Cash Before Custom


Last week in Madang, Papua New Guinea, an important judgement was delivered in the National Court regarding the controversial Ramu Nickel Mine. The case featured 1040 plaintiffs and related to the deep-sea tailings placement (DSTP) — a contentious mine waste disposal method that threatens both the local environment and the health of the population.

The Ramu Nickel Project is a large-scale project that comprises a composite mineral resource initiative with four components: a mine, a pipeline, a refinery and wharf — and DSTP. The mine at Kurumbukari is in the high country and involves a series of open-cut pits and plant that produces ore slurry. The pipeline transfers the ore slurry 135km from Kurumbukari to a refinery at Basamuk, on the Rai Coast of Madang Province. The refinery at Basamuk processes the slurry and the refined nickel and cobalt is exported from the wharf.

The DTSP system is the controversial tailings disposal process that transports the refinery waste through a sloping 400-metre pipeline offshore to a depth of 150 metres where the tailings are dumped into the sea in Basamuk Bay. The amount of waste is staggering: 50 million tons each year for the 20 year life of the project.

The plaintiffs were seeking a permanent injunction by attempting to assert their property rights on customary lands, including seawaters affected by the Ramu Nickel Project. They were not successful in this action.

Their efforts to stop the DSTP were split into three parts. Firstly, they made a claim that the DTSP would create a "common law nuisance" on the grounds that it would interfere with the population’s enjoyment of the land and sea.

Secondly, they argued that  environmental harm that would result from the 1 billion tons of waste over the 20-year life of the mine would breach the PNG Environment Act (2000).

Thirdly, they argued that the DSTP would contravene "National Goal No. 4" of the Papua New Guinea constitution, that relates to the sound principles of stewardship over natural resources and the environment. It states:

"We declare our fourth goal to be for Papua New Guinea’s natural resources and environment to be conserved and used for the collective benefit of us all, and be replenished for the benefit of future generations."

The National Goal goes on to call for "wise use to be made of our natural resources … in the interests of our development and in trust for future generations". In addition, there is the requirement that resource extraction should ensure that "all necessary steps … (should) be taken to give adequate protection to our valued birds, animals, fish, insects, plants and trees."

The defendants, who included the the Chinese-owned mining company Ramu Nico Management (MCC), the state of PNG, and the country’s Director of Environment, mounted a number of counter-arguments. To begin with, they argued that nuisance could not be proven. Contamination would only be evident after the event. Herein lies a big problem with the PNG Environment Act: it has provisions for prosecution when nuisance or damage is proven, rather than for sensible stewardship that would avoid contamination in the first place.

The defendants also argued that they could not be held to account for National Goals as they are non-justiciable. That is, the National Goals fall outside the jurisdiction of the Court.

Finally, the defendants questioned whether some of plaintiffs were genuine landowners. The defendants highlighted that those whose livelihoods had already been affected by the delay in mine production would be further prejudiced if the project was further delayed.

In summing up his decision to refuse the request for an injunction, Justice Cannings had this to say:

"Of the seven factors identified, three (standing, likelihood and extent of environmental harm, National Goal No 4) favour a permanent injunction. Three do not (delay by plaintiffs, lawfulness of DSTP, economic consequences). One (good faith of parties) is equally balanced.

I have decided that the substantial factors favouring an injunction are outweighed by the opposing factors. This is a borderline case. The plaintiffs have marshalled a compelling body of scientific evidence that the Director of Environment has approved operation of a very risky activity that could have catastrophic consequences for the plaintiffs and the coastal people of Madang Province. But I am satisfied that he has made that decision in good faith. If an injunction were to be granted at this late stage the economic consequences would for MCC and for the People of Madang Province be very damaging. Needless to say, if these proceedings had been commenced much earlier, the result may well have been different. My conclusion therefore is that the application for an injunction is refused."

This was a win for the defendants, and in the view of the judge, also an economic win for the people of the province.

But what is the real cost of this economic win for the 370,000 people of Madang Province? The province covers an area of 29,000 square kilometres, most of which is remote and undeveloped, although the province is an important producer of cocoa, copra, cattle, sugar, palm oil and woodchip. There will be some unspecialised jobs in the mining sector for locals and some service sector benefits — but there’s a real risk of catastrophe to the coastal people of Madang if contamination of fish stock occurs when 1 billion tons of contaminated mining waste is dumped into their ocean.

Most disturbing is that the real property rights of the custom landowners and stewards of the subsistence fishing grounds have been overlooked, despite the compelling body of scientific evidence provided by the plaintiffs.

With significant mineral exploration underway elsewhere in Melanesia, as here in Australia, the court’s prioritisation of politics before people, economy before environment, cash before custom reflects very badly on the values of contemporary society and is very much at odds with the notion of sound stewardship of natural resources.

In response, some of the plaintiffs have already moved to lodge an appeal to the Supreme Court. Their position is quite easy to understand: after 20 years the mining company will have made its profit, the PNG Government will have perhaps seen a very small increase in GDP — and Astrolabe Bay, the source of subsistence seafood for the local community, will have been contaminated by 1 billion tons of mining waste.


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