How mining companies rip off PNG -- Antony Loewenstein interview

Independent journalist and author Antony Loewenstein visited Papua New Guinea in January and February as part of his research for an upcoming book and documentary about disaster capitalism and privatisation.

He spoke to Green Left Weekly's Ash Pemberton about the influence of the resource industry in PNG, its links with government and private security forces, the rising influence of China and PNG's domestic politics in light of upcoming elections.

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What is the resource industry's relationship with the PNG government?

The relationship is an incredibly incestuous one between the PNG government and the resource companies. It doesn't make much difference who's in power.

The real power in PNG undoubtedly does lie in elements of the government, but also equally as powerful are resource companies not based in PNG, but Australia, the US or parts of Africa.

PNG is an amazingly wealthy country resource-wise. Sadly, pretty much since independence from Australia in the mid-1970s, a variety of forces — local politicians, often a very complicit media and also resource companies — created a country with very few regulations, able to be exploited.

The most infamous example of that, where I spent some time early this year, was in Bougainville with the Rio Tinto mine there. This led to the civil war that killed thousands upon thousands of people.

The tragic reality is there is now talk about reopening that mine. Of course, that should be the decision of the Bougainvillians, but personally speaking I think that would be a travesty.

I saw the environmental catastrophe that was caused, let alone the social dislocation that occurred. There is no serious offer on the table to fix that up, to repair the environment.

Rio has talked about spending some money on environmental clean-ups, but the amount of money that would be required to do the job properly is arguably beyond what Rio has and what they're willing to spend.

And in some ways the environment is not fixable any more. I saw polluted waters, huge areas of land that had been turned into pure sand in the middle of former forests.

When journalists, myself included, have written about the environmental vandalism and crimes committed by Rio, the response by Rio and forces close to them has been: “How dare they speak out, there are local people who want the mine to reopen so they can get more money to work on the economy.”

There's no doubt opinions are mixed on how people there feel about the mine reopening. People who are talking about possibly supporting the mine reopening are doing it out of desperation.

Bougainville is incredibly poor, it's in desperate need of money. There are some who talk about other ways to raise money for the economy, such as tourism and agriculture.

One of the peace treaties that was signed between the PNG government and Bougainville was to allow a referendum on independence for Bougainville and that's going to happen at some point in the next [few] years.

The fear that many people have in Bougainville is that if they become independent — which I understand is what most people do want — they worry how they are going to survive economically.

That very bad situation almost forces the hand of people who say “we don't want the mine to reopen, but it may be a ready source of finances immediately”.

That's just one example of what's undoubtedly a massive resource exploitation and, more importantly, [is] exploiting the desperation of locals who are very poor — it's unbelievably underdeveloped.

If you go to a lot of towns and areas around where the mine used to be, it's like going into a time warp. It's really mad. You can go to towns near the mine and it's like the war finished last week.

There's still burnt-out buildings, there's petrol stations full of graffiti. Things are grim.

And that's to some extent why some individuals who fought with the resistance against the mining company seemed resigned to the fact the mine might reopen.

What is the relationship between resource companies and private security forces in PNG? In particular, you've written about multinational company G4S.

G4S are the world's biggest security company. They are based in Britain, they have hundreds of thousands of employees in countless countries. For a number of years, they used to run and manage the detention centres here in Australia and their record was, to say the least, pretty appalling.

They have become unhealthily close to the PNG government. The main issue in PNG in terms of energy and resources apart from mining is the LNG [liquefied natural gas] plant, scheduled to open in 2014. It is run by Exxon Mobil.

Exxon Mobil and the PNG government have formed an incredibly close relationship with G4S, to the point where G4S employees are ubiquitous, you see them everywhere.

In many places in the highlands and areas near Port Moresby where the LNG plant is being developed, there are countless reports, including from Oxfam and Human Rights Watch, of G4S working for Exxon and being against the local people.

There are countless examples of where local individuals, tribes and groups are resisting what is happening to their territory both in terms of the environmental destruction and lack of benefits that Exxon promised. G4S becomes almost Exxon's crack force, it becomes their protection.

The reality is the relationship between G4S, the government and Exxon is only going to tighten because resistance, including violent resistance, to the LNG plant is growing.

The resistance is not because, as Exxon and some others have said, that people just don't like development. The truth is the average PNG person that I met would like to have better schools, healthcare, education — all the things the average person wants.

I think one of the problems has been Exxon, among others, promised a hell of a lot to a range of local communities in the areas where the LNG plant is, and most of those promises have not been fulfilled.

Exxon and other companies go into villages and say: “We want to come onto your land. We'll give you a bit of compensation. We're gonna give you schools, healthcare, a nice hospital and a range of other things.”

Initially, some communities welcome that, and you can understand why.

In a range of areas across PNG, because communication is pretty bad and there is not a big internet culture, people are only now realising there are so many examples of local communities being shafted by companies who promise a lot and deliver little.

Then, when communities get pissed off, when they might sometimes sabotage a pipeline or storm a local office demanding their rights be heard, the security company used to protect Exxon is G4S.

That's where you start having a very problematic relationship within the communities themselves. Because you have locals fighting locals.

You have local G4S staff fighting local villagers who are pissed off with the company. That brings major tensions in society — violence, insecurity, alcoholism, domestic abuse and a range of other problems.

The collusion between Exxon and G4S is problematic because the PNG government, whose military is unbelievably corrupt, increasingly relies on a foreign private security force to do the job that should, in theory, be done by the local military or police force.

The sad reality is that in the vast majority of cases the local people are being shafted and the vast majority of the money from resources exploited in PNG is not going to the local people.

There are some examples of the [Peter] O'Neill government introducing free schooling for certain [school] years. That's been welcomed by people, and that's supposedly coming from some of the revenue from the LNG plant.

But as a report by local figures in PNG found recently, the country is essentially run by a quasi-mafia. That sort of corrupt culture has been endemic for a very long time.

But in my view, the presence of those companies is very rarely providing benefits for the vast bulk of the people. If you are going to exploit resources, locals need to benefit from that.

Yet in every type of UN human development measure, PNG people are struggling, to put it mildly.

How likely do you think it is that the situation around the LNG plant is going to degenerate into violence?

If you ask me is a Bougainville-style conflict very likely over the LNG plant, the short answer is I don't know. I did hear from a number of activists campaigning against the LNG plant that they're worried that that sort of conflict is very possible.

Most of the violence so far against the LNG plant has been relatively low level. I'm not minimising the deaths, but we're not talking about a huge civil conflict yet.

But, of course, the LNG plant is not open. I heard constantly when I was there that the communities who live in those areas have learned a lot from the Bougainville struggle.

No one is dying to go to war. People don't, generally speaking, have a desire to go to war. Even if you win a war, communities get destroyed.

The Bougainville resistance won that war undoubtedly, but Bougainville is a destroyed area. You win the war, but you can almost lose the peace.

People haven't forgotten that and Bougainville still remains a very important part of people's collective memory in PNG.

I think it's inevitable that civil strife and rising violence against Exxon and G4S — and the PNG government providing political cover for them — will grow. That's been happening for the past six months.

You have an unfortunate political culture from O'Neill down. In some ways it doesn't make much of a difference who runs the country.

The general sense is that the PNG government, who are being hugely funded and supported by foreign aid — from Australia and others — and by Exxon and others, have a largely uncritical view toward the resource industry. This is despite the fact that they know the majority of the PNG people are not benefiting from it.

A lot of people were very critical, when I was there, of the role Australia plays. Australia's position in PNG is quite central.

Australia gives roughly $500 million in aid each year. It is a huge amount of money, and [Kevin] Rudd when he was foreign minister increased it.

The problem is that the Australian government, through AusAID, has a new program advocating assisting mining companies who are exploiting PNG.

Of course it's not framed like that, it's framed as: “PNG is minerally and energy rich; the companies are going to go there anyway; how to do it in such a way that we can assist the PNG government to use that money more wisely?”

In theory, you might say that sounds really good. But the problem is when you have such a broken political culture and the record of a range of companies — Rio, Exxon, Shell, pretty much any major Western energy company — is pretty much, to a company, woeful.

I was in Madang, for example, where there's the Ramu nickel mine run by the Chinese and the record of that is bloody appalling as well. So I'm not suggesting this is just Western companies.

Sadly, PNG is a really worrying sign that the growth of China as a world superpower is not going to make much difference in terms of how they view exploiting communities.

China is moving into PNG in many ways. My sense when I was there was most people were worried about that.

There is a lot of mistrust toward Chinese companies operating there and their record in a range of areas — mining, fishing and others — in terms of environmental destruction, is very bad.

While you were there, were you able to gauge the mood of the public toward Prime Minister Peter O'Neill and his rival, former PM Sir Michael Somare?

When I was there, across the political divide, I found virtually no support for Somare at all. People's view was that he's an old guy, his time has passed, he's too close to the Chinese, the country's insanely corrupt, it's time for a change.

O'Neill was seen as someone younger, a fresh face, hadn't been tested yet, which was seen as a positive. He was starting to offer free education for some years of school, which was seen as a very, very positive thing.

People were hopeful that there would be some kind of way of making the country less corrupt, more accountable.

O'Neill has talked about that at least. I would be fairly confident to say, and I could be wrong, that if there's an election held next month, he's going to win pretty convincingly.

His attacks on the judiciary recently have not been received too well in some circles, but I doubt it will affect his electoral prospects too much.

Even if Somare runs, people see him as a bit of a doddery old fool. He was seen as the father of PNG — he was there in '75 when Australia handed over the country to the PNG people.

But people look around them and say “Our country is broken”. Somare was a key leader for the last 30 years and he's left the country in a pretty bloody bad shape.

So if there is a way to improve that, then I think people will embrace that. But the irony is, considering all the issues we've talked about, there's not much difference between him and Somare in terms of blindly backing resource companies. That's the reality.

But a lot of people there that I spoke to thought that maybe, in baby steps, O'Neill would do things a bit better. People see it's not going to be huge change.