Friday, September 20, 2013

State to Own Ok Tedi Mining Ltd

State to own Ok Tedi
House passes Bill to hold 100 per cent stake in mine


PARLIAMENT has passed amendments to the OK Tedi Mining Agreement for the State to have 100 per cent ownership of the OK Tedi mine.
The move by Parliament also ended a war of words between Prime Minister Peter O’Neill and OTML chairman Sir Mekere Morauta over the issue.
When making the amendments, Parliament passed a new tenth Supplementary Agreement that will result in the cancellation of PNG Sustainable Development Program (PNGSDP) shares in OTML and the issue of new shares to the State.
On the commencement date, all ordinary shares held by PNGSDP in the share capital of OTML shall be cancelled and cease to exist.
More than 122 million new fully-paid shares in the share capital of OTML will be issued to the State.
These shares are free of any encumbrances, charges or equitable interests.
The PNGSDP will undergo a major restructure of its operations to ensure its funds is exclusively for the benefit of the people of Western Province.
The new Bill also provided that any person who has any choice in action or right to pursue or enforce legal proceedings against or in relation to BHP in relation in connection with the operation of the OK Tedi mine will now have their full rights restored.
The effect of this is that individuals will have all their legal rights restored and are free to pursue any new or former actions against BHP.
The Mining (OK Tedi Ninth Supplementary Agreement) (Amendment) Bill 2013 was introduced by Prime Minister Peter O’Neill and was passed 62-0 votes.
Several MPs, including Sir Michael Somare, Garry Juffa, Tobias Kulang and Sam Basil abstaining by walking out of the chambers before the vote was taken.
Sir Michael during debate warned of the negative image this kind of legislation would have on future investors who were thinking of investing in the country.
Mr Kulang said legacy issues were against the State in the government’s failure to manage their own state enterprises.
He also called on Mr O’Neill to give a break-down of shareholding between the landowners, provincial government and the State.
Mr O’Neill, when presenting the amendment said this was a very important Bill to be introduced to the House.
“No one can sit in this House and excuse BHP for the destruction it had caused. But that is what the Government under Sir Mekere did in 2001,” Mr O’Neill said.
“They came up with a deal that would grant total immunity to BHP from prosecution for environmental damage or compensation, in exchange for a program company set up outside of PNG, and still controlled by BHP.”
The company was set up in Singapore, called the PNGSDP.
“Off course Sir Mekere now sits at the top of PNGSDP and Ok Tedi Mining Ltd, as chairman, courtesy of his friends at BHP when he retired.”
Source: The National, Thursday September 19th, 2013
GRAND Chief Sir Michael Somare warned parliamentarians yesterday not to rush the Ok Tedi Mine Continuation Amendment Bill before he walked out of the chamber when a vote was about to be taken.
Sir Michael when debating on the bill had warned MPs not to rush into making amendments and laws that would give the wrong signal to the international community.
“I see the mood and emotions of parliament,” the former prime minister said.
“I support the idea but we must understand (that) today the action of this parliament will give a wrong signal to the international community that we are moving towards the nationalisation of all resource ownership.
“If there is a problem, the prime minister should call for dialogue. You can’t do it (through) legislations.”
He said Ok Tedi had made a lot of money for the country.
Sir Michael, who was interjected through a point of order, said what he said was for the good of the nation.
He said the action would affect the economy and the trust the country had in the international community as a destination of investment.
“I do not oppose, yes people discuss what the people understand,” he said.
“Paias Wingti, Julius Chan and I are around. No one listened to us but I warn you young MPs that things do not change overnight. You must be careful.
“We are respectful people. We hear one side of the story here but we have not heard the other side of the story.
“For the benefit of PNG ... think before doing it.”
Source: The National, Thursday September 19th, 2013
SIR Mekere Morauta has vowed to fight tooth-and-nail to defend the Western people’s US$1.6 billion (K3.97 billion) share in the Ok Tedi Mining
Ltd (OTML) from being taken away by the Government.
Parliament yesterday passed the Mining (Ok Tedi Tenth Supplemental Agreement) Bill 2013 with 62 votes to nil to give the Government full ownership of the giant mine.
Sir Mekere, the PNG Sustainable Development Program (PNGSDP) Ltd chairman, also accused Prime Minister Peter O’Neill of planning to control the US$1.4 billion in PNGSDP’s longterm fund which was being kept in Singapore.
But a spokesman for O’Neill yesterday said the people of Western, through their elected leaders, had voted in Parliament to approve the State’s 100% ownership of the mine.
Sir Mekere yesterday said despite the Government having the overwhelming majority to pass legislation to take control of the mine, the PNGSDP, as custodian of the Western people, would not give it up without a fight.
“I can only defend,” he told a media conference.
“Under our constitution, the state can expropriate private assets if it is in the national interest but a fair compensation has to be paid.
“He (O’Neill) has to convince us that it’s in the national interest. If it is in the national interest, he has to pay. That’s under the constitution.
“I hope he’s the last prime minister to expropriate his own people’s assets without compensation.”
Sir Mekere said O’Neill had the PNGSDP firmly in his sight.
“He’s not only trying to take US$1.6 billion by expropriating these shares, he wants to take control of US$1.4 billion in the long-term fund, saved from past dividends for expenditure in future after mine closure.
“He wants to take control of that as well as start spending now. It doesn’t make sense to me. Why is he so unkind to the people of Western?”
In yesterday’s sitting, O’Neill said the transfer of 100% shareholdings in OTML was in the best interests of the people of Western and PNG.
“According to the Ninth Supplementary Agreement, BHP gifted its shares in the mine to PNGSDP. This meant that PNGSDP held 63% of the shares in Ok Tedi and the State held the remainder. The intention of this was that the mine would effectively be owned by the State. The mine would belong to the people of Western and its proceeds would be used for their benefit.
“However, PNGSDP has not operated as intended and BHP has continued to have a hand in PNGSDP. This is wrong. We are a sovereign country and can be trusted to manage our own resources and affairs. The State must be able to act on its own accord.
“It is time to review the operation of PNGSDP.
“The state is not taking these shares – it will be providing some compensation to PNGSDP.”
O’Neill said regardless of the amount of compensation, the people of Western would not be disadvantaged as the dividends from OK Tedi would be used to fund development projects under the Western Province Development Plan.
“We are simply returning an asset that was gifted to the people of Western back to them, so that they can fully benefit from it, and begin to rebuild their lives.”
Source: The National, Thursday September 19th, 2013
OK Tedi mine landowners can now pursue legal actions against BHP in relation to environmental damage caused by the mining operation.
It follows Parliament’s amendment of the Immunity Act 2001 yesterday.
The bill, tabled by Prime Minister Peter O’Neill, received overwhelming support from MPs. They repealed the Ninth Supplemental Agreement on Ok Tedi where all parties undertook to waive any rights or action against BHP Biliton and the State in relation to environmental damage caused by the mining operations at Ok Tedi.
O’Neill said the mine caused a lot of environmental damage which the State and the people did not expect.
He said BHP, “hell-bent on the profits”, ignored it and allowed the disposal of waste into the Fly River, causing extensive environmental damage which affected many lives.
“No one can sit in this house and excuse BHP for the destruction it had caused. But that is what the government, under Sir Mekere Morauta, did in 2001,” the prime minister said.
“They came up with a deal that would grant total immunity to BHP from prosecution for environmental damage or compensation, in exchange for a programme company (PNGSD) set up outside of PNG in Singapore, and still controlled by BHP.
“Of course Sir Mekere now sits at the top of PNGSDP, and Ok Tedi Mining Ltd as chairman, courtesy of his friends at BHP when he retired.”
He said the Bill would remove this waiver for BHP Biliton meaning that landowners or affected parties could bring any action or enforce any right against it.
“The government in 2001 made a very bad decision in granting immunity to a corporate giant, preventing its own people from exercising their right under law to sue for permanent damages done to their environment and their livelihood.
“This doesn’t happen anywhere else. Companies and corporate entities own up to their responsibilities and pay compensation,” he said.
Source: The National, Thursday September 19th, 2013
NORTH Fly MP Boka Kondra thanked parliamentarians for wiping away the tears and bearing the burden of the people of Western by passing a bill to protect their interest.
Kondra, an Ok Tedi mine landowner, said the people had suffered because of the arrogance of BHP by dumping waste into the Fly River which had been a concern for a long time.
“I speak on behalf of the people of Western and the provincial government and say thank you to government for wiping away the tears of our people,” he said.
“The lady that we got married to (referring to BHP) although exited 10 years ago was still in control and was not good.
“The time has come for her to go.”
Kondra said since 1979, no development had taken place.
“We have been crucified for the benefit of economical benefit by creating indemnity.”
He said many people had died while others were affected by the pollution.
“Some students sent to New Zealand went through some tests which found that their blood contained metals.”
Middle Fly MP Roy Biyama said the people had suffered enough with many experiencing the effect of the pollution of their river system.
Others who took part in the debate and supported the bill were Sumkar MP Ken Fairweather, Middle Ramu MP Tommy Tomscoll and Environment and Conservation Minister John Pundari
Sir Mekere: Bill is a grab for money, power


Chairman of PNG Sustainable Development Program Sir Mekere Morauta has described a legislation passed by Parliament as a blatant grab for power and money, and would have serious negative consequences for the nation and for Western Province in particular.
And he has vowed on behalf of PNGSDP to examine the law and see what options they have.
“We have a duty to the people of Western Province who own the mine and receive the dividends paid to PNGSDP in the form of social and economic development to protect their rights and their assets,” Sir Mekere said.
“I guarantee them that we will do all that we can.”
Earlier in the day before Parliament passed the legislation, Sir Mekere held a news conference and reiterated his statement that the decision by Prime Minister Peter O’Neill to expropriate Ok Tedi Mining Limited without compensation was “nothing more than stealing an asset” from the people of Western Province.
Sir Mekere said PNGSDP would do “everything in its power to prevent expropriation without compensation” and was ready to take legal action if the legislation was brought to Parliament.
“Those shares are owned by the people of Western Province, not PNGSDP,” he said.
“PNGSDP is merely the custodians of them.
The Prime Minister is legally and morally obliged to pay a full and fair price if he is so determined to get his hands on them.”
Sir Mekere said the company would stand with the people of Western Province who had voiced their strong opposition to the government’s plans.
“PNGSDP has a duty to protect Western Province people’s assets and will do so with all necessary legal means,” he said.
“Stealing an asset worth approximately K2 billion to the people of Western Province plus their annual K450 million share of the Ok Tedi dividends is not acceptable legally or morally. It is unconstitutional as well. I also fear that this is just the first step – I hope he does not want to get his hands on PNGSDP itself and the $US1.4 billion in the long-term fund.”
Sir Mekere was shocked by the PM’s announcement on EMTV and said he had spent the past six months trying to negotiate with the PM for a fair deal on the Western Province’s 63.4 per cent shareholding held by PNGSDP.
Mr O’Neil on Tuesday slammed Sir Mekere, saying the PNGSDP had mixed success in its various programs and its failures were notable for an organisation that was “growing like a bureaucracy” in PNG.
“We know he (Sir Mekere) represents BHP on that particular board, he does not represent the people of Papua New Guinea, he does not represent the people of Western Province. He does not represent Western Provincial Government in any shape whatsoever,” Mr O’Neill said.
“His interest is very clear, he represents foreign interests, he represents BHP – now our Government is trying to correct the mistakes of the past.
“We are trying to ensure that there is transparency and accountability in the way that OK Tedi is managed, in the way that PNGSDP is managed and it must be done for the interest of the people of Western province and the people of Papua New Guinea as a whole.
“The assets of OK Tedi and the assets of PNG Development Program is not Sir Mekere’s, it is not BHP’s – it belongs to the people of Western Province and it is the people of PNG who rightfully own those assets.
“That is why it is important that we manage them in consultation with our people.”
Mining Act upsets Opposition

The Opposition has raised concern that the Government is tabling amendments to the Mining Act to give the State “maximum power” to determine the future of the Ok Tedi Mine and the PNGSDP.
In a statement the Opposition said, “We are very concerned that the Government is setting a very dangerous precedence here by trying to legislate to take control of private companies.”
They said the move was a very negative signal to the investment communities and will create a lot of unnecessary anxiety.
“We are very concerned that this Government is using its numerical strength and the immunity of the amended Section 145 to slowly become dictatorial.”
The statement read that this was what the Opposition had been trying to warn the people of this country when it raised issues on the amendments to Section 145 on Motions of vote of no confidence.
It said, “This is a very dangerous trend for this country and the people must pressure and encourage their local members of parliament to use their conscience to scrutinise such bills.
“The opposition is also concerned that certain pertinent questions remain unanswered with the bill.” The points raised include:
* The Prime Minister has not clearly defined what is going to be the new shareholding structure once the Ok Tedi mining is taken over.
* Will the current 63 per cent shareholding by the people of Western Province increase or decrease?
* How much shareholding is the state planning to take? will it remain at 37 per cent or increase?
* What happens to the $US1.4 billion held in Singapore by PNGSDP for the people of Western Province for future generations? Who takes control of these funds when the take over takes place?
* What is the corporate structure that the government will use to take over the operations of the OTML? Will there be political appointment at the board and management?
* Have they consulted the people about this move?
The Opposition said that until these pertinent questions were answered, they were very suspicious of the Government’s move and would like to request for more clarity from the government. This is a very important matter especially for the people of Western Province who have suffered from the bad decisions of past governments.
Kondra: Economic independence vital


Papua New Guinea must be economically-independent and self-reliant, says Minister for Tourism Arts and Culture and North Fly MP Boka Kondra.
Mr Kondra, who was in his electorate for a visit last weekend, said PNG was rich in natural resources but does not possess the “buying power” and we are still poor on our own land.
“We must start to think, talk, plan and act positively towards being economically independent,” he said.
“I urge Papua New Guineans not to be lazy; we must spend money wisely and use it on starting small businesses or Small Medium Enterprises which the O’Neill-Dion Government is embarking on.”
Mr Kondra said the Ok Tedi Mining Limited (OTML) will be taken over by the people of Western Province and the Government as of January 1, 2014.
“More than 63 per cent shares of PNG Sustainable Development Program will be diverted back to the people of Western Province and the Government,” he said.
Mr Kondra said the government was ready to overthrow the supplementary agreement number nine with developer BHP.
He said this in response to the community mine continuation agreement (CMCA) leaders’ recent media reports opposing the Government’s move to take over PNGSDP.
Mr Kondra urged them to calm down and cooperate with the Government to take over the mine because it was for the interest for the people of Western Province and PNG.
“What the Government is doing is clear; it wants to give ownership back to the people and not to be deprived on our own land by foreign companies,” Mr Kondra said.
“PNGSDP is BHP’s, it is not ours, how much percentages do we as landowners or people of Western Province own?”
He said said OTML would be the first to be taken over by the people and the Government and it will be a model mine for others to follow.
“The National Executive Council will come here to sign new agreements with us,” he said

Related News Link
BHP Says PNG Removing Ok Tedi Protections Raises Sovereign Risk
PNG's Government takes Full ownership of Ok Tedi Mine
PNG Government takes 100% ownership of OK Tedi Mine
Ok Tedi Mine Immunity Removed
PNG Takes Over Ok Tedi Mine
PNG Government takes full ownership of Ok Tedi Mine

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