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Everyone take a deep breath – the sky is not falling!


MONDAY'S ARTICLE IN The National and Peter Donigi’s response in PNG Attitude yesterday about landholder rights need some clarification.

Both articles were about amendments to the Papua New Guinea Mining Act originally proposed by Boka Kondra, now Minister for Tourism, Arts and Culture, which were taken up by Mines Minister Byron Chan in a new Bill.

Boka Kondra is the member for North Fly where the giant Ok Tedi mine is located and he has long been concerned by the environmental damage caused by the mine as well as with the treatment of landholders by the previous owner, BHP.

The proposed amendments in the Bill were also openly detailed in the media last year.

The article in The National has got the story wrong.

This is not a draconian Bill designed to give landowners exclusive rights to land and minerals.

Instead, it is an attempt to come part of the way towards easing the tensions which exist between landowners and miners by giving the former more equity in mining projects.

The definition of ‘landowner’ remains unchanged.

The ownership of minerals remains with the state.  The amendments only include the extension of state rights to offshore areas.

Section 5 (1) of the Bill says “All minerals existing on, in or below the surface of any land in Papua New Guinea, including any minerals contained in any water lying on any land in, and in the offshore of Papua New Guinea are the property of the state”.

All this land is available for mining.  There are special reserved areas in the Bill which are now specified and include cemeteries, roads, railways (?), airports, historical or cultural monuments, archaeology remains, religious sites or national monuments, nature habitats, national parks, old forestry areas, villages, towns and cities.

All that this means is that miners will have to do their homework a bit more diligently to find out where all these places are located before they proceed.  It is a sensible measure and will avoid situations like the recent case in the Southern Highlands where the home of an ancestral snake was damaged by pipeline construction.

The Bill also brings the Mining Act into line with the Oil and Gas Act by requiring social mapping studies to be completed prior to entry on to land for exploration and later, in more detail, when the exploration turns into the development of a mine. 

This is a sensible amendment and will save miners a lot of heartache and money down the track.  They may not realise it but making them carry out such studies is in their own best interest.

Section 29 (1) of the Bill says, “It shall be a condition of every exploration licence that the holder undertake social mapping studies and landowner identification studies in accordance with this section”.

The proposed amendments also provide for landholders and provincial governments to negotiate equity in a mining project.

Section 19 (1) says, “Mining Project area landowners and an affected Provincial Government may negotiate with the vendor of a Participating Interest (the mining company) on freely negotiated commercial terms, a further portion of the vendor Participating Interest in addition to that granted to the state pursuant to section 18”.

This is not mandatory and miners can opt not to negotiate such a deal.  Sensible mining companies will take advantage of the opportunity however.

Section 18 (1) says that, “Subject to the agreement under Part VI, the State shall grant to the landowners and the affected Provincial Government, if any, in a Mining Project in their area, a Participating Interest of 5% and such other equity benefits in that Mining Project”.

Under Section 18 the landowners and Provincial Government get to decide how to divide the 5% between themselves.  This equity is to be held in a trust controlled by a Mineral Resources Development Company Pty Ltd set up as “the trustee and manager of the project area landowner and affected Provincial Government interest”.

The landowner beneficiaries of the trust have to be incorporated landowner groups.  That is, they have to prove their entitlement under the recent changes to the Land Group Incorporation Act.

Sections 18 and 19 are what The National and others are deliberately misconstruing as giving landowners ownership of minerals.

The Bill also requires the submission of a mine closure plan which takes into account the environment, workers and landowner interests.  Most of the other matters in the Bill are to do with administrative matters.

The Bill also cuts down the opportunities for wheeling and dealing of exploration licenses and eases up on reporting requirements, all of which should please the miners.  It also stipulates that one company can only hold a maximum of eight exploration licenses at one time.

The Bill falls well short of what Peter Donigi wants, but it is a practical and sensible response to the calls from landowners for more control of resources on their land.  It also brings Papua New Guinea in line with best practice in Australia and other resource rich countries.

Peter Donigi had a hand in the original proposal by Boka Kondra and his reputation as a maverick is probably what has got The National agitated.

However, it is certainly not an excuse for that newspaper to run around shouting that the sky is falling.

Phil Fitzpatrick is principal of South Pacific Social Solutions and an Associate of Jackson PR Associates


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Peter Sandery

The matter has not just snuck up on the miners et al - I first brought the total disagreement of traditional owners to the concept to the attention of Chevron Niugini in 1988 and suggested that at least the matter should be looked at from a risk assessment point of view.

Like much, though not all of my advice at the time, that was one that was totally ignored. It could have been resolved with a bit of thought then and probably still could now with a bit more, but if ignored it will not go away and be the catalyst for widespread dissatisfaction in the future.

Just as another aside, I also drew the attention of all of my various employers in the industry between then and 2008 to the same matter, albeit with exactly the same response.

Alex Harris

Thanks Phil. One would think the issue for the miners would be the phrase, "There are special reserved areas in the Bill which are now specified and include...nature habitats..."

That just about encompasses everything.

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