Industry Abandons Ok Tedi Mine in Papua New Guinea

industry abandons ok tedi mine in papua new guinea

geoff evans , director, mineral policy institute, australia

Two things happened in February 2002 that highlight how, despite the rhetoric about improved industry performance, real change lags far behind.

bhp walks free from ok tedi
The first event occurred as BHP Billiton completed its walkout from the Ok Tedi mine in Papua New Guinea (PNG) in February. The corporation's exit was facilitated by legislation rammed through the PNG Parliament late last year that sets an appalling precedent for relationships between transnational corporations and national governments.

The legislation allows the mine to continue operating with ongoing waste disposal into the Ok Tedi River. It also provides BHP Billiton with legal indemnity from future claims for environmental and social harm, and allows the company to take as “informed consent” any person claiming they can speak for a whole village.

The ethical values that BHP Billiton claims to have are highly inconsistent with the ongoing pollution at Ok Tedi, and the company is unwilling to stop this by matching its values with dollars. BHP Billiton claims it argued long and hard for early closure of Ok Tedi, but understandably the PNG government and local communities opposed this, fearing economic hardship.

poisoned gift of a mine
BHP Billiton should have granted billions of dollars to provide a tailings solution at Ok Tedi, or alternatively compensated the PNG government and local communities to ease the transition and disruption of early mine closure. Instead, it offered the landowners the poisoned gift of 52 percent equity in the mine for its remaining life. The mine has now been passed over to the ironically-named Sustainable Development Project Company, designed to provide long-term benefit to local communities, but whose income is dependent on the very mine killing the local environment.

mmsd comes up empty
This situation shows how badly mining industry reform is needed. Yet in February, any faint hopes that the much-vaunted Mining, Minerals and Sustainable Development project (MMSD) might offer some solutions proved misguided (also see article previous page). The MMSD was charged with "identifying how mining and minerals can best contribute to the global transition to sustainable development," and released its final international report in May.

Many environmental and human rights organizations were sceptical of the MMSD, fearing its true motives were more about tightening the embrace between industry and investors, lenders and insurers than about strengthening community and government ability to enforce environmental justice.

we need mandatory, not voluntary code
Sadly, BHP Billiton's actions in PNG exemplify the ugly truth behind the MMSD's sweet-sounding overtures about voluntary changes. The MMSD report contains many recommendations, but essentially promotes the existing paradigm – ever-expanding mining - based on voluntary self-regulatory regimes. It also calls for the development of a non-binding international “Sustainable Development Code.”

Environment, labour, human rights and indigenous organizations will also campaign for a code, but for one that complies with international conventions and standards, and makes mining companies' “licence to operate” conditional upon compliance with the code.


contradictory message
Ironically, the MMSD report also calls for development organizations and international government agencies (such as the World Bank and UNEP) to assist capacity building in developing countries, essential for independent regulation and monitoring. Peter Colley, research director of the Australian miners' union (the CFMEU) points out that it is "both intriguing and contradictory that a company-sponsored initiative is saying this," given that these corporations have led the charge for smaller government and lower taxes. Yet these very institutions and funds are needed to support effective development and regulatory programmes.

dialogue no substitute for action
MMSD calls for ongoing dialogue and partnerships bringing together industry, government and community sectors, and operating at the international and regional levels.

The Mineral Policy Institute welcomes dialogue with industry or governments on mining, minerals and sustainability. However, credible dialogue requires MMSD and corporate rhetoric to be backed up by the industry demonstrating fundamental changes in its practices on the ground, commitments to mandatory compliance with international human rights, labour and environmental conventions and a new level of corporate accountability. There must also be a shift from investment in ever-expanding mining toward investment in a minerals future based on curbing consumption through resource conservation, re-use and recycling.

Of course, independent action, research and solidarity of communities and NGOs linking the global North and South will be most crucial to achieving a truly sustainable minerals future.