Pacific Power? by Wallis JoAnne;

Author:Wallis, JoAnne;
Language: eng
Format: epub
Publisher: Melbourne University Publishing
Published: 2017-08-15T00:00:00+00:00

Investment

There is considerable Australian investment across the Pacific Islands, totalling US$15 billion in 2015.170 The most significant investment is in exploiting natural resources, primarily in PNG and Solomon Islands. Australian mining projects in the region are often large, exemplified by the Panguna mine in Bougainville, operated by Bougainville Copper Limited in which Australian company Rio Tinto was a major shareholder, and the Ok Tedi mine in PNG, which was operated by Australian mining company Broken Hill Proprietary Company Limited (BHP).

As described in chapter 3, the social and environmental impact of the Panguna mine, as well as tensions over the way the revenues it generated were distributed, played a large part in instigating the Bougainville crisis. This caused significant damage to Australia’s relationship with PNG and particularly with Bougainvilleans, who were initially wary of Australia playing a role in the peace process there, owing to concerns that Australia was primarily interested in reopening the mine.

Another notable example of damage done to Australia’s relationships in the Pacific Islands was the Ok Tedi mine located near the Ok Tedi River in PNG’s North Fly District of the Western Province, at which BHP commenced gold production in 1984. Immediately before operation of the mine began, a tailings dam designed to accommodate waste materials from mining procedures collapsed. Operation of the mine continued despite the absence of any means to process waste, and the mine began to release tailings waste, which included toxic chemicals, into the Ok Tedi River and other parts of the Fly River System.171 Damage resulting from the pollution was extensive. In the years after mining operations commenced, the number of fish caught gradually decreased by up to 90 per cent.172 Growth of the sago plant, the main staple food source for locals inhabiting the area, was also adversely affected.173

In 1994, at the request of 6000 landowners in the region, Australian law firm Slater & Gordon filed a claim against BHP seeking A$4 billion in compensation for damage caused by the mine.174 In 1996, the parties reached an out-of-court settlement of US$500 million, which included US$90 million in compensation for 30 000 villagers living along the Ok Tedi, another US$35 million for inhabitants of the lower Ok Tedi (the most severely affected area of the river) and plans to construct a new tailings containment facility.175

Throughout the case, BHP was criticised as a ‘big Australian bully’,176 the title reflecting the foreign and imposing nature of the mining company and its operations in PNG. Villagers expressed considerable anger and distress towards the company and the impact it had on their traditional land and livelihoods.177 These sentiments were further reinforced in 1999 when BHP admitted that the tailings containment options it had offered as part of the settlement would not alleviate any of the existing pollution and that instead the river’s condition downstream would continue to worsen for several more decades.178

In February 2002, BHP Billiton (BHP had merged with Billiton in 2001) withdrew from the Ok Tedi mine and transferred its 52 per cent equity

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