Ok Tedi task force 'review continues'
The National, Copyright 2000
November 27, 2000
By SINCLAIRE SOLOMON
THE Government has yet to review the recommendations from the Government Task Force on Ok Tedi which was set up in April this year following the World Bank's recommendations on the giant copper mine in Western province.
The task force was to review and recommend to the Government the most appropriate measures to deal with the current environmental situation caused by the mining operation, including the early exit of BHP.
Mining Minister Michael Laimo made this statement on Friday to clarify the current uncertainty surrounding the future of the mine operations.
"Given the current work being done by the task force, the Government still maintains the position that the Ok Tedi Mine will continue to operate up to the end of its currently estimated economic life to the year 2010," he added.
Mr Laimo said that while the Government's task force was undertaking its investigations, the representatives of shareholders of the Ok Tedi Mining Limited have met several times to consider the possibility of engaging an independent assessor on Ok Tedi.
This independent assessor will be required to provide advice to the Ok Tedi Mining Limited's board on the operation of the mine after BHP's exit.
The State is represented at this shareholder meetings by the secretaries of Finance and Treasury, and Mining.
Given the current status of work being undertaken by the task force on Ok Tedi and the discussions among the shareholders, Mr Laimo said that no immediate changes to the operations of the mine are expected.
On the consultation with the people living along the Fly River, Mr Laimo said he was grateful for the support and interest shown by these affected people to continue the consultation process initiated by former Mining Minister Sir Michael Somare.
He said these consultations have resulted in the heads of agreement that was signed recently by the affected people, Ok Tedi Mining Limited and the Government.
In October this year, OTML and the Middle Fly landowners signed the heads of agreement so that negotiations could start in earnest on a compensation package for ecological and other damages caused by the mine.
The agreement paved way for the landowners to negotiate an integrated benefits package whose success however, is dependent on whether the mine, which has a lifespan of 10 years remaining, continues.
OTML managing director Dr Roger Higgins said after the signing that he hoped common sense would prevail so that both parties would come away from the negotiation table in a "win-win" situation.
Dr Higgins said the heads of agreement sets out the process to be used, the subjects to be discussed and who the negotiators will be.
He said that if the people and the Government decide the mine should continue, the benefits package will form part of a Mine Continuation Agreement between the OTML and the 17 Middle Fly villages.
Only one village, Mipan, was not represented to sign.
The benefits package will be in three components - development aid, future generation trust account, and cash payout.
Under the current arrangement these villagers only receive an annual royalties payment from OTML.
However, the company decided on a bigger package after a 1998 health, ecology and risk assessment report on the tailings dumped into the river system showed that the Middle Fly villages, from Kiunga downstream to the Fly River-Strickland rivers junction were the most affected and would be for at least another 20 years.
The landowners are being represented by Port Moresby law firm Fiocco Posman & Kua Lawyers.
The negotiations are expected to lead to the signing of a memorandum of understanding on the integrated benefits package by the end of this month.
This will again depend on decision made by the communities and the National Government on the mine's future.
The Ok Tedi board of directors in July this year agreed to a benefits package but had left agreement open to dialogue between Middle Fly landowners and the company.
Only last week, BHP announced that it will set up a community trust for landowners as part of its plans to exit the mine before the end of its life. If BHP was to exit its 52 per cent stake, the proposed trust could redirect shareholder dividends from the company to the Middle Fly villagers affected by the environmental damage.