MARTYN NAMORONG | Namorong Report
DR ILA TEMU, the spokesperson for mining companies in Papua New Guinea recently raised a series of points in support the former Somare government's decision to allow Nautilus Minerals to destroy the Bismarck Sea and current Mining Minister Byron Chan's decision to maintain the status quo.
Dr Temu highlighted that many organizations were misinforming the public about the issue. However, if one takes a look at maps on Nautilus Minerals website, one begins to appreciate the scale of the disaster Nautilus intends to create. It has tenements over vast areas of the Bismarck Sea and the internal waters of Milne Bay Province.
Dr Temu claims that since Nautilus Minerals has received government approvals its exploits are sound. One only has to look at government approved projects like Panguna, Ok Tedi, Porgera and Hidden Valley to appreciate that government approvals cannot be trusted.
The manner by which the Somare government was willing to amend Environmental Laws in favour of mining companies, also indicates the standards used to give approvals.
In any case, what body of scientific knowledge about the territorial waters of PNG has the government used to create the necessary legislative, institutional, policy and regulatory frameworks necessary to approve and regulate seabed mining?
Professor Richard Steiner from the University of Alaska Marine Advisory Program reviewed Nautilus Mineral's Environmental Impact Statement. He stated in his concluding remarks that "clearly, the project is not sustainable, as it exploits a relatively finite mineral deposit, lasts only 30 months, contributes a relatively small amount of money to [PNG], severely damages the benthic habitat for a rare deep sea sulfide mound ecosystem and poses risk to other marine resources in the region..."
It would be interesting for the Department of Environment and its former boss Wari Iamo to explain to the people of PNG how they assessed Nautilus Minerals EIS and how they came up with monitoring mechanisms.
The recent Tumbi Landslide in the Southern Highlands highlights the risks posed by large extractive industries in terms of creating man-made disasters. Nautilus Minerals will be altering seafloor morphology in an actively tectonic region.
Natural undersea tectonic events pose a number of geohazard risks (e.g., the Aitape tsunami) to coastal communities. The Nautilus activities will only add to these risks.
Dr Temu also highlighted that any action by the government to stall Nautilus Minerals' Solwara 1 project will increase PNG’s sovereign risk profile. Commenting on the possibility of government intervention, Dr Temu said, “This would also raise concerns in the international investment community of the dangers of sovereign risk."
Sovereign risk refers to the credit worthiness of the "sovereign", i.e., the government, and is used as a measure by financial institutions as to whether a country is worth investing in. It is measured using complex mathematics and data but in a nutshell it reflects two main variables: political risks and fiscal risks.
Will stalling Nautilus increase PNG's sovereign risk profile? On face value, yes. But when put in context, the risk is not significant. We live in a world where, compared to the sovereign risk profiles of debt-ridden European economies, PNG is a much better destination for investment.
PNG doesn't have to worry about any sovereign risk associated with small players like Nautilus Minerals when a major player like Exxon Mobil has shown confidence in PNG as a destination for major long term investments.
The LNG project is a much longer, 30 year investment compared to Nautilus's 30 month mining experiment.
Recently at a recent conference in Sydney, Peter Graham, the managing director of Esso Highlands Ltd, highlighted that the LNG Project makes PNG a good investment destination.
"The Project will generate many direct benefits but also contribute indirectly to growth by stimulating associated businesses and demonstrating to the world that PNG can be an attractive investment destination," he said.
In a world where there is growing demand and depletion of natural resources, PNG is now better placed to dictate the terms by which it resources are extracted. The granting of licenses and permits to Nautilus were flawed and the injustice perpetrated against coastal communities must be corrected.
Planning Minister Charles Abel has signed the petition against seabed mining and his Milne Bay governor, Titus Philemon, has done likewise.
Oro Governor Gary Juffa leads a group of Middle Bench MPs who also would like to see a moratorium on seabed mining in PNG. Madang Governor Jim Kas has also expressed his opposition to the project.
Given current local and global economic conditions, Dr Ila Temu may be exaggerating the sovereign risk associated with stopping Nautilus. Nautilus Minerals' 30 month seabed mining experiment in insignificant compared to the greater scheme of things in PNG.
The people of PNG and their leaders can confidently stop this evil act with very few adverse effects to the investment environment in PNG. The lesson here for foreign corporations is that gone are the days when you can take short cuts, mislead and bully the people of PNG.