Wikileaks expose US & PNG position on Bougainville case against Rio TintoPublished by MAC on 2011-09-12
London Calling re-enters the eye of the storm
A decade ago, landowners profoundly impacted by Rio Tinto's Panguna copper-gold mine in Bougainville tried to bring the company to court in the USA, using the Alien Tort Act.
They wanted Rio Tinto to account - and pay massive compensation - for human rights crimes, allegedly committed by its subsidiary Bougainville Copper Ltd (BCL) before the mine was closed down by militants in 1989, and the government of Papua New Guinea (PNG) tried to reclaim it by force.
For around six years, the PNG government maintained the case should be heard within its own jurisdiction - not in the USA where public concern and any amount in settlement would almost certainly be greater. The US administration is believed to have strongly backed this position.
Then, in 2006, the PNG administration apparently changed its mind.
According to two recently "wikileaked" cables (reproduced below) it argued that the USA was, after all, the appropriate forum to examine the landowners' accusations. And it urged the then-US ambassador, Robert Fitts, to PNG to concur.
Whom the cap fits?
The cables are quite revealing about the divergent attitudes of the PNG and US governments at this time, although they were both trying to quash the plaintiffs' submissions - or at least limit any adverse fallout should they meet some success.
In expressing bewilderment at PNG's volteface, US ambassador Robert Fitts commented:
"The GPNG [government of Papua New Guinea] position is a bit strange if viewed from its own financial perspective. As a 25% [holder] of BCL, it would presumably have to front up its share of any award that was made."
However, went on Fitts: "[G]iven the way things are done here, the general suspicion is that PM Somare has been given a financial incentive to reverse the previous government's position on the case.
"Certainly, it would be very typical of Melanesia if what the government saw as in its nation's interest also redownded to the individual benefit of its leadership. It is worthy of note that Paul Nero, a plaintiff and the current PNG CG [Consul General] in Brisbane, is very much a Somare man."
Five years on, and this comment brings us to an affidavit, sworn by Michael Somare earlier this year, where he accused the mining giant of having financed, and virtually master-minded, the horrendous war by Papua New Guinea against Bougainville.
In June 2011, one of the largest shareholders in Bougainville Copper Ltd - the European Shareholders of Bougainville Copper [ESBC] - reacted to Somare's affidavit.
"Poor, delirious old man"
Describing the former prime minister as a "poor, delirious old man who is more and more out of his mind", ESBC's president, Dr Axel Sturm, accused Somare of having himself provoked the landowers' suit against Rio Tinto. See: London Calling asks: did Rio Tinto fund war on Bougainville?
The landowner plaintiffs are still awaiting further developments in their case, after an October 2010 recommendation by the 9th Circuit district court in California that their claims be disposed of through "mediation".
Meanwhile, Axel Sturm has expressed on his website, and in a number of emails, distinct displeasure at the stance adopted on these issues, both by MAC and in our own London Calling column.
In a flurry of messy missives, Sturm accused MAC of having financed the attendance at last year's Rio Tinto AGM of Clive Porabou - a noted Bougainvillean activist, implacably opposed to re-opening of the Panguna mine. See:
An Axel to grind
Except to state that Mr Sturm is flatly mistaken in this regard, we won't deign to take up cudgels with the man.
It's somewhat striking, however, that he seems to have got wind of ambassador Fitts' 2006 suspicions about Somare's role in brokering the California court case, some months before they were revealed in the new wikileaks.
Not that we're suggesting any direct link between Fitts and Sturm.
In the field of conspiracy theorising, Axel from Andorra is hills ahead of us.
(Thanks to our Australian colleague, Vikki John, for sending us these wikileaks).
[London Calling is published by Nostromo Research. Views expressed in this column do not necessarily represent those of any other party, including the editorial board of MAC. Reproduction is welcomed, provided full acknowledgment is given to source].
Viewing cable 06PORTMORESBY401, FOREIGN POLICY IMPLICATIONS OF SAREI VS. RIO TINTO Reference ID - 06PORTMORESBY401
Created - 2006-09-25 00:22
Released - 2011-08-30 01:44
Classification - CONFIDENTIAL
Origin - Embassy Port Moresby TO RUEHC/SECSTATE WASHDC PRIORITY 4634
SUBJECT: FOREIGN POLICY IMPLICATIONS OF SAREI VS. RIO TINTO
REF: SEPT 21
CLASSIFIED BY: Robert Fitts, Ambassador, U.S. Embassy Port Moresby, Department of State. REASON: 1.4 (b)
1. (SBU) Summary: The PNG government of the day has taken and communicated a decision to the Embassy that it does not want to be seen as standing in the way of the hearing of the subject case in California courts. Accordingly, we must assess that there are no compelling foreign policy objections vis-a-vis PNG (and Bougainville.) In particular, we do not concur with the representations that an adverse decision on the case would creat a backlash against the GPNG. This of course, does not speak to the broader foreign policy implications of the Alien Tort Statute. We do note, however, that as long as the case goes on, the Autonomous Bougainville government will be tempted to avoid the difficult decisions and hard work of development in favor of waiting for pie in the sky via ATS. End Summary
2. (U) Australia, whose mining companies are active around the world, understandably would like the Alien Torts Statute to be as limited in scope as possible. In particular, the non-paper (ref) refers to the requirement that local remedies be exhausted prior to application of the ATS. That certainly has not been the case with Sarei.
3.(U) In fact, PNG's statutes require as well that all litigation on natural resource projects be brought in PNG courts. In an earlier iteration of the case (2001 or so) PNG agreed that it would not charge the plaintiffs for violating that provision in order to pave the way for having the case transferred back here.
4.(SBU) But the worm has turned. I was officially informed by both the Minister for Bougainville Affairs and by the Prime Minister's Chief Secretary (the country's top civil servant although it is a political appointment) that the government did not want to be seen as standing in the way of Bougainville's claim. They wanted the case to proceed. [This had the air of, we hope the US courts will quickly dispose of this troublesome issue. Alas, I had to remind them that the US courts were neither quick nor subject to this Embassy's influence.] In fact, they said that they were opposed to having the case in PNG courts as any setbacks to Bougainville's side would be seen there as a sign the PNG government was trying to keep them under PNG's thumb.
5.(SBU) The Bougainville peace negotiations are largely over, though sensitivities are still very near the surface. We are now in the lengthy run up to the proffered 2015-2020 plebisite on possible independence. The Bougainville Affairs Minister noted that his main job is making sure the Bougainville leadership sees the PNG government as helpful and supportive of its efforts to set the stage for that plebisite.
6.(SBU) There is lots that is troubling about this case. Bougainvillians actually believe that, if the case proceeds, they will pocket $10 billion and become a rich province again. [Actually, if Bougainville and PNG history is any guide, most of that chimeral $10 billion would instead wind up in the Brisbane housing market in the name of individual Bougainville leaders.] While the case is ongoing, there is every incentive for the leadership to wait for its ship to come in and not make the responsible and hard decisions that are required. Also, there is no guarantee that a future PNG government - which could take office after the May 2007 elections, might not reverse course. This would be particularly true if lurid testimony was made public of the conduct of PNG forces during that troubled conflict.
7.(U) But, the government of the day has taken the firm position that it does not want to stand in the way of the litigation. Therefore, this Embassy cannot argue that there are compelling foreign policy reasons for the case not to go forward. [This is vis-a-vis PNG. The Department and DOJ will have to weigh the world wide implications of ATS cases.]
8.(C) In particular, the assertion made by the Australian Embassy rep that a loss by the plaintiffs would result in a backlash against the PNG government is unfounded. Such a backlash would come only if the PNG government had been opposing the case. I checked with the Australian High Commission here and they share my assessment on this specific point. [The GOA may be trying to limit ATS application and so marshalling every argument it can think of. This one, though, does not hold water.]
9.(C) Comment: The GPNG position is a bit strange if viewed from its own financial perspective. As a 25% of BCL, it would presumably have to front up its share of any award that was made. However, given the way things are done here, the general suspicion is that PM Somare has been given a financial incentive to reverse the previous government's position on the case. Certainly, it would be very typical of Melanesia if what the government saw as in its nation's interest also redownded to the individual benefit of its leadership. It is worthy of note that Paul Nero, a plaintiff and the current PNG CG in Brisbane, is very much a Somare man.
Viewing cable 06PORTMORESBY319, SAREI VS. RIO TINTO
Reference ID 06PORTMORESBY319
Created 2006-08-09 03:04
Released 2011-08-30 01:44
Origin Embassy Port Moresby
SUBJECT: SAREI VS. RIO TINTO
REF: 05 PORT MORESBY 120
CLASSIFIED BY: Robert Fitts, Ambassador, U.S. Embassy Port Moresby, Department of State.
REASON: 1.4 (b)
1.(C) SUMMARY/COMMENT: The current PNG government would not object to continuation of the case vs. Rio Tinto in California courts, however it would likely be discomfited if the case were prolonged. A lengthy case could also serve to delay responsible decision making by the Bougainville government. A new PNG government (expected in June 2007) could well raise anew objections to the case. Thus, there would be little immediate adverse foreign policy impact to resumption of the case.
However, there could well be different considerations down the road. END SUMMARY
2.(C) The current PNG government is on record as preferring that the Bougainville class action suit now in California courts be decided in the U.S. That statement was made in March of 2005 (reftel) in the context of upcoming elections in Bougainville. Those elections were held in May last year. The autonomous provincial government has been formed and has gotten down to the serious business of hitting the government and donors up for money to fund its operations. The new provincial government has uninterested in raising its own revenue within the province. If we enquired today for the position of the PNG government, we confidently expect that it would not oppose continuation of the case in US courts. This is after all a national election year for PNG. The prospect for funds from the case also helps contain, to some extent, demands for additional funding from Bougainville. If the Department wishes, we will request the views of the government, but a response might take some time.
3.(C) The Bougainville peace process, in the eyes of Bougainville leaders, has a long way to go. It will only end some ten or 15 years in the future with a referendum on independence which is provided for in the newly adopted constitution. Whether that referendum will in fact be held, will depend on the progress of national politics. Continuation of the case does encourage those who hold the millennialist hope/belief that the suit will produce billions, rendering the province rich. A long trial could thus serve to delay provincial leaders from making hard decisions, like raising revenue locally to fund development. In fact, the same PNG Minister who said (reftel) his government would not raise an objection to the case proceeding, pressed the Ambassador to ensure that the case was decided expeditiously, "so that the Bougainvillians can get down to business."
4.(C) The previous Government in PNG had objected strongly to the case being tried in U.S. courts, which was the basis for the original USG submission on the case. A national election in PNG will be held in May 2007 and it is completely conceivable that a new government would raise those objections anew, particularly if evidence in the case was drawing criticism of PNG's conduct in the succession crisis.