Resource Owners Support Government on OK Tedi Take Over.

The Resource Owners Federation of PNG Inc. believes that Prime Minister Peter O’Neill‘s action in passing legislation to take ownership of the OK Tedi Mine is well justified as his action has flushed the Lion out of the Sheep’s skin.

In 2002 BHP and the National Government under the Prime Ministership of Sir Mekere Morauta informed Papua New Guinea of BHP’s exit from the OK Tedi Mine. Citizens were led to believe that the people of Papua New Guinea were to take ownership and full control of the mine through the State. However in reality, the public statements were only a smoke screen to mislead the country, because the State was never to own the mine or control it. Sir Mekere through blindness or deliberately, allowed BHP to continue to control the operations of the mine through a Singaporean owned Company called PNG Sustainable Development Program Limited (PNGSDP),whose board was controlled by BHP appointees. PNGSDP was not a PNG company but a foreigncompany (Singaporean) controlled by BHP for the supposed benefit of the people of Papua New Guinea.

According to the 2012 PNGSDP Annual Report, there were three BHP appointed Directors called “A” Directors. “B” Directors included a director appointed by the Minister for Treasury, a director appointed by the Bank of Papua New Guinea and a director appointed by the PNG Chamber of Commerce and Industry. There were two other directors appointed by the Board, including a Singaporean director and the CEO of PNGSDP. The Chairman of the Board was always a  “A” or BHP director. Although BHP supposedly exited the OKTEDI Mine Limited, it never really did, because it returned through PNGSDP to continue its management and control of the OK Tedi mine. BHP the lion was always in control of the Ok Tedi mine after returning under the cover of a sheep’s skin.   The State representing the people of Papua New Guinea never had control over the mine or PNGSDP, because it only had one or two directors in PNGSDP.

The People of the Western Province, including the landowners, were not given any shares in PNGSDP nor assigned a position on the Board of the PNGSDP until 2012, when the WesternProvincial Administrator was assigned an ex-offcio board position.  They too have had no say or control of the operations of the mine since 2002.Despite expectations of the landowners, people of Western Province and other Papua New Guineans, that a tailings dam would be built to put an end to the dumping of mine tailings into river systems, no such dam was built in the last decade, although the mine made significant profits. This alone must be justification enough for Prime Minister O’Neill and his government for taking over the mine. Only time will tell if it wasreally impossible to have built a tailings dam in OK Tedi, as we have been led to believe thus far.

The next question is.  Did Papua New Guineabenefit from the operations of the Ok Tedi mine under PNGSDP? This question can be answered by looking at where the profits of the mine were spent by the PNGSDP. The PNGSDP have an investment fund where PNGSDP say they have invested 66% of the profits from the Mine.PNGSDP say they spent the balance of 34% on projects in Papua New Guinea including about a third of this amount in projects in the Western province. Western Province has and continues to be one of the least developed provinces in the country. PNG is a third world developing country that needs significant amounts of money to accelerate infrastructure and other development programs to catch up with the rest of the world. How could investing a massive 66% of the profits of the OK Tedi Mine help develop the country if the funds were locked up in bank accounts, investments shares or bonds in overseas countries? Surely, there is something wrong with our leaders in the likes of Sir Mekere who agreed to lock up much needed funds that could have been used to accelerate the development of our Nation. This is yet another justification for Prime Minister Peter O’Neill and his government for the taking over the mine.

Going forward, we believe that the Prime Minister should honour the indemnity PNG gave BHP in 2002, which should be extended to PNSDP for its part in the dumping of more tailings in the river systems over the last decade. Inexchange, BHP and PNGSDP should return to PNG of all the investmentfunds they have invested overseas.  The funds should then be used to construct a tailings dam, restore any other environmental, social and cultural damages suffered by landowners and accelerate the development of the districts affected by the mine, the Western province and Papua New Guinea generally.


Jonathan Paraia


Leave a Comment

Your email address will not be published. Required fields are marked *