By Frank Enright
"We are in fact proud of our achievements at Ok Tedi", pronounced Jerry Ellis, BHP's mineral division chief, in the face of a $4 billion compensation claim lodged by local landowners in the Papua New Guinea Highlands. The landowners filed proceedings against BHP Minerals Pty Ltd and Ok Tedi Mining Ltd in the Supreme Court in Melbourne on May 5. The action was described by the principal plaintiff, Rex Dagi, as the best day of his life.
The writ claims $2 billion in compensation and $2 billion in exemplary damages, and insists that BHP build a tailings dam to contain its toxic effluent.
The villagers, who had their first contact with "Western civilisation" only 30 years ago, claim the water in the river system is undrinkable and poisonous to people, fish, plants and the wildlife which sustains their life, culture and religion.
In BHP's corner is the Australian government minister Robert Tickner. So impressed was Tickner after a recent visit to the mine site in the rugged Star Mountains of Western Province that he recommended that "Mining companies operating in Australia on or adjacent to Aboriginal land have a lot to learn from the Ok Tedi operation".
The "Big Australian", in declaring its intention to vigorously defend itself against the class action suit, claims, "Ok Tedi operates in compliance with PNG law and with the support of the PNG government".
The National newspaper in PNG on May 9 quoted Dagi expressing disappointment at reports that BHP was seeking to move the case to PNG. "If BHP has nothing to be ashamed of and if it is as confident of being vindicated as it has been telling the people of PNG, why not have [the case] in Melbourne where the whole world will be watching?", he asked.
Just how confident should BHP, which manages and owns 52% of the project, be on the basis of its environmental record at Ok Tedi?
The discontent of the 40,000-strong population in the Fly River area is not new. On January 18, 1990, landowners demanded, among other things, K2.5 million compensation for people living along the Alice and Fly rivers. Landowners at that time threatened to block the river and close the mine — acutely reminding the PNG government of its problems on Bougainville, another mining disaster visited upon local people and their environment by an Australian mining company.
Each working day, the mine discharges 100,000 tonnes of waste rock and 50,000 tonnes of tailings directly into the river system. Thirty million tonnes of tailings are discharged into the rivers each year.
The project was approved on the basis that it would have a tailings dam. In fact, one was constructed but was swept away by a landslide on the eve of the mine starting up in 1984. The area has a rainfall measured in metres per year.
Responding to increased local and international pressure, BHP in 1989 threatened to close the mine if it were forced to build a tailings dam, blackmailing the government, which paid with the health of the local population and ecosystem.
Under this pressure the government, which has increased its shareholding in the mine to 30%, decided to allow the mine to continue operating without a tailings dam, a decision described by the PNG Trade Union Congress as a "victory for the powerful multinationals over the country" amounting to "genocide". Ok Tedi accounts for 16% of PNG export earnings since the Panguna mine on Bougainville was forcibly closed.
David Robie, writing in the April 15, 1992, Green Left Weekly, related that the International Water Tribunal, an independent body funded by the European Commission, individual European government agencies and Scandinavian governments, found that the Ok Tedi operation had seriously polluted the rivers. It said: "If no ... storage or no cost-effective storage is feasible, the jury believes that the externalised costs of the projects grossly exceed the benefits and, consequently, the activities of [Ok Tedi] should be phased out".
In the same article Robie reported, "The Wau Ecology Institute's case against Ok Tedi accused the company of 'showing disregard for the environment' of PNG, taking advantage of low environmental standards in a Third World country, operating a mine without waste retention facilities — 'which would not be permitted in any of the shareholders' home countries', and taking advantage of economic pressures on PNG to avoid cost-effective environmental protection measures". (The Wau Ecology Institute was the PNG organisation that filed the case.)
The tribunal said the Ok Tedi case highlighted the need for foreign shareholders to be held liable for environmental damage.
Other independent studies have condemned the mine. The German Starnberg Institute found in its independent study in 1992 that the Ok Tedi River, a major tributary to the Fly, was biologically dead and the Fly River itself greatly reduced in biodiversity. The Fly River system is PNG's largest. An Australian Conservation Foundation report confirmed that parts of the Fly River system are dead.
A 1989 University of Sydney study found excessive levels of heavy metals, copper, cadmium and zinc; others of concern include mercury and lead. These pose a threat to the prawn industry in the Torres Strait, into which the Fly River empties BHP's waste. Thousands of islanders rely on seafood for their diet and livelihood. Ultimately, the Ok Tedi dumping will pose serious problems for the northern Great Barrier Reef.
Eventually, it is estimated, 1000 square kilometres of seabed will be covered by a metre-thick carpet of BHP's sludge.
Steve Harvie, spokesperson for the mine, conceded on television in 1989 that "disposal of the waste into the Ok Tedi [river] has a major effect on the level of the fish stock in that river. It also has a significant impact on the upper reaches of the Fly River."
By contrast, the executive director of BHP's gold division stated, "I think the environmental impact has been quite acceptable".
Dr Doug Holdway, an ecologist previously employed by the Australian government in Kakadu, ridiculed this assertion: "Ok Tedi ... is probably one of the dirtiest, one of the absolute foulest mining situations that exists on this earth".
In addition to the environmental destruction wrought by the mine's operation, there have been a number of accidents. In June 1984 a barge transporting 2.7 tonnes of cyanide sank in the Fly River. Only a few drums of the poison were recovered.
Only days later an operating plant failure allowed over 1000 cubic metres of cyanide to pour into the Ok Tedi River; dead fish and crocodiles could be seen for a considerable distance downstream.
In June 1989 a burst pipe spilled toxic chemicals into the river. This was discovered weeks later by a local politician; BHP had failed to report the incident to the PNG department of environment and conservation. It is suspected that many other accidents have gone unreported.
The PNG governor-general condemned the environmental destruction caused by the mine in 1992.
BHP, which is on line for a $1.2 billion profit this year — with over $50 million per annum coming from Ok Tedi — says "engineering and geological reviews indicate a tailings dam is not practicable" subsequent to the 1984 landslide.
However, according to government sources quoted in the May 16 issue of Business Review Weekly, "The political reality now is that the tailings must be disposed of. BHP will have to revive its tailings options." The anonymous source claimed that PNG could afford the political fallout even less than the financial contribution to construct a dam.
This case will be carefully monitored by Placer Pacific, an Australian listed company operating the Porgera gold mine, which pumps rock sediment and "treated" sulphuric acid in large quantities into the Strickland River, which flows into the Fly River. Extraction of gold involves using large quantities of arsenic and sulphuric acid.
This is the context in which BHP says it is proud of its record and Labor minister Tickner extols the virtues of the Ok Tedi operations.
BHP has maintained all along that the effects of pollution from Ok Tedi are minimal. Doug Holdway back in 1989 exclaimed: "Minimal? So killing a 220-kilometre river in terms of the major fish species, impacting on 800 km below that, beginning a major impact on the remainder of the 1400 km river system, impacting on the Gulf of Papua, and also on the northern parts of the Barrier Reef ... If that's minimal, then I don't know what the maximal possibility would be."
Five years later, with an additional 150 million tonnes of poisonous sludge flowing through their river system, the villagers around Ok Tedi are ever more urgently asking the same question.
What kind of development? — page 13.