MINING: The Bastards are Bluffing

 

Having written two articles on lessons from mining in Bougainville and the recent controversy on ownership rights; I thought to myself “S.H.I.T.! The bastards are bluffing!” I was about to torture my laptops keypad when I received an email from ma good ole buddy Warren Dutton.

Warren’s been around a long time and was a politician during those good old days when I wasn’t even born. He is a worried man. He runs a rubber company, North Fly Rubber, back home in the Western Province of Papua New Guinea. He believes that very little is being done to mitigate the impact of the Dutch Disease on the Agriculture sector due to the Liquefied Natural Gas (LNG) project in the Southern Highlands.

Anyway, back to what he had to say regarding mineral ownership:

“I understand of course that our present and potential Corporate Citizens would find it far easier to be able to deal privately with public servants and politicians, than with a multitude of resource owners, who would in the first instance, have an inflated view of the value of their resources. In fact I believe that it might in practice be easier for corporate citizens to insist on good governance by the servants, public and political, of the State than it would be to have to deal with individual landowners.
If it proves to be too difficult in PNG they could always return to places like Somalia, where I would suggest that their tolerance (encouragement?) of bad governance has led to the development of both pirates and the conditions which may have led to famine.”

As far as Warren is concerned, PNG does not stand to lose if the miners choose to ship their asses off to Timbuktu. More mining would only increase the stress of the Dutch Disease on other sectors of the economy.

Now don’t get me wrong. Warren aint no bleeding heart liberal. He strongly believes in State Ownership of minerals. However, he stated that the Miners have, by tolerating/influencing corrupt regimes in PNG, created this mess for themselves. People don’t trust their corrupt government anymore and so they want ownership rights. Warren wrote:

“Unfortunately to date, PNG corporate citizens, particularly, but not only, those with parent companies in Australia, have until now kept aloof from expressing their political views, and ideologies, in respect of the good governance of PNG.  This is a dereliction of their democratic duty as citizens of PNG, which they are not guilty of at home.  There if they don't like a Mining or a Carbon Tax, they have no hesitation in advocating a change in Government.  Here in PNG they have kept silent and at best allowed a patently corrupt Government to survive for almost a decade, and have kept equally silent while it has morphed, in an Unparliamentarily, and almost certainly Unconstitutional way, into a "new" Government which we can only pray is slightly less corrupt.”

It will therefore be a coup for the miners if the government capitulates from a position of strength. The fact is that the PNG Government has never been in a stronger position to get better mineral rights arrangements for its people.

Initially, after the announcement by Mining Minister Byron Chan, many miners decided to calm down the markets by stating that the changes wont be damaging. However, considering the ad hoc manner in which this new Government was formed, it seems the policy wasn’t thoroughly thought through. This left it vulnerable to attacks from miners and academics.

Prime Minister O’Neil raised the white flag and poured cold water over the matter. He said that it was not government policy yet because it had not been discussed by cabinet and Parliament. If O’Neil is to be believed one could also say that Little Chan acted like an amateur spewing policy statements without first going through cabinet and his boss.

Papua New Guinea deserves better from its citizens – both Corporate and Individual!