A Warning from West Papua

A sad story taken from today's Sydney Morning Herald. What happens when the mining company's sweet talk about jobs, wealth, growth, education, roads etc etc stops and mining begins.

ABOUT once a month, a ship from Townsville makes the long journey to Raja Ampat, a seascape of astonishing beauty and diversity inthe far western reaches of Indonesian New Guinea.

Here, where the westerly currents of the Pacific Ocean flow into the Indian Ocean, hundreds of improbable domed limestone pinnacles rise from the sea, encircling placid, turquoise lagoons. And if the 612 islands and countless shoals and reefs of Raja Ampat take the breath away, they only hint at the treasures below.

This remote part of West Papua province is the hub of the world's marine biodiversity, home to 75 per cent of its coral, as well as 1500 fish species, including huge manta rays, epaulette sharks that walk on the sea floor with their fins, turtles and an array of weird and wonderful fish.

Yet the vessel that makes the regular trip to and from Townsville does not bring tourists or divers. There are no scientists on board to study this marine wonderland. Rather, it is in Raja Ampat to take a consignment of tens of thousands of tonnes of the red clay soil, rich in nickel and cobalt, and destined for the Yabulu refinery owned by one of Australia's richest men, Clive Palmer.

According to conservationists and marine scientists, this mining activity and the prospect of further exploitation puts one of the world's most precious ecosystems under threat.

Raja Ampat's significance to the world is immense. It is the heart of the famed Coral Triangle, and the strong currents that rush between its islands help seed much of the 1.6 billion hectares of reefs and marine life that spread from the Philippines down to the Solomon Islands.

"I'm appalled by what's going on," says Dr Charlie Veron, a former chief scientist from the Australian Institute of Marine Science who has surveyed the region on many occasions. "If you had a rainforest with the most diverse range of species in the world and people started mining there without doing any kind of proper environmental impact study, there would quite rightly be outrage. Well, that's what's happening here."

The impact on local communities has also been devastating. What were once close-knit villages are now divided as competing mining companies offer financial inducements to residents for support. And, in a sadly familiar tale for the Papua region, where separatist sentiments linger, the benefits of exploiting its resources are largely flowing outside the region. Derisory royalties go to landowners, and minuscule salaries are being paid to locals who gain employment.

Deep fjord-like bays cut into the hinterland of mountainous islands, framed by vertiginous jungle-clad cliffs that drop steeply into the water. There are oceanic atolls, shallow bays with fine white-sand beaches, snaking rivers and mangrove swamps.

The vessels sent to collect the nickel and cobalt for Clive Palmer's Queensland Nickel dock at Manuran Island, where the mining has continued unabated despite a decree by West Papua Governor Abraham Atururi banning all mining activity in Raja Ampat.

"The mining started in 2006. There were protests, but the military and police came and they stopped them," says Yohanis Goram, from Yayasan Nazaret, a local NGO that opposes mining.

The operator of the mine, PT Anugerah Surya Pratama (PT ASP), has promised environmental safeguards but, according to one local from nearby Rauki village, they are ineffective. "When it rains the sea turns red, sometimes yellow," says the village elder in a phone interview. "The runoff is supposed to go into a hole but it comes out [into the sea]."

Yosias Kein hails from Kapidiri, an island near Manuran that claims customary ownership. "The mining waste damaged the coastal areas and covered up the coral reefs. Besides, it is difficult for people to get fish now. Fishermen in Kabare village, also in Rauki village, saw the waste went down into the seas near Manuran. Now they have to go fishing a bit further to the east or to the west."

The strip mining for nickel leaves the landscape barren, and the steep cliffs of Raja Ampat's islands mean heavy rainfall overwhelms the drainage systems and sends the soil into the water.

The impact is twofold and nasty for coral, says Charlie Veron. "Sedimentation sinks onto the coral and smothers it. But worse is ‘clay fraction', where very fine particles are suspended in the water, blocking the sunlight."

Photos taken from Manuran and supplied to The Saturday Age show murky water and dead coral after heavy rains.

PT ASP is a Jakarta-based mining company, and also owns PT Anugerah Surya Indotama (PT ASI), another mining outfit that operates on Kawe Island in Raja Ampat, despite a court order to desist due to a conflict over mining rights with a West Papua-based company. The ownership of the companies remains a mystery, although West Papua is rife with speculation that senior politicians and military figures have a stake.

The speculation is easy to understand, as the Jakarta company seems to have extraordinary pull at the highest levels of government in both Jakarta and Raja Ampat. When rival mining company PT Kawei Sejahtera Mining (PT KSM), owned by local man Daniel Daat, began loading its first shipload of nickel in 2008 at Kawe, three gunships and an aeroplane were sent to stop the consignment after PT ASI, which also claims a mining licence for Kawe, complained. Daat was thrown into prison.

The mines at Manuran and Kawe are guarded by military and police who locals say are on the company payroll. And, while 15 other mining companies have been pushed out of Raja Ampat since the Governor's decree, PT ASP and PT ASI have remained.

At the very least, the two companies appear to have a cavalier approach to doing business in Raja Ampat. Police documents obtained by The Saturday Age reveal the companies allegedly bribed the bupati, or regency head, of Raja Ampat, Marcus Wanma, to gain mining licences. Wanma was paid $36,000 to issue the mining licences in 2004, and a further $23,270 for "entertainment" purposes, the documents say, citing police interviews with 16 witnesses, including Wanma's staff and Yos Hendri, director of PT ASI and PT ASP.

The documents record that about 670 million Indonesian rupiah (about $122,000 on currency valuations at the time) was paid in 2004 to Wanma for nine mining licences, and only 197million rupiah was deposited in the regency's bank accounts. "The rest of the 500 million [rupiah] was used for the personal interest of [official] Oktovanius Mayor and Marcus Wanma," the documents say.

Wanma, in the end, escaped prosecution and remains the regency head. He has been incapacitated with a serious illness and is believed to be in Singapore recuperating. He was unavailable for interview, and Raja Ampat officials declined to comment.

Whether the licences were corruptly obtained or not, the fees paid for them are desultory.

The open-cut mining undertaken on Manuran is cheap and low tech. After clearing the vegetation, workers simply dig up the soil, haul it into trucks and take it to the docks, where it is sent to processing facilities where pure nickel, used in stainless steel, is extracted. The mine's wharf is nothing more than a tethered barge with no cranes. Costs for the company consist of little more than maintaining about 40 trucks and heavy-moving equipment and the simple wharf.

According to villagers and employees, most of the mine's labourers earn between $170 and $200 a month. Customary landowners also receive a royalty, but an investigation by The Saturday Age reveals that it is tiny.

Soleman Kein, an elder from Kapidiri, says a new deal was negotiated last year increasing landowners' share of the mine's income from 1000 rupiah (11¢) a tonne to 1500 rupiah.

An industry expert with knowledge of Raja Ampat's high-grade nickel laterite ore says PT ASP would be getting between $US40 ($A37) and $US100 a tonne, depending on the fluctuating world prices. The average price would be about $US60 a tonne, he says.

A single 50,000-tonne shipload of nickel laterite ore earns the miner, based on average price of $US60 a tonne, $US3 million. The mine at Manuran Island typically does two shiploads a month. If a tonne of nickel laterite sells for about $US60, the locals are getting less than a 0.3 per cent share.

"These companies want a lot of money for not much effort," says one veteran miner with two decades of experience in Papua. "They pay as little attention as they can to environmental standards and take the money and get out ... The amount the locals get is pitiful."

Yos Hendri, a director of both PT ASI and PTASP, pulled out of an interview at the last minute and declined to respond to detailed emailed questions. But according to one source , the local government gets another 3000 rupiah a tonne, while a further 2000 rupiah a tonne is devoted to infrastructure.

All up, the source says about $200,000 has been spent on local villagers in royalties and infrastructure since 2007. In the meantime, the company has earned well over $150 million from sales, although between 4 and 5 per cent of that revenue should flow back to the central government's coffers.

To be sure, some of the villagers are happy with the arrangement. Soleman Kein is delighted with his new house, paid for from the infrastructure fund. "My house used to be made of sago leaves; now the company has renovated it, our walls now are made of bricks, we have a roof made of zinc and the interior part of the house is beautifully painted," he says.

But villagers from Rauki say only 10 of 76 homes promised in 2009 have been built. And disputes rage between clans over who gets the money.

"Conflicts emerge because certain groups of families claim ownership of Manuran Island while others reject their claims," says Yosias Kein. "Sometimes, there have been physical conflicts, sometimes an exchange of arguments. The problem is the company does make some payments but the amount is not equal."

The squabbles have torn apart what were once tight-knit communities. The simmering discontent is "like a volcano", says one Rauki native, that "will erupt one day".

"Corporations are the ones that get the profits," says Abner Korwa, a social worker from the Belantara charity, who has closely tracked the mining. "Once the deposit is exhausted, the big corporation leaves and we will be left alone with the massively damaged environment."

Queensland Nickel has a sustainable development policy that strives for "minimising our impact on the environment" and commits to "pursue honest relationships" with communities.

The company declined to be interviewed or respond to emailed questions. "We don't comment on the business of our suppliers," says Mark Kelly, Queensland Nickel's external relations specialist. Clive Palmer's publicist, Steve Connolly, also declined to comment.

Korwa says companies such as QN should not shirk responsibility for the behaviour of their suppliers, given that they make considerable profits from the arrangement. "They don't have to invest too much in Raja Ampat. They don't have to be troubled by mining concessions, the way business is done here," he says. "But they can still get the nickel".

Oxfam Australia, which runs a mining ombudsman, says there is a clear obligation for companies such as QN thatprocess raw minerals to be held accountable for their suppliers.

"Australian companies need to make sure that they are only buying minerals from other companies that respect workers' rights, community rights and the environment. If there's a good reason to believe that a supplier is causing harm, the company should undertake a thorough assessment," says Oxfam Australia executive director Andrew Hewett. "If any issues are found, the company should, in the first instance, work with the supplier to try to rectify the problem. If this doesn't work, the company should reconsider its business relationship with the supplier."

QN should be well aware of the issues in Raja Ampat. It bought the Yabulu refinery from BHP Billiton in 2009 when the mining giant pulled out of Raja Ampat, selling its mining rights for the region's Gag Island amid concern about the ecological and social impacts of mining.

The simmering discontent is not restricted to the villages around Manuran, but is ripping apart other villages whose people have been the custodians of Raja Ampat's wonders for centuries. For them Raja Ampat — literally Four Kings — was created by eggs that descended from heaven to rest in the water.

The dispute at Kawe Island is particularly poisonous. It arises because QN's supplier holds a licence issued by Wanma that, it argues, supersedes one issued by the governor of West Papua to PT KSM, the company run by the unfortunate Daat, who, besides being a businessman and a politician, hails from Raja Ampat's Maya people.

Korinus Ayelo is the village chief of Selpele, which has customary ownership of Kawe, and supports Daat's PT KSM. But rival company PT ASI engineered the highly contested elevation of another chief, Benyamin Arempele, who endorsed its rights to mine.

Repeated legal cases have found in favour of Daat but PT ASI continues todevelop its mine and conduct exploration. "They are still working today, guarded by the police," says Ayelo, adding that villagers who were previously close now don't talk to each other. "There's a distance between our hearts," he explains. "The people are uneasy. PT ASI uses the military. There are TNI [armed forces] everywhere. People must face the presence of TNI every day."

Daat says high-level political and military support from Jakarta is behind PTASI's continued operations. "It is impossible to get such support for nothing. I believe the profits from Manuran Island are shared by several parties, parties that support this company," he says. "I won this case at the District Court, at the Provincial Court and at the Supreme Court. How great is the Indonesian law system? They are still in Kawe doing exploitation despite the courts' rulings."

Regardless of which company has the legitimate mining rights at Kawe, there are many villagers and conservationists who want mining stopped outright at Kawe, and in the whole of Raja Ampat.

Kawe is a place of huge environmental significance, close to the stunning Wayag archipelago of karst limestone pinnacles and host to 20 world-class diving sites as well as green and hawksbill turtle breeding sites and shark pupping grounds.

Photos obtained by The Saturday Age show that earlier mining activity at Kawe led to the heavy red soils being flushed into the sea, covering the reefs, a problem that will only get worse once full operations resume.

"We are very concerned about the potential for sedimentation and metal deposits to be transported by Kawe's strong currents and moved up to Wayag and down to Aljui Bay," says Mark Erdmann, senior adviser to Conservation International's marine program in Indonesia.

Raja Ampat is theoretically protected by seven marine parks and a shark conservation zone, but while enforcement against illegal fishing is actively conducted, land-based threats such as mining on nearby islands continue unabated.

Indonesia's government has recognised the extraordinary habitats in Raja Ampat. It put the region on the "tentative list" to become, like Australia's Great Barrier Reef, a UNESCO world heritage area in 2005. But the application has stalled due to inaction by the government, many suspect because it wants to exploit the area's natural resources through mining and logging.

In a deeply worrying development forconservationists, nickel and oil exploration restarted this year after the local government issued new exploration permits

"There is tremendous wealth in the natural environment from fishing, pearling and tourism," says Erdmann, citing a State University of Papua survey that found the long-term benefits from theseeco-friendly economic activities outweighed the short-term gains from mining.

"Mining and this precious, pristine eco-system can't co-exist in the long term."

Read more: http://www.smh.com.au/environment/sea-of-trouble-20110701-1gv49.html#ixzz1Qvw8OIPv

First the Egyptians, now the Greeks, next Papua New Guinea?

Photo: Greek protesters hold a banner in front of the Parthenon

Last week we posted an article which raised questions over whether electoral politics in its current form constitutes democracy, that is does it enhance the capacity of each individual to participate in the economic and political decision making processes that condition their life. We suggested decision making takes place at hermetically sealed levels, which ordinary people are excluded from.

In Greece at present people are taking to the streets to express their anger over decisions taken by the political elites and bankers, which ordinary working Greeks are now being told to pay for by the European parliament, the IMF and indeed their own government. The question in Greece, the question in Spain, the question in the United Kingdom, the question in Egypt, the question in Papua New Guinea, is whether people can not simply express rage, but can covert this growing revolutionary spirit inspired by decision making from above, into creation.

With the father of Papua New Guinea stepping down from power, fears are arising over a constitutional crisis. The mining companies, loggers, banks and agrofirms do not fear popular participation, the people are too divided by poverty, by clan affiliation, by geography for that, what they fear is that the Waigani elite will become fractured, consumed by in-fighting, which will lead to political stagnation.

Like with the Arab world, there is a belief that Papua New Guineans are incompatible with revolutionary change. Papua New Guineans are too parochial to seriously challenge the status quote, too mired in the world of patronage, localism, clan politics, kinship networks. The question is can these emblems of 'fragmentation',  become a strength that unites people, under a national bloc that seeks to protect culture, land and environment from the coercive forces of capital and political domination.

The Greeks search for their answers, the Egyptians, Syrians, Libyans, Tunisians, Yeminis etc, search for theirs, each answer will be specific to the national situation, but the question is whether a general theme can run through all movements, to depose market determinism and enact a new world of social exchange for social people that takes as its guide human beings, land, environment, sustainability, future generations.

We will continue to challenge the big companies like Exxon Mobil through a peaceful campaign of protest and critique, as will others, but unless the life force of the powerful are challenged on a mass scale, any victory will be temporal and sporadic. Only a united, mass movement will create the environment for true participation in economic and social change in Papua New Guinea.

Rio Tinto Caused The War: Somare

A story from The Age, does Exxon Mobil have any less leverage we wonder?

PAPUA New Guinea's Prime Minister, Sir Michael Somare, has accused Australian mining giant Rio Tinto and its subsidiary Bougainville Copper Limited (BCL) of being behind the PNG military's bloody suppression of Bougainville rebels opposed to the company's Panguna copper mine.

An affidavit written by Sir Michael when he was Opposition Leader in 2001 - and never made public - alleges that Rio played an active role in military operations that ultimately led to a civil war and blockade of the island in which 15,000 people died between 1989 and 1997.

''Because of Rio Tinto's financial influence in PNG, the company controlled the government,'' Mr Somare's affidavit states.

''The government of PNG followed Rio Tinto's instructions and carried out its requests … BCL was directly involved in the military operations on Bougainville, and it played an active role. BCL supplied helicopters, which were used as gunships, the pilots, troop transportation, fuel and troop barracks.''

The Somare affidavit was lodged as part of an ongoing class action in the United States by the islanders against Rio Tinto.

The case has been bogged down in legal argument for 10 years, preventing much of the evidence, including the Somare affidavit, from being made public. In his signed statement, Sir Michael claims that without Rio Tinto, there would never have been a war.

''It is my opinion that absent Rio Tinto's mining activity on Bougainville or its insistence that the Panguna mine be re-opened, the government would not have engaged in hostilities or taken military action on the island.'' The affidavit will complicate Rio Tinto's current attempts to reopen the mine, which is being supported by Sir Michael's government.

Sir Michael was unaware that SBS's Dateline program had obtained his signed statement from sealed US court material until his office was contacted this week. Sir Michael is recovering from double heart surgery in Singapore and his office was unable to say if he still stood by his comments.

The ailing leader's statement reinforces claims from the islander litigants and former rebels that Rio Tinto had a hand in the military's efforts.

Sam Kauona, a former fighter, said: ''It didn't surprise me, all the time we knew.

''We knew that BCL was financing this war on Bougainville because when we were fighting … all the BCL vehicles were being used by the security forces.''

Panguna landowner, former rebel and local chief Philip Miriori said Sir Michael's statement backs up his long-standing claims about Rio's complicity with the PNG military.

BCL chief executive Peter Taylor was aware of the affidavit, but said he was surprised Sir Michael would ''make these accusations knowing they're completely unfounded''.

Brian Thomson's report on the war in Bougainville screens on Dateline on SBS1 at 8.30 tonight.

This story was found at: http://www.theage.com.au/national/rio-tinto-caused-war-somare-20110625-1gkow.htm

Strategies for Changing the World

http://vimeo.com/17157070

Following on from our Monday post, the above link is to a very interesting talk by two Irish intellectuals, Kieran Allen and John Holloway on  strategies for everyday people to become involved in building a new movement based on popular participation in the economic, political and cultural decision making processes on which our life, and the life of future generations hinge.

The Impoverishment of Democracy – Papua New Guinea and the Erosion of Popular Participation

If democracy is about popular participation in the decision making processes that directly shape our life, then we should not be looking to western models of Westminster democracy for guidance. In this article we argue that the poverty of electoral politics and the despotism of the market must be challenged by a participatory democracy that actively engages people in economic and political decision making.

In true western conceit the word democracy is commonly fused to a Westminster style system of elections and party politics. This is democracy we are told!

However, what is democracy if we strip away the liberal ideological baggage that is attached to it in the textbooks? In its most stripped down form it would appear that democracy is a generalisation that captures our capacity to participate in decision making processes that shape our life – and thus it is an elementary feature of social life that has occurred in Papua New Guinea for many thousands of years.

However, Papua New Guinea’s integration into the global market and an international system of governance entails that the decision making processes that directly affect us today take place at various social levels and on different temporal scales. It occurs at the level of the family, the local community, the provincial and national level, and indeed internationally. The decisions may be over what is going to happen tomorrow, or what is going to happen over the next decade.  They take place through numerous forums, from world trade summits through to the cabinet room and multinational head offices.  Note, most of these forums we are excluded from. Note also, that those forums where we do have a voice, e.g. the family or local community, are heavily conditioned by those forums in which we do not have a voice.

Indeed, the laws we live by and how public monies are used, is decided within the secretive (corrupt?) corridors of government. Decisions over which regions of the global economy will develop, have access to jobs, the conditions under which work will take place etc, are decided by autocratic business leaders in a more or less anarchic fashion (i.e. it is a sum result of their individual, self-interested decisions). In a real sense then, a market based economy, overseen by a Westminster style democracy, liberalism par excellence, has in fact eroded democracy in Papua New Guinea, leaving decision making it in the hands of an elitist group of politicians and the dictatorship of business heads.

Ironically who has more democracy, a villager who through dialogue and consensus with other community members, has input into how the essential resources of their society are employed, or the city worker who hopes they can find a job, rent an overpriced home, and afford medical bills perchance they or their family gets sick? The decision making processes on which the city worker’s future depends, occurs at levels beyond the scope of their participation – they can only hope and try to survive in conditions dictated to them by others. The villager on the other hand engages in a process of dialogue, where consensus is built, and a decision is reached, they have a real say.

Indeed, regular elections, while obviously important, do not make a democracy. In some senses it can actually erode democracy, if elections mean that decision making is delegated to a small elite, while the people are largely marginalised. If this more or less describes the situation in Papua New Guinea, then no it is not a democracy. However, nor for that matter is Australia, the United Kingdom or the United States. These countries have elections, but citizens do not substantively participate in political and economic decision making. In fact we have been conditioned to believe that this is normal, how on earth could a world develop where consensus was really built through consensus rather than dictation.

Thus the fight in Papua New Guinea should not be purely over formal democracy (electoral politics), this is a struggle for an impoverished form of democracy. The struggle should be over real, substantive democracy, that enhances the capacity of every individual regardless of their wealth, status, gender or age, to participate in the economic and political processes that set the stage in which life is lived (electoral politics, in this sense, must be part of a much broader program of participation). Sure this might take place in important respects through reforming formal electoral processes, but we should not allow this diluted, half hearted form of democracy to dominate our thinking.

Therefore, the question that needs an answer is: what sort of institutions do we need to develop to obtain popular involvement in the economic and political processes that determinate our lifestyle and standard of living?  Of course, any answer to this question demands we violate the norms of a world where those who monopolise wealth through a system of exclusionary private property, feel ordained to make the primary decisions. Indeed, look at the reaction of the national government and MCC to an attempt by landowners in Madang to have a voice in the mine’s waste disposal system. It has been met by violence, threats, and rogue legislation, leading landowners down the adversarial path of court orders and legal actions. Some call the landowners activists, others troublemakers, this however is democracy in action, mediated however through a system that does not tolerate popular participation, thus it takes the costly form of adversarial struggle in the courts.

For those struggling to allow greater popular involvement in decision making over major social processes that will forever change Papua New Guinea, for better or worse (e.g. LNG PNG!), we must have the resolve, the vision, arguments and popular support to violate the norms of the powerful and invent new forums for participatory democracy, otherwise the dictatorship of the market and the autocracy of closed government will continue to prevail. 

LNG Spin, the Echo of History and the Real Questions the ABC Should Be Asking!

In a recent infomercial ... ahem interview ... on ABC Radio for LNG PNG, Esso Highlands boss Peter Graham celebrated the innovative range of benefits being devolved to local communities as a result of the LNG project. For those versed in the history of mining in PNG, however, there was a definite echo. The very innovations which Graham suggests will endear the LNG project to local communities, are a carbon copy of Bougainville Copper Limited’s (BCL) localisation policy, which to put it mildly was an abject failure. Here are a few examples of their shared approach to localisation:

Corporate Social Responsibility

Peter Graham: “Long-term the security of the project is really driven by the relationships you have with the people in the communities in which you are dealing. We recognise that, we understand that we need to be seen as good corporate citizens within those communities, to be a participant in the community and to have a sense of ownership by the people in the communities, of the project. We nurture that sort of relationship with communities”.

BCL: The first boss of BCL, Frank Espie claimed, “[c]ontrary to some impressions, the Chairman of a multinational company can be a responsible citizen ... I am best able, in the long run, to ensure the return on my shareholders’ investment by conducting our business in a way which satisfies local requirements”. 

Training and Employment

Peter Graham:  “I think as a matter of priority we have decided to take a very comprehensive approach to national content. We would like to maximise the opportunities for Papua New Guinea citizens to participate in the project so we have invested heavily in creating substantial training institutions in PNG to help develop the skills of Papua New Guineans during the construction phase.”

BCL: According to former BCL Managing Director, Paul Quodling, BCL actively localised its staff, consequently by 1988 83% of the company’s employees were Papua New Guinea nationals, with preference informally being given to Bougainvilleans. Moreover, according to two former BCL Chairmen, Don Vernon and Don Carruthers, during the life of the mine BCL trained over 12,000 Papua New Guinean citizens.

Local Business Assistance

Peter Graham:"When you look back over the history, certainly of the oil and gas industry in Papua New Guinea, there have been some great successes and there have been some areas where business development hasn't been quite as good as it might have been, you know, companies failing. And we'd like to do everything we can to ensure we do not have business failures in Papua New Guinea associated with the project. So we set up what we call the Enterprise Centre, but basically it is a resource centre. Its an organistion, a physical institution with resources in it, provided free of charge, to landowner companies in particular to develop their business skills, to develop a sound business plan, understand the roles of directors and officers of the company again to ensure that once they get started there is a sustainability about what is developed and we don't have to deal with collapsed companies and the debris that can come from that."

BCL: BCL created both a business advisory service in order to foster small business, and a community relations department. Additionally, BCL also helped to initiate and fund the Bougainville Copper Foundation, a charitable body constructed with the broad aim of improving the welfare and development of the people of Papua New Guinea.

Landowner Companies

Peter Graham:  “As far as I am aware the approach here is unique. I am not aware of other countries where there is this particular approach to developing landowner companies. Certainly micro-businesses are developed in other countries but here there has been and we've made a major push, as has Oil Search and others, in developing business opportunities associated with the project. I think we've made good headway ...  We allocated a number of reserved areas to give them a leg up so they could start with confidence to develop skills in those areas, things like catering, camp maintenance, security, labour hire, and get them focussed on that rather than spreading their interests focussed across a very broad spectrum of business opportunities. .

BCL: According to former BCL Managing Director, Paul Quodling:  “The organization of mess food-buying through rural consolidation agencies opened up a lucrative market for garden-style cash crops. Service functions ancillary to BCL’s mainstream operations were devolved to local contractors. Labour contracts, transport, security services and building were typical industries that attracted individual or community involvement. Since not all business opportunities were within the competence of such groups, provincial planners incorporated the Bougainville Development Corporation to develop middle-size ventures often in partnership with offshore experts”.

The Elephant in the Room: The Questions Resource Operators Wont Answer

Behind these elegant defences of the LNG project, Graham fails to address, what all major resource developers in PNG fail to address:

Who will bare the environmental costs of the project?

How will rapid urbanisation and mass migration be addressed?

Why should we think that the taxation revenue will not be squandered by a corrupt and inept state?

How will Exxon ensure that local benefits are not monopolised by a small minority of local elites, leaving women, young people and other marginalised community members on the periphery (whilst also placing stress on intra and inter community relations)?

What safeguards are in place to ensure communities are not dispossessed of their land through the rapid, uneven development of the rural economy, fostered by the project (e.g. due to new demographic pressures and new land use practices)?

These issues are of everyday concerns for communities in PNG, for resource operators these are issues to be danced around and avoided for the duration of the project (pesky NGOs that raise these issues, can be accused of having hidden agendas, because as we know multinational corporations are pure of heart Papua New Guinean nationalists). Unfortunately while resource operators can cut and run when the realities of social dislocation, dispossession, inequalities and cronyism reaches its peak, local communities cannot.

Imperialist Light or Imperialist Heavy: An Interview with Don Poyle

Sacked PNG Foreign Minister on US China rivalry in the Pacific

Source:  http://www.radioaustralia.net.au/pacbeat/stories/201106/s3237952.htm

Papua New Guinea's outgoing Foreign Minister, Don Polye, says he would like to see more United States investment in the Pacific.

Earlier in the year, United States Secretary of State, Hilary Clinton, warned the US Foreign Relations Committee that the Pacific, and Papua New Guinea in particular, is an arena for growing strategic competition between the US and China.

Despite China's rapidly diversifying interests in the region, the United States has just one major investment in Papua New Guinea - the PNG LNG project.

And the US has alienated key Pacific nations, such as the 8 tuna-rich countries that are parties to the Nauru Agreement.

In Papua New Guinea, an influx of new Chinese investors, some of whom are illegal immigrants, is creating a backlash.

Mr Polye, who as you've heard was sacked this week as PNG's Foreign Minister, following ongoing leadership tussle with acting Prime Minister, Sam Abal.

But in the lead up to next year's general elections he will continue to be a major force in PNG politics.

He spoke with Radio Australia's Pacific Business and Economic reporter, Jemima Garrett, in his parliament house office, before he lost the Foreign Minister's job.

Presenter: Radio Australia's Pacific Business and Economic reporter, Jemima Garrett
Speaker: Don Polye, Papua New Guinea's outgoing Foreign Minister

GARRETT: Don Polye, thank you for joining Radio Australia and welcome to the program.

POLYE: Thank you for giving me that opportunity.

GARRETT: US Secretary of State, Hilary Clinton, says PNG is one of the hot spots for strategic competition between US and China. What are you seeing on the ground?

POLYE: There are two things I'd like to mention here. What Hilary Clinton said probably is true. But we like to see every player play our rules and our standards here in Papua New Guinea, where every rule of law and every rule of business is followed. Secondly, we welcome the competition because its going to be a positive development for Papua New Guinea. In other words, an increase in investment into the country, will definitely boost our business activities and economic activities here. I welcome the competition and look at Papua New Guinea as a strategic place to invest in . However, I would like to make the point that we should work together on a level playing field following all laws.

GARRETT: John Momis, the President of the Autonomous government of Bougainville, has said apart from the PNG LNG project American investment is conspicuous by its absence. In fact, he said there was so little he thought the US had a policy of NOT investing in PNG. How do you respond to those comments?

POLYE: Well, it is quite true to an extent. You look at history. Americans have never invested much in the Pacific region, as a business. Of course they've got military bases up there in Guam, and the Philippines and others. And of course, they had the involvement in the second world war and they came to PNG but after that you come another 20 years and you really would not have seen any American investments here, and the one we have seen is the Exxon Mobil. I think Chevron came in but they went out some years back so really I think this is on a bigger, larger scale but on a smaller scale investments and trade there hasn't been as much as other countries investing in PNG.

GARRETT:Do you think the United States has left too much of the running to Australia?

POLYE: Laugh - I really don't know about that. I can't answer the question. But I think, the US is a big economy maybe they are too big. And they care less to invest. I mean they've got all their businesses, there. They are already a flourishing superpower so they probably 'why should we invest in other countries? We are big already. We have ventured a lot of these American dreams' and so forth. But Australia, I don't think they've come and invested in PNG because of such mind set by US. Australia would naturally be investing because PNG is the closest destination to invest. Even in the colonial days Australia showed a lot of interest in PNG in alluvial goldmining and other activities so traditionally you'll find Australians have always been here -easy for them to invest in a country they have always been familiar with but US, like I've said, maybe they are too big.

GARRETT: Papua New Guinea has also recently walked out of talks to renew the Pacific tuna treaty with the United States because the United States wasn't paying what PNG thought was a reasonable licence fee or willing to offer competitive market access. Are PNG's relations with the US at something of a low point?

POLYE: I don't know I do not like to see Papua New Guinea's relations with the US at a low point. I would like to think that we could discuss those issues on the table. I know there has been some exchange on the media on this, when our acting Prime Minister did make some comment on this issue but I think new can always discuss those things. Come to a roundtable and see how best we can address those issues. I would like to also make, PNG sees US as important in the region, in the Pacific although they did not have a big investment in the country we regard them as very important to the Pacific region. And therefore we would like to see them invest more here and fisheries is one area and I would like to encourage them to relook at the issues that PNG has raised. We are probably saying that because we are applying the same fees to others like Japan. With Japan, for some time pulled out from fishing in PNG but recently, in the last 2 to 3 years they tried to show a lot of interest in investments here. So I would like to think the US and Papua New Guinea should discuss more. Understanding one another better would be the way forward. And I encourage the US to invest more in PNG and in the Pacific because that is what is happening at the moment.

GARRETT: Let's turn now to China, just how much interest is PNG seeing in investment from China, particularly in the resources boom?

POLYE: My view is that China's approach to investments - they just do investments regardless. They are aggressive. Most of the businesses you find, the big companies are owned by the state and they come in a big way. And Chinese business men and women I also see them in a driving to invest here in Papua New Guinea. I think it is also a cultural thing too. I also think it is an issue of standards, and the legislative framework that's in place in the country, as to how you go into business within those frameworks. There is a lot of factors that really drives people but China is becoming a major investor in this part of the world.

GARRETT: Some commentators have suggested that there are now double the number of Chinese citizens in PNG, both legal and illegal, compared to the number of Australians. What is your assessment of the situation?

POLYE: It could be true. I do not have any official report to give you a specific answer on this but what you hear people saying could be true. I have just talked about the asylum seekers issue. In PNG there are people who come in illegally without our systems even knowing about this. That is an area of challenge to me as Minister for migrations, in really coming up with laws. In fact, I am reforming laws now to combat or to address some of those issues so we stop illegal migrants into Papua New Guinea. The point that I alluded to earlier on - we encourage investments in the country but by following the rules. Sometimes unfortunately, the rules are not followed. Illegal immigrants come in because of the incapacity of our own systems in the country, we do not effectively detect them and take necessary actions. So we do admit to some of those shortfalls, on our side, but we would like to also encourage people who come into this country to be responsible. I encourage people who come here to do business in a genuine, honest, and through the legal processes. But those who come in illegally �by the reforms that I am doing you will find I am getting much tougher on illegal immigrants.

GARRETT: Australia does give substantial aid to the PNGDF but would you like to see more aid specifically to this issue of illegal immigration?

POLYE: Yeah - well illegal immigration is a big area that we can address together. The business in this country must b e on a level playing field. It is unfair for some business who come in to do general business complying with all rules while others just come in to rip-off things and stay out of the legal spectrum and that is not good. We are reviewing the issues. We have a meeting coming up in July this year - somewhere in Canberra or Brisbane yet to be confirmed - but in that meeting we will have to address those issues of immigration, of border security, how we do that because it affects business and most of those illegal immigrants in this country have been Chinese and we'd like to discourage that. And to protect business, I think that is where PNG and Australia and of course others in the region, the Pacific Islanders, Indonesia, Malaysia, all of us should be working together.