MAC: Mines and Communities

A new era for Bougainville

Published by MAC on 2005-06-16

A new era for Bougainville...

The President of the new autonomous state of Bougainville has promised a plebiscite to enable citizens to decide whether or not to allow the re-opening of the Panguna copper-gold mine. The pollution and appropriation of land caused by this project was at the root of the vast conflict which erupted in 1988, claiming up to 20,000 lives.

Joseph Kabui has also said that his government would consider negotiating with the Rio Tinto subsidiary, BCL, for a transfer of the company's equipment, while supporting small-scale alluvial mining by Bougainvilleans in the concession area.

Meanwhile Francis Ona - the man who led the uprising against Rio Tinto and for an independent Bougainville - remains holed up in his self-declared "kingdom" at Panguna, having refused to join the electoral process, but not specifically interrupting it.

A new era - Bougainville's new autonomous govt sworn in

The National (Papua New Guinea)

June 16 2005

BUKA: Bougainville's first autonomous government was sworn in yesterday in a ceremony watched over by the island's new president Joseph Kabui and Prime Minister Sir Michael Somare.

A dawn flag-raising service launched celebrations before a 40-seat assembly met for the first time.

The island's new blue flag, featuring a traditional red Upe headdress, was raised by Bougainville police officers in the northern town of Buka. School children sang the new Bougainville anthem and Kabui called for a few moments silence out of respect for the more than 10,000 people who died during the Bougainville conflict.

The recent election on the island of around 180,000 people was a key step in the 2001 Bougainville Peace Agreement, which ended years of bloody secessionist conflict.

Wide autonomous powers have been granted to the Bougainville government and a referendum on whether it will become independent from Papua New Guinea will be held in 10 to 15 years.

Kabui told dignitaries a new political baby had been born. He thanked PNG, Australia, New Zealand, other Pacific Island nations, the United Nations and Commonwealth Secretariat for their support. "Today is a proud moment," Kabui said. "It is an important milestone in the political walkabout of Bougainville."

Sir Michael was the guest of honour at the main inauguration ceremony conducted on a rain-sodden school playing field in tropical heat. He uncomplainingly trod in sandals through mud to inspect a Bougainville police contingent which later marched past an official stand where he and Mr Kabui stood side by side in review.

Children ran onto the field displaying giant Bougainville flags before Chief Justice Mari Kapi swore in Kabui and the assembly members. In a speech, Sir Michael congratulated Mr Kabui and the newly-elected members.

He urged Bougainvilleans to get behind the president and new government as one people.

He also announced a K10 million establishment grant and said the national government would honour its promises made under the peace agreement. Somare also said secessionist leader Francis Ona should join with the new political process to help advance Bougainville rather than stay aloof.

Ona, one of the instigators of the Bougainville conflict and self-declared king of the island, opposed the election but did not try to disrupt it. Mr Kabui said the assembly had unanimously agreed to the formation of a grand coalition government, which would tackle issues like HIV/AIDS, employment for ex-combatants and ongoing weapons disposal.

He said for much of the 1990s, Bougainville was known as the place where the worst conflict in the Pacific since World War II was taking place. "But since 1997, Bougainville has become better known as the place where one of the world's most successful and unusual peace processes has been taking place," he said.

Mr Kabui won the presidency by a large margin over his nearest rival, former Bougainville governor John Momis who plans to legally challenge the result, alleging irregularities and intimidation.The position of speaker has been offered to Mr Momis. But he politely declined though it was hoped his leadership experience could be put to use in something like a proposed peace studies centre, Mr Kabui said.

Those who attended yesterday's ceremony were senior PNG government ministers, the Australian and New Zealand High Commissioners to PNG, Michael Potts and Laurie Markes, other regional diplomats and UN representatives.

Kabui sets mission of making autonomy work

The National (Papua New Guinea)

June 16 2005

Buka: Making autonomy work for Bougainvilleans is the only way to prove to secessionist leader Francis Ona that the new autonomous government is a real alternative, the island's new president says. The first priority of the new government was to find money to make that autonomy work and provide goods, services and answers to the people, Joseph Kabui said on the eve of the new assembly's inauguration yesterday. "Definitely funding is going to be our number one priority," Mr Kabui said. Funding would have to come from within Bougainville, through agreed PNG government grants or from overseas donors, Mr Kabui said.

"I believe given time we will show that autonomy does have answers for the people of Bougainville.

"That will be the only way that we can prove to (secessionist leader) Francis Ona that we have a real alternative here."

Ona has declared himself king of the island and apart from staging recent public rallies opposing autonomy and the election, he has remained for 16 years in his mountain retreat near the defunct Panguna copper mine. Mr Kabui said Ona was an entrenched opponent of authority because in past years the interim provincial government and the PNG government had failed to provide goods and services to Bougainvilleans.

Income from copra, cocoa and vanilla as well as new ecotourism and fishing ventures were some of the new autonomous government's options for funding, Mr Kabui said.

The sensitive issue of a return to mining would also be considered. The giant Panguna copper mine was the flashpoint for the secessionist conflict following landowner resentment and environmental concerns. Mr Kabui said a return to mining would have to go through a plebiscite but that did not stop the government looking at other avenues such as helping people earn more from alluvial gold collecting on the old mine's tailings. The new government would also look at negotiating with Bougainville Copper Ltd (BCL) and the PNG government about a transfer of remaining assets including equipment, land and funds from the Panguna operation. Mr Kabui said his government hoped to maintain a respectful partnership with the PNG government.

"This is not a province any more. We are an autonomous government now, an independent government, and therefore I hope that can be taken on board by the PNG government.

"If they don't take that sort of approach they will only be reinforcing in the minds of the people of Bougainville that there's no other answer when the referendum time comes except for them to go through one door, and that's independence."

B'ville is still part of PNG, says PM

By CLIFFORD FAIPARIK The National (Papua New Guinea)

June 16 2005

PRIME Minister Sir Michael Somare said yesterday that Bougainville will continue to be part of Papua New Guinea until Bougainvilleans decide to become independent by 2015.

"However, the decision to become independent will be subjected to the final authority of the national parliament. In the meantime, they will still be represented on the same basis as every other part of PNG," Sir Michael said.

He was speaking during the inauguration of the Bougainville Autonomous Government and the swearing in of the 40-member cabinet at Hahela in Bougainville yesterday.

Deputy Prime Minister Sir Moi Avei and other senior ministers and bureaucrats also attended the ceremony.

Sir Michael said that Bougainville Autonomous Government has been established under the PNG Constitution and has been democratically elected. "The international community also recognised this system of government as the ultimate source of governmental authority throughout the country. No other body in PNG enjoys similar recognition," he said. Sir Michael said that under the Bougainville Peace Agreement, there is a grant system to ensure that Bougainville will continue to have access to grants from the National Government.

"Thus The National Government has already allocated K10 million to Bougainville to show its commitment to the Bougainville people to help kick start development in Bougainville.

"However, this grant is not to be used as particular individuals or groups may prefer. It has been budgeted for use in the ways specified in the Bougainville Peace Agreement," he said.

Sir Michael also urged the Bougainville leaders to be transparent in the use of the money as other Papua New Guineans also have pressing needs. "People in remote areas throughout the country need access to improved health and education services for their children. They also want roads, wharves and airfields in order to get their goods to markets to help themselves," he said.

Sir Michael also called on Francis Ona to come out from hiding and contribute to Bougainville's development under the Autonomous Government. "He and his supporters must respect the wishes of the majority of the Bougainville people and work within the mandate of the United Nation for the greater good of Bougainville and Papua New Guinea," he said.

Bougainville's pot of copper

Sydney Morning Herald

Editorial, June 16 2005

Few listed companies have such an unfortunate history as Bougainville Copper. It is 16 years since its gigantic copper and goldmine was abandoned as secessionist rebels fought to wrest control of Bougainville from Papua New Guinea. The Australian-owned miner was not, in the eyes of many locals, merely a hapless victim of circumstances. Many blamed the environmental damage the mine wrought, and the export of its handsome profits, for igniting the civil war. The jungle has since been slowly reclaiming the rich Panguna site and its mining equipment is corroding away. In its quarterly production reports, Bougainvillea Copper continues flatly to note "no production". Why then has its share price jumped so dramatically that the ASX was prompted to ask the company to explain?

The answer lies in yesterday's inauguration of Bougainville's first autonomous government, led by its newly elected President Joseph Kabui. Bougainville's independence forces never quite achieved their ultimate political goal, but a 2001 ceasefire deal came with considerable autonomy and the promise of a future referendum on full independence. Mr Kabui was the last premier of the province in the late 1980s, under Port Moresby's authority, before the system collapsed into anarchy. He defected to the armed opposition just in time to retain his local standing, and has since manoeuvred his way through factional tensions among the veterans of the war to again emerge in charge. Bougainville now desperately needs an economic beginning. Whether Mr Kabui will be tempted to lift the ban on mining is as yet unclear. For its part, Bougainville Copper recently pointed out that it holds the only exploration licence for the area.

The war cost about 10,000 lives in a community of fewer than 200,000 people. It wrecked local agriculture and destroyed the island's tiny manufacturing base. But it would be reckless and unrealistic to pin too much hope on Panguna's pot of copper and gold. Small economies which rely on windfall resource royalties are extremely vulnerable, especially to corruption, as the budgetary woes of Nauru and Papua New Guinea attest. International investors can afford to speculate. The new Bougainville administration cannot.

Political rivalries are still simmering on Bougainville, despite Mr Kabui's clear election win. And the mine is in no condition to be quickly reopened. Mr Kabui's immediate attention should be focused on establishing good governance and restoring basic services. The lure of mineral wealth should not distract from that fundamental task.

Bougainville inaugura su autonomía con izado de bandera


Terra Actualidad - EFE

La provincia de Bougainville, en Papúa Nueva Guinea, inauguró hoy su autonomía con una ceremonia tradicional en la que se izó la nueva bandera y se abrió la primera sesión del parlamento, elegido en los comicios del mes pasado.

El nuevo presidente de Bougainville, Joseph Kabul, dijo que la prioridad de su gobierno será 'hacer que la autonomía funcione' y encontrar los fondos necesarios para ofrecer a sus ciudadanos los bienes y servicios que necesitan, informó la radio ABC.

Para ello se contará con la explotación de los recursos agrícolas, como la copra, el coco o la vainilla, y con la creación de nuevas industrias de ecoturismo y pesca, indicó Kabul, quien no descartó volver a considerar el controvertido sector minero como base de la nueva economía.

Kabul insistió en la necesidad de que la provincia pueda autofinanciarse.

El nuevo gobierno de Bougainville se responsabilizará de funciones gubernamentales que hasta ahora han correspondido a la administración de Port Moresby, a excepción de las políticas exterior y de defensa.

El primer ministro de Papúa Nueva Guinea, Michael Somare, presidió las ceremonias de inauguración del nuevo gobierno y participó en la sesión parlamentaria con los 39 miembros de la Asamblea.

La creación del gobierno autónomo, cuya composición será anunciada por Kabul la próxima semana, culmina el proceso de paz en esa isla de Papúa Nueva Guinea con el objetivo de crear las bases de un proceso de independencia futuro, que podría culminar con un nuevo referéndum dentro de diez o quince años.

El conflicto independentista de Bougainville estalló en 1989 cuando los propietarios indígenas de las tierras ocupadas por una gigantesca mina de cobre australiana se alzaron en armas tras negarse a recibir compensaciones por los destrozos medioambientales causados por las extracciones mineras.

La violencia motivó la intervención del Ejército de Papúa Nueva Guinea en defensa de los intereses de la compañía minera, principal fuente de ingresos del país.

El conflicto, uno de los más sangrientos del Pacífico Sur, costó 20.000 vidas, un diez por ciento de la población, y el desplazamiento de 15.000 personas a campos de refugiados y a las vecinas Islas Salomón.

El antiguo líder del Ejército Revolucionario de Bougainville, Francis Ona, reclama la independencia de la isla y rechaza el establecimiento de un gobierno autónomo, al igual que muchos de los habitantes del área de la antigua mina de cobre de Panguna.

Ona fue el único de los líderes independentistas que en el 2001 se desmarcó del acuerdo de paz firmado con el Gobierno de Nueva Guinea Papúa para poner fin a una década de guerra civil.

La isla de Bougainville pertenece geográficamente al archipiélago de las Islas Salomón, de las que dista tan sólo siete kilómetros, frente a los más de 760 kilómetros que la separan de Papúa Nueva Guinea.

Panguna copper mine to remain closed: Akoitai

By Clifford Faiparik, The National

24 June 2005

The Panguna copper mine will remain closed for an indefinite period despite the Bougainvilleans having their own government system, said Mining Minister Sam Akoitai.“Who knows it may take another 20 years for an agreement to be reached that will benefit every one who is involved with the mine.

“The opening of the mine is a sensitive issue. About 20,000 people have died during the 16-year-old crisis regarding the operation of the mine.

“Thus there must be a good agreement between the landowners, developers, Bougainville and the National Government. Also it will need about K2billion to re-open,” said Mr Akoitai.Mr Akoitai said this yesterday to clarify rumors that the mine will be opened following the formation of the Bougainville Autonomous Government.

“I have received a letter from the Bougainville administration office dated June 07, advising me of a decision for an urgent review of the Bougainville Copper Agreement Act 1967, and that under their request for the existing moratorium on exploration and mining on Bougainville, gazetted on 22nd April 1971, be revoked, and further advised that Bougainville is now cleared for mineral exploration. “Thus I have directed my Department to coordinate with the Attorney General and other Government agencies to urgently prepare a submission for me to advise the National Executive Council and Government on the decision of the Bougainville Administration and the urgency of the National Government to revoke the existing moratorium and be advised of the Administration’s decided clearance for the return of mineral exploration on Bougainville.”

Mr Akoitai said just because he had received the letter, it did not mean that the mine will soon be re-opened.

“I have already talked with CRA regarding the opening of the mine. But they are still tangled up with the National Court ordering them to pay more than K28millin in outstanding taxes to the Internal Revenue Commission.”

During the inauguration ceremony on Bougainville, President Joseph Kabui said that with Mr Akoitai, a fellow Bougainvillean as the mining minister, the future of the Panguna copper mine will be a priority of the new Bougainville Autonomous Government.

“The very sensitive issue of Bougainville Copper Limited is a matter that we will endeavour to resolve early in our political life while we have a member from Bougainville as Minister for Mining in the National Government. Efforts will be made for negotiations with the National Government and BCL as soon as practicable,’’ said Mr Kabui.

Kabaui names 10 ministers

The National

24 June 2005

The president of the Autonomous Bougainville Government, Joseph Kabui, yesterday announced the appointment of a compact ten-member cabinet that will run the affairs of the newly-formed provincial government.

Mr Kabui himself will be responsible for relations with the National Government and in promoting employment and the peace process.

Eight of the ministries went to members of the ruling Bougainville People’s Congress Party, with the two others including the new leader of the New Bougainville Party, Ezekiel Masatt, and the independent member for Ramu, Moses Koiri.

Mr Kabui will take personal responsibility for inter-government affairs, labour and employment, national and international affairs, reconciliation and unity and peace.

He has appointed Joe Watawi as his vice- president with responsibility for the portfolios of public service, planning and monitoring, trade and industry, port services and micro-finance.

The former deputy governor, Gerard Sinato, has been made minister responsible for health, environment conservation water and sanitation.

Ms Magdalen Toroansi, women’s representative for Central Bougainville, is the minister responsible for women’s issues and religion, traditional authority, local level government and non-governmental organisations.

The member for North Nasioi, Mathias Salas, a former banker, has been made minister responsible for finance and treasury, minerals, petroleum and gas exploration.

The member for Ramu in Siwai, Moses Koiri, a lawyer, will be in charge of works, transport and civil aviation, lands, physical planning, growth centres, housing, energy and telecommunications and information technology.

The member for Tonsu and leader of former Governor John Momis’ New Bougainville Party, Ezekiel Masatt, also a lawyer, has been made minister responsible for police services, justice, correctional service, courts, liquor licensing, customs and quarantine.

The member for Lato in Bana, Michael Otoroa, has been made minister responsible for education, higher education, research, science and technology and ‘kastom’.

The member for Atolls, Taehu Pais, is minister responsible for fisheries, primary industries, forestry, commerce and culture and tourism.

The ex-combatants representative for Central, Glyn Tovirika, is the minister responsible for youth, veterans’ affairs, sports and recreation.

Mr Kabui called on the new ministers to contribute meaningfully to the development of Bougainville, along with other members that would be called on to serve in various committees.

Bougainville leader calls for talks on mining

Radio Australia

21 June 2005

The new president of the Papua New Guinea province of Bougainville, Joseph Kabui, says he is ready to launch talks about the future of the controversial Panguna copper mine.

The mine, which is owned by Australian company Bougainville Copper Limited, has been closed since the mid 1980s because of tensions over royalty payments.

President Kabui says he is now prepared to examine a range of mining options.

"There's so much gold drifting down the tailings of Java river. We don't have to open up Panguna mine itself, but we can help people to get all the gold out from the tailings through alluvial mining," he said.

After a long silence - during which he has definitely been affected by delusions of grandeur - the fomentor of the Bougainville rebellion, which led to the movement to secede from Papua New Guinea, ex-Rio Tinto employee, Francis Ona, has said, once again, that the Panguna mine will never re-open. Well not quite judging by the statement quoted from him below.

At the same time the US legal team, which wanted back in the late nineties, to sue Rio Tinto on behalf of land owners damaged by the mine, is arriving in the new autonomous state. to try to do a deal on behalf of their clients - which may or may not see the revival the mine as one of the cash-cows placed on the table.

ONA: NO, NO - 'Close B'ville Govt and let me run it'


1 July 2005

The re-opening of the Panguna copper mine in Bougainville is a no, no! Self-styled leader of the unrecognised Me'ekamui government and recluse Francis Ona in an exclusive interview with our Gorethy Kenneth in his Guava village outside the mine site on Tuesday said suggestions to re-open the mine to finance the Bougainville Autonomous Government would be resisted.

'Let me run B'ville government'

By Gorethy Kenneth

The re-opening of the Panguna Mine will be a no, no and the decision will have to come from the people and the landowners, reclusive Me'ekamui leader Francis Ona said on Tuesday.

And whoever is talking about re-opening of the Panguna mine that caused the loss of 20,000 lives "must be out of his/her mind" Mr Ona said.

Further, Mr Ona said if there was no money to run the Autonomous Bougainville Government, he wants it closed down and let him run Bougainville.

In an exclusive interview with the Post-Courier in his Guava village on Wednesday this week, Mr Ona said if the mine had to be re-opened by the people it would be facilitated by the Me'ekamui government. Mr Ona was responding to questions as to whether he was supportive of negotiations to re-open the Panguna Mine.

"My people and I won't allow the mine to be re-opened. Twenty thousand lives were lost and this is how we can compensate their lives? Kabui (Autonomous Bougainville Government President Joseph Kabui) or anyone talking about re-opening the mine must be out of his/her mind . . . (Mr) Kabui and his government must find other means of earning money and not try to use this mine to get loans from the World Bank. If you don't have the money, then close the government and let me run it. Me'ekamui has all the funding available and ready," Mr Ona said.

"At this point, Panguna is not going to be opened for the remaining short term as it is associated with too much pain and suffering.

"The leaders of PNG and the autonomy truly believe opening such a mine as this one will be okay when so many alive today are still suffering because of the deaths of their parents, brothers and sisters, its way too soon.

"No, I will not support that, it's entirely up to the people and if they decide to agree on the re-opening then Me'ekamui will have to facilitate it.

"However, as we go along in our established sovereignty and independence, it is maybe the case later. Who knows, that will be a decision of the people not mine, the House of Lords, the House of Representatives, landowners and others will then have to decide but now its not possible.

"I know since the closure of Panguna, it led to the whole international mining community changing its operations and approach to landowners, especially in terms of what today is considered as environmentally friendly mining that we have to be aware of but in terms of Panguna, tell Mr Somare (Sir Michael) and other leaders I will bring the orphans and the widows to him if he wants to come look in their eyes and say 'hey profits to PNG matters not what you lost'.

"I am not going to do that, leadership is about respecting the people you represent and respecting yourself."

B'ville class action gains momentum


1 July 2005

Lawyers involved in the multi-million class action lawsuit by Bougainvilleans against Rio Tinto Zinc - major shareholder in the Bougainville Copper Ltd - are on their way to Bougainville.

The team from the United States of America, led by Brent Walton of Hagens & Berman Sobol Shapiro, have arrived in Port Moresby and are expected to travel to Bougainville in the next few days.

They want to meet with key national leaders in Port Moresby prior to having an audience with Autonomous Bougainville President Joseph Kabui.

Mr Walton was one of the lawyers representing plaintiffs Alexis Holyweek Sarei, Paul E. Nerau, Thomas Tamuasi, Philip Miriori, Gregory Kopa, Methodius Nesiko, Aloysius Moses, Raphael Niniku, Gabriel Tareasi, Linus Takinu, Leo Wuis, Michael Akope, Benedict Pisi, Thomas Kobuko, John Tamuasi, Norman Mouvo, John Osani, Ben Korus, Namira Kawona, Joan Bosco, John Pigolo and Magdalene Pigolo on the multi-million dollar damages lawsuit against RTZ for genocide and environmental damage.

The lawsuit surfaced during Moresby North-West MP Sir Mekere Morauta's term as Prime Minister. Sir Mekere had warned that the class action filed in the Federal District Court of California - if successful - would not be enforceable in Papua New Guinea because of the Compensation Act.

When Sir Michael Somare assumed office after the 2002 elections, he gave his blessings for the class action to go ahead on questions by then Bougainville Regional MP John Momis.

The irony was that American judge Justice Margaret Morrow had already dismissed the claim.

The trip to Bougainville follows Mr Kabui's announcement placing the future of the Panguna copper mine as a priority of his government.

Bougainville, despite the major fanfare about the autonomous arrangements, does not have much of an internal revenue base.

Mr Kabui said he wanted to make use of the fact that Central Bougainville MP Sam Akoitai is currently the Mining Minister to resolve the "sensitive issue of Bougainville Copper Limited".

A negotiation with the National Government and BCL as soon as practical was what he had in mind. Mr Akoitai, in a press statement days after that announcement, indicated he had received a letter from the Bougainville administration advising him of a Cabinet decision to have an urgent review of the Bougainville Copper Agreement Act, 1967.

That letter also requested a moratorium on exploration and mining on Bougainville gazetted on April 22, 1971, to be revoked and the province be cleared for mineral exploration.

Mr Akoitai said he was preparing a submission in consultation with the Attorney-General's office for the National Executive Council to consider that would include the Bougainville Government's request.

As a US legal team discusses the long-postponed compensation case against Rio Tinto in the US, for damages done to Bougainvilleans and their environment, the country's mining minister says he wants action against the British company to be separated from negotiations with its BCL subsidiary.

Akoitai disappointed over Rio Tinto suit


11 July 2005

Lawyers representing Bougainvilleans on a class action law suit against Rio Tinto in the United States were told to spell out what they wanted to achieve.

Mining Minister and Central Bougainville MP Sam Akoitai said on Friday he was disappointed that the lawyers — led by instigator of the class action Paul Stoker and Brent Walton, of American law firm Hagens Berman Soboc Shapiro, did not properly outline in writing what they were to get out of defending the Bougainvilleans in the case and also how much they would look to claim as compensation from Rio Tinto for alleged damages done to the environment.

He said the lawyers must also specify clearly that they were representing all the Bougainvilleans and not just small groups on the island such as landowners or Dr Alexis Sarei who initiated the class action.

“I do not want my people of Bougainville, especially Central Bougainville, to be used to push for this case if it is not going to benefit them,” Mr Akoitai said.

President of the Autonomous Region of Bougainville Joseph Kabui told Mr Stoker and his team of lawyers in Buka last week that he wanted the class action suit to be separate from any discussions that the team may have with the autonomous government.

Mr Kabui said Bougainville Copper Limited and Rio Tinto were two separate entities and they should be treated as such.

He said the ABG interests in BCL was to negotiate the take over of any assets BCL had on Bougainville such as the prospecting licences, the right for exploration on Bougainville which included the minerals owned by BCL under the prospecting licence it had with PNG and properties in Arawa and Loloho.

Bougainvilleans leaders in Port Moresby also called on the lawyers not to deal with the president directly and deal with senior officials in the ABG who would then advise Mr Kabui on the developments the class action.

BCL sent out K89m overseas to avoid paying taxes: IRC lawyer

By Moresi Ruahma'a, The National

15 July 2005

The Bougainville Copper Ltd has allegedly sent out of the country a total of about K89 million to avoid paying corporate income taxes to the government, the Supreme Court heard yesterday.

Marshall Cooke, QC, representing the IRC, told a lone Supreme Court bench presided by Justice Timothy Hinchliffe that since 1998 BCL was alleged to have remitted to Australia a total of about K89 million to avoid paying corporate taxes to the Internal Revenue Commission.

"There was this movement of funds offshore,'' said Mr Cooke in objecting to a BCL application seeking to stay an order by Judge Gibbs Salika of the National Court decision.

In a decision last April, Judge Salika directed BCL to pay the outstanding income tax of about K30 million, an assessment made by IRC covering the years from 1998 to 2001.

However, Gadens Lawyers representing BCL, opposed the tax assessment and appealed to the Supreme Court to restrain IRC from carrying out the National Court decision.

Mr Cooke told the court what BCL currently has is about K12.9 million in Treasury Bills with the Central Bank.

He said: "If IRC did not act and issue tax assessment notice there would be no money left from the Treasury Bill.''

He argued that BCL has been refusing to pay taxes to IRC over the years although it has substantial investment of about K320 million here and oversedas.

He argued that K12.9 million held in the Treasury Bills was deposited for a six-month period and will be mature on July 29.

The IRC counsel said if IRC exercised its powers under the Taxation Act the K12.9 million would represent only a third of the tax liability.

Towards the end of his presentation, Mr Cooke then made a successful interim stay application and obtained the orders to restrain BCL from using or paying out funds from the Treasury Bills.

Erik Anderson of Gadens Lawyers at the beginning of the court hearing told the court that "it would be a big loss for BCL if the stay order was not granted".

Mr Anderson said if the application was refused it would also be a loss for the State amounting to about 20% from outstanding taxes owed to the IRC. He warned that it could lead to the company's shutting down its office in the country.

Mr Anderson further argued that it was not accurate to charge that BCL "improperly" sent the money offshore.

The company, he said, did it on the basis of an investment decision.

He also argued that BCL could not pay the taxes to IRC because it was not in a position of making any profit after the Bougainville crisis shut down its operations and its assets were completely destroyed and stripped off.

Therefore, he submitted the tax regime applied by the respondents was "harsh and oppressive" under sect 41 of the Constitution.

Kabui urges Ona to share gold wealth

By Lloyd Jones, Papua New Guinea Correspondent, The National

11 July 2005

Port Moresby: Secessionist leader Francis Ona should use the gold wealth he claims to have to compensate Bougainvilleans for years of suffering during the island’s conflict, Bougainville President Joseph Kabui says.

The reclusive Ona recently said gold panned by villagers in mountain rivers and sold overseas had funded his secessionist Meekamui Movement.

It was also helping fund the alternative Meekamui administration being built for Bougainvilleans, he said.

Ona refuses to recognise the island’s newly-elected autonomous government.

Moreover, he has declared himself king and proclaimed Bougainville a sovereign and independent nation separate from Papua New Guinea.

He and his followers continue to live near the giant Panguna copper and gold mine that was at the centre of a decade of bloody conflict.

More than 10,000 people were killed, with some estimates putting the toll closer to 20,000.

In 1989, landowner discontent over environmental damage and benefits from the giant Bougainville Copper Ltd (BCL) mine sparked the secessionist conflict which dragged on through the 1990s.

Ona recently said he would support Kabui and his autonomous government only if they recognise Bougainville as a sovereign nation already independent from PNG.

If the autonomous government did not have the finances to run the island, it should step down and let him take over, Ona said.

In response to Ona, Kabui told reporters this week the island was not for sale.

He urged Ona to join other Bougainvilleans in developing a free democratic society that did not require the barrel of a gun or fear to rule.

Finding funds to develop Bougainville was a major priority and challenge, Kabui said. “It would be appropriate for Mr Ona to consider using his vast wealth to

compensate the people for the years of suffering we have endured in his name. “The vast wealth he claims to have is needed by his people,” Kabui said.

“The money does not belong to him and just because he has amassed a fortune at the expense of 20,000 lives does not give him the right to undermine internationally-accepted democratic principles and impose his own dictatorial regime.”

Kabui said Ona should realise the democratic path followed by the new autonomous government could lead to internationally-recognised independence.

Under the 2001 Bougainville Peace Agreement, the islanders have been promised a referendum in 10 to 15 years time on independence from PNG.

Meanwhile, Kabui has backed taking a class action in the United States against BCL and its major shareholder Rio Tinto, saying BCL’s operations caused permanent environmental, cultural and social damage to Bougainville and compensation was due.

To regain the credibility of BCL, all assets associated with the Bougainville operation should be handed over to Bougainvilleans, he said.

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