MICHAEL PASCOE | Sydney Morning Herald
WHILE THE AUSTRALIAN GOVERNMENT was auditioning on Thursday for a minor job with Ashton’s Circus (they were turned down), real news was breaking to our north.
Papua New Guinea’s prime minister reportedly announced his government would seize control of the $1.4 billion sustainable development fund set up by BHP in 2002 as a gift to the PNG people with a structure designed to try to prevent it being seized by the politicians of a country rated by Transparency International as one of the world’s most corrupt – ranked 150th out of 176.
This is the latest act in a saga of both tragedy and generosity. The Papua New Guinea Sustainable Development Program represents by far the biggest act of corporate philanthropy in Australian history.
When Anderson personally reviewed the studies commissioned by his predecessors of the Ok Tedi mine’s impact, he found it morally impossible to continue to operate the mine. The initial plan was to effectively fill the hole in, a scheme that would allow mining to continue for a little longer without polluting the river, giving PNG time to adjust.
But with Ok Tedi being the government’s biggest source of revenue, Port Moresby would have none of it. The mine would continue to operate as long as it was profitable.
Anderson nonetheless believed BHP could not ethically keep mining, so its majority stake was gifted to the people of PNG through the PNGSDP structure, a Singapore-based corporation with PNG government representation on its board, but not dominance.
New PNG Prime Minister Peter O’Neill last year began his push to take control of PNGSDP. Steadily rising tensions broke surface when PNGSDP chairman Professor Ross Garnaut was banned from entering PNG after he very gently stated the obvious about the country, that it was “tempting for political figures to think of better ways of using it right now rather than putting it into long-term development”.
Thursday’s development – O’Neill announcing that Ok Tedi’s lease would not be renewed upon its expiry next year, that the PNG government would own and operate the mine and that “we will restructure the PNGSDP with our own people managing it, not by strange people who live beyond and do not know our needs” – would be a sorry conclusion to a magnificent effort to ameliorate an environmental disaster.
There was hope that O’Neill becoming Prime Minister would help lift PNG and much of the new government’s rhetoric has been encouraging about removing some of the infrastructure bottlenecks holding this complex country back.
Certainly a good government could indeed put the PNGSDP funds to good usage, but good government to the benefit of all the people have not been the rule in PNG. Despite fabulous natural resources, delivery of services in many areas has gone backwards.
Giving O’Neill the benefit of the doubt, the tragedy here might not be what his administration might do with the money, but whatever crew takes over from him. It’s a tough job standing between a politician and a bag of money the world over, including Australia.
When the PNGSDP was set up, it was envisaged that it would ultimately be controlled by the PNG government. The timing and attempted safeguards could not be ensured a decade ago. The structure has at least preserved a large proportion of Ok Tedi’s wealth for the people. In the end, it is indeed theirs to deal with.
To have the structure end in rancour and high dudgeon though, bodes ill. Australia’s nearest neighbour and major destination of Australian aid funds has a great many problems as well as potential.
Facts and more facts from Paul Yabob. Good luck with the new arrangements, the PNG people (ie villagers, students, sick) deserve them.
Posted by: Martin Kerr | 27 March 2013 at 05:16 PM
Michael Pascoe is forgetting several key facts in his one-eyed and ill-willed article.
Such articles do not bode well for relations between PNG and Australia. Indeed such stereotyping articles by ignorant and lazy journos who should know better keep raising the ire of decent Australians and PNGians year in and year out.
Fact 1. All minerals in the ground belongs to the Independent State of PNG. Once a license runs out, the State can do as it pleases. In the case of OTML it is the Independent State of PNG's sovereign right to grant or not grant a renewal. That is the law of England that Australia instituted in PNG.
Fact 2. It is BHP, the Great Australian, which polluted the mighty Fly River over several decades in the manner it operated the mine.
Paul Anderson had to divest BHP's interest for fear of further litigation resulting in billions of dollars in damages payments.
BHP got Mekere Morauta's PDM government to come to the Party. It was an exercise in damage control, and had nothing to do with any inch or ounce of philanthropy!
Fact 3. BHP immediately after the divestment had a sharp and marked rise in its stock value to the tune of billions of dollars.
The divestment was a clever market strategy to elevate the green profile of BHP. It was a strategy that benefitted BHP more than the people of PNG or the tragedy that was the Fly and its inhabitants.
Fact 4. In setting up PNGSDP in an off-shore trust arrangement, BHP ensured that the proceeds of PNG's own resources in one of its large copper-gold mines did not flow to its national coffers, but to the laps of few BHP cronies, who would play Father Christmas and do as BHP and Canberra willed with the proceeds.
The Board of Trustees were people who were both Canberra and BHP stooges. This is perhaps the greatest act of daylight robbery of a nation's wealth, if ever there was any!
Would Australia tolerate, say China, coming into Australia and setting up an offshore trust in Hong Kong to keep the proceeds of all iron ore from the Pilbara? Then stack the Trust with Chinese persons deciding where and how the billions should be spent, if at all, in Australia?
Meanwhile keeping the billions in Hong Kong and enriching the Hong Kong economy and investing it in the Chinese and London markets?
Fact 5. PNGSDPL was set up to obtain legislative immunity from prosecution for environmental damages of a great river system, a human and environmental tragedy, that can be even observed from the moon.
Mekere gave the clemency. To protect it with change of government, Mekere has been appointed back to head PNGSDPL.
PNG did BHP a favour that it did not deserve. It would have been better for the whole world if companies like BHP who behave unethically were brought to account!
Need I go on?
PNGSDPL remains a clever deception on the government and people of PNG - far from being an act of philanthropy as others would like the world to believe.
The Fly remains the greatest human tragedy in PNG, sanctioned by both the Australian and PNG (Mekere Morauta) governments.
Posted by: Paul Yabob | 24 March 2013 at 03:34 PM