MAC/20: Mines and Communities

Australian firms plunder Papua New Guinea

Published by MAC on 2004-04-29


Australian firms plunder PNG

By Sir PAULIAS MATANE, The National (PNG)

29th April 2004

IT'S customary to give members of our families, friends and acquaintances presents during Christmas time. And of course those who give willingly to receive presents too.

Last year, I received lots of cards, letters and other presents, both from here and abroad. However, one 'present' was different. It was a four-and-a-half page article titled, 'Australian Firms Plunder Papua New Guinea,' from a close and long-time Australian friend who asked me to share it with many readers of this column.

The contents are those of the author of the article and not necessarily mine though I do agree with some. What are your views? Let me know. We begin with the first part.

"A central feature of the Australian government's foreign policy in the Pacific has been the ongoing threat to cut off aid to any of the Pacific Island states that do not agree to implement 'good governance' measures, such as economic restructuring and combating corruption. Australian Prime Minister John Howard declared prior to the Pacific Island Forum in August 2003. 'Our very clear message is that we want to help Pacific Island countries, but a condition of that help has to be rooting out corruption.' This was the prelude to Howard's government compelling PNG into accepting Australian control of two of its key state functions -- finance and the police.

"But the real meaning of the term 'good governance' has been highlighted by a handful of the 70 submissions to a recently completed Australian Senate Committee. Good governance is a euphemism for political intervention into the affairs of Pacific states in order to guarantee the uninterrupted exploitation of the resources and people of the region by Australian corporation giants, as well as to protect their tax breaks and legal immunities.

"The submissions revealed the social and environmental corporations in PNG. Companies such as BHP-Billiton and Rio Tinto, underpinned by an Australian government statutory body, the Export Finance Insurance Corporation (EFIC), have laid waste large areas of the country. The livelihoods of tens of thousands of landowners have been destroyed and environmental damage inflicted that will last for decades. In its submission to the Senate Committee, AIDwatch commented on the impact of the Australian-owned CRA/Rio Tinto Lihir project, locate on Lihir Island off the northeast coast of PNG. Lihir is one of the world's richest gold mines. 'During its life the mine will dump 98 million tonnes of cyanide-contaminated tailings and 330 million tones of waste rock into the ocean, in an area described by ecological studies as one of the richest areas of marine biodiversity on earth,' AIDwatch stated.

"Each year the US$1.3 billion Lihir project pumps 110 million cubic metres of waste into the sea through a subterranean pipeline. It also dumps 20 million tonnes of rock waste a year into the seas from barges. Both Australia and PNG are signatories to the London Convention, an international treaty that bans the practice of dumping toxic waste in the ocean. Nevertheless, the Australian government's EFIC provided the mine with the risk insurance it required to begin the project in 1997. According to the Mineral Policy Institute, EFIC has also given Lihir Gold a US$250 million guarantee of commercial bank finance. The US equivalent of EFIC, the Overseas Private Investment Corporation, turned down the project on environmental grounds.

"The environmental damage perpetrated on the island of Bougainville during the 1980s was also the responsibility of Australian mining interests. Rio Tinto operated the now defunct Panguna copper mine - the world's largest open-cut mine, two kilometres across and a half a kilometre deep. Between 1972 and 1988, the mine excavated 300,000 tonnes of ore and water a day. At peak capacity, Panguna accounted for 44% of PNG's export earnings and 20% of the government's revenue.

"According to the Australian Conservation Foundation: 'Rio Tinto laid the groundwork for an environmental disaster by dumping waste rock and tailings and emitting chemical and air pollutants without regard for the villagers. The tailings turned the fertile Jabs and Kawerong river valleys into a wasteland. Fish and whole forests died and water became non-potable, turning 30km of the river system into a moonscape. As tailings made their way down the Jaba River to drain into the Empress Augusta Bay, the Bougainvilleans' major food source of fish there was also destroyed. At the same time, Rio Tinto's mine operators dumped chemicals directly into the Kawerong river, leaving the river acidic and copper green. The mine also emitted dust clouds that crucial in financing the project, providing an US$80 million guarantee of commercial bank finance for the mine. EFIC's predecessor provided the insurance cover against the risk of non-payment for US$26 million of equipment supplied to the mine. Landowners began to sabotage the mining operations after complaints of inadequate compensation. The actions of Rio Tinto ultimately sparked a civil war on the island that led to the deaths of 10,000 people.

"The Ok Tedi mining project is one of the most notorious environmental disasters caused by Australian corporate interests. It was also supported by EFIC with US$42 million loan. BHP dumped 80,000 tonnes of tailings containing copper, zinc, cadmium and lead directly into the Fly and Ok Tedi Rivers everyday for two decades. This has ruined the land upon which thousands of subsistence farmers depend, and poisoned some 2000 square km of forests. BHP polluted the Ok Tedi River and contaminated a section of the Fly River, PNG's second biggest river system, severely depleting fishing stocks. Royals Melbourne Institute of Technology Professors Doug Holdway warned in 1999. 'We're going to see a lot more damage in the future, not less. If you put 400 million tonnes of tailing down a river system, there should be no surprises that you're going to have significant biological impacts that will last for decades possibly even centuries'.

The above is the first part of this sad message. Make sure you get a copy of next Thursday's copy of The National for the rest of this story. Have you got any comments to make on the above? Please let me know and if they are good for public consumption, I will include them with others in this column for the rest of the readers to read.

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