By The Hon. Belden Namah, MP

I am now convinced that the Somare Government does not consider the interests of local people or the country to be of any importance. 

Increasingly, decisions that negatively affect every citizen are being made by this Government that are justified because they say they are in the ‘National Interest’.  In fact, these decisions are only in the interest of the political elite and the robber companies that the Somare Government is now attracting to steal from Papua New Guinea’s resources.  

Environment Act amendments

The Somare Government recently passed amendments to the Environment Act that allow one man, the Secretary of DEC, to exempt any company or developer from abiding by PNG’s environmental protection laws.  This is the same man who the Ombudsman Commission recommended should face expulsion from the public service for his involvement in illegal forestry allocations.  Now, when ever the Secretary or his political masters feel that a project is in ‘the national interest’ the developer need not go to the lengths of preparing Environmental Impact Statement, or abiding by our environmental protection regulations – they can simply obtain an exemption to our laws!  

If the Secretary issues an exemption permit that turns out to NOT be in the national interest  - say for instance, he allows a mining company to put wastes into the sea, that turn out to be toxic and kill all the fish – no one but the Secretary can cancel the permit.  Not even the Prime Minister or the NEC!   If the Secretary did not want to cancel the permit, the only way it could be achieved would be for the NEC to sack the secretary, replace him with someone else, then ask THAT person to cancel it.  

This nonsense is where we have allowed our democracy to go?

It gets worse.  The amendments to the Environment Act exempt developers from paying  landowners compensation for any ‘unexpected’ environmental damage.  All compensation needs to be agreed up-front, prior to a project commencing.  This means that in the case of ‘unexpected’ environmental damage, like what occurred in Bougainville, Ok Tedi, Porgera, Tolokuma, and Hidden Valley, the landowners would have got nothing.  So lets get this straight.  A company can tell the Government and the Secretary that they will do no environmental harm and that therefore the landowners should get no compensation, and they can be given a permit to operate.  If  a year or two later, it ‘turns out’ that they are having a massive impact and peoples lives are destroyed – it was ‘unexpected’, so no compensation will be needed or required.  It is amazing that this is also in “The National Interest”  - as was stated by the Environment Minister, the Honourable Benny Allan.

Prime Minister Somare thinks that scuttling the Constitutional Rights of Papua New Guineans will give investors the certainty they need to invest here.  Perhaps he allows himself to believe that the sacrifice is worth it so that we have the money to develop?  I think not.  We are not going to see any real money and we are certainly not going to develop if this continues to be our mode of operation. In this regard, the ongoing controversy over the Chinese Ramu Nickel Mine in Madang is instructive.  

Ramu mine waste dumping 

Over the last few months a group of landowners have been legally challenging the permits given by the Prime Minister and the Secretary of DEC to the Chinese to dump their mine wastes in the sea, just offshore from their villages.  Back in March, the court placed an injunction on the discharge of these wastes until the full matter was heard.  This hearing SHOULD have occurred two weeks ago. However on the eve of this case, the three plaintiffs suddenly withdrew.  

Last week, Judge Cannings said that the circumstances of their withdrawal was highly suspicious. Perhaps it was because the plaintiffs arrived at the court in a Chinese-owned bus with tinted windows?  Perhaps it was that they sat in court flanked and guarded by thugs in the employ of MCC, the Chinese company?  It is easy to imagine that the threats and coercions of the Chinese and their locally-employed thugs convinced these simple villagers that capitulation ‘was in the National Interest’.

Don Polye certainly seemed to think so.  He said the day after that he was ‘glad that the plaintiffs now fully appreciated the facts of the project and wanted to work with the developer and government….to benefit all of us’.  In truth, the plaintiffs did not look anything other than scared of the facts before them – suggesting that they do what they were told or be dealt with!

Ramu mine financial returns

But what does “National Interest” actually mean in relation to the Ramu Nickel Project?

• The project is exempt from paying taxes for 10 years – that’s right, a 10 year tax holiday.  So the Nation is not going to be seeing any money for a long time, if ever.  

• It is also exempt from paying GST.  While you and I pay the Government 10% of the value of everything we buy, the Chinese, who control the second largest economy in the World, pay nothing.  No GST on the petrol they consume, the rice they buy in the supermarket, nothing.

• Under the old project agreement with Highlands Pacific, the State of Papua New Guinea was going to acquire 30% of the project.  This would have given us a reasonable equity in the development.  Under the new agreement with the Chinese MCC, our potential ownership is practically non-existent.  We are spectators in this ‘development’.

• What about all the jobs?  We are not getting this ‘National Interest’ either.  MCC is exempt from PNG’s Immigration and Employment laws.  This is how they have been able to bring in many thousands of unskilled Chinese workers, many of them convicts (yes criminals who have had the choice of either going to jail or coming to PNG), many who do not speak English or Pidgin, to take jobs that we could easily fill.  Localisation plans?  Nothing. 

• Royalties?  What is our share of the project revenue that we can use to build schools, roads and health centres around the country?  That’s where it gets even more worrying.  Most mining companies in most countries have to sell the ore they extract at international market rates – that way host Governments know that the company is selling their resources for as much as possible, and therefore paying the maximum amount of royalties on their profits.  Not so MCC. Somare has granted MCC the legal right to sell our ore to THEMSELVES in China, at what ever price THEY deem acceptable.  This means that they WILL sell to themselves at the cost of their operations, generating no profits, and therefore NO royalties.  This is called transfer pricing - the under-pricing of exports between affiliated companies in different countries for the purpose of transferring profits, revenues or monies out of a country in order to evade taxes. Somare gave them permission to do this.     

We are essentially giving this ore deposit to the Chinese for FREE, while giving them full rights to pollute and destroy what they wish.  Somare told the villagers of the Rai Coast that they would need to accept some environmental harm as the necessary sacrifice for the country to develop.   But given that PNG is going to see NOTHING from this project, where are our benefits?.  I am deeply worried about where the benefits may have gone. I suspect they have already been spent, shoring up Parliamentary numbers, paying for lavish travel, filling overseas bank accounts.   This is not the National Interest. We are rapidly becoming like one of those African countries that allow their people to starve, or worse, while the state sells off national assets to Chinese companies at fire-sale prices.

So what is in the National Interest?

The National Interest would be served if our Constitution was upheld, if we regulate developers such that our environment is protected, and if we required miners to pay just tax.  It would be in the National Interest if these monies were spent on real development – decent infrastructure and educating our people – not throwing it away on corrupt deals, white elephant projects and outright theft.  

Finally, I am hereby committing to initiate proceedings against the Government to challenge the constitutional legality of their Amendments to the Environment Act.  I am doing so in my own right, as a landowner and member of Parliament. 

The Hon. Belden Namah