infrastructure was to kick up by 85 per cent but has fallen 32 per cent; imports were expected to rise 58 per cent but have fallen 73 per cent. “On almost every measure of economic welfare,” Flanagan concludes, “the PNG economy would have been better off without the PNG LNG project.”

A trio of male leaders comes in to meet me in Tari from project hotspots: Henri Harinda from the town of Angore, Pipe Tundu from Komo, and Haguai Kamia from Hides. Like Janet Koriama, they are damning of the PNG government, but they don’t share her regard for the companies. They each bring piles of worn paperwork tracking their land claims and, in English and the local languages of Tok Pisin and Tok Ples (via an interpreter), attempt to explain their rights through the labyrinthine local lore of customary landholding.

Individuals might have a tie to a piece of land on the father’s line (“A” class), or on the mother’s or wife’s line (“B” class), or through association (“C” class). Any piece of land might have several custodians with overlapping rights. These rights are archived not in titles but in fine-grained memory going back generations. ANU geographer Bryant Allen, who worked on contract for ExxonMobil, has stood in the bush with his GPS and a posse of clan leaders countless times trying to determine boundaries. “Sometimes they will say, ‘Bryant, you go over there, we have to talk about this.’ And there will be some shouting and screaming. Then it stops. Three or four people have said their genealogies and argued their case, and someone has said, ‘You’re right,’ and they all agree.” Mostly, he says, it sticks.

In the years leading up to PNG LNG, local landholding custom was explored and explained in depth to corporates and bureaucrats by experts such as Allen and the anthropologist Laurence Goldman. Goldman likens residency arrangements on the land to hotels: some rooms are occupied by descendants of the hotel ancestor, some get a room by virtue of a female link (but might get kicked out at any time) while others are occupied by friends – so long as nothing rocks the boat. Yet as the landowners I meet tell it, the strongest land claim these days sits with the man who is drinking buddies with the company community affairs rep or who has the most persuasive English.

The village of Hides sits on a ridge the locals call Gigira, home of the underground fire, Lai Tebo. It is at the heart of the project, hosting the gas-conditioning plant and several wellheads. Haguai Kamia has spent five years in court seeking rental payments for key sites. He won his case in 2017 and was awarded $100,000 back rent. The court orders, filed in a worn leather satchel, cost him most of that in legal fees, he says. So far he hasn’t been able to retrieve a larger payment, for environmental damage, that he says ExxonMobil gave to the wrong person. Like everyone, he’s still waiting on royalties. When the money comes he will be obliged by custom to share it between seven clans – dozens of individuals – and the church. All of them, waiting.

Kamia was one of the landowners involved in a blockade of the Hides plant in August 2016, a defining escalation in tensions between locals and the project. ExxonMobil’s blanket position is that payment and distribution of royalties and other benefits is the responsibility of the PNG government – nothing to do with the company. Many landowners accept this, but they also know that they won’t get action from the government unless they bring pressure to bear on the project. And around it goes.

Later I speak to three senior village women who live near the plant. They say that fighting has displaced many people, many schools are closed, and many families are hungry. Meanwhile, “the government is employing policemen to just look after the camp, and neglect the people”. The three women also worry about waste from the plant contaminating the water they rely on to cook and wash. They ask me not to publish their names.

Kamia says his boys dropped logs over the Hides access road “because we are crying for the royalties to be paid”. Armed men occupied the plant and shut it down. An ultimatum was given to the national government to honour benefits-sharing agreements within seven days. In the end a deal was brokered, including a government offer of $14 million “to try and soften the mood”, says Kamia, “make [us] feel, Oh, there is something bigger coming, just sit down and relax.

Things could have gone differently. Kamia says a lot of big weapons were moved into the area. There was potential for the situation to explode. But soldiers and police guarding the project are mindful that locals outstrip them for firepower, says Michael Main, a Melbourne-based anthropologist who was doing fieldwork in the area at the time. “One [police officer] told me, ‘We’re not going to risk our lives for ExxonMobil – I can see people have got nothing out of this project. We’re not going to go against the locals.’”

Main also tells of encountering young men who had hauled 20-kilogram rice bags packed with marijuana through the bush to the West Papua border and traded it for Indonesian military weapons. He observed landowners growing emboldened. Whether the Huli have the cohesion to mount a Bougainville-style resistance is a matter of lively dispute, but their firepower is not in doubt.

In December 2016, shortly after an ambush on a political convoy killed two men, and with a national election looming, the PNG government announced it would deploy the PNG Defence Force to the project area to quell violence. But skirmishes continued, including kidnappings of PNG LNG personnel and attacks on facilities. Last November, after an ExxonMobil security manager was kidnapped and released unharmed at Angore (thanks to the intervention of a local pastor, according to Main’s sources), the company evacuated non-essential staff.

Main has written a report exploring the backstories of recent clashes, often identifying threads relating to PNG LNG. His analysis, which will also be published shortly by Jubilee, echoes warnings from a gathering of development and resources specialists and scholars at ANU back in 2007 that “far from improving the wellbeing of [highlands] communities, these new sources of revenue have created new sources of friction”.

The question of how powerfully the PNG LNG project factors in the tempo of tribal conflict provokes intense debate among scholars and old PNG hands. Peter Botten says he’s seen profound cultural change over 25 years in PNG. “There were no mobile phones, tribal culture was relatively straightforward, and the elders and leaders were respected and listened to.” But it’s simplistic to blame big projects, he says. “The resources industry has really had very little effect apart from bringing more money in. Fights aren’t over jealousies [about] resources issues; the fights are very strongly around traditional issues of ‘you took my wife’ or ‘you took my pigs’, and then someone gets killed and then it’s payback.”

The Huli are infamous fighters. (We are sharing, caring and loving, says Janet Koriama, until you take what is ours.) But warfare was historically highly regulated and centred around compensation for losses, says anthropologist Chris Ballard. The LNG project “has massively ramped up rivalries, fuelled the arms race, and provided everyone with some level of grievance”. That said, apportioning blame is “hugely complicated, and I would be deeply suspicious of any narrative that claimed to know otherwise”. Another expert, who lived in the area for many years, argues that “government at all levels must bear responsibility”.

I ask Pipe Tunda, a landowner from Komo, how people are feeling. He lets rip. The interpreter summarises: “They are traumatised, it is really pressuring them, it could explode at any time … They are hungry and they have nothing.” During the construction phase, Komo was buzzing with jobs, aircraft bringing in equipment, camps full of workers. Now it’s a no-go ghost town.

Tunda is party to a judicial dispute-resolution process set up to try to resolve competing landowner claims that have dragged on for more than three years. He’s also involved in a process of “clan vetting” set up by the PNG Department of Petroleum and Energy to try to find ways to get royalties paid to rightful clans or sub-clans in Hela. That mission is now eight years over deadline.

Janet Mbuda, a schoolteacher from Hides who interprets some of my other interviews, says much of the danger comes from young men, teenagers mostly, who left school because of fighting or the lack of school fees. “They can kill anyone … the white men, the black men, they don’t care … their mindset is spoiled. They were expecting something high, but their life went back to zero.”

Around 80 per cent of Papua New Guineans live beyond the reach or interest of a largely dysfunctional state. Land, most of which is still in customary ownership, is cherished as central to security, society and survival. Papua New Guinea law recognises this. The Oil and Gas Act 1998 requires that before convening a development forum for a new project – the meeting where stakeholders thrash out terms and conditions – the petroleum minister shall determine the persons who will receive royalties and equity benefits. Yet today those beneficiaries remain unidentified in Hela.

“Somehow all the construction went ahead without this important part of the law being complied with,” says Stephen Howes, who with PNG lawyer Sam Koim co-authored an analysis on the stalemate. Howes says the responsibility – and the failure – to make the determination rests with the PNG minister. But “it’s the responsibility of all parties to ensure compliance”.

“In hindsight, it’s a mystery as to how this happened given ExxonMobil is a multinational and pretty risk averse, and worried about its reputation. And the only answer I have been able to come up with is that they thought [the determination process] would happen pretty quickly.” But Howes says that assumption meant that “Exxon and the other developers were taking on a massive project risk”.

Howes also questions Australia’s $US350 million investment in the project, through the Export Finance and Insurance Corporation (EFIC) in 2009. At the time it was the biggest foreign loan made by the Australian government. “Given that it was a legal requirement prior to construction, EFIC should have put as a condition of disbursement that landowner identification be determined by the minister.”

ExxonMobil deflects questions on this issue. But Oil Search’s Peter Botten answers emphatically. Determinations were made for every licence area, he says, albeit with landowner leaders rather than individuals. “I was there on the ground [in Hides] at four in the morning when it was signed. They had the mandate from their people, I assume, to sign off on that, otherwise they wouldn’t have done it.”

Colin Filer, an anthropologist and resources expert at ANU who helped write the PNG legislation, explains that what the law requires is for companies to undertake and submit to PNG authorities “full-scale social mapping and landowner identification studies”. But what that means is open to interpretation.

Filer says that in 2006, as the PNG LNG project was rapidly taking shape, meetings were held in Brisbane and Canberra between the PNG government and ExxonMobil to try to sort out what the process should and would entail. He was there as an independent consultant. The PNG side argued it wanted a kind of “telephone directory” of Huli landowners, something that would identify individual beneficiaries.

“And we said to ExxonMobil, ‘Well, that’s probably what you ought to produce.’ But then the question was, who was going to pay for it? Because it was going to be an expensive thing. And ExxonMobil said, ‘Well, we’re not paying for it – we’re not required to do this [in] the Act.’”

So no telephone directory, partly because it was going to be extremely difficult (some argued impossible) and costly. And “because basically these guys in Texas can’t see the point”, says Filer.

“They don’t seem to have ever been able to adapt their corporate management style to the realities of Papua New Guinea. They are still operating as if it was just any other gas project anywhere else in the world. It could be Siberia.”

The upshot is that four years down the track the landowners of Hela are still waiting. As angry as many of them are, the rationale is that they can’t and won’t mount any substantial, sustained or coordinated attack on the project for fear of never seeing their money.

But Howes argues that “people aren’t always rational, especially over long periods of time in a conflict-prone area. And the second problem is that once the [distribution of royalties] is finally made, there will be winners and losers, and the losers then will protest.”

In the capital, Port Moresby, I got a glimpse of the superheated tensions among landowners when I found myself squashed in the National Court’s tiny public gallery with about 60 Huli men hearing rulings on a disputed portion of the $13 million payment that was promised to break the Hides blockade 18 months earlier. (The only other woman in the court was the judge.) The desperation of the Port Moresby–based landowners, some of whom have been enlisted for years by the companies to keep a lid on tensions at home, was palpable.

When I recall the scene for lawyer Sam Koim a couple of hours later, he provides the backstory. “These people have come to Moresby, they live on borrowed money, they hire vehicles, they are chased after by loan sharks.” Koim has observed the fallout, the fragmentation even within families, fighting and suing one another. Hela Province is not like Bougainville, he says, where you had an organised and cohesive society. “But the people [in Hela], with due respect, are the last people you want to play games with. They may not be organised, but it needs just a spark.

“I’ve warned the Exxon guys, told them, ‘Don’t be arrogant.’ They think these people up there are ignorant, but the moment they are enlightened, they cannot continue to be suppressed,” says Koim. “They have the weaponry to do it, they have the potential to do it, they have the might to do it.”

And then the earth roared.

The 7.5 magnitude earthquake struck under Mt Sisa in Hela Province at 3.44am on February 26. It poured mountains of earth into rivers and destroyed food gardens, choking the lifeblood of countless families, so its cruelty has barely begun. As well as many deaths there were reports of communities desperately eking out supplies waiting on unreliable food drops and suffering outbreaks of diarrhoea. Damage shut down PNG LNG facilities for more than six weeks, with ExxonMobil declaring force majeure on its exports. It announced it would be restarting operations on April 13.

The response from the outside world to the crisis was slow, largely blamed on remoteness. ExxonMobil said it would give $1.3 million to earthquake relief, and Oil Search $6.4 million in cash and kind. The latter quickly mobilised its helicopters to take a lead role in assessing needs and delivering relief, ferrying Prime Minister Peter O’Neill into the crisis where he consoled bereft survivors daubed with mourning mud.

But distress soon turned to anger on the ground. “This is 5th Day,” wrote Hela governor Philip Undialu in a Facebook post.

Where are all the helicopters used to fly around Hela looking for Oil and Gas? Why a number of helicopters still flying around the disaster areas but not interested in helping victims? Why we have helicopters for evacuating employees but nothing to rescue injured people? Don’t we have social obligation to the communities?

“The Tari fight is getting worse,” tweeted the Catholic bishop of Mendi, Donald Lippert, on March 30. “They’ve come to the Mission primary school and burned down four staff houses. What’s next???? Most people have run away carrying their belongings on their backs and dragging their pigs behind them. PNG 2018!!!! Good Friday!!!”

The same day, James Komengi, the disaster response coordinator with the Uniting Church in Tari, sent me an email. “We are outside on the road watching the communities on one side of town burn down. We are told many men and women have been shot dead. Will confirm deaths.” Seven fatalities were later reported, among them three teenage schoolboys – one shot, two hacked with bush knives. The killings were described as tribal payback for the shooting in the Tari market of a local councillor two weeks earlier.

Seismic and social aftershocks continued, one crashing upon another. In Tari, violence spiralled. Under the headline “Tari on the Brink of Anarchy”, The National’s reporter wrote that people were more fearful of the fighting than they were of the earthquake. Governor Undialu said he had fewer than 20 police to secure the town. Meanwhile, a specialist squad was up the road, guarding the ExxonMobil plant at Hides. “Why should PNG LNG Project be given preference over the lives of ordinary people?” Undialu asked. “I’ve been asking the police commissioner to … give us additional manpower, which has fallen on deaf ears.”

By mid March the quake’s death toll stood at 125. Soon after, more than 55,000 people had been displaced by either the quake or the fighting, and 270,000 were in need of assistance.

With the landscape rolling and roiling with powerful aftershocks, the traumatised population looked for explanations. While all else was broken, Digicel’s communications towers were working overtime. Some turned to the spiritual, recalling the Lai Tebo prophecy, some to science. Social media erupted with a mix of passionate religious rants appealing for mercy from the Huli god Dadagaliwabe, and cut-and-pastes from geological journals on “induced seismicity” (where minor earthquakes and tremors can be triggered by human activity). These “Facebook scientists”, as James Komengi describes them, were “confusing people who are 80 per cent uneducated” by blaming the earthquake on gas extraction. Either way, the project was squarely in the frame.

“I now demand answer[s] from Exxon and my own government as to the cause of this unusual trend in my Hela,” wrote finance minister and local MP James Marape on Facebook. The prime minister appealed to the Australian government to provide scientific advice.

When Geoscience Australia responded with a report explaining that the quake was consistent with the regional plate tectonics that have shaped the highlands over millions of years, and that it was highly unlikely to have been triggered by mining, exploration or extraction, Hela governor Undialu wasn’t persuaded. Nor was former justice minister Kerenga Kua, who in parliament argued that the Australian government could not carry out an independent assessment because it had a financial stake in the project.

Peter Botten was quoted saying that the Huli superstitions around the cause of the earthquake represent “a communication issue”. But anthropologist Michael Main argues it is, rather, a critical development issue, arising from the collision of the conditions in Hela before the quake and the trauma in its wake. “Huli cosmological belief that the extraction of their gas will bring about the end of the world has been fuelled over the past four years by growing resentment over the failure of the project to come good on its development promises,” he wrote for the scholarly blog EnviroSociety.

If the PNG LNG project had delivered on its promises of education and training opportunities, infrastructure, business development and alleviation of poverty, then the concern of its Huli landowners might be over how to utilise their resource to better develop their province to cope with earthquakes into the future. As it is, the PNG LNG project is logically understood in the context of their resource curse.

In an email to me, American-born Bishop Lippert described a maelstrom of factors at play: frustration at the failed promises of the PNG LNG project (“no matter what the causes … legitimate and illegitimate”); young men impaired by blind rage and the abuse of cannabis or alcohol; the breakdown of traditional society with nothing to take its place … “The perversion of cultural constraints has opened the door to killing women and children, something that would be rare in the past, so I’m told.”

On March 30, an emergency order was issued, declaring that “the security situation in Hela Province (and specifically the town of Tari) has deteriorated to the point where the lives of relief workers, public servants and the general public are manifestly in danger”. The order mobilised the PNG Defence Force to bring the situation under control using “all reasonable force”. There was a “shoot to kill” curfew from 6pm to 6am, Bishop Lippert wrote. The United Nations and other agencies evacuated their relief teams, who had still not returned by mid April.

James Komengi keeps a running list of requirements for when the relief teams return: tarpaulins, water containers, building materials, tanks … “The rains are saving many families,” he writes. “Without rain, many people will become very sick.”

In a closed Hela Facebook group, someone posts a picture of four high-powered automatic weapons leaning against the wall of a grass hut. The post says the guns were stolen from a mobile police squad – they’re being offered for sale. Papua New Guinea’s highly active social media commentariat furiously debates whether this might become another Bougainville, and what else it signals for the fragile nation’s future.

“The worst-case scenario is one that PNG has already experienced,” argues ANU economist Paul Flanagan in an article for East Asia Forum.

The loss of social licence for the Bougainville copper mine in 1989 started a decade-long civil war that led to thousands of deaths, undermined development prospects on the island for a decade, damaged PNG’s economy more broadly, and quite directly led to the removal from office of prime ministers Paias Wingti and Julius Chan.

“There are real risks that the parallels [in Hela Province] will be much more manifest than to date,” Flanagan tells me. “Almost every wrong policy is being pursued – everything we wouldn’t want to avoid a resource curse.”

If the crisis in the wake of the earthquake persuades the PNG government to find a way to get overdue royalties to Hela landowners, and along the way rethink some of its macroeconomic policies, “hopefully things will go well”, Flanagan says. It’s not too late, he argues, to change the development path from a resources focus to something more inclusive that builds on agriculture and other areas. “It will take a decade. It’s got to start.”

If not, he warns, the consequences will be worse than what Papua New Guinea endured through the 1990s, when incomes across the country fell by 25 per cent. Provinces with healthier economies would resent the drain of poorer ones. “That is the sort of thing that leads to these fracturing tendencies in the nation state of PNG,” says Flanagan, an observation that feeds into increasing anxiety about the fragile geopolitics of the Pacific.

Stephen Howes argues that the failure of royalties to flow to Hela landowners already casts a significant pall over the prospects of future resource projects. “The PNG LNG project was supposed to send the global investment community a strong signal that PNG could manage large resource projects. But it is increasingly evident that this one very important piece of the puzzle was never put in place. And that will surely be a deterrent to other potential investors.”

Michael Main says that not so long ago, despite all the distress of landowners around the project, he would not have imagined that they would ever organise to put an end to it. “But things change, and the structures that were there – and that I thought would mean this project would keep going – are themselves subject to change in a way I hadn’t expected.” And that was before the Huli apocalypse.

Laurence Goldman, an anthropologist with many more years’ experience in the highlands, albeit not recently, won’t venture any such bets. “PNG has a wonderful way of contravening the best guesses that people have.” It’s an observation that evokes a favourite line from another PNG veteran, the late historian Hank Nelson: “As is often the case in Papua New Guinea, unfolding events have continued to unfold.”

Back in Australia, I receive an email from James Komengi in Tari. He says that there’s a lot of talk about protests planned in Hides and Tari against the project, maybe another shutdown. “Many people here [even outside the project area boundaries] are demanding they be compensated as landowners because the ‘man made’ earthquake disaster has affected us.” Events are unfolding.

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Porgera still at 25% capacity

PNG Industry News | 27 April 2018

BARRICK Gold is still evaluating the impact of the February 26 earthquake at its Porgera joint venture copper-gold mine in Papua New Guinea’s Enga Province.

It has, however, kept its 2018 group guidance unchanged at 4.5-5 million ounces of gold at all-in sustaining costs of $765-$815/oz, and 385-450Mlb of copper at $2.30-$2.60/lb.

The Porgera processing plant is operating at 25% capacity and is expected to return to full production by the fourth quarter.

The Canadian-based miner produced 1.05Moz of gold in the first quarter at an all-in sustaining cost of $804/oz and 85 million pounds of copper at AISC of $2.61 per pound.

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