Bougainville faces tough decision to reopen controversial mine to fund independence

Island in need of revenue to build viable sovereign state · Panguna mine was at the heart of the war that claimed at least 10,000 lives in the 1990’s · Recently released report blames Rio Tinto of “multiple human rights violations” linked to the mine

Ruins of the Panguna mine
Ruins of the Panguna mine Author: madlemurs @ Flickr
When Bougainville held its independence referendum in December 2019, one of the unresolved doubts was how it could financially sustain itself if it seceded from Papua New Guinea. With 80% of its annual budget stemming from the PNG government, the Autonomous Bougainville Government has a difficult decision on the table: how to reopen the Panguna mine, which could provide it with significant economical injection, but nothing risk-free. A recently released report by an Australian human human rights group recalls the social, economic, and ecological disaster caused by the exploitation of the mine in the surrounding communities.

Panguna is a copper and gold mine that Anglo-Australian multinational Rio Tinto exploited, through its subsidiary Bougainville Copper Limited (BCL), from 1972 to 1989. The Papua New Guinea government obtained significant economic benefits from the mine, some of which were funded social services in Bougainville. The mine also created jobs for some Bougainvilleans. However, most of the mine’s jobs were filled by people from outside the island. Several local landowners protested what they considered to be under-compensation by BCL. All this, along with a number of negative social and environmental consequences, led to Bougainville’s resentment against the mine, and ultimately led to an armed conflict that killed 10,000 to 15,000 people.

A legacy of social, economic and environmental destruction

A report that has just been released by Australian human rights group Human Rights Law Center once again denounces the catastrophic legacy of the mine in communities in the Jaba and Kawerong rivers valley, just below the mine. Rio Tinto, the group says, “is responsible for multiple human rights violations caused by pollution.”

While the mine was open, BCL “discharged over a billion tonnes of mine waste into local river systems, devastating the environment and the health and livelihoods of local communities,” the report reads. “Polluted water from the mine pit flows unabated into local rivers” to this day.

Rio Tinto divested from its majority stake in BCL in 2016 and ignored those impacts. Most of the shares in BCL are now owned by the governments of Papua New Guinea and Bougainville.

Among the impacts of this environmental disaster, the report cites the fact that local communities now have “severely limited” access to safe drinking water. This has led to the appearance of respiratory and skin diseases among the surrounding, 14,000-strong population.

Mine waste, meanwhile, causes avalanches that destroy farmland and forests, forcing residents to relocate. Infrastructure such as bridges or roads is damaged, resulting in several fatal accidents. As a result, local communities are suffering from “food shortages” and are being “deprived of traditional building materials for their homes.”

The report also says the disaster has led to the destruction of “sacred sites fundamental to communities’ connections with the spirits of their ancestors.”

In elaborating the report, the Australian rights group did a research from September 2019 and February 2020, visiting 38 villages and conducting 60 interviews to people living or working in mine-affected areas.

Authors of the report say these people demand “urgent assistance” to face those problems. Rio Tinto, Human Rights Law Center argues, should not ignore them. The group says the multinational company should “listen to communities,” “acknowledge responsibility,” “commit to funding an independent environmental and human rights impact assessment of the mine site,” and “contribute to the establishment of a substantial, independently-managed fund to help address the harms caused.”

Opposite interests in mine reopening

The mine has been closed since 1989, but the Bougainville government has plans to reopen it, which for obvious reasons is still a delicate affair on the island. The issue has taken on even more importance after, in December 2019, 98% of voters in the referendum supported independence from Papua New Guinea.

It is a tough decision for the Bougainville government. On the one hand, it must try to prevent the potential for conflict and destruction that the mine bears. Panguna, for many Bougainvilleans, is still synonymous with war, and symbolizes the worst wound in the recent history of the country.

On the other hand, because landowners’ stances —to which the law grants a prominent role in deciding whether or not to reopen the mine— are not unanimous and do not necessarily fit with government plans. On the contrary, conflicting interests exist, in which power struggles intersect with clan and group divisions. Some landowners would prefer not to reopen Panguna. Others favour mining the site again, but each signing contracts with different companies. The Financial Timesrecently spoke of a “scramble for political influence among foreign mining companies, which want to establish operations in an area that contains copper and gold reserves estimated to be worth tens of billions of dollars.”

The article said that the Bougainville government favoured the option of accepting the investment from an Australian company, Caballus Mining. Bougainville president John Momis said in a RNZ interview that Caballus would be the partner of a new company, Bougainville Advance Mining, majority-owned by Bougainville.

As for landowners, some reject the Caballus option because they are enganged in talks or agreements with other companies, such as the Australian RTG or the BCL itself. Some political leaders have also said that Chinese proposals exist.

The Bouganville government, meanwhile, knows that submitting a viable plan for independence is a key argument in its post-referendum talks with the Papua New Guinea government. It is worth recalling that, despite the clear outcome of the vote, Papua New Guinea has no obligation to legally grant independence to Bougainville: it is the Papua Parliament that has the last say. The more doubt there is about Bougainville’s future stability, the more unlikely is it that the PNG government sees independence as a viable final stage in its talks with the Bougainville government.