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Media Background briefing: BHP: The Quiet Deceiver
Tuesday 11 November 2003 Media Background briefing
BHP: THE QUIET DECEIVER
BHP has made numerous commitments to sustainability and corporate responsibility in recent years since causing devastation at the Ok Tedi mine in PNG, but has anything really changed? Investigations by the Mineral Policy Institute have shown that BHP’s ethical facelift is drooping, and the Big Bad Australian is still up to the same dirty tricks.
“I don’t believe we would pressure anyone to change their laws, stated Don Argus at the BHP’s London AGM , but someone had better tell the chairman of BHP to believe it. He made a shaky claim that BHP would “not place pressure anywhere”, despite the fact that Australia’s foreign affairs minister, Alexander Downer admitted in parliament that BHPB had done so. Downer revealed that BHPB requested and received the assistance of the Australian embassy in Jakarta to pressure the Indonesian government to change laws that prevented the exploitation of BHP’s mining lease in a protected forest area. This is despite commitments BHPB made internationally to respect legally designated protected areas and not to try and overturn the laws of countries in which they work.
“We won’t ever again dump our waste in rivers” …(we’ll dump it directly into the ocean instead.) BHP committed never again to use the practice of riverine tailings disposal after dumping its mine wastes and tailings directly into the river, leading to widespread human rights violations and an environmental disaster along an entire river system at its Ok Tedi mine in PNG. BHP now refuses to rule out the dumping of toxic tailings directly into the ocean- (in an area recognised as containing the highest marine biodiversity in the world) at its proposed mine on Gag Island. Similar to the situation at Ok Tedi- where the river is decimated and locals are now reliant on compensation payments to buy tinned fish- local communities rely significantly on the surrounding marine resources for their food security and livelihoods.
“we won’t mine in World Heritage Areas”…( we’ll mine it before they are declared World Heritage) In August this year, BHP made a joint statement with 12 mining companies, undertaking to recognise World Heritage properties as ‘no-go’ areas. It included an undertaking ‘not to explore or mine in World Heritage properties’ and a commitment to take all possible steps to ensure that operations are not incompatible with the outstanding universal values of World Heritage properties. BHP’s intention to mine at Gag Island, with its recognised world heritage values, currently being considered for world heritage listing, drew a statement of concern from UNESCO who urged the Indonesian government to reconsider in light of the region’s extraordinary conservation value.
“ Our exit from Ok Tedi was contingent on an informed consent process”… A recent report by a law professor at the UPNG has ripped to shreds any remaining claims BHP had regarding the legitimacy of agreements with landowners, finding that people were selectively and partially informed, did not see the documents before signing, did not understand the implications of the clauses in the document, were told the documents were not open to negotiation and were not provided with materials which the company claimed was used to inform people of the consequences of ongoing operations of the mine.
Grave doubts exist regarding the ability of BHPB to live up to the standards it portrays externally. Documented deceptions of both the communities in which it operates and its shareholders cast doubts on BHPB’s overall financial, environmental and social reporting. Chairman Don Argus slyly evaded the issue by claiming not to know about efforts by BHPB to pressure the Indonesian government to allow it to mine in protected forests where open cut mining is currently banned. BHPB had committed internationally not to attempt to undermine laws of countries in which it operated. If the chairman is so misinformed, (or simply dishonest) what can we expect of the rest of the company? A report on BHPB’s exit from the Ok Tedi mine in PNG indicates that BHPB misinformed both its shareholders and the landowners who signed agreements relating to the Ok Tedi mine, about the conditions of exit from the mine.
Gag Island…The next Ok Tedi? BHP will come under fire at its AGM in Melbourne for its proposal to mine in protected forest on Gag Island, and its refusal to rule out dumping of mine tailings into the ocean.
About the Gag Island Proposal: BHPBilliton is seeking to establish a open cut nickel mine that would mean up to three quarters of the total landmass of the island would be turned into an open pit mine. Mining would continue for up to 20 years and extract up to 33,000 metric tons of nickel from the 660,000 metric tons of rock dug out of the small island.
Mining in Protected Forests The open cut mine is proposed in protected forests on Gag Island, where mining is currently banned under Indonesian forestry legislation. BHP, breaking commitments it made internationally to respect legally designated protected areas, has been pressuring the Indonesian government to allow it to mine on this island. Currently the government is currently split over whether or not to provide BHP with an exception to the protected forest laws. Despite media reports of the lobbying and admissions by the Australian foreign affairs minister of embassy assistance provide to BHP in its efforts, BHP’s chairman claimed at their recent AGM that he knew nothing about it and could not believe that his company would be putting pressure anywhere to do so.
Dumping Mine Tailings and Wastes into the Oceans At Gag Island, BHPB is considering submarine tailings disposal- the disposal of mine wastes and tailings into the ocean, a controversial and scientifically unproven method of waste disposal that is effectively prohibited in most Western countries including Australia. Despite the fact that the surrounding oceans are recognized by UNESCO as containing coral reefs with the highest known marine biodiversity worldwide, BHBB is considering using the sea as a dumping ground for tailings rich in heavy metals, laden with silt and contaminated with toxic reagents from the extraction process, and threatens to irreversibly change the surrounding ecosystem. The proposal is reminiscent of Ok Tedi-where the company proposed to build tailings dams and then pressured the government into accepting direct waste disposal into the river as the only viable option.
Tailings from the Misima mine in PNG have smothered the ocean floor over an area of approximately 20 square kilometres. In Indonesia, two mine sites are already using Submarine Tailings Disposal, causing serious health impacts in local communities, threatening food security and loss of livelihood to the local fishing communities. The waste pipes have failed on several occasions and spilled their toxic contents onto the land and into the sea.
UNESCO intervenes- highlighting the extraordinary value of Gag UNESCO intervened in the debate, and highlighted the World Heritage values of the area, sending a letter to the Indonesian parliament considering whether to permit mining in the area, urging them to consider the extraordinary value of the region for conservation purposes.
The letter cites Gag island as one of seven conservation sites in Southeast Asia which are now being considered to be included in the World Heritage. Review of existing data and the results of several scientific surveys revealed, that the Raja Ampat archipelago contains the richest coral reefs with the highest marine biodiverisity in the world,and collectively have 505 species of coral reef or 64% of the coral reef species in the world, as well as being home to at least 1,065 species of fish.
OK TEDI: Can BHP escape its past?
Despite BHP’s assurances to shareholders, it appears increasingly inevitable that liability for the ongoing environmental devastation at Ok Tedi will return to haunt BHPBilliton. A court case is currently underway in Melbourne regarding BHPB’s failure to live up to its obligations under a settlement agreement with the affected landowners of the infamous mine that destroyed a river system. BHPB cleverly attempted to limit its liability for the ecological disaster caused by its Ok Tedi mine by placing its shares of the mine in a trust fund from which compensation payments to landowners would be made, and succeeded in gaining indemnity for any damages that will exceed the amounts in this trust fund.
This approach reflects a despicable trend in the mining industry, where companies seek to evade and limited liability for the costs of gross past abuses upon environments, communities and workers. The trend is reflected here in Australian by James Hardie Industries recent denial of responsibility for shortfalls in the trust fund they set up to deal with claims from asbestos victims.
BHPB’s strategy to wipe its hands of devastation caused at Ok Tedi and dump the environmental and social costs upon local communities and the PNG government has always been criticized on ethical grounds, but now damning new evidence raises further questions regarding the process for their exit.
BHPB claimed to shareholders and the general public that its exit was contingent on agreements signed that were “ an expression of the informed consent of the affected communities to the mine’s continued operations, and acceptance of an integrated set of measures to compensate them for the mine’s impact on their communities.” A recently released report indicates that communities were mislead, that BHP did not disclose to them information regarding the levels of likely future impacts, or the implications and consequences of signing the agreements.
The independent research report by UPNG law professor, Lawrence Kalinoe reaffirms what communities and NGO’s have been saying since the beginning- that the agreements do not reflect a fair or equitable value for damage, and that BHP’s claims to gaining the informed consent of landowners for indemnity against environmental damage and for the conditions of continued operation of the Ok Tedi mine are dubious indeed. The report rips apart the fragile claims to legitimacy that these agreements may have had, and raises the question of whether liability for the damages at Ok Tedi will come back to haunt BHPBilliton.
BHPB made a highly controversial exit from the mine, drafting the parliamentary law that secured it indemnification for future, as yet unquantified environmental damages, and allowed it to place its shares in a trust fund to be used to pay compensation. Once the Ok Tedi mine closes, and local communities, and the Papua New Guinean government realize the full extent of the costly legacy that BHP has dumped upon them, anything is possible. Already calls have been made to overturn the laws governing BHP’s exit and redirect liability back to the company.
FINDINGS FROM THE KALINOE REPORT: The report finds that the agreements were “a legal device to lock in and keep the affected communities from pursuing individual or separate lawsuits for environmental damage and resultant loss and nuisance.. to control and minimize the extent of liability to levels it knows it can afford… not to reflect a fair or equitable value for damage” (from report by UNPG professor, Lawrence Kalinoe)
·BHP did not fully disclose information on the level of environmental impacts, on the uncertainty of future damages or on the effects of the clauses of the agreements they signed. There was only partial and selective disclosure, and thus little to no informed consent
·All changes suggested by landowners were refused, landowners were told the agreements were pro forma and that specific clauses were not subject to negotiations
·The agreements were not openly discussed or explained to communities before they signed them, people were not informed of the workings, requirements, implications or consequences of signing. People did not see the documents prior to signing them, let alone understand the terms and conditions of them.
·Majority of people from the communities did not see the background materials which were meant to inform them of the impact of the mine continuing
·Any person who held him or herself out to be a community leader and a representative of the community bound the whole community to the agreement, irrespective of the actual level of consensus in the community, or whether any express authority has been given for this person to sign the agreements
·The agreement binds each person upon whom that person says they are acting on behalf of, including, without limitation, children and future generations
·If the Victorian courts find for the landowners (who chose not to be party to the agreements with the company), and these courts order either construction of a tailings storage facility or damages for environmental damage to any member of the communities then there will be no obligation for continuing compensation payments to any of those who signed the agreements instead of going to court.
BHP Chairman lost in the woods over Indonesian Protected Forests.
BHP is expected to come under fire at its AGM in Melbourne later this month.
Questions have been raised as to whether the chairman of BHP, speaking at their London AGM, deceived shareholders intentionally, or was simply ignorant of the companies concerted pressuring of the Indonesian government to gain permission to mine in protected forest on Gag Island.
Despite clear evidence to the contrary, Don Argus, the chairman of BHP stated he had no knowledge of BHP’s involvement in lobbying to overturn laws banning mining in protected forests in the country. Mr Argus responded to questions at the London AGM of the company by stating that to his knowledge BHP had not done so, and he did not believe BHP would be applying pressure anywhere to lobby for changes to laws.
“It is of grave concern that the chairman of BHP Billiton is ignorant of concerted efforts by the company to influence the legal processes of the Indonesian government. Either he is deliberately misleading shareholders or he really has no idea of the conduct of BHP in other countries. Whatever the case, his lack of knowledge is unbelievable, and leads us to the conclusion that BHP can not be trusted- it is a warning sign to look carefully behind their other claims to responsible conduct.” stated Techa Beaumont of the Mineral Policy Institute.
Parliamentary questions answered by Foreign Affairs Minister Downer in late 2002 revealed extensive lobbying of Indonesian officials by Australian Embassy staff in Jakarta, including the Ambassador, at the behest of Australian mining companies. Downer's answers revealed that mining giants BHP Billiton, Newcrest, Placer Dome, and Rio Tinto specifically requested, and received, lobbying assistance from the Australian Embassy on the matter of mining in protected areas.
Australian embassy officials on nine occasions, with companies present at a number of these meetings pressed the Indonesian parliamentarians, officials, including the Ministers and Departments for Economic Affairs, Mining, Forestry and Environment to drop the ban on open cut mining in protected areas where these companies had mining leases.
BHP Billiton will hold its Australian AGM in Melbourne on November the 13th, and it is expected that there will be further questioning by concerned shareholders over BHP’s activities. A number of other issues regarding BHP’s claims to corporate responsibility are expected to arise, including new information on Ok Tedi, BHP’s proposal to dump wastes in World Heritage value coral reefs, and labour conflicts.
Additional Information
1. Media Contacts for further comments or interviews
Gag Island:
Nur Hidayati: Indonesian Forum for the Environment , WALHI, Indonesia ph: +62-812-997-2642
Tracy Glynn: Mining Advocacy Network (JATAM) ph: 62-(0)21-794 1559
Jason McLeod: Australia West Papua Association, ph: 0438 303 532
Ok Tedi and PNG
Dr Bob Danaya: Governor of Western Province, PNG PH 675 327 7402
Damien Ase: Center for Environmental Law and Community Rights, PNG PH: 675 323 4509,
Matilda Koma: PNG, NGO Environmental Watch Group (Mining organisation working with PNG communities) PH: 675-311 2966/67
Stuart Kirsch: social anthropologist, academic commentator on Ok Tedi Assistant Professor, Department of Anthropology, University of Michigan Ph 1-734-764-2292
Shareholders:
John Poppins: BHPB Shareholders for Social Responsibility ph 03) 9807 1262
2. Selected Comments on BHP
Concern for social and environmental justice in Melanesia, our closest neighbours is something that we as Australians should all feel strongly about. Having spent much time in PNG and West Papua over the past 17 years I feel outraged about the actions of Australian mining companies in this region. I having met many Papuans who have been affected by the shoddy behaviour of these companies...the environmental devastation of the Fly River, harassment of landowners in The Timika reg ion, the coercion and misinformation in signing dodgy consent documents. Too often the actions of these companies are to do with maximising profit with little or no concern for the local peoples and the their land. This is totally unacceptable. If shaming them is the only way to change their behaviour, then shaming them should be the ambition of all Australians who care about the world around them.
David Bridie composer/musician not drowning,waving and solo artist
“the big Australian has turned out to be the big bad neighbour.”
It wants all the kudos it can get by claiming a commitment to sustainability and promising to respect legally designated protected areas whilst at the same time working to open up 8.6 million hectares of protected tropical rainforests in Indonesia to open cut mining. Whilst the profits go to shareholders, the creatures of the forest will go closer to extinction. It is a disgrace.” Senator Bob Brown
3. Additional materials available upon request:
Primary documents referred to in this briefing Photos: damage to the river, forests and environmental impacts at Ok Tedi Audio recording: comments by Ok Tedi landowners regarding BHP Video recording: shots of Ok Tedi and interviews with Ok Tedi landowners relating to BHP
Transcripts of Interviews with affected landowners from BHP’s Ok Tedi Mine, Fly River Region, PNG Interviews by independent filmmakers Mandy and Fabio Cavalini: audio and video copies available on request from the Mineral Policy Institute
If the Europeans can clean the environment up after the nuclear waste whatever that goes through make sure the environment is clean, why can’t we do that here in PNG?. There is technology available. If the Americans can go to the moon we can go, we can do anything on earth. It’s a matter of how much of money going to be spent. BHP simply does not want to spend money. BHP simply does not want to spend money.”- Rex Dargi, Ok Tedi Landowner
Our environment as it is, we don’t need a scientist to tell us or an expert to tell us the river is polluted, when we know the tree is dead it’s dead. By psychically looking at it- it’s dead. So no scientist can tell us” the fact that whether the tree is dead or not dead it can’t do that.- Paul Katut, Ok Tedi Landowner
We all know that we have been poisoned but what other ways would we survive”- Woman landowner from Bosset
We never knew what was actually happening we knew there was a word mining, that all nothing else”- Paul Katut
My village is badly affected and I’m from here, I’m going to die and they’re going to bury me here. So I have to tell the government, or tell the world what ok tedi has done is wrong. It’s about time they listened to the people. – Robin Moken, Ok Tedi Landowner
What we are saying is if they going to continue mining what are they going to with the rehabilitation of the environment. The destruction in the river are you going to clean it up? Or are you going to find a way to store all those chemicals and all is going directly into the river- that’s the question we’re asking. we’re not saying Ok Tedi is bad, we’re calling ok Tedi is bad for environmental purposes.- unidentified landowner
The people are worried, they know that things are happening but then there’s a confusion. People have been told by the company this and that. They don’t know what to do. They want to get money, or they want the mining to continue so that it will bring them some benefits to them”- landowner from Ok Tedi
The men that went up are after money. Ok Tedi gives them free ride, free chopper, free hotel, Ok Tedi gave them allowance, you and me nothing”- Rex Dargi
BHP is a big man with a lot of money, its got lot of wealth. We landowners are nobody who are we? We don’t have the wealth. Probably we have the resources on the land.- Roben Moken
The only way is to get him we have to poison him. We weaken the person before we can do anything to him. For me to negotiate I don’t think BHP will listen, who are you? –unidentified Ok Tedi landowner
We have to take him to court and we have to get people to testify in the court to prove beyond reasonable guilt to what he has done.
The way that they put the MCA is in a way that we are not sure OTML and BHP he will just go free hand. Now we can’t do that. we have in our custom to pay back. You got to pay something for what you have done . so I think its as simple as that. They should have you know given us something and say look we have done something wrong so we have destroyed your land so we’re giving you this much and this much to the government and we’re going out. So we shake hands and say we’re happy but he is not going with out without giving something is . I cannot say anything”-
For more information, please contact:
Techa Beaumont
Executive Director
Workphone: +61 2 9557 9019
Mobile: +61 (0) 409 318 406
Created: 01 Jan 1970 | Last updated: 09 Nov 2003
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