Leadership failures impede progress in Western Province

Above: Chairman of OTML and PNGSDP, Prof Ross Garnaut makes a point to Ati Wobiro, Governor of Western Province, on board the Fly Explorer yesterday.

Yesterday, I was in Kiunga. I flew there from Tabubil in the morning to witness the launching of the Fly Explorer. The vessel was built in Malaysia at a cost of around USD 2.3 million using dividend funds from the various Ok Tedi related Trusts.

As I reported earlier, it will be leased by the Ok Tedi Development Foundation to Ok Tedi mine, to be used as a scientific research vessel to monitor the environment.

Apart from a few words from Managing Director of Ok Tedi, Mr Nigel Parker and the Governor of Western Province, basically reiterating their commitment to work together the opening remarks by one of the commounmity leaders struck me the most.

Nick Bun is the President of the Ok Tedi Mine Impact Area Association (OTMIAA). He spoke of the lack of capacity of leaders within various Trust Communities. Nick himself illustrated how much he lacked in his understanding of the machinations of Ok Tedi related community development activities. He seemed very stressed about the exhaustion of Trust Funds to purchase three vessels, the Fly Hope and the Fly Explorer as well as the bulk carrier, the Fly Warrior.

What he did not seem to understand was that although Trust Funds were exhausted in purchasing these vessels, they would be leased to Ok Tedi Mine, thus generating income.

Having said that, I am also concerned of a possible conflict of interest by Ok Tedi Mine and it's community development vehicle the Ok Tedi Development Foundation (OTDF), in creating a scenario like that especially at a time when the Mine Lease Extension was being negotiated with affected communities and the 10th Supplementary Agreement regarding Ok Tedi Mine is up for negotiations.

This issue, highlights the lack of leadership in Western Province. Despite the questionable motive of investment, the fact of the matter is that the State, the Fly River Provincial Government and the Provincial Administration have failed in their fiduciary duty to the Trust Communities. The failure of Government Agencies to deliver much need services to Mine affected communities has compelled the miner Ok Tedi Mining Ltd to take a leading role, particularly in the North Fly region.

There was money meant for development projects in communities, just sitting in the bank while communities suffered the effects of the world's third largest environmental disaster. Clearly, someone had to do something, and the Ok Tedi Development Foundation was set up by the miner as an implementing agency for projects in Mine affected communities.

So I found myself sitting on the Fly Explorer nibbling finger food and wondering if the people along the Fly River have a development story they have to tell, or are they like the Western Province deer caught in the headlights of development and wondering what to do.

The master of ceremony for the Fly Explorer launching had died the night before the the day of launching. He was a broken man lost to alcoholism. His death highlighted the problem of alcoholism and incompetence amongst many Provincial leaders in politics and civil service.

According to Ian Middleton, the CEO of OTDF, 60 % of Western Province's Children do not complete grade 8 and the Province's education standards are regarded as the second lowest in the country. Health indicators are poor as well and health experts quietly express concern that province has the highest incidence of Multi Drug Resistant Tuberculosis in the World.

It is now up to the leaders of Western Province to create their own development agenda and work towards achieving it. The prospects look gloomy however. Having signed an Agreement with PNGSDP, Governor Wobiro is now keen on signing MOAs written by Ok Tedi and OTDF. The problem with this is that the Governor is essentially allowing these parties to dictate the development agenda as opposed to his administration.

The Governor and his advisory team (if any) must take this opportunity to dictate the terms to OTML, OTDF and PNGSDP, and not the other way around. It is critical, that Western Province's political elite, particularly the Members of Parliament, take the lead on developmental matters in order to ensure that there is a sense of ownership of the development agenda.

A sense of ownership, ensure sustainability of developmental activities. If there is no sense of initiative and therefore ownership: a project will fail, however well intentioned it may have been. It is up to the people of Western Province to develop their province: not Ok Tedi or PNGSDP. If they depend upon these entities to dictate the terms of development, they will never be masters of their own destiny.

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PNGSDP increasing its focus on Western Province

A development partnership agreement between the PNG Sustainable Development Program (PNGSDP) and the Fly River Provincial Government (FRPG) has been gathering dust for the past five years. Today, Governor Ati Wobiro, along with PNGSDP CEO David Sode and PNGSDP Chairman Ross Garnaut signed a Memorandum of Understanding that is expected to increase development co-operation between PNGSDP and the FRPG.

This year PNGSDP has increased its focus on Western Province, with an increase in its development budget. The shift in focus comes as it is increasingly becoming a major player in the resource exploitation sector. Earlier this year, PNGSDP acquired a stake in Highlands Pacific Ltd, at the behest of Ok Tedi Mining Ltd. Highlands Pacific owns a stake in the Frieda River Copper projects well as tenements 40 Km north of Ok Tedi mine, which could potentially be farmed into the existing mine processing facilities.

PNGSDP will also be undertaking Court proceedings against the National Forest Board and the State regarding the awarding of timber rights of the Wipim-Tapila Timber Project in South Fly. PNGSDP alleges that the National Forest Board was not consistent in applying its own bidding rules when it awarded the project to a Asian logging company. It is alleged that the National Forest Board had instructed bidders that the resource would have to be all processed onshore and later allowed the Asian logger to export round logs.

PNGSDP subsidiary, Cloudy Bay Sustainable Timber Company, had submitted its bid consistent with the Forestry Board's requirement of onshore processing and is therefore seeking relief in the courts.

This is not the first time that the Forestry Board has stuffed up in awarding Timber Bids. Recently, the Supreme Court awardedTimber Rights to Madang Timbers over Ramu Forest Management Area Project in Madang Province, over-rulling a Forestry Board decision that gave the Timber rights to another company.

Mr Sode, urged the Governor of Western Province to ensure that Western Province'snatural resources get processed with-in the province. The Oriomo Special Economic Zone and the Daru Deep Water Port would obviously facillitate any Industrial activity in the Province.

PNGSDP is currently having talks with Talisman Energy, to built a gas powered plant that would utilize gas from Talisman's Stanley Gas field, in Western Province. Mr Sode would also like to see all of Western Province's gas processed in the Province.

PNGSDP has taken a more comprehensive approach to dealing with investing in the Western Province. But even if this commercial ventures are successful, what still remains to be seen is the translation of wealth generated from these activities into improving the lives of the people of Western Province. The challenge that still remains is the creation of an appropriate model of development for Western Province.

Hopefully this time, all parties gathered here at the Tabubil golf course will get it right. Just down in the river valley adjacent to the golf course lies an ancient river that was violated and destroyed by a flawed model of development. In pursuing various commercial interests, there has to be careful consideration of their impact upon the full spectrum of life.

 

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Dealing with Ok Tedi's destructive legacy

I am in Tabubil as a guest of Ok Tedi Mining Ltd (OTML) to cover the launching of its environment monitoring vessel, the MV Fly Explorer, in Kiunga tomorrow. The vessel is worth around 2.3 million US bucks and is paid for by the Ok Tedi Trust Development Fund (OTDF). The vessel will be leased by OTDF to OTML to be used as a scientific research vessel to monitor damages caused along the Fly River by Ok Tedi mine.

OTDF was set up as an arrangement between OTML and PNGSDP. OTDF now receives funding from PNGSDP and the Western Province People's Dividend Trust Fund set up by State under Mining(Ok Tedi) Mine Continuation (Ninth Supplemental) Agreement) Act 2001.

In other words, OTDF has used Western Province people's money to buy a vessel to monitor damages to the Fly. It is expected that the money will be recouped as OTML makes lease payments for the use of the vessel.

Western Province's political elite are meeting Ok Tedi mine Officials today in Tabubil. The new Governor and the 3 Open Members of Parliament are expected to arrived at 10 am for a briefing at the Golf Club. They are then expected to witness the launching of MV Fly Explorer tomorrow.

Officials from PNG Sustainable Development Limited (PNGSDP) are also expected to be present today and tomorrow. PNGSDP was created by BHP Billiton as it exited it's world class mine in Western Province after creating a world class environmental catastrophe. It (PNGSDP) was created as part of a deal that prevents Western Province people from suing BHP Billiton for damages to the Fly River.

The damages to the Fly River ecosystems and the villages whose livelihoods depend on the Fly have been enormous. The PNG Government has recognized this by granting 5% equity in the mine to affected villages. The problem with equity arrangements like this is that the people only benefit if the miner makes a profit or if they sell their shares. It would have been much better for them to be given a certain percentage of export value of each copper shipment, fixed at the World Market Price.

OTML, which is now co-owned by the Government of Papua New Guinea and PNGSDP, has since been trying to reduce further damages to the Fly River. It has built a tailings disposal mechanism (previously tailings were directly discharged into the Fly River Tributriaries resulting in the Worlds Third Largest Environmental Catastrophe)

A tailings pipeline runs from the mine site at Tabubil to Bige. It is currently being replaced following a flaw in the pipeline that caused a major tailings spill last year.

 

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