LNG in the News: The Post-Courier is at it Again

The Post-Courier it would appear are prepared to publish corporate public relations spin, check out Friday's Post-Courier:

Esso promotes local staff

PNG LNG project’s employees are its most valuable resource and are at the core of Esso Highlands achievements the project developer said in a statement.
Esso said it had invested in the safety, health, development, and training of its workforce to ensure that it attracted and retained staff.
“Recruiting and training Papua New Guinean citizens is a key priority for the PNG LNG project.
“There are currently 2,300 Papua New Guinean citizens employed on project construction activities, representing approximately 80 percent of the project’s total construction workforce.
“Workers have been sourced from across the project region including Gobe, Kopi, Kantobo, Hides, Komo, Moro and the LNG plant site areas, as well as other areas of Papua New Guinea such as Port Moresby, Mendi and Lae,” the company said in a statement.
The project seeks to create an environment of open communication with our employees through employee forums.

LNG WATCH COMMENT ONE: So why does PR spin get published as news? Funding cuts at the Post-Courier? Editorial pressure on journalists to be corporate friendly?

LNG WATCH COMMENT TWO: It would be interesting to know how unions and NGOs in other developing countries rate Exxon Mobil's labour practices?

Exxon Mobil, Papua New Guinea’s New Bougainville Copper Limited?

By LNG Watch Papua New Guinea

Using the United States’ Alien Tort Act plaintiffs from Aceh, Indonesia have been seeking compensation from Exxon Mobil for almost a decade (Exxon Mobil will operate Papua New Guinea's LNG project). One wonders if they have ever crossed paths with a number of Bougainvillean plaintiffs who have also been using the United States’ Alien Tort Act to obtain compensation from Rio Tinto (Bougainville Copper Limited’s parent). The resemblance between the two cases is striking. 

The Acehnese plaintiffs claim that during the region’s war for independence, Exxon Mobil helped the Indonesian military to abuse civilians. According to their complaint, Exxon Mobil, through its subsidiary PT Arun LNG, built and maintained “Post 13”, where Indonesian special forces tortured and murdered Acehnese civilian. Additionally, Exxon Mobil is accused of having supplied heavy equipment which the military used to dig mass graves for their victims.* Exxon Mobil has strenuously denied the plaintiffs’ accusations.

Similarly, the Bougainville plaintiffs claim that during the region’s war for independence, Rio Tinto, through its subsidiary Bougainville Copper Limited (BLC), helped the military to abuse civilians. According to their complaint, BCL supplied PNG’s security forces with vehicles, accommodation, supplies and administration services, which facilitated a prolonged campaign of state terror that saw villages burnt, civilians executed and thousands left homeless. Rio Tinto has strenuously denied these accusations.

Given this parallel of history, concerns must be raised now that Exxon Mobil is looking to operate in Papua New Guinea through its subsidiary Esso Highlands. Especially if Papua New Guinea’s (PNG) Police Commissioner Gari Baki’s proposal to develop a Special Operations Group for the LNG project is approved. This proposal would see the Royal Papua New Guinea Constabulary’s (RPNGC) Mobile Squads deployed en masse to protect the gas operations (Post Courier, 5/10/2010).

While many RPNGC officers serve honorably under conditions of extreme difficulty, the Mobile Squads have a checkered history that should not be ignored. According to a former RPNGC Assistant Commissioner:

Basically the mobile squad people are semi-military, they are aggressive, they don’t do what normal policeman do, they go in there and they beat a few heads in. I am talking frankly, they will knock a few heads in, burn a few houses down, shoot a few pigs, shoot at cars … That is not policing, that is not normal policing … The mobile squads operated with a modus operandi of frightening people   

During the Bougainville conflict the Mobile Squads were responsible for extra-judicial killings, the destruction of villages and the raping of landowners’ wives. More recently, Amnesty International have documented the Mobile Squads’ role in the destruction of village homes and the forced eviction of approximately one thousand people living near the Porgera mine during April 2009.

Image: A Victim of Mobile Squad Excesses, Porgera (Amnesty International 2010)

While we cannot assume that the Acehnese plaintiffs’ claims are entirely accurate, nevertheless, the eyewitness testimony is powerful enough to raise concerns.* Given that Exxon Mobil will be operating in a highly contested region, where their operations will come under threat from landowner protests, will they be able to responsibly control the security agencies protecting their operations? Indeed, what is their position on Gari Baki’s proposal? Will Exxon Mobil accept assistance from a paramilitary force (i.e. the Mobile Squads) with a sustained history of human rights abuses? If so, will they also help to fund this Special Operations Group proposed by Police Commissioner Baki, which is expected to require an extra K2 billion?

*For more on this story, see the following report by Al Jazeera:

Part 1: http://www.youtube.com/watch?v=RVD6DIm6oDY

Part 2: http://www.youtube.com/watch?v=7MtrONDC0xs

Southern Highlands Social Indicators

Here are some basic statistics on the Southern Highlands region, where the LNG project will be hosted. As was evidenced in the SBS documentary Resource Rage, people from the region are struggling to understand the complex impact the project will have on their region both socially, environmentally, culturally and demographically. High levels of illiteracy and poor levels of education do not assist matters.




Source: National Research Institute, (2010), Papua New Guinea District and Provincial Profiles



The Bell Tolls for Papua New Guinea - The Looting of Africa

Is Africa Still Being Looted? A Debate Dodging World Bank Schizophrenia

By Patrick Bond*

The continent’s own elites, together with the West and now China are still making Africans progressively poorer, thanks to the extraction of raw materials. Reinvestment is negligible and the prices, royalties and taxes paid are inadequate to compensate the wasting away of Africa’s natural wealth. Anti-extraction campaigns by (un)civil society are the only hope for a reversal of these neocolonial relations.

Though it’s easy to prove, using even the World Bank’s main study of natural resource economics, apparently the looting allegation is controversial. When I made it during a Canadian Broadcasting Corporation (CBC) interview last week (http://www.cbc.ca/thecurrent/2010/08/august-10-2010.html), the World Bank’s chief economist for Africa, Shanta Devarajan, immediately contradicted me, claiming (twice) that I am not in command of ‘the facts’.

Here’s how it went:

Patrick Bond: Africa is suffering neocolonialism, and that means the basic trend of exporting raw materials, and cash crops, minerals, petroleum, has gotten worse. And that’s really left Africa poorer per person in much of the continent, than even at independence. The idea that there’s steady growth in Africa is very misleading, and it really represents the abuse of economic concepts by politicians, by economists, who factor out society and the environment. And it’s mainly a myth, because, really, the extraction of non-renewable resources – those resources will never be available for future generations. And there’s very little reinvestment, and very little broadening of the economy into an industrial project or even a services economy.

CBC: Mr Devarajan, how would you respond to that view?

Shanta Devarajan: First, I just want to correct one of the facts, which is that the continent is not poorer per person. GDP per capita is not lower today than it was ten to fifteen years ago. In fact, it is considerably higher.

Here, Devarajan abuses the discussion about African poverty by using the Gross Domestic Product (GDP) measure, even though just seconds earlier I had warned against doing so. African economies suffer extreme distortions caused by the export of irreplaceable minerals, petroleum and hard-wood timber. Were he honest, Devarajan would confess that GDP calculates such exports as a solely positive process (a credit), without a corresponding debit on the books of a country’s natural capital.

Seeking a less biased wealth accounting – i.e., by factoring in society and the environment so as to calculate a country’s ‘genuine savings’ from year to year - we find that Africa gets progressively poorer. This was demonstrated in even the World Bank’s own book, Where is the Wealth of Nations?, published four years ago (and still available on the Bank website).

According to the book’s authors, “Genuine saving provides a much broader indicator of sustainability by valuing changes in natural resources, environmental quality, and human capital, in addition to the traditional measure of changes in produced assets. Negative genuine saving rates imply that total wealth is in decline.”

The researchers are conservative in their assumptions, but once they factor in society and the environment, Africa’s most populous country, Nigeria, fell from a GDP in 2000 of $297 per person to negative $210 in genuine savings, mainly because the value of oil extracted was subtracted its net wealth.

Even the most industrialized African country, South Africa, suffers from resource curse: instead of a per person GDP of $2837 in 2000, the more reasonable way to measure wealth results in genuine savings declining to negative $2 per person that year. From 2001, the problem became even more acute thanks to the delisting of the largest corporations from the Johannesburg Stock Exchange, which added not just the outflow of mineral wealth, but also of profits and dividends that in earlier years would have been retained in South Africa.

(SA president Jacob Zuma approved these policies and he is still relaxing exchange controls, thus permitting further wealth outflow. It was the height of United Nations incompetence or irony that Zuma was last week named as co-chair of Ban Ki-moon’s new panel on global sustainability, “tasked with finding ways to lift people out of poverty while tackling climate change and ensuring that economic development is environmentally friendly.” And after the United Nations climate summit in Cancun fails in December 2010, a year later Zuma will host the crucial Johannesburg follow-up to the Kyoto Protocol, whose targets of 5 percent emissions reduction expire in 2012. What might we expect? Beholden as he is to mining/smelting capital, with his son and nephew seeking mineral-tycoon status, Zuma signed the Copenhagen Accord last December. But this mainly confirmed that his climate-vulnerable kin in rural Zululand will suffer so that Melbourne and London shareholders of BHP Billiton and Anglo American can continue receiving the world’s cheapest electricity, from South Africa’s rapidly-expanding coal-fired power generators. Just so you are warned.)

As commodity prices soared from 2002-08, the outflow of wealth was amplified. But dating to the independence of so many countries over the past five decades, the story is the same: Africa looted in a manner that even World Bank environmental staff are openly confessing, even if Devarajan has (consciously or subsconsciously) ignored their research. Hence it is misleading to the point of mischievousness for Devarajan to contradict my assertion that Africans are getting poorer.

The interview then turned to public policies associated with the looting of Africa.

CBC: The World Bank gets a lot of heat for your structural readjustment programme from some quarters. And that is when you offer to countries interest-free loans but they’re contingent on some pretty severe austerity measures that some people say can be counterproductive because they hurt the economies in question more than they help them. And you’ve been criticized, notably, by economists like Patrick Bond and I’d like you to listen one more time to something he’s told us.

Patrick Bond: The World Bank and also the International Monetary Fund, they sort of fooled us, in 2008-2009, because they seemed to shift their ideology away from a very hard-core agenda of promoting markets above everything else. And for a time it seems they were promoting government deficits and a Keynesian strategy: government should step in when the private sector fails. But now it seems like it’s back to business as usual, namely export orientation and austerity. And the World Bank, led by President Robert Zoellick who had come from the Bush Administration - he worked for Enron and for Goldman Sachs – this sort of leadership, and the Northern orientation and the banker mentality, means that the only way forward is to get away from these institutions, maybe to default on their debt, to kick them out of the country. And Latin America provides a good model for doing both of those things.

CBC: And in fact some Latin American countries, Argentina, successfully told the institutions like yourself and the IMF to take a hike, and in fact it ended up doing them a lot of good. So how do you respond to someone like Patrick Bond?

Shanta Devarajan: Oh I think again that we have to look at the facts. There’s no question that the structural adjustment policies of the 1980s and early 1990s received a lot of criticism. But then ask the question, ‘what changed?’ As I was saying, the growth has accelerated since the 1990s. We can’t hide from that fact. And you look at what changed. And it’s that these countries adopted exactly the Washington Consensus policies in the mid-1990s, the African countries. The difference is that they did it out of their own accord, out of domestic political consensus, rather than imposed from Washington or Paris or London. And I think that’s the point that people are not recognizing, that the actual policies that are generating the growth, are actually very similar to what was criticized in the structural adjustment era.

Again, African GDP growth may have accelerated as commodity prices rose, but Africa became poorer once we calculate the net wealth effect and genuine savings. Devarajan can’t hide from that fact.

To disguise this by saying that structural adjustment did not work before the mid-1990s because it was ‘imposed’ by Devarajan’s colleagues, but did work after the mid-1990s because it was adopted through a ‘domestic political consensus’, is the most bizarre claim I’ve ever heard about African macroeconomics. There has never been a political consensus to structurally-adjust Africa, aside from the permanent problem of unpatriotic elites who are more closely allied with Washington, Paris, London, Brussels and Beijing string-pullers than with their subjects (a problem which in his 1961 book The Wretched of the Earth, Frantz Fanon so eloquently brought to our attention).

The Bank’s 2006 book mentions one obvious policy conclusion, learning from a country with petroleum resources that did not fall victim to resource curse: “Norway has used the flow accounts for energy and greenhouse gas emissions to assess a policy that many countries are considering: changing the structure of taxes to increase taxes on emissions and resource use.”

But liberalization imposed by the World Bank’s lending staff does precisely the opposite. This is the sort of schizophrenia we have come to expect from Bank researchers who arrive at common-sense ‘talk-left’ conclusions, such as that extracting resources from Africa leaves the continent poorer. But it is not surprising that Devarajan and World Bank operational staff ‘walk right’ when it counts, in interviews with gullible journalists like CBC’s Mike Finnerty (who failed to follow up on either of Devarajan’s whoppers) and when imposing neoliberal policies on wretched African elites.

In this context, the only encouraging signs are the myriad of challenges to extractive industries by activists who often put their bodies on the line in sites of sustained state and corporate violence like the Eastern DRC where human rights watchdogs struggle to document the murder of approximately five million people, Zimbabwe’s Marange diamond mines, South Africa’s Limpopo and Northwest Province platinum fields and the Eastern Cape’s titanium-rich Xolobeni beaches, the Niger Delta’s oil-soaked creeks and Chad’s oil fields, Firestone’s Liberian plantations, Lesotho’s dams supplying Johannesburg’s hedonistic water consumers, and other dam displacement zones including Gibe in Ethiopia, Mphanda Nkuwa in Mozambique and Bujagali in Uganda, to name just a few.

Because World Bank officials can be counted on to ignore their own research and hence continue promoting non-renewable resource exports; because this arrangement suits multinational corporations and donor agencies; and because African elites will continue taking this advice (often with sweetener bribes as was the case of the African National Congress’ role in the Medupi power plant controversy, funded by the Bank’s largest-ever project loan, for $3.75 billion, in April 2010), Africa will grow progressively poorer.

The African networks of civil society which promote ‘publish what you pay’ and other gambits for transparency, participation and human rights should finally come to the realization that this system of looting is not going to be reformed under the prevailing balance of power, and that much more forceful resistance to extraction is required – and is underway.

*Patrick Bond directs the Centre for Civil Society at the University of KwaZulu-Natal –http://www.ukzn.ac.za/ccs - and from September will be on sabbatical at the University of California/Berkeley Department of Geography.

How many times have we heard this before! Growth for who? Development for who? Please answer!

PNG ECONOMY LIKELY TO GROW 10 PERCENT IN 2011

Gas boom driving 7.5 percent growth this year

MELBOURNE, Australia (Radio Australia,Oct. 7, 2010) – The ANZ bank says double digit economic growth is possible for Papua New Guinea in 2011. PNG is expected to grow by 7.5 per cent in 2010.The latest ANZ Bank report, says the boom created by liquid natural gas development could lift that to over 10 per cent in 2011. The report's author, Paul Gruenwald, says the boom is a significant opportunity, but warns, it will only lift living standards for the people of PNG if it is managed well. He says more effort will be needed by the government and the private sector to train the workforce and to improve infrastructure. In the immediate term the Bank says inflation is a risk. It recommends raising interest rates the gradual strengthening of the currency and restrained government spending.

One from the Archives - Exxonmobil and Human Rights Abuses in Aceh

Presenter: Sonia Randhawa
Speakers: Teuku Ardiansyah, chairman human rights and social research institute Kata Hati; K Shanmugan, campaigns coordinator Amnesty International Malaysia.

• Listen:
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RANDHAWA: It's seven years since the eleven villages first filed their suit against Exxon Mobil for complicity in killings and torture. Some human rights organisations claim the case was postponed, after intervention by the Bush administration. In 2006, the judge presiding in the case ordered it to go ahead and he's now said the plaintiffs have provided sufficient evidence at this stage for their allegations of serious abuse.

From November 1999, Exxon Mobil took over Mobil's operations in Aceh. Activists say that while the corporation did not carry out abuses itself, it actively worked with the military involved in torture, sexual abuse and destruction of property.

The ruling has been welcomed by activists in Aceh.

Teuku Ardiansyah, is the chairman of human rights and social research institute, Kata Hati.

ARDIANSYAH: The decision only we are talking about the reconciliation basically of peace if somebody push or attack others, they have to say if they are sorry, they have to say what they are wrong, they have to take responsibility for their activity in the past. We have to talk about victim's rights. If no-one take the responsibility about killing, about kidnapping and anything, so how about the victims? There's no-one give attention for them now.

RANDHAWA: He says he has little doubt of the corporation's responsibility.

ARDIANBSYAH: Exxon is one of company in Aceh and they have a relation with the military activity. They have to take responsibility, because they use, they give the equipment, they give the land to military to do some harassments, to do something activity to hurt the Acehnese people. For us, for our civil society, now Exxon have one relation with the military in the past, because they support the military. They give like some money to pay the judge, for the people.

RANDHAWA; But Exxon Mobile in a prepared statement, say there was no claims that they participated in human rights violations.

STATEMENT: Exxon Mobil will continue to vigorously defend against these baseless claims and pursue all avenues available to us through the US legal system. Exxon Mobil condemns human rights violations in any form and has actively expressed these views to governments and others around the world. The claims are based on the alleged conduct of the Indonesian military against citizens of Aceh, in Aceh, during a civil conflict. There is no claim that any Exxon Mobil affiliate participated in any human rights violations or any other wrongdoing.

RANDHAWA: The judge found for Exxon Mobil's US affiliates did not have a case to answer.

International human rights organisations however, have condemned corporate behaviour in Aceh during the conflict. K Shanmugan from Amnesty International, Malaysia.

SHANMUGAN: It confirms that corporate entity do involve in security issues and is giving rise to human rights violation. I would put it as the corporate sponsored torture that it exists, it confirms that. Now it brings back the question of how to make corporate entity accountable as well to human rights violations. I think that will have a bigger impact, to say that now we have to seriously look at, not only the state, but also the corporate entities in terms of human rights violations.

Proof trading in PNG a risky business

Townsville Bulletin (Australia)

October 9, 2010 Saturday
1 - Edition
Tony Raggatt

A VIOLENT raid on a construction camp for the $16.5 billion liquefied natural gas project in Papua New Guinea has underlined the risks for investment in Australia's resource-rich neighbour. However Townsville businesspeople trading in PNG are nonchalant.

``It's nothing out of the ordinary,'' one Townsville businessman working in PNG said yesterday.

The raid occurred at night at a camp being constructed by Townsville company Curtain Bros and Perth-based Clough Engineering for the huge Exxon-Mobil-led LNG project.

Several men raided a compound area used for storage of heavy machinery, setting alight a Caterpillar 740 dump truck and another truck and damaging other equipment, some of it with gunfire. No-one was at the site at the time and no-one was injured.

Townsville Chamber of Commerce president John Carey, pushing renewed business links with PNG, said the risks of doing business there, particularly in relation to law and order and civil unrest, were well known.

Mr Carey said violence among competing tribal groups was an unfortunate byproduct of a rapid increase in wealth such as that provided by the LNG project. He said recent Townsville trade delegations had been successful with a business reporting yesterday it had won work and another saying it was negotiating a joint venture.

Mr Carey said the chamber would meet with airport officials soon to prepare a case for direct flights between Townsville and Port Moresby.