Papua New Guinea: OK Tedi - Up The Fly Without A Paddle

Published by MAC on 2012-12-27
Source: Globe & Mail

Up The Fly Without A Paddle

By Jo Chandler

Globe & Mail

17 December 2012

The Global Mail investigates rumours of a mysterious plague down-river from a giant gold mine in remote Papua New Guinea, and uncovers disturbing questions about the flow of benefits from the resources boom.

Kabusi Kebei's deathbed is a grass mat, her pillow a knot of rags. She rises from it with a quiet greeting, showing more grace than a stranger's rude intrusion on her dying deserves.

She endures my few questions, but plainly Kebei just wants to lie back down by the embers of her fire, even though all those around her are sweltering in the steamy build-up to the wet season. She is in pain and I, ashamed, retreat. She will never know that she's been cast as a bit player in the latest chapter of an epic narrative of power, politics, money, hope, expectation and exploitation - miscast, as it turns out. And yet hers is likely the truest tale to be found on this murky stretch of Papua New Guinea's fabled Fly River.

I've been led to Kebei by a posse of her neighbours, villagers living on the palm-fringed bank of the Fly delta. They identify the mother of eight as a possible casualty of a strange new plague rumoured to be striking their remote communities; one said to cause women to bleed, sores to weep and strange lumps to grow. They suspect it may have been brewed in the brown water of their infamously despoiled river, the gutter for 30 years of operations of the Ok Tedi copper and gold mine, 1,000 kilometres upstream. Each year the mine - the mother lode for the PNG economy, accounting for 16 per cent of gross domestic product in 2011 - dumps 40 to 50 million tonnes of waste rock and tailings in the Ok Tedi tributary which flows into the Fly River (down from a peak of 90 million in 2002). Porgera gold mine also sends much of its waste down this waterway.

The story of a mysterious disease outbreak in the remote South Fly, where many communities can only be reached by boat or air, has been making headlines in the PNG press. It has also prompted questions in the Parliament - including calls from three Fly River MPs to close the mine on health and environmental grounds - and is now creeping into the international media. The issue follows a leaked, six-month-old internal report by Ok Tedi's development arm, scoping out concerns raised by women community leaders. The company referred the report - which urged immediate dispatch of an expert health team to investigate further - to its health agency, but no other action was taken.

The leaked report surfaces at the same time as Ok Tedi Mining Limited (OTML) is negotiating compensation deals with 100,000 Fly River people living downstream of its operations. The company has plans to wring another decade of life from its mine, which had been due to close in 2014. At a recent mining conference in Sydney, OTML announced the deal was all but sealed, with most communities already signed - the community of the Manawete region, which I visit, is one of two holding back.

Meanwhile, upstream in the political headwaters, there's a mighty struggle for control of the $1.4 billion fund Ok Tedi spawned for the PNG nation, the Sustainable Development Program (PNGSDP). In a unique arrangement, a battered BHP divested its 52 per cent stake in the mine to the people of PNG via the Singapore-registered SDP in 2002. This came after BHP conceded the mine's environmental fallout was much worse than it had anticipated, costing it dearly in reputation and out-of-court settlements to afflicted Fly communities. With the government of PNG deciding to keep the mine running, the deal indemnified BHP against future legal liabilities. Two-thirds of SDP's money is locked away for long-term development after the mine closes.

Today the fund's value has exploded beyond all expectations, courtesy of the resources boom. If the Ok Tedi mine - as of last year wholly owned by the people of PNG - continues to operate until 2022 as now planned, the value of the program's long-term projects will swell to $3.7 billion, according to a recent independent report on SDP. In the meantime, SDP rolls out an ambitious development program worth more than $100 million in 2011, making it a heavyweight aid agency equivalent to some of the nation's biggest external donors. In a landscape of desperate need, cashed-up SDP is a potent resource, and some of PNG's political big men are increasingly resentful of external influence over the fund, particularly BHP's lingering veto over the shape of the board.

These tensions spilled into a pronouncement by PNG Prime Minister Peter O'Neill last month that prominent Australian economist and longtime PNG mining player Professor Ross Garnaut - chairman of Ok Tedi Mining, and until recently also chair of SDP - was no longer welcome in PNG. Garnaut had reportedly said, on the subject of the stockpiling wealth, that it was "tempting for political figures to think of better ways of using it right now, rather than putting it into long-term development". O'Neill blasted this as a slur on his nation's reputation.

Acutely aware that the vortex of politics and money swirling around Ok Tedi is as treacherous and turbid as the notorious Fly tides, I nevertheless take a plane from Port Moresby and then - at the invitation of the Ok Tedi Mine Impacted Area Association, a community group which has been agitating on health concerns - a fast dinghy from Daru, and wade in to see something of the realities of life in the South Fly.

The resources boom is fuelling unprecedented growth in the PNG economy - minerals exploration has exploded in the past five years, with almost 300 exploration licences now current, and a backlog of another 400 applications. It is also stoking urgent questions within and beyond PNG about the nation's capacity to ensure that a fair portion of the wealth being burrowed from its vast natural riches finds its way into the lives of its 7.2 million citizens, 81 per cent (5.8 million people) of whom live in rural and remote communities, surviving largely on their wit and their food gardens. Where better than to explore some of these questions than deep in Ok Tedi country, Western Province, home to the nation's richest quarries, and to some of its most poorly served communities.

By the time I - muddier, and with more questions than answers - am ferried out of the river mouth and back into a red Daru sunset two days later, I have tentatively concluded that there is little evidence of any new health crisis in the villages I've visited. Riding the rough chop of Torres Strait on a near-empty fuel drum, I ponder a reality that is more complex, but no less confronting.
In a landscape of desperate need, the cashed-up SDP is a potent resource, and PNG's political big men are increasingly resentful of external influence over the fund.

My inexpert diagnosis is confirmed a few days later in briefings from medical teams dispatched by the World Health Organisation (WHO) and Daru Hospital, to investigate the controversy. Their examinations identify sickness and disease emerging from years of accumulated neglect, compounded by dirty water, poor nutrition, crowded living conditions, too many babies, lack of roads and power, decaying or abandoned health facilities and hardscrabble lives made harder by shifting tides and islands of sediment, soil erosion and vegetation dieback, and the loss of fish catches and crops.

Although I don't doubt the anxiety of local women over the cause of all the sicknesses they witness and endure, Kabusi Kebei's quiet agony is not the consequence of some mysterious new ill. It emerges, as we sit and talk on the floor of her smoky hut, that, like thousands of her countrywomen, she is dying of gyneacological neglect in the form of cervical cancer.

She lives in a community suffering a chronic lack of basic medical services. Her husband Gideon explains that by the time her pain and bleeding compelled her to take a long day's journey on a crowded outrigger canoe to Daru Hospital in July, the doctor said there was nothing to be done. It's a story I've heard countless times when visiting women's wards and talking to specialists around the country.

PNG has among the highest rates of cervical cancer in the world; the disease kills at least 700 women a year. Kebei's imminent death, at 49 years of age, may be unfathomable in the Australian context. But without early detection (pap smear screening), treatment (PNG has a single overworked radiotherapy machine, and access to chemotherapy and surgery is extremely limited) and prevention (HPV vaccine, while it holds great promise for developing nations, remains financially beyond reach), in PNG her death is no mystery.

Neither is the death of another much younger woman from the area only a week or two earlier. She was also said to be a casualty of the rumoured mystery outbreak, and her picture featured in the newspapers. But further inquiry reveals she died days after giving birth. PNG is also blighted by horrifying rates of maternal death - an estimated 733 deaths per 100,000 live births. In Australia - cruelly, the invisible frontier between one of the best health systems in the world and one of the worst can be crossed with just another short boat ride - the equivalent figure is 8.4 nationally, but a poorer 21.5 if you are indigenous.

Like the health teams dispatched up the Fly, I went looking for evidence of a rumoured emergency, but found instead merely endemic tragedy with all the imponderable questions it raises.

Ok Tedi's operations over a generation have provided critical infrastructure, opportunity and services to some of the world's most isolated and challenged communities, plus 2,000 direct jobs (95 per cent of them going to local people) and as many again spun off through local businesses and subcontractors. But in the South Fly villages I visit the only evidence of substantial trickle down from its USD1.45 billion annual revenue is the sediment. It raises the riverbed and spills water onto the land, wiping out food gardens and spoiling drinking water, even exposing old graves. Such issues are serious enough to prompt the mining company to consider relocating severely impacted communities.
Like the health teams dispatched up the Fly, I went looking for evidence of a rumoured emergency, but found instead merely endemic tragedy with all the imponderable questions it raises.

This is despite the millions directed every year by Ok Tedi and SDP into development. OTML boasts that since 1982 it has contributed kina 707 million (about AUD312 million) to Western Province, and that since BHP's exit in 2002 it has paid over kina 17 billion in direct benefits to PNG people through dividends, royalties, taxes, land leases and compensation payments. But after more than 20 years of cash benefits of one form or other from the mine, there is little evidence to be seen enduring in the three villages I visit.

According to a 2008 analysis by the Asian Development Bank (ADB), less than 1 per cent of Ok Tedi landowners' money has been invested back into agriculture - although further up river, in the better-served North Fly, I have in the past visited communities earning good returns from their rubber trees, harvested and sold through co-operatives that piggyback the rubber to market on the mine's barges.

But here in the south, the women say the cash soon goes on food, fuel and school fees. Some see little of it - it vanishes in Daru or Port Moresby, with their husbands.

There's a sense of desperation in the maneouvering of communities and leaders to wring something lasting and tangible from the mine's remaining years. As the ADB report observed, "lost opportunities ... haunt the community, especially as the mine moves closer and closer to closure, and as people realise that with all the benefits they have received so far they have not achieved much to secure their future".

"All that copper, all that gold, going down this river all these years," reflects Dobin Kirori, my dinghy "captain" - himself from one of the nearby islands - as night closes on the Fly. "And all these villages still in darkness."

Vanishing money

At Wariobodoro on the Fly Delta's northern side, I wade from the dinghy up through the sucking grasp of the mud and am hauled inelegantly up the steep, crumbling bank. Nearby there's a platform where sago is beaten and washed in the dirt-brown water.

At this point in time, sago is served morning, noon and night in the homes of many of the villagers I meet. Yields of other crops along the Fly River are vulnerable to the seasonal whim of the river. A huge king tide had risen up a week earlier - its mark can be seen at shoulder height on buildings. It ruined garden crops, and even washed through the high ground of the graveyard. Sago has the nutritional value of cardboard, but it fills bellies. Water for drinking, cooking and washing comes from a nearby swamp.

I've travelled across from Teapopo with Narema Makai, a women's leader and mother, wife of a community health worker. This is her mother's village. Makai has been a key agitator on local women's concerns and assisted the health teams on their recent surveys. She's been busy on her phone talking to media and political players around the country. Thanks to the growing Digicel network there's reasonable coverage now, even in these remote parts. It is radically changing PNG's social and political dynamics as the once-silent majority broadcasts its stories and concerns through SMS and Facebook groups. Makai is part of the wave of people capitalising on the technology - particularly women, who have historically been marginalised and neglected in the deals brokered between miners and male landowners. Still, she's hamstrung. With no power, few people can charge their handsets. Before we part company with our boatman, Makai begs a couple of litres of fuel from the outboard, which will enable her to run a generator long enough to plug in and get back on the air.

En route to a women's meeting, we negotiate poultry and the ramshackle infrastructure of village life - fractured and overturned watertanks, open drainage channels, cooking fires, the spindly legs of thatched village suburbia hoisting houses beyond reach of the tide. We acquire an entourage of curious children and dogs. Our procession is shooshed quiet as it passes the open-walled shelter where Seventh Day Adventists bow their heads in devotions.

We pass the broken-down buildings of the elementary school that has been closed for a year (maybe longer, depending who you talk to) as a result of some local inter-clan fighting. Many households are still crowded with relatives who were displaced when their huts were burned.

We pass the aid post, which is closed, and where there have been no medicines for months. They are closer now though: I will later find boxes of the drugs and medical supplies, deliveries of which are a key priority of Australia's AusAID program, just arrived in the Teapopo health centre and awaiting wider distribution. One-third of South Fly's aid posts - basic medical outposts that were once the backbone of PNG's rural health network - were shut last year, according to National Department of Health statistics. Their absence is identified as a critical factor in Western Province's poor health indicators, which are among the lowest in PNG.

The aid posts close down because often there are simply no trained staff on the ground to run the centres. Basic supplies of medicines and equipment frequently get lost en route. Teapopo has the good fortune to have a nurse - Royleen Ruhi - but when I meet her she is desperately concerned for her own little boy who has diarrheoa. She left him with some bigger children when she went out to try to catch fish due to the food shortage. It took a long time. She came back to find him very unwell. Because she has had no supplies delivered for two months, there's little medically she can do for him, or for anyone else.

The national figures show there were only three rural outreach programs per 1,000 children in South Fly last year, and fewer than 40 per cent of pregnant women in South Fly were accessing ante-natal programs. Leprosy remains a serious issue in some communities further up the river. And the memories are still fresh of the deadly cholera outbreak that raged through here only two years ago and claimed an estimated 500 lives nationally. These are conditions mired in social, political and environmental paradigms that can be as impenetrable to the outsider as the surrounding swampland.

An analysis by a Deakin University development expert last year, which plotted Western Province's health, education and income indicators on the United Nations international scale, concluded that if the province were a nation, it would rank right in the bottom cluster with the likes of Zimbabwe and the Democratic Republic of Congo. The preliminary findings provoked some controversy, with critics objecting that Professor Mark McGillivray's model used 10-year-old data, but the overall bleakness of the bottom line was largely undisputed.

The problems in Western Province are acute, but by no means unique. PNG's ranking on the UN Human Development Index is 153 out of 187 countries, the score having barely improved in the past decade. It's not anticipated that the region will meet any of the Millennium Development Goals by 2015, and its health and education indicators are the lowest in the Asia-Pacific region. Life expectancy for a Papua New Guinean is just 62.8 years.

Earlier this year PNG's National Research Institute (NRI), an independent think-tank, published a substantial report attempting to come to grips with the multi-billion-kina question of why, in a nation that is so rich, people remain so desperately poor and without access to even basic services.

The report's author, Peter Johnson, tackled the issue through the case study of the Porgera Gold Mine, which has operated for more than 20 years, and which also sends its muck downriver, into the Fly. "To date, over a billion kina in cash and benefits have spread through the Porgera region ... [but] it is almost impossible to see where the money has gone," he said.

"PNG's economic development has a history of boom and bust, feast and famine, hope and despair. Its people and its communities question where all the money has gone and why their expectations have not been fulfilled. In the end, the questions are left unanswered and people continue to live with the precious little that is left."

Johnson's aim was to identify some strategies that might ensure the latest boom turns into meaningful development. Given landowner and community tensions over the benefits expected to flow from the massive $US19 billion Exxon-led PNG liquefied natural gas (PNGLNG) project due to begin production in 2014, the stakes have never been higher.

What Johnson's report found was that the Porgera mine operator, Barrick, had fully met its obligations for payments to various government institutions, and these could be tracked via a clear audit trail into government coffers. And then they vanished. "The question of where these payments go and how they are spent once they leave the mine remains unresolved."
"To date, over a billion kina in cash and benefits have spread through the Porgera region... (but) it is almost impossible to see where the money has gone."

Johnson identified a "complete lack of transparency and accountability" around many institutions associated with the mine. "The national government lacks a credible, concise and explicit program to detail its payments from and to stakeholders and track how stakeholders under its control operate." NRI chief Dr Thomas Webster, when questioned about the findings, said it was clear there are some "government institutions which are not doing what they were expected to do on the ground in terms of looking after health services, education and so forth".

In this context it's encouraging that a recent independent review of PNG's Sustainable Development Program - that trust fund formed to administer OTML's assets, and which is closely scrutinised and frequently questioned by critics - was largely positive about its development efforts and strategy. However the review stressed the difficulties faced by SDP, operating in an environment where capacity is low, corruption is a serious problem, and risks are high.

When anticipated benefits don't materialise, rumour and misinformation thrive, and stir grassroots anger. The NRI report highlights the difficulties for citizens thwarted in gaining an understanding of their rights and dues by legal and payment systems that are "complex, opaque and one-sided". A parable of this can be found in the concerns around water quality in the South Fly area.

Village people tell me they are aware Ok Tedi scientists test the water and sometimes take blood samples, but they say they are given no feedback on the findings. OTML is required by law to annually monitor and report water quality and other impacts of its activities, and its most recent report, for 2011, concludes that there are no human health issues regarding drinking water or edibility of local food and fish. Dissolved copper concentrations remain at high levels, which poses "a threat to the aquatic ecosystem", though they have decreased significantly in the past two years.

The NRI report urged PNG, as a first step to improving the flow of mining wealth into communities, to sign on to the Extractive Industries Transparency Initiative (EITI), a global standard which requires companies to disclose what they have paid to governments, and governments to report what they have received, and the information is then published for all to access. Further, it needed to bring the same level of transparency into play domestically, to track the flow of money and accountability within and between departments and agencies. "Until there is greater transparency in how resource finances are distributed both in terms of individual and community benefits, PNG will remain resource rich and its people poor," Johnson said.

While the NRI analysis blames corrupt and inept public service and government cultures for the disappearance of mining benefits, the Asia Development Bank sheeted much of the problem home to the culture and leadership of landowner communities.

The ADB report, which looked specifically at Ok Tedi to explore the obstacles to sustainable development out of mining, found economic opportunities had been squandered through poor management and advice, in turn fed by a lack of know-how and information at the grassroots. Community leaders tended to be determined on the strength of their land claim rather than their inherent leadership qualities, the analysis found, with the result that they were "not always representative of, or accountable to, affected communities, and may even work against their collective wellbeing".

In recent years, over the course of several journeys taken to understand the social and environmental impacts of development on PNG communities, I've seen and heard plenty of accounts of the diabolical communion between the two camps blamed by the two reports for the breakdowns and blockages that effectively steal development benefits from impacted communities. The self-interested leader and the corrupt, inept official serve themselves, and contrive to blame each other. In doing so, they whip up bewilderment and anger that pumps yet another dimension of hurt into already volatile, often violent and fragile realities.

Their victims are the women and children who gather in the sparse shade of Wariodoboro and Teapopo and ask why they are getting sick from preventable disease; why they can't access a nurse or midwife when they are in labour; why the health clinic is filthy and crumbling; why they can't get medicines for their children; why their gardens are inundated and ruined; why basics such as power and clean water remain unimagined luxuries; and why the benefits and royalties and payments seem to flow down the river right past them, along with the rest of the mine muck.

Mending a fragile nation

Now it seems the clamour over Fly-area health concerns, political expediency and public relations around the negotiations to extend the Ok Tedi operations have colluded - apparently happily - to finally answer some of the women's prayers. Mining Minister Byron Chan has pledged to immediately channel kina 43 million of Ok Tedi money into extending a tried and working model of improved health services - which has already brought significant improvements to the North Fly area - down into the desperately needy Middle and South Fly regions.

But in a cruel twist, that old medical gag, "Do you want the good news, or the bad news?", comes to mind. The bad news I find waiting on my return to Daru is horrifying.

In the wreckage of the fractured health systems and the crammed shantytowns of Daru's Fly River diaspora - where thousands of people who have abandoned their remote villages live in wretched settlements, dozens to a house - lie the seeds of a real, erupting public health crisis with profound implications for PNG and the wider region.

Tuberculosis (TB) is a deadly yet curable disease which thrives on poverty and overcrowding. It mutates into even more potent forms when health systems are not capable of ensuring that treatment with powerful antibiotics is supervised and completed. In the past 18 months, anxiety over a brewing TB crisis in PNG, with Daru at its epicentre, has prompted a flurry of urgent investment by AusAID, World Vision, PNG health authorities and other agencies. They have funded critical equipment, buildings and medical expertise aimed at rehabilitating long-neglected Daru Hospital and the depleted and demoralised provincial health teams, in a frantic attempt to monitor, evaluate and respond to the epidemic.

The self-interested leader and the corrupt, inept official serve themselves, and contrive to blame each other. In doing so, they whip up bewilderment and anger that pumps yet another dimension of hurt into already volatile, often violent and fragile realities.

A specialist WHO team is just completing an assessment of tuberculosis in PNG; it is, by some estimates, already the nation's deadliest infectious disease. New diagnostic technology which just came online this year is confirming WHO's worst fears of a drug-resistant TB epidemic which is - according to WHO PNG chief Dr William Adu-Krow - "off the charts" in Western Province and neighbouring Gulf Province.

About 50 per cent of TB-positive sputum tested in Daru Hospital since the arrival of a GeneXpert diagnostic machine in May is showing as multi-drug resistant (MDR) TB, according to a recent report by Melbourne's Burnet Institute. The report, by epidemiologist Dr Emma McBryde, estimated registered incidence of TB in Western Province at around 500 per 100,000 people, much higher than the PNG health department estimate of 150 per 100,000. "Nevertheless, the true incidence of TB is likely to be even higher due to poor access to health care and poor rural services in the region", she reported.

WHO's yet-to-be published findings are also "very dramatic", Adu-Krow says, ranking PNG "amongst the worst in the world". He's urging that an emergency taskforce be set up to tackle the crisis, not least because millions of dollars in Global Fund money, which is critical to the PNG national TB program, will dry up next March. And no one knows what will happen without it.

Already TB cases occupy most of the available hospital beds in Western Province. An "ordinary" case of TB costs kina 60 (about $30) to treat. A multi-drug-resistant case costs kina 15,000 ($7,500), and can require eight months of hospital treatment plus follow up. Now the ultimate TB horror scenario of extensively drug-resistant (XDR) tuberculosis has been identified in six patients - five in Daru, one of whom has been taken to Cairns for treatment that includes several years in isolation and a combination of powerful drugs. In the Australian context, the treatment bill for a single XDR case could be in the realm of $1 million.

Adu-Krow cites a case in Daru in which five members of a family of eight have died of TB. Even those who survive the disease - especially children who contract TB meningitis - are profoundly damaged for life, crippled physically and mentally. "I think we need to be worried," Adu-Krow says. He's concerned not only with finding budget and services to respond to the coming emergency, but with recognising the inevitable shortfall and the ethical questions that will raise - who will get treatment, and how much treatment will they receive?

I emerge from a 45-minute briefing with the WHO hierarchy to reflect on what I have learned. One feared epidemic - the mysterious bleeding disease - retreats, only to be replaced by grim evidence of a much wider threat. The imperative for PNG's governments, public servants, powerful corporate citizens and aid partners to find the capacity to use the fragile nation's accumulating wealth for the sake of all its citizens downstream gains a new and desperate urgency.

With the wild months of political upheaval that followed the end of Grand Chief Sir Michael Somare's era over, and his claim to power cemented by the recent national election, Prime Minister Peter O'Neill has identified tackling mining reform and corruption among his government's top priorities. While he's assuring nervous investors that he won't do anything too radical (despite the push from some of his own MPs to give local landowners more control of future projects) he's emphasised commitments to streamline processes, build productivity, prioritise domestic energy projects and to spread the country's wealth more broadly.

The NRI analysis on how to improve spending of the nation's mining windfall and improve the lives of all Papua New Guineans concludes that "PNG has the expertise and resources, domestic or international, to design and develop strong policies to ensure all revenues are adequately accounted for and spent as determined by its people. However, should the years slip by and nothing change, the answer to the question of why PNG is so rich yet its people remain so poor will simply be, because that is what we chose".

Back in Port Moresby I scrub the Fly River out from under my fingernails and off my boots. But Kabusi Kebei, and her daughters, will not be so easily washed away.