Ok Tedi villagers force BHP back down

By Norm Dixon

The long-running legal battle between BHP, majority owner of the Ok Tedi Mining Ltd (OTML) gold and copper mine in PNG's remote western highlands, and local land-holders, whose livelihoods have been severely affected by the 100,000 tonnes of mine waste that pours into the Ok Tedi and Fly rivers every day, has been settled out of court. The result is a clear victory for the villagers and for the principal that mining companies must apply the same environmental standards in the Third World as they do in their home countries.

Since 1992, the more than 30,000 land-holders had been attempting to force BHP to build a tailings dam to contain the toxic mine residue, as well as demanding $4 billion in compensation and damages in a court case before the Victorian Supreme Court. BHP refused to build the dam claiming it was too expensive and would force the mine to close.

BHP was supported by the PNG government to the extent that Port Moresby attempted to outlaw PNG citizens from taking legal claims for compensation against foreign companies in the country where they are based. The legislation, part of a compensation package the PNG government attempted to impose on the land-holders, was found to have been drafted by BHP's lawyers in an effort to scuttle the Victorian court action. The land-holders' international campaign, the active and creative representations of their lawyers, Melbourne-based Slater and Gordon, and solidarity actions by Australian supporters severely embarrassed BHP.

On June 11, BHP cracked and agreed to spend up to $400 million to construct a "tailings containment system", pay land-holders $110 million in compensation, provide $40 million to move 10 villages away from the most polluted parts of the Ok Tedi, pay the land-holder's $7.6 million legal expenses and sell 10% of OTML to the PNG government on behalf of the land-holders so that the annual income would continue to benefit local communities.

BHP's back down, however, does not go as far as the construction of a tailings dam, the land-holders preferred solution. Instead, BHP is considering the construction a 110 kilometre pipeline to transport tailings to a site below the mountains near the coast. The site will be leased from villagers. The environmental ramifications of this scheme are yet to be revealed. The company will also examine the feasibility of dredging the river bed in the worst affected parts.

From GLW issue 236