MAC: Mines and Communities

Rio Tinto finally "gifts" Panguna mine-stake to Bougainville

Published by MAC on 2016-08-18
Source: Radio New Zealand, Channel News Asia

Will it now walk away scot-free from toxic legacies?

PNG warns Momis over Bougainville share row

22 August 2016

The Papua New Guinea Prime Minister Peter O'Neill has warned Bougainville's John Momis not to play politics over Bougainville Copper Limited shares.

Mr O'Neill sparked fury in President Momis last week by handing the national government's shares in BCL to landowners on Bougainville rather than to the Autonomous Bougainville Government.

Mr Momis said this threatened the peace process and he said his government could well pull BCL's exploration licence, which would make the shares worthless.

Mr O'Neill said Mr Momis was trying to manipulate the peace process for political gain.

He said the ABG was very welcome to participate in the consultation process with the landowners, but the shares would go to the people who had a direct stake in the mine.

Mr O'Neill said the views of the National Executive Council were final.

He said the government was committed to advancing the peace process, and not play petty politics that could only undermine peace.

Mr O'Neill said he gave the shares to the landowners so that the ABG could not have outright control of the mine.

He said this was better for transparency, and ensured that shares were in the hands of the traditional people to whom they belonged.

Minister Miringtoro responds to the attacks on the National Government by President Momis over the transfer to the landowners of Rio Tinto’s BCL shares

Jimmy Miringtoro MP

21 August 2016

I, as the member for Central Bougainville elected by the people of Central Bougainville into the National Parliament of Papua New Guinea, am concern[ed] about the continued media attacks by the ABG President John Momis regarding the transfer of 17.4% shares to landowners and people of Bougainville, by the National Government. As far as I know during his meeting with the Prime Minister which was attended by the Regional Member for Bougainville and Minister for Bougainville Affairs, Joe Lera, the President Momis agreed to the share distribution to the Landowners and ABG.

The 17.4% BCL share equity in effect were gifted to the National Government by Rio Tinto. It was therefore was the prerogative of the Prime Minister to give the shares to the landowners as a token of goodwill. ABG on the other hand was offered 36% percent by Rio Tinto through the National Government, making it a majority shareholder. This distribution of shares was tabled and approved by the cabinet on the 11th of August 2016.

I don’t see any logic in the President’s Statement that such a move is a threat to the Peace Agreement. In my [opinion] it is a step in the right direction in strengthening the peace by addressing one of [the] root causes of the Bougainville Crisis, by giving shares to landowners who had been deprived of proper compensation, for permanent damage to their land and their environment. Even any attempt by BCL to clean up the mess will not restore it to it’s original state.

Firstly let me remind the good President that in the 20 years when the mine was in operation during his terms in office as a Senior Minister and Statesman, he never made any effort to negotiate for equitable benefits to landowners from the proceeds from the mine through ownership of shares in BCL.

Needless to say that during that time Panguna mine was one of the most profitable mines in the world and the shares were worth their weight in gold. Today we have to put up with childish bickering from the President over shares that are worthless unless there is mining operations churning out profits.

The President goes on to say that the ABG Mining Law gives landowners full decision-making involvement and good revenue sharing opportunity if mining resumes. That is untrue.

Firstly the mining law was written by an organization that has a reputation of undermining rights of indigenous people and liberalizing economies in the Third World for take over by large corporations.

Secondly, the Mining Law violates the United Nations Charter on the Rights on Indigenous People especially the concept of “Free Prior Informed Consent” or FPIC.

The Mining Law should have gone under the scrutiny of the landowners via independent legal consultations. The whole matter was virtually dropped on the people in the mine-affected areas of Central Bougainville and also the people of Bougainville at large.

As the mandated Member of the National Parliament, representing the landowner of Central Bougainville, I have consulted with the Prime Minister prior to making the decision to give the shares to the landowners. It is the only way justice can be served to people who have not lost their land, their environment which is their livelihood, but also their lives.

The President’s outbursts are shameful because he was the one who stirred up the landowner sentiments to cover up his failures at the national level, in securing better outcomes for the landowners in the mine affected areas. He verbally attacked BCL in 1989 and came up with a dream he called “The Bougainville Initiative” in which he tried to bring in another company to replace BCL as the miner at Panguna.

The President can start to make peace with the people of Panguna and Bougainville by admitting that he had failed them. He should apologize to them for the sufferings and miseries they faced when they chose to take up arms because he did not hear their cries as their leader and representative in the National Parliament. He could have prevented the war if he had been honest right from the start.

The President must now talk with the Landowners about the shares instead of making unnecessary attacks on the National Government, which has done its part. The giving of shares to landowners and ABG is an indication that the Government has a genuine concern for the welfare of the landowners. It anticipates further negotiations and discussions with ABG and landowners to decide how best to work together for the benefit of all parties.

However, up till now President Momis has proven that he is incapable of running a Government which is struggling with the delivery of services to the population and the management of funds given to it. His Mining Law has proven ineffective in preventing BCL from exiting without meeting it’s obligation to clean up the mess it left behind.

The only option left now is to make the landowners shareholders of mine, as they cannot be compensated for the loss and damages they have suffered. Court battles that the President is hinting at can take years and there is no guarantee that they will be won and may meet the similar fate to the class action previously lodged in the USA. In addition, it is highly questionable at this point in time who will meet the legal costs of the legal challenge against Rio Tinto.

The Bougainville Peace Agreement deliberately steered clear of the mining issue because it was a very sensitive and emotional issue owing to the fact that it was viewed by many as the root cause of the conflict that led to loss of many lives and properties.

ABG’s premature effort to reopen mining in Bougainville when the wounds of the war were still fresh and people are still deeply divided was always going to create problems for ABG and the National Government. Over the years, ABG has been crying for money which it cannot manage as it was indicated in audit report from Auditor Generals Office.

Currently we have complaints from the President about the shares. How can his inappropriate Mining Law protect landowner interests when the law gives ultimate power back to ABG and not the landowners. A law which carries jail terms and monetary penalties against landowners who disrupt mining operations if the mining company did not respond to their grievances. Is this the sort of law to protect rights of the landowners?

I recommend that the President cede control of Bougainville to someone who has the energy, commitment and vision to move Bougainville forward instead of wasting time trying to kick up a dead horse. I see nothing wrong with building wealth for the landowners who can then contribute meaningfully to Bougainville’s economy instead of them being spectators all the time.

Our people are tired of vague idealism by those who live in utopia that has brought no tangible benefits to us but continued exploitation by foreigners. 

PNG gives mine shares to Bougainville

Radio New Zealand

August 17, 2016

The Papua New Guinea Government is to transfer mining shares gifted it by Rio Tinto, to the people of Bougainville.

The Prime Minister, Peter O’Neill, told parliament today his government is aware of the pain and torment the people of Bougainville have gone through, and the importance of land to them.

The shares in Bougainville Copper Ltd, which had run the long shut-down Panguna mine, will ensure the autonomous government has a majority shareholding in the company.

Bougainville President John Momis has been pressing for the shares for weeks and had threatened legal action against both Rio Tinto and the national government.

A critical concern for Mr Momis is that Rio Tinto is walking away without clearing the damaging legacy left by the mine such as ongoing environmental and social issues.

Last week, Mr Momis signalled the Bougainville administration could take legal action against Rio.

Mr O’Neill has now told parliament his government is serious about empowering communities and giving Bougainville’s landowners and the people direct control over any future mine developments.

He added that this transfer of shares further strengthens the confidence of Bougainvilleans in the peace process.

PNG gives Rio Tinto mine stake to Bougainville after outrage

17 August, 2016

SYDNEY: Papua New Guinea's prime minister on Wednesday (Aug 17) sought to sooth anger about his government's increased stake in a mine at the centre of a decade-long civil war in Bougainville by giving part of it to the local community.

The huge Panguna mine on Bougainville island is one of the South Pacific's largest mines for copper and gold but has been shut since 1989 after continuous attacks by secessionist rebels in a conflict that has cost an estimated 10,000 lives.

Anglo-Australian mining giant Rio Tinto had a 53.8 per cent stake in Bougainville Copper Limited (BCL), which controls the facility, but last month said it would gift its share to the PNG government and Bougainville's autonomous administration in a move that would leave both parties with a 36.4 per cent stake.

It was the first time Bougainville's autonomous administration had owned a stake in Panguna.

But the news angered local politicians, with Bougainville President John Morris' saying then that his community could not accept equal or majority control of BCL by Port Moresby.

PNG Prime Minister Peter O'Neill told parliament on Wednesday his government - which already has a 19 per cent share of BCL - would transfer the 17.4 per cent stake gifted from Rio to Bougainville to "help to alleviate some of the legacy issues of the past".

"With this transfer, the people of Bougainville will own a combined shareholding of 53.8 per cent of BCL," he added.

"This ownership will also give landowners and the people direct control over environmental issues of any future mine development that will take place. By transferring these BCL shares to the people we are further strengthening the confidence of Bouigainvilleans in the peace process."

There has been ongoing political sensitivities about Bougainville, which was granted autonomy by the PNG government in June 2005 and is expected to hold a referendum on independence in the next few years. PNG is due to hold national elections next year.

Bougainville's separatist conflict was the bloodiest in the Pacific since World War II, and ended when the New Zealand government helped broker a truce signed by all factions in 1997.

Before it was closed, the mine produced copper concentrate for 17 years, which represented 44 per cent of PNG's total export earnings at that time.

Arguments over environmental damages and compensation from its operation had been central to the conflict.

Rio Tinto slams ungrateful Bougainville, after its ‘gift’ of shares

17 August, 2016

In a new press release [see below], Rio Tinto hits back against allegations it has failed to compensate those on Bougainville harmed by its mine.

Rio Tinto deny they have ever acted in breach of the law, a fact with which they claim President Momis agrees.

The elephant in the room is the company’s involvement in war crimes committed by the PNG Defence Force and Royal PNG Constabulary mobile squad units. Rio Tinto makes no comment in this respect. Not surprisingly, it has been notable by its absence from recent Bougainville Government (ABG) press releases.

Which raises the question, why would the most potent allegation be left off the agenda?   

Rio Tinto statement 12 August 2016

In June 2016 we announced that we would transfer 68% of our shareholding in Bougainville Copper Limited (BCL) to the Autonomous Bougainville Government (ABG) for no consideration, and that the State of Papua New Guinea (PNG) is entitled to the remaining 32%. If the ABG chooses to take up its share, the end result will be that the ABG and PNG will hold equal shares in BCL. Further information around the share transfer can be viewed at:

This gift of our shares to the ABG and PNG was the conclusion of a strategic review that looked at a broad range of options and through which we worked hard to consider all relevant interests. By distributing our shares in this way, we aimed to provide landowners, those closest to the mine, and all the people of Bougainville a greater say in the future of Panguna. The ultimate distribution of our shares also provides a platform for the ABG and PNG Government to work together on future options for the resource. We believe that the resource will have a stronger future under the ownership of stakeholders best placed to ensure the stable and safe operating environment required to take the asset forward. This includes political, financial and legal capability as well as the consent and active involvement of landowners and local communities.

When BCL evacuated the site in 1989, we believe that BCL was fully compliant with all regulatory requirements and applicable standards at the time. This is something that was acknowledged by President Momis in his speech to the Bougainville House of Representatives on 22 December 2015 and in other public commentaries. Neither BCL, nor Rio Tinto as a shareholder, has been assured safe access to the mine site since 1989.

Bougainville fury over Rio Tinto grows

Radio New Zealand-

1 August, 2016

The government in the autonomous Papua New Guinea region of Bougainville is to press the global mining giant, Rio Tinto, on several fronts after it last month divested itself of its majority shareholding in Bougainville Copper Ltd.

The company split its shares between the autonomous provincial government and the national government in Port Moresby.

But Bougainville is furious that it was not given all the shares, and that Rio Tinto said it is was no longer obliged to do anything about the damage caused by the Panguna mine, which sparked a civil war that lasted through the 1990s.

The province hoped to reopen the mine as a way to generate revenue should it vote to become independent from PNG after a referendum scheduled for 2019.

Last month, the autonomous government held an emergency session of its parliament and issued a number of resolutions.

"My government, and all Bougainvilleans, oppose the shares in BCL being transferred to the PNG government. The justification for the transfer advanced by Rio has no basis," John Momis, Bougainville's president, told parliament.

"Equal PNG shareholding with the ABG raises the same grave dangers for the future of peace in Bougainville," he said.

"Moreover, its decision on allocating shares was clearly made in close consultation with PNG, and without consulting the ABG. Perhaps they both forgot that the mineral resources BCL was established to mine are located in Bougainville. Perhaps they forgot that Bougainville is autonomous, and has full power over mining. "

Bougainville accepted its 36.4 percent of BCL but will negotiate with the PNG Government for it to surrender the Rio Tinto shares it was given.

"There is a deep history of conflict and bitterness in Bougainville over the impacts of the Panguna mine. Since 2014 I have been advising the Prime Minister, in the strongest terms, that it is impossible for Bougainvilleans to accept National Government control of Panguna through control of BCL," said Mr Momis.

The ABG called for Bougainville-wide unity as it launched what it said would be the strongest possible international campaign to pressure Rio Tinto to accept its responsibility for the mine's legacy issues and that it would pursue the company in the courts.

"It is grossly unjust - completely unacceptable - for Rio to now refuse any responsibility for the long-term impacts of the operations of its subsidiary, BCL. They told me they can walk away because they operated the mine under the PNG legal standards of the 1960s, 1970s and 1980s. But it was clear in the 1980s, at least, that the standards of the day were appalling. It was the injustice of those terrible standards that caused the conflict," said Mr Momis.

Bougainville also intends taking up the legacy issues with both the PNG and Australian Governments.

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