MAC: Mines and Communities

An unchanging climate at BHP Billiton

Published by MAC on 2013-10-25
Source: Statements, Jakarta Post, ABC Net, AAP, Guardian (2013-10-30)

Initial reflections on the 2013 BHP Billiton AGM

Andy Whitmore, on behalf of the London Mining Network

24 October 2013

Large mining company AGMs seem to have a certain unified blandness about them these days (at least for those whose experience stretches back to Rio Tinto AGMs in the late 1980s, which had at times a certain chaotic, carnival feel to them). Today's meetings are ‘well-managed', in the sense that the interventions from the stage are all effectively stage-managed, and that the Chair keeps a firm hold of interventions from the floor. (That firm grip of the meeting may be wrapped in a very polite velvet glove, but it is steely none-the-less). Those asking questions are generally allowed a fair amount of time to present their point, and excessive care and politeness is taken in dealing with those who have travelled from affected communities.

This could be seen as progress, but the concern is still with the substance of the meetings, particularly the responses from the board. A good example of that was in the intervention of Jazmin Romero Epiayu an indigenous representative of Fuerza de Mujeres Wayuu from La Guajira in the north of Colombia. Jazmin made an impassioned plea to the board for BHP's joint subsidiary, El Cerrejon coal mine, to leave their land. She mentioned the blockades the Wayuu had set up against against the company, but stressed that their objection was deeply cultural, and they just wanted the company to leave. Her question was would they leave or not, and although there was a response which talked of respect for her beliefs, about the situation at the mine, and invited Jazmin to talk to them afterwards, there was no direct answer. One can only assume therefore that the answer is no; the company will not leave. However, given how direct the question was, it is to be hoped that the point got through at least. It may be there will never be a meeting of minds on this, but it just seems that the studied politeness of current meetings fails in dealing with the people whose lives are so directly affected, and are prepared to be uncompromising as a result.

The second overseas visitor to the AGM was Hendrik Siregar, Coordinator of JATAM (The Indonesian Mining Advocacy Network) who was there to pass on a similar message with how local communities in the relatively unspoilt rainforest of Kalimantan (Indonesian Borneo) do not want the coal mining to proceed. The company response was that they were not advancing larger mines on their concessions (yet), although they were progressing a smaller mine which would not produce coal this year. Pressed whether they would support a rail project into the heart of Borneo to move mined coal, the company distanced itself from being involved in building such a railway, but then wouldn't rule out using it (which really seems to be having your cake & eating it).

There were other forensic questions about the company's business, and responses around a potential iron ore mining in Guinea which is near a world heritage site (that at present this did not really fit in with the company's focus on iron ore in Western Australia, and so seemed to be waiting to be sold). There was also a question on the Papua New Guinean government's ‘nationalisation' of the rump part of what was left of the Ok Tedi mine. Press reports seemed to suggest it could leave the company open for future legal action (as they had also lost their indemnity which came with the initial deal). The company was confident , however, that there was no new room for legal action against the company by local communities.

Otherwise, the main theme of interventions at the meeting was around the issue of climate change. If Jasmin and Hendrick were stressing the impacts of such mining on local communities, others talked to the issue of how BHP making coal and petroleum two of the ‘four pillars' of company growth was a potential disaster for all of us. The focus for this was Ian Dunlop, who stood for election to the board on a platform of ensuring they took the issue of climate change seriously. The board advised against voting for Ian, and although he was allowed to speak at the meeting, were (politely) hostile to his candidacy. His argument was basically that there was "group think" in the board, and that although the company had made positive steps in what it did about climate change, that it required a radical rethink in a world that was moving towards a 4 degrees rise in temperature. He noted that the board's response, which was to dismiss him as a "single issue" candidate, revealed how they essentially belittled the hugely significant impact climate change would likely have on the company (& indeed the world!). This was a point the board seemed to concede on somewhat. Ian was supported by a number of interventions, including from faith-based investors. However, the board closed ranks, and although the chair, Jacques Nasser, said he welcomed Ian's input to date in challenging the board, he seemed to saying that they had been challenged enough for now, thank you.

So after a two hour plus meeting we all filed away, with us ‘minority shareholders' voting for Ian, but knowing his candidacy was as likely doomed as the chances of a fossil fuel company taking the radical steps required on climate change. That seemed to be the main frustration from (this particular meeting). Company representatives spoke at great length about their contribution to mitigating climate change (focussing on increased efficiencies, monitoring carbon outputs etc.), but didn't square that with then relying for half of the key business products on fossil fuels. The answer seemed to be that this was a big problem, but that it was society's problem, and we all need to solve this together, i.e. BHP are only the suppliers. It may be true we need to solve this together, but at the moment BHP Billiton is one of the suppliers. Arms traders may not pull the triggers of their weapons, but they still have responsibility as the suppliers, and surely have a moral obligation to find some other business, no matter how lucrative. How true that is of BHP Billiton, which as a diversified entity has more choice than some other fossil fuel companies in the direction it takes.

Jacques Nasser closed by noting how long the company had been around (as its separate entities, BHP and Billiton) and put their long-standing and success down to "evolving & anticipating where the world is moving. That is our business. That is what runs through the bloodstream of this company." From the evidence of the responses today, one assumes their evolution may not take them in an enlightened direction quickly enough, if at all.


Indigenous woman travels from Colombian barricades to BHP Billiton AGM in London

London Mining Network press release

22 October 2013

An indigenous woman from La Guajira in the north of Colombia has travelled directly from the continuing blockade of a controversial coal mine, directly to London to attend the AGM of BHP Billiton, the company that co-owns the Cerrejón mine.

On October 15, more than 2,000 indigenous people from Colombia blockaded roads leading to the Cerrejón mine site, reportedly shutting down 40% of the mine's operations. Protesters are now blocking the railway which takes coal to the export port.

The mine has been the subject of international criticism over the forcible displacement of communities when mining began, and decades of air and water pollution which have had disastrous impacts on the health and traditional ways of life of neighbouring communities. Recently the company came under fire for a plan, now on hold, to divert the only major river in the semi-desert province.

Jazmin Romero Epiayu, an Indigenous Wayuu woman from the Epiayu clan, has travelled from the blockade in Colombia to London to take part in the BHP Billition AGM on Thursday 24 October, to tell shareholders why the Wayuu people have been driven to take such drastic measures against the Cerrejón mine.

Jazmin Romero Epiayu said:

"BHP Billiton and its associates at Cerrejon are taking out the coal, which for us represents the internal organs of Mother Earth, which is sacred to us. Diverting the river would be like cutting her veins. They are damaging our land and we have to defend it."

On Thursday Jazmin Romero Epiayu will enter the BHP Billiton AGM to address the board of directors and describing the impact that the coal mine has had on her community.

Richard Solly, the coordinator of the London Mining Network who will also be attending the AGM said:

"BHP Billiton is one of many mining companies listed on the London Stock Exchangewhich violate the rights of communities around the world. BHP Billiton is among the better London-listed mining companies. The fact that at Cerrejon it has trampled over the rights of local people and caused massive environmental damage shows that UK regulation is completely inadequate."

The AGM will also be attended by a representative of Indonesian communities opposed to BHP Billition's coal mining in ecologically sensitive parts of Borneo.

Jazmin Romero Epiayu is also taking part in the World Development Movement's "Carbon Capital" speaker tour around the UK from the 20 to 31 October, organised in collaboration with London Mining Network, Colombia Solidarity Campaign and Down to Earth.

For more information or interview contact: 07903 851695

** ENDS **

Notes

Cerrejón is a giant open-pit coal mine in La Guajira, northern Colombia. The mine is jointly owned by three of the world's largest mining companies; London-listed Anglo American, BHP Billiton and Xstrata. Tatiana told us about how the Colombian government has presented Cerrejón as an example of responsible mining. However this is far from the truth. The Cerrejón mine is located in Wayúu indigenous territory and when mining began 30 years ago local people were not consulted. Instead their lands were seized and communities were forcibly displaced, violating their constitutional land rights. The Colombian government has failed to adequately compensate any of the affected communities.

Pollution and dust from the coal mine has caused the contamination of water supplies and the air. Indigenous groups report that their traditional lifestyle has been badly affected, soil pollution has caused failed crops, fishing areas have been contaminated and displacement has disturbed inter-community relations. The creation of the mine has failed to significantly boost the local economy - La Guajira is still one of Colombia's poorest regions. Paramilitaries from the mining company continue to threaten and pressurise local communities.

See more at: http://www.wdm.org.uk/climate-change/anglo-american%E2%80%99s-dirty-investments-protest-19-april-2013#sthash.B50LmlAI.dpuf

LOS INDIGENAS WAYUU PARALIZAN LA PRODUCCION DEL CERREJON - http://rio-rancheria.blogspot.co.uk/2013/10/los-indigenas-wayuu-paralizan-la.html

The Carbon Capital Speaker Tour

http://www.wdm.org.uk/events/carbon-capital-speaker-tour


BHP Billiton encroaching into the Heart of Borneo

The Jakarta Post

23 October 2013

An Indonesian activist is set to slam the board of mining giant BHP Billiton during its annual general meeting (AGM) in London, UK.

The activist, Indonesian Mining Advocacy Network (JATAM) coordinator Hendrik Siregar, will raise concerns over seven coal concessions collectively covering an area of more than 350,000 hectares in the relatively unspoiled rain forest in the center of Borneo

These concessions overlap into the transnational Heart of Borneo conservation area, described by the Asian Development Bank as "the lungs of Southeast Asia".

Hendrik will attend the AGM to voice his concerns about the Indomet project in Central and East Kalimantan. The Indomet project is a joint venture between Indonesia's second biggest thermal coal producer PT Adaro. BHP Billiton holds a 75 percent share, with Adaro holding the other 25 percent.

"BHP Billiton, backed by UK shareholders and investors, tells the world that it is 'resourcing the future'. But local communities in Central Kalimantan are telling us that coal mining is destroying their future," Hendrik said in an official release.

Hendrik's trip to London follows a visit to Indonesia and the site of the Indomet project by the UK organizations Down to Earth and the World Development Movement and coincides with the launch of a report by the World Development Movement called "Banking while Borneo Burns".

The report highlights the wide-ranging complicity of UK investment in Indonesia's "coal rush", which is devastating for local communities and their environment.

Hendrik will also be meeting with parliamentarians, investors and the public during his trip.


BHP Billiton to be slammed for Borneo coal mining at AGM

Press Release by Down to Earth and London Mining Network

22 October 2013

London - The board of controversial mining giant BHP Billiton is set to be slammed at its AGM by an Indonesian activist over seven coal concessions collectively covering an area of more than 350,000 hectares in the relatively unspoilt rainforest centre of the island of Borneo. Part of this project overlaps the transnational Heart of Borneo conservation area, described by the Asian Development Bank as "the lungs of Southeast Asia".

Hendrik Siregar, Coordinator of JATAM (The Indonesian Mining Advocacy Network), will be attending the AGM to raise his concerns about the Indomet project in Central and East Kalimantan.[1] The Indomet project is a joint venture with Indonesia's second biggest thermal coal producer PT Adaro. BHP Billiton holds a 75% share, with Adaro holding the other 25%.

Community leaders from Maruwai village next to the planned Haju mine do not want any more mining companies to come to their lands. The pollution and destruction caused by existing coal mining has prompted them to reject the advancing spread of mining corporations like BHP Billiton, which threatens to destroy their health and livelihoods.

Hendrik Siregar said:

"BHP Billiton, backed by UK shareholders and investors, tells the world that it is 'resourcing the future'. Local communities in Central Kalimantan are telling us that coal mining is destroying their future."

Hendrik Siregar's trip to London follows a visit to Indonesia and the site of the Indomet project by the UK organisations Down to Earth and the World Development Movement and coincides with the launch of a report by the World Development Movement called "Banking while Borneo Burns". The report highlights the wide-ranging complicity of UK investment in Indonesia's ‘coal rush', which is so devastating for local communities and their environment.[2] Hendrik will also be meeting with parliamentarians, investors, the UK government and the public as part of his trip.[3]

The extent of corporate involvement in Indonesia's coal sector - backed by the UK government has recently emerged through a series of scandals and new independent reports : the Bumi plc scandal; Standard Charter's billion-dollar loan to the Borneo Lumbung coal mining company; loans to BHP Billiton from HSBC, RBS, Lloyds and Barclays and UK links to a proposed controversial billion dollar railway infrastructure project to ship out coal from the Heart of Borneo.

Andrew Hickman from Down to Earth said:

"The energy we consume in Britain is dirty, but the profit that UK companies make from Indonesia's coal is dirtier. Local communities facing health problems, pollution and human rights abuses in Indonesia know that this coal is deadly too. BHP Billiton's Borneo coal concessions will be a disaster for local people, the environment and our climate."

Laying waste to the forests: coal's impacts on local people's land and livelihoods in Central Kalimantan.

** ENDS **

For more information about coal impacts in Indonesia see: http://www.downtoearth-indonesia.org/campaign/coal. For more information about London-listed mining companies generally, see London Mining Network's website at http://londonminingnetwork.org/
Notes:

[1] The AGM will also be attended by Jazmin Romero Epiayu, an Indigenous Wayuu woman from Colombia who is coming to criticise the board over displacement and pollution issues from the Cerrejón coal mine. See http://londonminingnetwork.org/2013/10/indigenous-woman-travels-from-colombian-barricades-to-bhp-billiton-agm-in-london/

[2] The WDM report and video can be accessed at http://www.wdm.org.uk/climate-change/uk-banks-financing-coal-boom-destroying-borneo-rainforests

[3] Hendrik will be speaking at Dirty Energy, a free event in London at 7pm on Thursday 24th October, organised by London Mining Network, Colombia Solidarity Campaign, Down to Earth and the World Development Movement. This event is part of WDM's Carbon Capital speaker tour and is being held on the day of the AGM of mining company BHP Billiton.

For dates around the country see www.wdm.org.uk/events/carbon-capital-speaker-tour


BHP Billiton directors tells shareholders to block environmental activist's board tilt

By national resources reporter Sue Lannin

ABC online

25 October 2013

BHP Billiton has told shareholders to vote against an attempt by a climate change campaigner to win a seat on the board of the big miner.

Former resources industry executive, Ian Dunlop, has become an environmentalist and is challenging the world's biggest miner on climate change by trying to become one of its directors.

Mr Dunlop previously worked for energy giant Shell, and is a former chair of the Australian Coal Association.

He was the head of the Australian Greenhouse Office Experts Group on emissions trading and is the chair of the Australian National Wildlife Collection Foundation.

Last night at BHP Billiton's annual general meeting in London, chairman Jac Nasser told shareholders not to vote for Mr Dunlop.

"He is not endorsed by the board," Mr Nasser said.

Mr Dunlop says the big miner needs to do more on climate change.

"BHP, actually, is more advanced than most companies in basically addressing the questions of climate change," he said.

But Mr Dunlop says the big miner needs to do more.

"The problem is far greater than I think anybody is acknowledging and accordingly it needs a totally different approach to the one that has been taken at the present time."

The ABC understands Mr Dunlop got less than 4 per cent of the votes cast at the London meeting.

Australian investors will get the chance to vote on Mr Dunlop's nomination next month at BHP Billiton's Australian AGM in Perth.

Mounting shareholder pressure over climate action

Pressure on resources companies to do more on climate change is mounting.

A coalition of 70 global investors who manage $3 trillion worth of assets have launched a campaign to persuade the world's big energy companies to look at the financial risks of global warming.

Some investors were not happy with Mr Nasser's recommendation.

Several investors said they were disappointed by the company's opposition to Mr Dunlop joining the board.

BHP upbeat on China outlook

BHP Billiton remains upbeat on China's demand for commodities like iron ore and coal even though it thinks the economic situation in Europe remains challenging.

Jac Nasser told shareholders that China's economy is expected to grow by more than 7 per cent next year.

Chief executive, Andrew Mackenzie, says the future remains positive for the resources industry.

"Looking ahead the future of our industry is bright," he said.

"Over the next 15 years, global commodity demand is expected to grow by up to 75 per cent as millions move from the Chinese countryside to the cities and the rising middle class demands improved housing and consumer goods such as air conditioners, cars and better quality food," he told investors.

He said there was unlikely to be any further major writedowns on the company's businesses, like nickel and shale gas.

One investor asked about Papua New Guinea's decision to strip the big miner of legal immunity over the environmental damage caused by the Ok Tedi gold and copper mine.

BHP transferred ownership of the mine to a charitable trust in 2002 in return for legal immunity from compensation claims.

Mr Mackenzie said he doesn't believe that any potential compensation claims for environmental damage will succeed.

"The actions of the government of course are very disappointing," he said.

"Our advice is its unlikely that more can be claimed so there is no increased risk for shareholders or very, very small," he said.


Former coal man turned environmental activist vies for BHP board seat

Sue Lannin

ABC Net

25 October 2013

TONY EASTLEY: A former coal and oil industry executive who is now an environmental activist is trying to change BHP Billiton from the inside out.

The former resources industry insider Ian Dunlop wants to get onto the BHP Board, but it could be a battle. At last night's annual investor meeting in London the world's biggest miner told shareholders to vote against his election.

The vote will be completed next month in Perth at the company's Australian annual general meeting.

Here's resources reporter, Sue Lannin:

SUE LANNIN: BHP Billiton chairman Jac Nasser is an old hand at annual general meetings. He's used to swatting off critical questions about the big miner's environmental record and financial performance.

BHP SHAREHOLDER: I ask you to listen to the call by civil society in central Kalimantan which is rejecting that railway that will drive a spear into the heart of the forest, the rain forest in central Kalimantan.

JAC NASSER: We take this very seriously and we know that you would not travel from Indonesia to talk to us if it wasn't an issue that you felt extremely strongly about.

SUE LANNIN: But this time around Mr Nasser faced a different challenge.

JAC NASSER: Item 23 concerns Mr Dunlop who has been nominated by an individual shareholder outside the usual nomination and governance committee process. He is not endorsed by the board.

SUE LANNIN: Ian Dunlop worked for energy giant Shell for decades. Now he is a climate change activist vying for a seat on the BHP Billiton board.

IAN DUNLOP: BHP actually is probably more advanced than most companies in basically addressing the questions of climate change. But the reason for my interest in this is actually the problem is far greater than I think anybody is really acknowledging.

SUE LANNIN: The ABC understands than fewer than 4 per cent of votes cast at the London AGM were in support of Mr Dunlop. The result will be finalised next month when Australian investors have their turn to cast their ballot at the company's local AGM in Perth.

Some investors weren't happy with Mr Nasser's recommendation.

BHP SHAREHOLDER 3: But I would like to express my disappointment in your rejection of Ian Dunlop's board nomination. I think his perspectives would add significant value to the BHP board.

SUE LANNIN: It was the first shareholder meeting for BHP Billiton's new boss, Andrew Mackenzie. He took over from former chief executive Marius Kloppers earlier in the year after the big miner had to make more big write-downs on the value of its businesses.

Mr Mackenzie was positive about the future, saying that demand for commodities would grow as China urbanised.

ANDREW MACKENZIE: Looking ahead, the future for our industry is bright. Over the next 15 years global commodity demand is expected to grow by up to 75 per cent as millions move from the Chinese countryside to cities.

SUE LANNIN: The BHP Billiton executives were also asked about the big miner's loss of legal immunity in Papua New Guinea over environmental damage caused by the Ok Tedi copper and gold mine.

Mr Mackenzie thinks the big miner is not liable for any compensation claim.

ANDREW MACKENZIE: The actions of the government, of course, are very disappointing. Our advice is it's highly unlikely that more can be claimed so there is no increased risk for shareholders or very, very small.

TONY EASTLEY: That report from our resources reporter, Sue Lannin.


BHP boss Andrew Mackenzie rejects climate change criticism from Ian Dunlop at AGM in London

Julian Drape, AAP London Correspondent

AAP

25 October 2013

Andrew Mackenzie, BHP Billiton Chief Executive, has denied his company is burying its head in the sand in relation to climate change.

BHP Billiton boss Andrew Mackenzie has denied the resources giant is burying its head in the sand regarding the risk climate change poses to its profitability.

At the company's AGM in London on Thursday, board candidate Ian Dunlop said climate change had the ability to "completely turn the company on its head or indeed destroy it".

The former Australian Coal Association chairman turned environmental campaigner argued the current board was "ill-equipped to deal with this challenge".

But Mr Mackenzie, addressing his first AGM as chief executive after replacing Marius Kloppers earlier this year, rejected the criticism.

"We can, and will, continue to adjust the shape of our portfolio to match energy demand, meet society's expectations, preserve the progressive base dividend and maximise shareholder returns," Mr Mackenzie told shareholders.

After the meeting he told reporters BHP wasn't investing in thermal coal, even though it stayed in the portfolio, with the focus being to "maximise returns with what we've got".

The Scottish businessman said over the next two years BHP expected to increase overall resources production by eight per cent annually.

Over the next 15 years global commodity demand was expected to grow by up to 75 per cent driven by China's rise, Mr Mackenzie said.

The current board has urged shareholders to vote against Mr Dunlop and the former Shell executive admits he'll struggle to get elected.

But Mr Dunlop is worried BHP isn't doing enough to prepare for a low-carbon future.

The world is on track for a 4C temperature rise that would reduce the population from seven billion to just one billion, the 71-year-old told shareholders.

"It's basically a world where business is not possible in the normal sense."

Mr Dunlop said to meet the UN's target of a 2C rise companies had to stop investing in fossil fuels and withdraw from existing projects.

That meant there was indeed a "carbon bubble" of coal which should never be burnt, he said.

"Essentially the result of that is going to be substantial write-downs and stranded assets.

"Politics is not going to deliver (on climate change) ... it's going to be up to business and its own self-interest to actually do it."

Votes from London's AGM will be added to those cast in Perth in November before a result on Mr Dunlop's bid is announced.

Company chairman Jac Nasser on Thursday insisted BHP fully recognised the "strategic nature of this issue".

But he admitted previously describing climate change as a "single issue" wasn't a good look and didn't fully recognise its importance.


Ok Tedi immunity gone, with implications beyond BHP

The Conversation

23 October 2013

The reversal of ‘immunity laws' surrounding Papua New Guinea's Ok Tedi mine means former owner BHP could face claims on environmental damage. AAP Image/Lloyd Jones

Remote Mount Fubilan, near the source of Papua New Guinea's Tedi River, is once again the site of global controversy surrounding the Ok Tedi copper gold mine.

Since the late 1980s, Ok Tedi has symbolised the David and Goliath struggle between major multinational miners, remote developing communities and the environment.

Ok Tedi resumed the spotlight in recent weeks when the Papua New Guinean Parliament removed former mine operator BHP Billiton's immunity from legal prosecution for environmental damages caused.

On 19 September, PNG Prime Minister Peter O'Neill led Parliamentary actions to pass a bill allowing the Papua New Guinean Government to take complete ownership of the Ok Tedi Mine. In a separate bill passed at the same time, new legislation removed BHP Billiton's immunity from legal action for environmental damage caused by the mine's operations.

BHP Billiton's legal immunity arose through a 2001 agreement in which the company voluntarily divested its interests in Ok Tedi, placing its majority shareholding into a charitable trust, the PNG Sustainable Development Program (PNGSDP). The Program held 63.4% ownership of the mine, with the PNG Government holding the remainder. This recent legislation transfers full ownership to the PNG state and removes that agreed immunity.

The environmental damage caused by the Ok Tedi mine is extensive and, many scientists argue, likely to be irreversible.

During the 1980s and 1990s, the mine dumped an estimated 80,000 tonnes of limestone sludge, containing chemicals and minerals, into the upper Tedi River.

A 1984 effort to build a tailings dam failed, with the company arguing that a dam was impossible in a geologically unstable terrain with heavy rainfall. Scientific studies found the large amounts of contaminated sediments have changed the river's ecosystem, with severe loss of fish, reports of death to riverside rainforests and areas along the river's considerable flood plain.

In passing the legislation, PM O'Neill declared to Parliament that the immunity granted to BHP Billiton marked "a very bad decision [by the then-PNG Government led by PM Mekere Morauta]...preventing its own people from exercising their right under law to sue for permanent damages done to their environment and their livelihood".
Global fallout

The PNG Government's decisions raise substantial questions for mining companies, mine-affected communities and governments worldwide. All of whom continue to grapple with balancing the economic and social development possible through mining, and the industry's negative environmental and social impacts.

What, if any, ongoing protection should companies expect or receive when immunity deals are struck? Which individuals within mine-affected societies should contribute to decisions about when and how mining companies are held to account? Are agreements made with one era's elected officials themselves immune to the attitudes and decisions of those who follow?

The Ok Tedi case is particularly thorny. Despite the extraordinary environmental damage, Papua New Guinea of the late 1990s was a country struggling under enormous economic pressures, including ballooning interest and inflation rates blamed on years of gross mismanagement. Government services strained under the weight of economic failure, leaving many remote communities bereft.

At the time of the 2001 agreement, BHP Billiton's preference was for closure of Ok Tedi. Yet the mine comprised an estimated 11 per cent of GDP and produced 19 per cent of total exports. For a country in economic strife, the closure costs associated with such an asset were deemed too great, the environment another victim of national economic necessity.

The reneging of legal immunity for Ok Tedi comes at a time when serious concerns are once again being raised about other PNG mining operations. The Panguna Mine in Bougainville, for example, holds the ongoing attention of international NGOs and local activists. Local communities are now fighting a potential reopening of the mine, which Jubilee Australia highlights as having a history of military-community conflicts.

The continued operations of the Hidden Valley Morobe Joint Venture also garner ongoing attention from NGOs and activist groups worried about tribal conflicts, land disputes, environmental damage and insufficient compensation.

The recent raising of Ok Tedi's ghost highlights the pernicious nature of mining's impacts and the ongoing requirements of redress and responsibility.

Interestingly, the PNGSDP claims that the immunity granted to BHP Billiton also extended to the State as partial mine owner. Removal of the immunity does not only affect BHP, they argue, but the Government itself. The legal reality of this assertion has yet to play out or be investigated.

Along with these questions, the case also reminds governments, especially those of developing nations, of the importance of foreign direct investment. Highlighting the tricky relationships between encouraging investment and protecting local societies and environments. In response to the legislative changes, BHP Billiton has warned the Government's actions raise PNG's ‘sovereign risk'. In other words, investors considering PNG as an option will now more carefully consider the levels of risk and uncertainty which may come with business commitments in PNG.

Miners, governments, mine-affected communities and NGOs are monitoring the Ok Tedi case with great interest. It remains a terribly compelling, modern day example of the tensions between corporations, communities, government and the environment. And now a stark reminder that forgiveness or impunity once agreed may be reversible.


Govt strikes deal with Ok Tedi landowners

Post Courier

24 October 2013

OK Tedi mining lease area principle landowners have accepted key offers by Prime Minister Peter O'Neill to end the current standoff over the mine issue.

Representatives of the 10 villages situated around the Ok Tedi mining lease area - Mineral Resources Star Mountains (MRSM) - in a meeting with Mr O'Neill agreed to the offers at Parliament House yesterday.

These offers include the increasing of MRSM's shareholding in Ok Tedi Mining Limited by the O'Neill-Dion Government, after it takes over PNG Sustainable Development Program, and the building of a tailings dam for the safe dumping of the mine's waste.

Mr O'Neill said the board members had expressed support towards the Government for its decision to take over PNGSDP, as PNGSDP had failed miserably to deliver tangible services to the people of Western Province.

"On behalf of the Government, I am offering to increase your shareholding of the Ok Tedi mine and establish a proper tailings dam, to control environmental pollution, particularly to the rivers and subsequently to avoid further harm to nature," the Prime Minister told the landowners at yesterday's meeting.

He said since PNGSDP had not built any infrastructure and the landowners had expressed gratitude that the Government had acquired PNGSDP and could now bring services to them.

Board member and Deputy Governor of Western Province, Borok Pitalok, said the board was fully satisfied with the outcomes of their discussions.

"Like a pig, it must be slaughtered and distributed accordingly," Mr Pitalok said.

"That is exactly how we've anticipated it to be all along with the revenue from the mine, however, BHP Billiton has failed to distribute it evenly.

"Therefore, we have now allowed the Government to distribute the revenue accordingly to all the shareholders and have asked for Western Province to receive the largest portion.''

Mr O'Neill says the decision on PNGSDP is for the people.


Swallowed by coal: UK profits from Indonesia's destructive mining industry

Funded by British investment, mining brings deforestation, health problems and pollution to Samarinda, part of 'coal's last frontier'

John Vidal

The Guardian.com

30 October 2013

Just 30 years ago, Samarinda was a sleepy village surrounded by deep equatorial forest and known mostly for its traditionally woven sarongs. Today it is the largest city in Indonesia's East Kalimantan province, with nearly 1 million inhabitants. It is also the centre of the burgeoning coal industry, surrounded by more than 1,000 mines and concessions.

The forests have gone, opencast mines circle the city and giant barges pass down the river Mahakam every few minutes taking coal to India, Japan, Korea and beyond. Nearly 70% of the city has been handed to coal companies as concessions. In theory, Samarinda could be swallowed by coal.

The city and most of East Kalimantan is unrecognisable to those who left some three decades ago, but now, say Indonesian and British campaigners, coal mining is poised to rip through central Kalimantan, or Borneo, a few hundred miles west of Samarinda. Mining companies such as BHP Billiton are moving in with money raised in London to exploit some of the world's largest deposits in what is being called coal's last frontier. So far, 449 exploration concessions have been awarded, covering 15,313 square miles (39,662 sq km) - about 25% of the area of the whole densely forested province famed for its tribespeople, remoteness and wildlife.

According to the World Development Movement and its partner in Indonesia, the East Kalimantan Mining Advocacy Network, mining and the infrastructure needed to extract and export coal from the heart of Borneo will inevitably ruin vast, heavily forested areas at great cost to people living there and the environment.

Apart from the millions of tonnes of carbon that will be emitted from the burning of the coal, massive railway projects are planned, and giant pits and waste dumps will be needed to support the industry. This will lead to pollution of rivers and land-grabbing during the digging of vast open-cast pits each covering several square miles, as people flock there in search for jobs.

The pace of the mining is speeding up in central Kalimantan. More than 8.5m tonnes of coal were dug last year compared with less than 1m tonnes in 2005; and by 2020 companies could be extracting more than 20m tonnes a year. Indo Met, the largest concession in central Kalimantan, owned by BHP Billiton, covers 350,000 hectares and is thought to have coal reserves of more than 774m tonnes.

Where mining has started, people complain of air pollution, flooding, and land grabs. "We receive all the negatives of coal but very little of the benefits. We will receive the full impact of the waste when they start dumping. The forest will be gone and we will lose our rubber trees," Erly Aisha, a Dayak leader from Maruwei village, told WDM.

Waste from Borneo Lumbung's mine has seeped into the local rivers, say other villagers. "The water is dark and dirty and makes your skin itch. We don't drink it now. The new mine is not operating but the company already has our land. We feel afraid," said Yesmaidfa, a mother in Maruwei.

According to WDM, the UK financial sector is involved in more than 50 major coal mines worked by 12 large companies in East and others in central Kalimantan.

BHP Billiton, which is listed on the London Stock Exchange, has recieved millions of pounds of investment from Barclays. Because it is part of the FTSE 100, almost every pension holder in the UK has money invested in it. Borneo Lumbung, which controls the Asmin Koalindo Tuhup mine in central Kalimantan, received a loan of $1bn (£0.6bn) from the UK bank Standard Chartered in 2012. Most of the money, says WDM, was used to buy shares in Bumi, the troubled London-listed firm co-founded by financier Nat Rothschild that owns large stakes in some of the biggest mining projects in East Kalimantan.

BHP Billiton, which has a 75% share in the giant IndoMet coal project, is estimated by WDM to have used about £110m of money raised in London. Elsewhere, Adaro Energy, Indonesia's second-largest producer of thermal coal, received £245m from a coalition of UK banks, including HSBC and Standard Chartered.

"With the financial sector shrouded in secrecy, it will be very hard to do anything more than estimate the true extent of involvement that UK financial and investment institutions have in fossil fuel projects in places such as Indonesia," said Alex Scrivener, author of the WDM report. "The sector and its institutions must be held to account for their bankrolling of climate change and environmental destruction."

Andrew Hickman, from the Indonesian mining watchdog Down to Earth, said: "The energy we consume in Britain is dirty, but the profit that UK companies make from Indonesia's coal is dirtier. Local communities facing health problems, pollution and human rights abuses in Indonesia know that this coal is deadly too. BHP Billiton's Borneo coal concessions will be a disaster for local people, the environment and our climate."

A spokesman for BHP Billiton in London said: "The IndoMet coal project is a joint venture between BHP Billiton and Adaro. The first stage of development is a small operation called Haju and we are continuing to evaluate the potential for larger scale developments in the region. Any development in central and East Kalimantan will be subject to detailed environmental and social impact assessments, feasibility studies and will require all appropriate permits to be in place before activities commence."


BHP Borneo coal plans may put ecosystem, orangutans at risk

Mining.com

7 November 2013

Conservationists are concerned that BHP's Indomet project plans might damage an area of central Borneo inhabited by endangered orangutans.

The project will result in mass deforestation of the Barito basin in the Kalimantan province, according to international environmental organization, Friends of Earth.

"These are sensitive forests full of biodiversity," said organization spokesman Nick McClean.

"There has been some logging of the lowland areas in the past but much of the area hasn't been scientifically surveyed. We could lose species we don't know anything about."

"In my home village, we have already seen the destructive effects of gold mining occurring in the Barito Basin," said Arie Rompes of Friends of Earth Kalimantan branch.

"If BHP continues with its plans for open cut mines, it will be a disaster for the local people, and it will be a disaster for these fragile ecosystems."

BHP plans to extract one million tonnes of coking coal from the remote area in 2014 and to eventually ramp up to 10 million tonnes/year.

"Our plans do not include mining in any protection forest areas in central Kalimantan, and any development in central and east Kalimantan will be subject to detailed environmental and social impact assessments, feasibility studies and will require all appropriate permits to be in place before activities commence," the company said.

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