MAC: Mines and Communities

The Weekend Essay: Has Bougainville a mine-free future?

Published by MAC on 2020-03-13
Source: Volker Boege

Rio Tinto remains at centre of the issue

In this important document, a consistent and reliable commentator, Volker Boege, analyses the situation in Bougainville facing its citizens following their overwhelming vote for independence from Papua New Guinea (PNG).

The consultant, who advises the German church organisation Misereor,  not only describes the possibility that PNG may seek to continue domination over the island's affairs, but also depicts the series of conflicts engendered over the issue of whether or not mining should be resumed on Bougainville - and if so, by which faction.

However, one matter seems vitally important and recognised by most constituents, whatever view they may hold: that  Rio Tinto should not be allowed to escape its responsibility for clearing up the mess it bequeathed the people when it quit ownership of the Panguna copper-gold mine some years ago.

[Please note that references for this article have not been included in this reproduction]


Panguna News update October 2019 to February 2020

Volker Boege

Misereor Consultant

This paper is an update on the Panguna–Rio Tinto Briefing Paper of 1 November 2017 and the Panguna News updates from November/December 2017 to August/September 2019. It covers new developments in the period from October 2019 to February 2020 with regard to the Panguna mine issue. Further updates are to follow. For basic information on the Panguna mine/Rio Tinto issue, see the 1 November 2017 Briefing Paper and its attachments.

1. Overview

The main event in the reporting period was the conduct of the referendum on the future political status of Bougainville. It was held between 23 November and 7 December 2019. An overwhelming majority of Bougainvilleans – 97.7 per cent – voted for independence, with 87.4 per cent of eligible voters participating in the referendum. Only two per cent opted for the alternative - ‘greater autonomy’ – within Papua New Guinea (PNG).

As the referendum, according to the Bougainville Peace Agreement of August 2001 (BPA), is non-binding, the government of PNG (GoPNG) and the Bougainville side will now have to consult about its result. According to the BPA, the parliament of PNG will have to ratify the outcome of these consultations. Bougainville after the referendum is thus in a transition period, and it is unclear, how long this period will last and what its final outcome will be.

In the reporting period the referendum, its preparation and its conduct clearly overshadowed the second important topic of Bougainville politics: the future of the Panguna gold and copper mine, and the future of mining in general. It can be expected, however, that this issue will soon come to the fore again, given that the future of mining and the political future of Bougainville in the eyes of many in the political elite and the wider public are closely connected, with the argument being that an independent Bougainville will need mining and the Panguna mine to become economically independent and financially self-reliant. On the other hand, voices that put forward alternatives to mining – agriculture, fisheries, tourism... – are becoming stronger.

Although in mid-2019 a consensus had been reached among all stakeholders that any debates about the re-opening of the Panguna mine should be postponed until after the referendum, behind the scenes quarrels continued. Landowners in the Panguna area remained highly divided, with some in favour of re-opening Panguna, others strongly opposed. And those in favour are divided into a pro-RTG camp and a pro-BCL camp, both claiming that they have majority landowner support and are in the best position to redevelop the Panguna mine. To make matters even more complicated, a strong faction within the Autonomous Bougainville Government (ABG) remained determined to open the doors for its preferred mining partner, Australian company Caballus.

Mining exploration in other parts of Bougainville experienced a major setback when a geologist working for Australian mining company Kalia Ltd. was killed in mid-December 2019 by disgruntled landowners in the Mt Tore region in northern Bougainville. As a consequence, the ABG indefinitely suspended all exploration activities on Bougainville. The incident demonstrates how delicate and contested the mining issue still is.

The Panguna Listening Project (PLP) entered its final stage. PLP books are being distributed by the Catholic Diocese of Bougainville in mine affected communities and beyond. The report on the results of the soil and water sampling endeavour is currently being prepared and will be taken back to Bougainville in March 2020. Follow-up has commenced, in particular also at the international level, with activities aimed at holding Rio Tinto to account for the environmental legacy it left behind on Bougainville underway.

2. The referendum on independence

Bougainvilleans cast their votes in the referendum from 23 November to 7 December. Out of 207,213 enrolled voters 181,067 persons actually voted (87.4 per cent), 176,928 opted for independence (97.7. per cent), and 3,043 for greater autonomy (two per cent) (with 1,096 informal ballots). This result was an unmistakably clear expression of the political will of the Bougainville people.

International, national and local observers as well as the Bougainville Referendum Commission (BRC) reported that the conduct of the referendum was free and fair, transparent and peaceful. In comparison to other elections in PNG or in the region (or, for that matter, in large parts of the world) the preparation and the conduct of the referendum was an outstanding success. The groundwork for that success had been laid in the previous months of 2019, when all stakeholders involved in the process – the ABG and the GoPNG, the United Nations, international advisers, the members of the Bougainville House of Representatives, local level governing bodies, NGOs and civil society organisations, the BRC and, most importantly, the Bougainville people on the ground – had come together to make Bougainville ‘referendum ready’.

During the referendum period, for a short time Bougainville was at the centre of international attention. International media had descended on Bougainville to report on the event, and media coverage was extremely positive and sympathetic, documenting the enthusiasm and commitment of the people on the ground (and also at times covering the issue of the Panguna mine as linked to the peace process and the referendum). International referendum observers from Australia, New Zealand, Fiji, Solomon Islands, the United Kingdom, Japan, the United States, the Republic of Korea, the European Union, the Commonwealth Secretariat and the Pacific Islands Forum were on the ground. Moreover, national observers from PNG and Bougainville civil society organisations (e.g. the PNG branch of Transparency International) as well as BRC-trained scrutineers followed the casting of votes closely. An international police mission, the New Zealand-led Bougainville Referendum Regional Police Support Mission, comprising of around 30 police officers from New Zealand, Australia, Fiji, the Solomon Islands and Vanuatu, supported the Bougainville Police Service in the provision of security during the referendum, transport of polling materials and the counting process. No security issues were reported, everything was peaceful. A Bougainville-wide liquor ban which was declared for the referendum period (and later was extended over the Christmas period and then well into 2020 due to its success) might have contributed to this.

People voted at 800 polling locations in Bougainville in a peaceful and festive atmosphere, with 1,500 polling officials, organized in 246 polling teams, travelling from village to village. Moreover, also Bougainvilleans living in other parts of PNG were able to cast their votes, with 25 polling stations established in the capital city of Port Moresby, in Lae and other urban centres; and even Bougainvilleans overseas were given the opportunity to vote: in Honiara and Gizo in the Solomon Islands and Cairns and Brisbane in Australia (altogether 12,715 non-resident Bougainvilleans had enrolled for the referendum, six per cent of the roll).

People were so enthusiastic to vote and voting was so well organised that the BRC could finish the voting process already on 3 December, well before the initially planned last voting day of 7 December. Counting also ran effectively and smoothly so that the declaration of the result could take place on 11 December, also clearly earlier than anticipated. International media, international observers and all other stakeholders were full of praise for the BRC’s work and for the way Bougainvilleans conducted themselves during the referendum. On 13 December, the Referendum Writ was returned to the PNG Governor General in Port Moresby. A forty day appeals period ended on 20 January 2020 without any complaint lodged. With this, the result became final and official.

According to the BPA of August 2001 the referendum is non-binding. PNG and Bougainville now have to consult about its outcome, and the PNG Parliament has the final say. The Bougainvillean side, however, has made it clear that in the light of the overwhelming majority for independence, consultations and negotiations should only be about the transition towards independence; the Bougainville negotiators will be in a very strong negotiating position on the basis of the 98 per cent pro-independence vote. The Bougainvilleans expect that such a clear democratic mandate is respected, and they count on the support of the international community - from the UN, the Melanesian neighbour countries, the regional powers Australia and New Zealand, and states and civil societies further afar. The GoPNG, however, has made it clear that it insists on its rights laid down in the BPA.

The different positions became already clear in the speeches given by the PNG Minister for Bougainville Affairs, Sir Puka Temu, and the ABG President John Momis on the occasion of the declaration of the referendum result on 11 December 2019. Sir Puka Temu acknowledged that the Bougainvilleans had spoken loud and clear, but he also said that PNG will need time to absorb and reflect on the result and consider options, and he reminded his audience of the non-binding character of the referendum. President Momis, by contrast, stressed the importance of such a clear outcome of the referendum which had been achieved in a free and fair vote and hence is an expression of the political will of the Bougainville people beyond any doubt. At the same time, he also confirmed that the Bougainvilleans will adhere to the BPA and are ready to consult with the PNG side.

Bougainville is now in a transition period, and it is not clear how long this period will last and what its final outcome will be. However, now that Bougainvilleans have spoken in the referendum, in their view the only way forward is transition towards independence.

3. Quarrels about Panguna

Over the last months, politics and the general public were totally focussed on the referendum. Accordingly, the issue of the Panguna mine did not draw much attention (although in international reporting about the referendum it got some coverage, addressing the mine as the cause of the war which finally led to the referendum, and/or the asset which could support Bougainville’s independence in the future). The stakeholders directly involved in the issue, however, continued their quarrels. It can be expected that struggles will intensify now that the result of the referendum in the view of the Bougainvilleans opens the way to independence. The question now is whether an independent Bougainville will need the Panguna mine re-opened, and if yes, by whom and under what conditions. The competing camps are positioning themselves for these future struggles.

As has been the case over the last years (see all the previous Panguna News Updates), BCL and RTG and their local allies in the Panguna mine area continued to fight each other viciously in the reporting period, and the ABG faction around President Momis and Vice-President (and Mining Minister) Raymond Masono fight against both BCL and RTG, trying to open the door for their designated partner Caballus.

BCL posits that it is “the best-placed company to rehabilitate, re-engineer, re-finance, re-resource, construct and to operate the giant Panguna copper-gold deposit”.1 It claims that its decisive advantage is that it “maintains an extensive corporate and technical data base, going as far back from exploration, advanced exploration stages, prefeasability stage, feasibility, construction and operational stages. The technical database is a uniquely powerful and invaluable resource. BCL’s technical team stands ready to reactivate this database”.2

Unfortunately for BCL, however, this advantage is of not much use for the company because both the ABG and large sections of the landowners in the Panguna mine area do not want to engage with BCL again. The environmental, social, cultural and spiritual destruction caused by BCL when it operated the Panguna mine in the 1970s and 1980s is not forgotten. To downplay these legacies by just saying that “over the years of operations there were environmental negatives” will not help BCL’s cause.3 Promising that BCL will provide “the infrastructure we need, the schools, hospitals, roads and all those other things that will help make the island prosperous” for an independent Bougainville is not particularly convincing against the background of those legacies.4

It was interesting to see that BCL’s staff on the ground in the Panguna area (its Village Liaison Officers and other local staff) are aware of the difficulties to achieve a social licence to operate in the light of BCL’s past. When I was in Bougainville in February I had the opportunity to talk to local BCL staff and asked them about the environmental legacy and BCL’s and Rio Tinto’s responsibility. They agreed that the company has an obligation to contribute to cleaning up the environmental destruction, and they agreed that this could not be done by today’s BCL alone, but Rio Tinto as the former majority shareholder has an obligation to also contribute.5

BCL claims that it has the majority support of the Panguna landowners, but this is disputed by its rival RTG which makes the same claim. Its local partner is the Special Mining Lease Osikaiyang Landowners Association (SMLOLA) under the leadership of Philip Miriori which says that it has the support of more than 90 per cent of landowners in the mine area. Accordingly, RTG posits that “SMLOLA’s many thousands of members have the power to confer the critically needed Social Licence together with the equally critical Free, Prior and Informed consent, to reopen Panguna”.6 Similar to BCL, RTG holds the view that “Panguna is the only asset which can materially assist Bougainville to establish a critical pathway to economic independence upon which the aspirations of so many Bougainvilleans depend”.7 SMLOLA is convinced that “the only means of generating income for Bougainville as soon as it gains independence” is by reopening Panguna.8 But also similar to BCL, RTG lacks the support of the ABG. Rather, the ABG is totally opposed to RTG and its presence in Panguna. SMLOLA’s proposal to have a reconciliation between itself and the ABG has so far fallen on deaf ears. The fact that SMLOLA was the only landowner association that was appointed by the BRC as a Registered Interest Group in the referendum to observe and scrutineer the referendum process was of not much help.9 RTG’s and SMLOLA’s admission that “there is still work to do to win the support of the ABG”10 is a gross understatement given the ABG’s fierce attacks on RTG. On 24 December 2019 the ABG requested from the PNG authorities to impose travel bans on the six senior company executives and directors of RTG because they are “continuing to disrespect our customs and laws, and causing disharmony amongst our people at such a critical time in Bougainville’s history”.11

SMLOLA rejected these accusations and called the travel bans “disrespectful”.12 In January 2020 ABG President John Momis even ramped up his attacks. In an ABG Media Statement he accused RTG of “lies and deceptions”, called its staff “immoral charlatans” and demanded from the Australian Stock Exchange to “perform a full investigation into RTG mining”.13 In response, RTG clarified to the Australian Stock Exchange that its executives were not banned from travel to PNG and that it is closely cooperating with SMLOLA as the organisation representing the customary landowners in the Panguna mine area.14 And SMLOLA declared that the “untruthful and incorrect attack on the SMLOLA and RTG is unprincipled and has no basis in fact or in law”.15 It posited that the purpose of the attack was to pave the way for the ABG’s preferred partner Caballus. There are indeed reasons for such an interpretation. For in his media statement President Momis also questioned the current entire fabric of landowner rights and associations, declaring “all current mine affected landowner associations, including SMLOLA, illegal, null and void” ,and announcing that the ABG “will be assisting the true and genuine landowners to ensure proper social mapping is carried out in order to establish new legal landowner associations and entities”.16 This was accompanied by the - incorrect - allegation that SMLOLA was a creation of BCL and that it pretended to own the Panguna mine. It was easy for SMLOLA to refute these allegations, reminding the President that it was the ABG itself which set up SMLOLA (and other Panguna landowner associations) in 2011, and clarifying that members of SMLOLA are customary landowners, not SMLOLA itself.17

It in fact very much looks like the President’s scathing attack on RTG is used to put into question current arrangements with regard to landownership so as to get rid of obstacles to Momis’ own plans. A ‘clean sheet’ would make things much easier for his faction within the ABG which supports the Caballus initiative. 18 This very much is in line with the previous efforts of that faction to change the Bougainville Mining Act (BMA) of 2015, and it shows that the pro-Caballus faction has not given up. While the referendum was carried out, Bougainville Vice-President and Mining Minister Raymond Masono declared that the ABG would take up the Caballus initiative again after the referendum, calling it a ‘revolution’.19

SMLOLA and RTG, as well as BCL and the landowner associations aligned with BCL, maintain their opposition against the proposed changes to the BMA and to Caballus. SMLOLA spokesperson Lawrence Daveona called it an “offensive and destructive attack on all Bougainville landowners’ hard-won legal rights” which would be “removed with the stroke of the pen, to allow the illegal transfer of the Panguna mine together with a near monopoly over all future large scale mining on Bougainville to an unknown shelf company in the British Virgin Islands {= Caballus – VB}, based on a plan which can never work”.20

All this demonstrates that the divisions regarding the future of the Panguna mine are as deep as ever.21 These are not only divisions between the ABG, Caballus, BCL, RTG, SMLOLA and other landowner associations, but there is also a strong anti-mining camp which is totally opposed to re-opening Panguna – and there are the thousands of small-scale alluvial miners working in the mine area and the tailings. These “gold panners say they don’t want large scale mining to return, it may interrupt their business”.22 Against this background, it is worthwhile to note Moses Pipiro’s (Supreme Commander of the Meekamui Defence Force, based in Panguna) concerns. During the referendum he said: “After the referendum, we shall see, if we talk about opening the Panguna mine, we create division again, because now we are focused on the unity on Bougainville (...) If we try to talk about opening the mine, we create the other monster again”.23

In this context it is interesting to see that voices calling for alternatives to mining are getting louder in the general public and in the political elite. When I was in Bougainville in February, I spoke to a few political leaders who will run for the position of President in the next elections in May 2020 who said: let’s forget about Panguna and mining, let’s focus on agriculture, fisheries, education.24

The Panguna Listening Project and follow-up

The Panguna Listening Project (PLP) of the Catholic Diocese of Bougainville (DoB) is in its final stage. The project will come to an end on 31 March 2020. During the reporting period, the two PLP booklets – the English version and the Pidgin version (‘We are crying for our land. Stories from the Panguna Listening Project’; ‘Mipela i krai long graun blong mipela. Ol stori blong Panguna Lisning Projeck’) – were distributed to mine affected communities by the DoB. The DoB also presented the booklets to the ABG, via the ABG Minister of Health, Dennis Lokonai, who is himself from a mine affected community downstream of the Panguna mine and who has shown a strong interest in PLP.

The booklets are in high demand. When I was in Bougainville in February 2020, together with Erica Rose Jeffrey (external consultant to PLP from PaCSIA) I talked to the DoB caretaker Fr. Polycarp (who leads the Diocese after the Bishop’s death in August 2019, until a new Bishop is appointed) and the DoB Chief Administrator Henry Taul. They are planning to distribute the booklets in a targeted manner to those communities in Bougainville who are currently thinking about allowing exploration or mining in their areas, and to those communities where exploration is ongoing, in order to let them know about the stories of the people in the Panguna mine affected areas. This, they argue, will provide communities with valuable experiences which they can take into account when discussing the pros and cons of mining.

The next and final step of PLP will be the presentation of the soil sampling report to the DoB, the ABG and the communities where soil and water samples had been taken in December 2018. For this purpose, Misereor consultant Axel Mueller will travel to Bougainville in the first week of March 2020, and I’ll accompany him. This trip had to be postponed because of delays in the analysis of the soil and water samples. People are very keen to learn about the results of the soil sampling, and one will have to think about potential follow-up, based on the results of the analysis.

As had been said in the previous Panguna News Update of August/September 2019, there is general agreement that an important dimension of PLP follow-up should be steps to clean up the environmental mess in the Panguna area and downstream. People agree that the former operator of the mine – BCL/CRA/Rio Tinto25 – has an obligation to contribute to this undertaking. As I pointed out above, even today’s strong supporters of BCL share this view. The environmental issue/Rio Tinto thus can become a unifying factor for all factions engaged in the mining debate. Holding Rio Tinto to account, putting pressure on Rio Tinto to contribute to environmental rehabilitation, is a topic which can unite the people and the various factions. This view was confirmed again in my meeting with Fr Polycarp and Henry Taul.

In this context, the people I spoke to are generally supportive of the idea to address the Panguna/Rio Tinto issue also at the international level. An international campaign to hold Rio Tinto to account would be welcomed. I introduced Keren Adam’s from the Human Rights Law Centre (HRLC) in Melbourne, who arrived in Bougainville two days before I left, to Fr Polycarp and Henry Taul in order to discuss HRLC’s activities with regard to an international Rio Tinto campaign with them. They were in full support of HRLC’s plans. And so is the newly appointed ABG Minister for Community Development, Marcelline Kokiai who Keren and I also talked to. It looks like now that the referendum is over, a focus on cleaning up the environmental degradation and convincing Rio Tinto to contribute to the clean-up, is very promising. HRLC will publish its own report on the situation in the Panguna area in late March, and together with the London Mining Network activities are planned for the Rio Tinto AGM in London on 8 April, including several side events. PLP, the PLP booklets and the soil sampling report have laid solid ground for these activities and a Rio Tinto ‘campaign’ more generally. It remains to be seen how in follow-up to PLP the local-international connections can be maintained and strengthened and how actual improvements for the mine affected communities can be achieved.

Other developments

- Exploration in the Mt Tore region in the north of Bougainville by Australian mining company Kalia Limited continued in the reporting period. In mid-December 2019, however, it came to an abrupt halt after a tragic incident. A geologist working for Kalia was killed by disgruntled landowners. He was from Enga Province in PNG. Seven other members of the Kalia exploration team were injured in the same incident (stab wounds). Landowners claimed that the team had ignored warnings to stay off their land and that they acted in defence of their land. Kalia at first denied the incident (talking about an ‘accident’),26 but later had to admit that its exploration team was attacked and one person killed.27 The ABG condemned the killing and called the landowners “criminal thugs”, at the same time also blaming Kalia for insensitive behaviour, going into an area where they were clearly not welcome. President Momis “expressed disgust and disappointment at the company Kalia/Toremana Joint Venture Limited for allowing its employees into this area knowing full well that there is criminal resistance for exploration in this area (...) The company has miserably failed to address its social issues and to fulfill its corporate social responsibility”.28 Kalia, by the way, is chaired by former Australian Defence Minister David Johnston who before taking up this position was boss of failed PNG miner Nautilus Mining which tried to introduce deep-seabed mining in PNG. As a consequence of the killing, the ABG indefinitely suspended all exploration activities of Kalia. The ABG also apologised to the family of the killed geologist and paid compensation (100,000 Kina; 28,000 USD) . It did not, however, follow up on its promise to “bring the perpetrators to justice without delay”.29 They still roam free today. The incident demonstrates how delicate and contested the mining issue is on Bougainville today.

- The suspension of exploration activities which was declared after the killing of the geologist also applied to the exploration area at the border of Central and South Bougainville, in Isina/Kokoda. But it was obviously not implemented there. The Isina mining endeavour is led by Sam Kauona, former supreme commander of the Bougainville Revolutionary Army. When I was in Bougainville in February, I met him, and he told me that exploration in Isina is ongoing, with three geologists from San Roque Metals (a Filippino mining company) permanently on the ground, plus twenty local staff. Sam also said that he is in contact with potential investors from Australia, Singapore, China and Indonesia. In particular he mentioned talks with Fortescue. The Australian mining company Fortescue Metals Group Ltd (the fourth largest iron ore producer in the world), owned by mining magnate Andrew ‘Twiggy’ Forrest (Australia’s second-richest person), has recently confirmed that it is interested in mining on Bougainvilleand and that representatives of Fortescue travelled there in late 2019. Sam said that talks with Fortescue so far have not led anywhere. In an
interview in November 2020 with the Australian TV program ’60 Minutes’ Sam had undicated that he has offers from China. This had sounded the alarm bells in Australia and elsewhere. When I talked to him, he downplayed the China option, saying that he is talking to several ‘eastern countries’ and is open to offers from everywhere. Sam is fully in favour of mining (including re-opening the Panguna mine), arguing that
the mistakes made by BCL in Panguna will not be repeated in the future, now that the Bougainvilleans have their own good mining act (the BMA) and are in full control of mining.

- Currently the focus of politics in Bougainville has somewhat shifted from implementation of the referendum results to the upcoming Bougainville elections. The last elections were held in June 2015, and according to the Bougainville constitution elections are due every five years. Hence elections for President and the Bougainville House of Representatives have to take place in May or June 2020. Preparations are complicated due to the ABG’s attempts to get through two election-related amendments to the Bougainville constitution. The first amendment is to maintain the three reserved seats in parliament for ex-combatants (according to the Bougainville constitution these seats were supposed to exist only up to the referendum). The second amendment is to allow a President to run for a third term. The Bougainville constitution has a two-term limit for the position of President (as in the USA and other democracies). But President Momis is obviously eager to stay on for a third term, and he and his supporters argue that he is the best man for the job in this critical transition stage. Public consultations about the proposed amendments took place in January and February 2020. They showed clear support for the continuation of the ex-combatants seats - and clear rejection of a third term for the president. The decision, however, on the amendments has to be taken by the members of the Bougainville parliament, with a two-thirds majority needed for changes to the constitution. In general, the heated debate about the amendments is seen as an unwelcome distraction from preparations for the negotiations with the GoPNG about the referendum. It can be expected that the upcoming election campaign and the elections will absorb most political energies in the coming months and, accordingly, nothing decisive will happen with regard to both the referendum negotiations and the Panguna mine issue until after the establishment of a new Bougainville government in June 2020.

Brisbane, 19 February 2020


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