Resource Rage: Exxon-Mobil LNG project an impending disaster

How is it that a country as richly endowed with natural resources as Papua New Guinea with multinational mining companies flocking there like bees to a honey pot is actually going backwards when it comes to key social indicators such as wealth and life expectancy?

Well, in looking for answers to that imponderable, Dateline video journalist Amos Roberts travelled hundreds of kilometres into PNG's rugged highlands where the latest mega-project - the biggest in the history of that troubled nation - is under way. Here's Amos. 

REPORTER:  Amos Roberts

Papua New Guinea's Southern Highlands - beneath these mountains lie great riches. Vast deposits of natural gas that promise to transform the lives of these people, and this nation.

SIMON EKANDA, TRIBAL LEADER: We call it "laitebo". "Laitebo" is the name that we had even before the exploration.

For Simon Ekanda, a leader of the Tugaba tribe, the gas has spiritual value.

SIMON EKANDA: Yeah, our people do sacrifice to the mountain, to the fire that never dies and was in that mountain. And this…. the very mountain which they did an exploration and found out there was a gas in there, in the mountain.

For Sir Michael Somare, Papua New Guinea's Prime Minister, it's the commercial value that counts. In December, he signed off on a $16 billion plan to ship the gas to Asia. This is Papua New Guinea's biggest-ever business deal - it promises to double the country's GDP.

MAN:  Ladies and gentlemen, we now propose a toast to the PNG LNG project, and the prosperity of the people of Papua New Guinea.

CROWD: Cheers.

But not everyone is toasting the deal.

SIMON EKANDA: It's just like raping a woman without her accepting you to have sex. It's just like raping a woman. They're going to rape our resources.

Simon Ekanda says his people have a prophecy warning them not to give the gas away to white men or 'red legs'.

SIMON EKANDA: We were told not to give the fire to a 'red leg'. To fulfil the prophecy, we want to get the maximum from the project. It's not an ordinary gas project - it's an extraordinary gas project.

Many landowners in the project areas are afraid the promised riches are going to pass them by.

ANGRY WOMAN: You never listen, you never listen - I'll chop you people. Are you listening? - I'll chop you.

I found confusion and anger from one end of the proposed gas pipeline to the other.

ANGRY MAN: They have guns - we have guns too.

REPORTER:  What's going to happen if the developer and the government go ahead with this project without your participation?

SIMON EKANDA: There's going to be a lot of chaos. I can promise you, I can guarantee you that. There's going to be a problem. 

Flying from Port Moresby to the Southern Highlands with Simon Ekanda, we follow the same route as the pipeline. MUSIC The project operator Exxon-Mobil will pipe the gas 700km from Hides and Juha in the Southern Highlands to a plant just outside Port Moresby.  This is where the LNG plant will be constructed. Before it gets there, the pipeline will pass through the territory of hundreds of different tribes - starting with the Tugaba, Simon's own.

A modest gas project has already been operating here for many years. The majority Australian-owned company, Oil Search, uses gas from Hides to generate electricity for the Porgera gold mine. Yet the people here live without power. Most survive off the forests, rivers and carefully cultivated gardens - they have little to do with the cash economy.

REPORTER:  How do people generally feel about this project? Are people excited?

SIMON EKANDA: Yeah they're excited, they've been excited for 20 years. There's a power project here. They have been excited about that power project, and then what that power project brought to this community is zero. You look at the school, you look at the hospital. You look at the power in the oil-search compound and then the houses next door. We are graduated, 20 years education of the gas project in this area. 

REPORTER:   But isn't it the role of the government to provide hospitals, to provide schools? What is the problem there?

SIMON EKANDA: Well I'm waiting for the government. Government has never come to this place. 

When we drove up a hill to film the plant we came upon these villagers preparing to ambush a rival clan - part of a long-running feud. This is a volatile region, bristling with weapons. I asked the villagers how they feel about the gas plant below. 

VILLAGER: This has already been going on and we still have no services. There's no hospital, no school, nothing around here. So, in the future, next year or in 5 or 10 years' time, my brothers or my children, will they be at school?

Peter Botten is the managing director of Oil Search, which has a 29% stake in the LNG project 

PETER BOTTEN, MD – OIL SEARCH: I can talk very much around oil projects. The LNG project, I think, is best discussed primarily with the operator, Exxon.

Exxon-Mobil, the project operator, refused to give an on-camera interview but Botten agreed to talk about his existing oil and gas operations and says landowners have every right to complain about the lack of government services.

PETER BOTTEN: The broad revenue streams that governments have received from the various projects since, over the last 20-odd years, has been substantial and you don't see that service provision into many of the resource areas, and that's a very valid point.

REPORTER: The villagers in Hides live next to a gas-powered electricity plant but they live in darkness. Can you understand why they feel as though the government's failed them? 

SIR PUKA TEMU, DEPUTY PRIME MINISTER: We acknowledge that concern but that's water under the bridge. I am of the strong opinion that this is the time for us to start getting things right. 

Last year, government ministers and officials arrived in the Highlands to meet with landowners. Over many months, detailed agreements had been negotiated to work out how the financial benefits from LNG would be divided between landowners, and local, provincial and national governments.

PETER BOTTEN: In the case of both oil and gas, the broad range of consultation, in my view, is almost unprecedented around the world. There's no country that I know that goes into this in such a democratic way, such a large way, and involves so many people.

Landowners and provincial governments could receive up to 7% of project equity plus royalties and share the proceeds of a development levy. Many landowners signed the agreements, but others - determined to hold out for a better deal, including more equity - did not.

SIMON EKANDA: Me, I didn't sign it. Me and my group, rest of the people, we didn't sign it. We want the equity in the project. I mean the landowners are as equal as the project LNG itself.

MICHAEL MCWALTER:  This has been an error of thinking for a long time and this error has been propagated by politicians going out and talking to landowners and addressing them as resource owners 

Michael McWalter is an oil and gas consultant and government adviser.

MICHAEL MCWALTER: Constitutionally, the natural resources belong to all the people of the country, not just those people who happen to have it under their feet - on their land

Simon Ekanda is attending a public meeting in Komo, which is set to become Ground Zero for the LNG project.

GEORGE, LANDOWNER: Good afternoon men and women. Good afternoon. My name is George - George Edwin. I want the project to come. I want LNG to come here. They've promised all these good services we don't know about will come here.

But even landowners like George, who support to project, are anxious about how it will disrupt their lives. Although there'll be some compensation, more than 500 hectares of bush will be cleared around Komo to make way for an international airport and gas conditioning plant.

GEORGE: They're going to remove us from our houses, our gardens. And the bush where we get our firewood and rope. How are we going to survive then? Exxon-Mobil, you have to consider all the things you're going to spoil. 

LANDOWNER: I'll lead the fight. I'll use a bomb. You won't come into my area.

Landowners from Komo and other parts of the country have already tried to slow work on the project - blocking roads and cutting down power lines. Some threaten to take things even further, raising the spectre of the civil war fought in Bougainville. 

LANDOWNER: There will be no project here. Something like Bougainville is going to happen and history will repeat with this government and company. We will die here and history will repeat itself here.

Many of those talking tough now, previously gave Exxon-Mobil their support. It's enough to make Simon lose his temper. 

SIMON: Now you're all complaining. Now you want to know more. You didn't know what you were signing. The chair at Exxon-Mobil says you said, "You can come to my land, and I will give you my land. Now you've signed they've all come. Now what are you saying? You've already said yes. You've already spoken for your land. Now I have to do the work. Why are you complaining now? When the community affairs officers came to your house, did you sign it, or not? You, yourself, accepted the community affairs officers into your house, and agreed.” 

OTHER MAN: I didn't wait, I just blindly signed it. They came, but didn't explain what the signing is all about, they just told us to sign it. So we did. They didn't explain it to us. You were explaining it but they didn't - that's all.

Opposition to the government and Exxon-Mobil follows the length of the pipeline. Community leader Pilita Kaware is from Kopi in the Gulf Province, where the pipeline will end up before entering the sea. To get there from Port Moresby takes four hours by road, and more than nine hours by boat. These waterways are the main way in and out for equipment and materials headed for Kopi. On our way, Pilita stops to talk to some of the traditional custodians of this river.

PILITA KAWARE: The Government calls this 'the Queen's waterways'. Is it really the Queen's water?

She believes they're entitled to compensation for the river's use.

PILITA KAWARE:  What will they spend in the next 30 years? Will you benefit from that money? I will fight for the waterways. You have to support me.

A few hours upriver we find the Oil Search camp at Kopi:

PILITA KAWARE: 2000 ton, the crane

Which Exxon-Mobil is busy expanding for the LNG project. 

PILITA KAWARE: This barge came in two weeks ago. This is all Exxon-Mobil.

There's a lot of extra work at the camp but locals complain jobs are going to people from other areas. Across the river from the camp is Kopi village - where there's no power or water - and it's a 7-hour walk to the nearest public phone.  Recently some local men, including Pilita's adopted son, attacked the contractors' camp at Kopi, frustrated by the lack of work.

PILITA KAWARE: The boys got angry because they want to be employed. That's the whole reason. Boys went down and attacked the camp just because of their same reason. To my understanding, it's OK, they can attack, because they have their rights. They want to work.

According to the police commander of Gulf Province, police arrived in an Oil Search vehicle after the attack, took the men away and beat them.

PILITA’S SON: They beat me in the car until we got to the base. When I got to the base there were two other young men who'd been beaten. Their faces and their bodies - blood was everywhere. 

Employment is just one of many possible flashpoints between the developer and locals.  Woite Arare believes the oil and gas businesses are taking advantage of her when they use this road through her land. So, she registers her protest by stopping the traffic. As I'm filming, a vehicle approaches her roadblock.

WOITE ARARE: Every day I tell you - you never listen. Have you paid for this road? Have you paid for this road? Every day I ask this. Now you pay me 2,000 kina. Every fortnight, you pay me 2,000 kina. You never listen. What about me? You're going to use my land for nothing? Are you going to use it for nothing? Bougainville is a place where there was serious trouble. 

In fact the car belongs to a local landowner company, which does contract work for Oil Search and Woite grudgingly agrees to let it pass. In many areas, anger at those benefiting from oil and gas, fuels conflict between landowners.

WOITE ARARE:  You directors always get money and you're happy all the time. What I'm doing here is very hard, very heavy. A woman can't do this. A woman can't do this. 

REPORTER:   Are you concerned about the possibility of individual landowners and landowner groups holding the project hostage because of their grievances?

SIR PUKA TEMU: It demonstrates the democratic vibrancy we have in our nation. 

REPORTER:  That's one way of putting it. 

SIR PUKA TEMU: We have the independence of the court, the judiciary, and the government does not interrupt. No doubt at the commercial level, delays will take place and state shareholders will lose money. But we need to go through those processes.

REPORTER:  So you're resigned to that? 

SIR PUKA TEMU:  We are resigned to that and we will manage them.

The villages of Porebada and neighbouring Boera are paying a high price for the coming LNGbonanza. They're close to where the LNG plant will be built, and hoped to gain a share of the spoils. But their greed led to tragedy - in January four men from Porebada were killed by their neighbours from Boera.  Australian contractors were building a road to the site of the new LNGplant. The promise of compensation for whoever owned land next to the road triggered rival claims - and violence.

IGO MEAURI, LANDOWNER: The actual gas plant, LNG gas plant, will be built in this area. 

Igo Meauri is the chairman of a local landowner company. He's taking me to where the killings took place with a village councillor who found the bodies 

IGO MEAURI: This place was covered by the blood. And we knew the body was killed here and the body was thrown back to the... in the bushes.

The four men from Porebada were shot and hacked with bush knives by villagers from Boera.

IGO MEAURI: It was very brutal. It was just too brutal, it was beyond expression. The coastal people we don't kill people, we don't kill people like that.

Gao Karoho was one of the young men who died because of the land dispute. He left a widow and two young children - including a baby daughter who was born the night he was buried. On the night the men from Porebada were killed, the villagers from Boera fled their homes - terrified of reprisals. Boera was deserted for six weeks before people started trickling back. 

WOMAN: We flee because we knew they were coming to kill us. Take revenge on that same night. So, we have to flee for our lives.

These women say the LNG project has brought out the worst in people. 

OTHER WOMAN: I think the LNG is bringing us good things, but people are maybe primitives.

REPORTER:  Does it make people go a bit crazy? 

WOMAN:  They go crazy. We go crazy because we want money - everybody wants money 

MICHAEL MCWALTERS: We're handing money out to people and taunting our own people. If you put a million dollars between yourself and myself and say "Whoever claims that ground there, can have it" we might have a little fight.

So far, any violence has been sporadic and easily defused. But some landowners warn that if their grievances aren't addressed, people will take matters into their own hands.

SIMON EKANDA: We know there is weapon. Even more than the defence force of this country can have. Even worse than that will happen - we've experienced the Bougainville crisis.






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It's disheartening to think that our country is on the verge of potential civil disorder because the Somares (father and son) and their cohorts are only interested in ensuring that they have a well established retirement benefit in place. If he ("grand chief sir" Michael) cared enough about this country, he'd put this entire project on hold, sort out any and all discrepancies regarding land ownerships, and everything else involved with the project, regardless of how long it takes, before proceeding; even going to the extent of cancelling the entire project in order to maintain social stability. Cancelling the project would mean landowners would have their lands and livelihoods back, and the government officials who were looking to get their pockets filled with "free money" miss out on their "unfair" share...a good trade-off if you ask me.