MAC: Mines and Communities

Bougainville Copper's bloody "hidden past" exposed

Published by MAC on 2012-05-01
Source: ACT NOW!, Papua New Guinea Mine Watch

Rio Tinto must address abuse claims, says criminologist

Debate continues raging over the role played by Rio Tinto's subsidiary Bougainville Copper Ltd (BCL) in the decade-long war waged by Papua New Guinea "security" forces on the people of Bougainville from 1988 onwards.

One of the key proponents of the company's innocence is major BCL stockholder, the highly-irascible Axel Sturm.

See: London Calling asks: did Rio Tinto fund war on Bougainville?

In his latest broadside, Sturm accuses Ulster University criminologist, Kristian Lasslett, of using his "academic position as a platform for indoctrination and agitation."

In fact Mr Lasslett's critique of the company's complicity in human rights abuses, during the first 15 months of the bloody conflict, is quite measured.

And it's based on compelling evidence which BCL shareholders - not to mention Rio Tinto itself - would do well to urgently address.

The London-based parent company continues denying any wrongdoing, even though a US federal court has agreed to hear some of the charges being levelled against it. See: U.S. Court is prepared to hear Bougainville genocide case against Rio Tinto

The greatest threat to Bougainville Copper's future is it's hidden past

By Dr. Kris Lasslett

via ACT NOW!

23 April 2012

Last month the President of the European Shareholders of Bougainville Copper (ESBC) Axel Sturm publicly raised concerns over the volatility of BCL's share prices. In an interview with PNG Industry News, he blamed political uncertainty in Papua New Guinea for BCL's current woes.

Young freedom fighter from the Bougainville Revolutionary Army <br>stands guard over the Panguna copper mine
Young freedom fighter from the Bougainville Revolutionary
Army stands guard over the Panguna copper mine.
Photo: Francis O'Neill, April 1994

However, perhaps the ESBC's President needs reminding, the greatest threat to BCL's future remains its unacknowledged past.

Despite revelations aired on SBS last year, which evidenced BCL's complicity in the brutal security force operations on Bougainville, BCL and the ESBC continue to play down the company's instrumental role in the conflict.

If the ESBC wish to restore the integrity of BCL, then they should forward the following demands to BCL's Chairman and Managing Director Peter Taylor:

1. BCL must publicly apologise for its evidenced role in the Bougainville conflict.

2. In an act of goodwill BCL should publicly disclose the depth of its involvement in the security force operations on Bougainville. This public disclosure should document the logistical support BCL supplied to the government's security forces between December 1988 and March 1990. It should also reveal the relevant conversations that took place between the BCL management and senior state officials during this period.

3. BCL should demand that Rio Tinto - its parent company - cease contesting litigation taken by Bougainvillean landowners in the US, and fully compensate those victimised by the security forces using BCL property/facilities.

4. BCL should immediately remove from its Board of Directors, Sir Rabbie Namaliu who was appointed in March 2011. Sir Rabbie Namaliu was the Prime Minister of Papua New Guinea during 1988-1992.

Under his Prime Ministership the Papua New Guinea security forces - in an effort to reopen the mine - executed and tortured civilians, systematically destroyed villages, and imposed a blockade on Bougainville, which included the denial of humanitarian aid. It is astonishing, in light of these facts, BCL would appoint Sir Rabbie Namaliu to the Board of Directors, and that the ESBC would support this decision.

As the last ten years has proven, Bougainvilleans are a forgiving people. But they will not suffer corporate intransigence lightly. If BCL comes to the table and publicly acknowledges its role on the Bougainville war, perhaps the healing process can begin. Only then will BCL shareholders find the certainty they demand.

The Evidence of BCL's role in the Bougainville Conflict: A Reluctant Response to Axel G. Sturm's Open Letter

By Dr Kristian Lasslett*

via Act Now!

26 April 2012

On the 23rd of April 2012, Act Now posted a blog I had written on BCL and the Bougainville conflict [see above]. It was a critical but hopefully constructive piece, on how BCL might mend certain bridges with communities on Bougainville, using fairly orthodox transitional justice techniques.

It was not a new argument, indeed the distinguished ANU scholar John Braithwaite wrote in 2011: "Reconciliation between the mining company, a subsidiary of Rio Tinto, and Bougainvilleans is yet to be achieved. An obstacle here is that the company fears ritual apology would expose it to liability in the courts. Yet this reconciliation to some extent holds a key to international reconciliation among Bougainville, Australia and Papua New Guinea".

In response to my article the President of the European Shareholders of Bougainville Copper composed an open letter addressed to me. This letter included comments that bordered on the slanderous. In particular Axel G Sturm argued:

"Your disgraceful lampoon is remarkable. It's really shameful if an expert in criminology completely ignores facts and reality. Your naive adoption of statements and claims from rebel groups on the ground disqualify you as an honest scientist...I suppose your work in Ulster [Northern Ireland], a region well known for rebellion and organised crime, troubled your vision...Unfortunately you are also allowed to spread your ideas among you students. You shall not use your academic position as a platform for indoctrination and agitation."

I took it from Mr Sturm's statement, he had not bothered to familiarise himself with my research on the Bougainville conflict.

Had he, Mr Sturm would have discovered that my findings are based upon interviews with General Managers and three Managing Directors who steered BCL during the 1987-1991 period.

These interviews were triangulated through extensive documentary research, using internal BCL records including meeting minutes and company memorandums (these documents became available following two court cases involving BCL and its parent company).

I also interviewed senior state officials in Papua New Guinea, including the former Prime Minister Sir Rabbie Namaliu (1988-1992), and senior military officers involved in the operations on Bougainville.

I remained somewhat aloof during the controversy elicited by an SBS report in June 2011, as I feel my research speaks for itself - on reflection, I perhaps erred in not correcting factual inaccuracies that were subsequently reported in the media (see Callick 2011).

However, in light of recent personal attacks on my credibility as a researcher and scholar, I feel compelled to summarise the empirical evidence on which my recent suggestions were based.

1. BCL placed substantive pressure on the Papua New Guinea government to send the Royal Papua New Guinea Constabulary Mobile Squads - a paramilitary style force, who according to their own commanders excel in the use of terror (RPNGC Assistant Commissioner, Personal Communication, 2006) - to Bougainville in 1988, following attacks on mine property by a landowner group.

They made this request in full knowledge of the Mobile Squads' chequered human rights record.

As one General Manager informed me: "We knew the riot squads were heavy handed, that was well known in PNG. That's how they worked. If you threw a rock at them you would get ten rocks thrown back. They were very heavy handed in the way they handled disputes in the Highlands...It was a case, somebody has to come. They were the only ones that could come, and put a lid on this thing before it got out of hand" (Personal Communication, 2006). The Mobile Squads were responsible for numerous atrocities on Bougainville during 1989-1990.

2. When Prime Minister Namaliu opted to send a peace delegation to Bougainville to resolve the impasse with landowners in December 1988, BCL's Chairman - who was also an executive at Conzinc Rio Tinto Australia (CRA) - threatened to withdraw all CRA investments from Papua New Guinea.

In a memorandum dated 6 December 1988 he recounts his reaction to the Prime Minister's proposal: "The PM's priority was to 'appease' the landowners. I expressed the view that CRA would want to review its assessment of PNG as a place to invest. In all, it was an unsatisfactory meeting".

At the time CRA was investing heavily in mineral projects at Hidden Valley in Morobe, and Mount Klare in Enga (Post-Courier, 29/11/1988; Business Review Weekly, 9/6/1989).

3. When Mobile Squad units and Papua New Guinea Defence Force (PNGDF) soldiers arrived on Bougainville during December 1988 and early 1989, BCL gave the security forces access to company assets.

A BCL General Manager from the period recalls: "We did everything they asked of us to make their life more comfortable, and better able to manage through, with transport, communications, provisions, whatever, fuel. You know we gave them everything, because as a far as we saw it we were hoping that they were going to solve the situation, so we could start operating again. So we supported them every way we could" (Personal Communication, 2006).

This claim was confirmed by a senior civil servant who was working in Papua New Guinea's Prime Minister's department: "We relied heavily on some of the civilian facilities provided by the company. They did everything, I mean we spent lots and lots of money, to provide backup support services for the operation. But the defense force was not properly equipped at all" (Personal Communication, 2006). I have found no evidence to suggest BCL were forced by the PNG government to make this contribution.

4. BCL regularly met with military commanders from the PNGDF and senior Cabinet figures. During these meetings security force operations were discussed in detail. For example, BCL was informed by the Minister of State that the security forces were planning to use "brutal firepower" to resolve the situation on Bougainville. This is evidenced in meeting minutes dated 8 June 1989. BCL did not alert the domestic or international community of the impeding humanitarian crisis.

5. BCL meeting minutes evidence the fact that during 1989 the company's Managing Director provided strategic input to PNGDF commanders and government officials on security force offensive operations.

6. BCL was aware of the illicit tactics being employed by the government's security forces, yet still availed company assets to the PNGDF and RPNGC.

For example, the company's charitable arm - the Bougainville Copper Foundation (BCF) - had surveyed homes lost to village burnings, which were conducted en masse by the Mobile Squads and the PNGDF during 1989. A BCF official informed me that during a security operation in March/April 1989, "forty, fifty villages, and the crops [were destroyed]. The villages were varying from five or six houses to twenty or thirty houses" (Personal Communication, 2006).

7. There is evidence to suggest BCL's Managing Director did raise concerns with PNGDF officers over the loss of civilian life. Nevertheless, the company continued to provide material assistance to the security forces.

8. Allegations have been made that BCL's Chairman supported the military blockade which was placed around Bougainville during 1990 - this blockade included the denial of humanitarian aid. In particular, the former Prime Minister and Foreign Minister (1988-1992) of Papua New Guinea, Sir Michael Somare, alleges that the Chairman stated lets "starve the bastards out".

Sadly the Chairman has passed away, and I have not been able to confirm the veracity of this particular allegation. However, I was told by a senior BCL executive that the company was supportive of the blockade for two reasons: "One was the ability of the militants to get more weapons to increase the level of their militancy. And the second was that there was always these threats that they were going to sell off the mine equipment" (Personal Communication, 2006).

Of course, I can only hint here at the evidence collected over several years of doctoral research. Moreover, in a blog post, it is clearly impossible to add more context, which would help readers understand some of the complex factors influencing BCL's decisions.

Though in light of the above, I would suggest - to borrow the words of Mr Sturm - it was in fact those scholars and journalists that rejected the allegations made against BCL by landowners and activists who might be accused of being "naive", after all accessible documentary evidence on BCL's involvement has been available since 1990 (following a Supreme Court of Victoria court case involving BCL and their insurers - BCL records are also stored in an archive at the University of Melbourne and may be viewed upon request).

Nevertheless, it is not my intention to vilify BCL. They operated the Panguna mine for 17 years, and many scholars and journalists have written quite favourable pieces on their corporate record during this period. My specific claims relate to a small window in the company's life, 1988-1990, where decisions were taken that implicated BCL in the hostilities, and the human rights abuses they generated.

Clearly it is up to the people of Bougainville to decide how they wish to manage their natural resources. However, democratic decision making about the future depends upon accurate knowledge of the past. In this respect, BCL can make an important contribution to democracy and reconciliation in Bougainville by, a) fully disclosing their role in the conflict; and b) making amends with those affected by their actions.

I am more than happy to engage in further probing dialogue with anyone who cares to comment; but I will not react to any further personal attacks, or ill informed judgements on the rigour of my research. I consider that issue now resolved.


* Kristian Lasslett is a Lecturer in Criminology at the University of Ulster and he sits on the Executive Board of the International State Crime Initiative.

Bougainville Copper posts K3.7m loss

Papua New Guinea Mine Watch

2 May 2012

Bougainville Copper Ltd (BCL) yesterday announced a loss of K3.7 million in 2011, compared to an anticipated loss of K7.3 million, reports The National.

Because of this, no dividends will be paid, chairman Peter Taylor announced at BCL's 45th annual general meeting in Port Moresby.

"Overall, income and costs were generally within budget, administration and exchange losses being over, offset by a similar amount under budget for BCA renegotiation," he said.

"Interest of K2.2 million earned on court-held IBDs has been brought into account this year.

"Due to the loss recorded and the need to preserve cash for future development the company will not pay a dividend.

"The company has sufficient funds to cover its recurrent expenditure under the current plan and is debt free."

Taylor said he was more optimistic about the future of this company than any year out of the previous 20 years.

"There are activities on foot in several areas that can positively assist Bougainville Copper Ltd make a return to profitable mining," he said.

"Some of these are within the control of the company itself, others less so.

"The most-beneficial change has been the focus of Panguna landowners and other Bougainvilleans on the re-development agenda, and the initiatives they have taken to contribute to momentum."

Taylor also talked about BCL's:

Investment strategy;
Ongoing tax dispute with the Internal Revenue Commission of PNG;
Litigation in the United States;
Corporate governance;
Risk management;
Bougainville Copper Foundation;
Significant events, beginning on Bougainville; and
Bougainville Copper Agreement

Taylor said Prime Minister Peter O'Neill had confirmed in parliament that BCL had, by right of the BCA, was permitted to operate at Panguna for a further 21 years from 2011.

"It is possible that some further remediation work will be carried out on site with the co-operation of landowners, to make areas safe whether mining proceeds or not," he said.

"President (John) Momis has been proactive in assisting the company carry out safety work.

"Again, the landowners will be informed and involved as appropriate.

"The vision to return to active exploration and profitable mining remains and, I am pleased to say, with the active support from local stakeholders to which I have earlier referred."

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