Bougainville pleas for PNG to surrender new BCL shares

Transcript

The mining giant Rio Tinto has handed its majority shareholding in Bougainville Copper Ltd to a trust which will distribute the shares to the Bougainville and PNG Governments.

This has prompted an angry reaction from Bougainville's President John Momis.

He says all of the 53.8 percent shareholding in the company, which hasn't produced any copper or gold in nearly thirty years, should go to the Autonomous Bougainville Government.

Mr Momis told Don Wiseman that Rio Tinto made its decision with no consultation and has walked away from its responsibility for the damage caused by the mine.

JOHN MOMIS: Rio Tinto made their decision in London and they only came to tell us, there was no consultation whatsoever. We tried to get them to understand our position and based on that, make the necessary changes, but they would not budge. So they have also walked away from addressing the legacy issues. The mine, as you know, caused a lot of damage, environmental damage, destruction to village life. In fact this was the root cause of the crisis and Rio Tinto just refuses to accept responsibility to compensate the people and pay for the damage that they caused.

DON WISEMAN: So what will happen now with that - if the ABG is a major shareholder does that mean you are effectively absorbing that debt, that legacy debt?

JM: Yes that would be correct. If we became the major shareholder we would absorb that. I guess we would have no option but to deal with the legacy issues, but we are considering getting legal advice to sue Rio Tinto for their refusal to address the legacy issues, namely the damage and the deprivation of normal life, destruction of villages and so on, around the mine.

DW: When you raise these legacy issues with Rio Tinto what do they say? Clearly they have ignored them all but what do they say to you during conferences?

JM: They said they operated the mine according to the then laws of the country. One, that they operated the mine, they didn't break any laws - the mining law of Papua New Guinea at the time allowed them to do what they did. And secondly they were forced to leave, implying that the crisis, the destruction caused to the mine by the rebels forced them to leave, so therefore they don't see any reason why they should be compensating us and paying for the damage done. But I told them that because of the totally unjust operation of the mine in Bougainville, although it was allowed by the law then, now everybody knows it was totally unjust. People of Bougainville got very little out of it, Rio Tinto made billions, Papua New Guinea Government made millions and millions and the least beneficiaries were the people of Bougainville and the landowners.  And the new mining policies that were developed post crisis as they learned from Bougainville, actually tell us that what we are telling them is true and they still refuse to accept responsibility.

DW: One of the critical things that your government faces, and you have mentioned this to us on a number of occasions, is the need for major foreign investors. Now that there is effectively not a major foreign investor in this big mining company that you had been hoping may come back under new terms, what chance is there of the Panguna mine ever re-opening, do you think?

JM: When Rio Tinto moves out we still have Bougainville Copper in which Rio Tinto had the majority shareholding. That company we are trying to take control of by asking that we be given the controlling interest and if we are in that position we would invite a developer to invest and come work with us. There are a number of big mining companies that are very interested. We have been contacted by them. We know if we what to make the best out of this, if we want to get a positive out of this disastrous situation that Rio Tinto has created by refusing to accept responsibility for the environmental damage, for the impoverishment of the people, by not accepting their responsibility to distribute benefits according to the best regimes of justice and sharing of benefits.

DW: Now with the national government still having quite a substantial part of Bougainville Copper, what sort of discussions are you planning with them about the unevenness of all of this?

JM: Under the current arrangements the national government and the ABG would have equal shares - the rest of those shares are owned by individuals. We don't want the national government to have equal shares with us. They have benefited from the mine - it's not acceptable to the people of Bougainvillle, unless the people of Bougainville, through their government, have a controlling interest. And that is what we are going to discuss with the prime minister.  The current situation is totally unacceptable but I believe that the national government, because they didn't pay for the shares given them - all given free - if they gave us majority shareholding them the people of Bougainville would be very happy because this is what they have been fighting for. At least they would feel they are in a position now under our own mining law to accept the responsibility to deal with other related issues such as the legacy issues and the people would be more than willing to discuss with developers and other investors, to re-open the mine. You know if you want to solve the Bougainville crisis this is the way to solve it. We are offering the national government an opportunity, which is also consistent with the Peace Agreement. The Peace Agreement is a joint agreement between the national government and the ABG. By implementing the Peace Agreement jointly we will solve the crisis. What we are now proposing is also consistent with the agreement. If they refuse then our law will not allow them to operate in Bougainville, so you leave a dead company - a company that has access to the data but they will not be allowed to operate in Bougainville, under our new mining law.

DW: Why is that?

JM: If BCL decides to sell 25 percent of its shares to another group, then by our law they will not be able to operate in Bougainville.