Named
after a passing 18th century French explorer, Bougainville Island has been
governed successively by the German Empire, Imperial Japan, Australia and,
since 1975, Papua New Guinea, which labeled it the Autonomous Region of
Bougainville. On May 11, the island's 300,000 people will vote in an election
that may pave the way for independence within five years, but could also
rekindle tensions over mining that led to civil war in the 1990s.
Bougainville is blessed or cursed,
depending on whom you ask. Its mineral deposits are so vast that from 1972 to
1989, royalties from a large open-cut copper and gold mine comprised 40% of the
Papuan government's revenue. The mine at Panguna, run by a subsidiary of the
U.K.-Australian mining group Rio Tinto, was shut in 1989 by a rebellion that
started with grievances among landowners about compensation and immigrant
workers.
Fork in the
road
The violence spiraled quickly into a separatist war
against the central government, led by the Bougainville Revolutionary Army and
backed by local militia groups. At least 5,000 people died out of a population
of around 140,000 at the time, some from the fighting, most from malaria and
other diseases than ran unchecked as health services faltered amid a government
blockade.
The civil war ended in a truce in
1997, followed by a peace agreement in 2001 that conferred autonomy to the
island. Successful elections were held in 2005, 2008 and 2010. Peace has
largely held, in spite of the continuing presence of armed groups around
Panguna, including some who proclaim loyalty to the Me'ekamui Government of
Unity, a rebel state declared in the 1990s. The upcoming election is the last
before a promised referendum on independence or continued autonomy, scheduled
to be held by 2020.
Whichever option the voters choose,
the island faces a dilemma.
Bougainville's autonomous status
gives it a separate police force and judiciary. The schools and health clinics
damaged by fighting or neglect have reopened. Roads, airstrips and jetties have
been patched up. Most of the work has been paid for by the national government
in the capital, Port Moresby. Only 34 million kina ($13 million) of the
autonomous government's 2014 budget of 312 million kina comes from local
sources. Most of the rest comes from the central government, with a small
portion provided by international aid donors.
There is little commerce in the province,
with most residents living off subsistence farming or fishing. Cash crops are
mostly limited to cocoa plantations whose output is worth about 180 million
kina a year. Small mining operations at about 40 sites are manned by around
10,000 people panning for gold and operating primitive sluices. These are
thought to generate about 75 million kina a year.
John Momis, outgoing president of the
autonomous region and a candidate for re-election, is one of many who argue
that to be truly autonomous, let alone fully independent, the island must
reopen the Panguna mine, which could provide sufficient tax revenues to finance
the government. But tussles over who will own and control the mine are already
triggering tensions like those that led to the civil war.
Post-apocalypse
For a quarter of a century, the mine and the nearby Arawa
township, built for its 3,500-strong workforce, have resembled the set of a
post-apocalypse movie. Huge dump trucks sit idle and rusting; vines are draped
from power pylons through which electricity has not flowed for years. Villagers
camp in bungalows abandoned by mine managers, cooking on fires in the gardens.
A 2012 "order of magnitude study"
by Bougainville Copper, a Rio Tinto subsidiary that ran Panguna and is 53.83%
owned the parent company, concluded it would take at least five years to reopen
the mine to produce 60 million to 90 million tons of ore a year. It estimated
the cost at $5.2 billion and an operating life of 24 years.
Bougainville Copper has always said
it wants to restart the Panguna operation. But the situation was complicated in
March, when the autonomous government scrapped the company's mining lease and
annulled a 1967 investment deal between the company and the former Australian
colonial government. Bougainville Copper retains an exploration lease and right
of first refusal should a new mining lease be offered -- but that would include
much stricter requirements for environmental protection and consent from local
landowners.
The company said the autonomous
government's action has created uncertainty about the future of the mine,
rather than helping to resolve it. Peter Taylor, Bougainville Copper's
chairman, told shareholders at the company's annual meeting in Port Moresby on
April 29 that it had written off the mine, which was valued in its books at
166.5 million kina. He said the company is considering legal options to protect
its rights. Rio Tinto has said it is reviewing its stake in Bougainville
Copper.
Devil we know
Others are mulling investments in Bougainville, although
the Me'ekamui rebel factions may hold the key to any restart of large-scale
mining. Interested parties include Lindsay Semple, a Canadian mining
entrepreneur, who briefly held rights granted by the autonomous government to
open mines other than Panguna; and Tall J, a subsidiary of a timber and mining
group called Bougainville Development based in the U.S. state of Missisippi.
Bougainville Development is 50% owned by Nevis Capital, an investment company
based in the U.S. state of Nevada, according to a July 2014 disclosure by Nevis
published by U.S.-based OTC Markets.
Sydney businessman Anthony Johnston,
who controls one of Australia's biggest waste disposal companies, United
Resources Management, and Ian de Renzie Duncan, an Australian corporate lawyer
and former chief executive of Zeus Resources, a small Australian uranium
explorer, are also understood to be interested in mining prospects in
Bougainville.
Anthony Regan, a constitutional
lawyer at the Australian National University, and an adviser to the autonomous
Bougainville government, said the two men appeared to be interested in
participating in the reopening of Panguna. Regan recounted a meeting with Momis
in February at which Johnston and Duncan argued that while Rio Tinto's
Bougainville Coppper subsidiary should be given first refusal, it should have
only six months to make a decision. Johnston did not return calls to his Sydney
office.
"It's the only game in town and
the buzzards are circling, some to gain advantage from the re-opening Panguna,
some seeking to oust BCL (Bougainville Copper) so their preferred investor can
come in, others opposing Panguna for fear that it would result in their favored
projects not going ahead," said Regan, adding that he thought most
Bougainvilleans would accept a return of Bougainville Copper to Panguna.
"Even the landowners are saying
they want BCL to come back: They prefer the devil they know," he said. A
new Bougainville mining law vests minerals in traditional lands with the
traditional owners. Even so, resentment could reappear among local people and
expectations for compensation payments are high, he said.
Momis has made clear he is also concerned
about a meeting in October between Papua New Guinea Prime Minister Peter
O'Neill and the Me'ekamui group, as well as discussions between O'Neill and Rio
Tinto. In several statements over the last six months, Momis has voiced
suspicions that O'Neill is seeking to buy Rio Tinto's shareholding in
Bougainville Copper. The central government already holds a 19.3% stake.
"Any attempt by the national
government to control mining in Bougainville could cause Bougainvilleans to
lose all faith in the Bougainville peace agreement," Momis said in a
December statement. "Many would refuse to work with the national
government anymore. They would want immediate independence."
O'Neill has denied any such plan,
saying in a letter to Momis on Jan. 30, "We are fully aware of the
sensitivity of the mine issue, and the national government has no intention to
take control of the mine in Bougainville."
Momis, a former Roman Catholic priest
who entered Papuan politics in 1972 and helped to write the country's
constitution, is the favorite to win the presidential election. Regarded as
incorruptible and open to both continued autonomy or independence, he is widely
seen as a safe pair of hands. Sam Akoitai, a former mining minister with the
central government and Bougainville resistance figure, is also thought to have
a chance of election. Three former rebel army commanders are also running,
along with four less well-known candidates. Momis and Akoitai both favor
pushing ahead with mining and upholding the referendum verdict.
Stay or go
"For these elections a huge amount is at stake --
the mining industry, jobs, and the referendum," said Regan. "This is
the fourth Bougainville-wide election since the peace agreement, but there is
10 times as much at stake this time."
The likely referendum outcome remains
unclear. Many of the dark-skinned Bougainvilleans regard lighter-skinned people
from other parts of Papua New Guinea as alien -- they are often referred to in
the province as "redskins." Bougainvilleans feel a cultural
affinity with the adjacent Solomon Islands, from which they were separated by
colonial rivalry between Germany and Britain in the late 19th century.
Port Moresby has put more resources into the
province as the referendum approaches, but its efforts may have come too late
to overcome bitter memories of counterinsurgency campaigns by national police
and soldiers in the 1990s. "Lack of support for the [autonomous
government] from Moresby has loaded the dice towards independence," Regan
said.
In a final twist in the Bougainville story,
the province could be denied independence, even if that is the clear preference
of voters in the referendum. Under the peace agreement, the implementation of a
vote for independence is left to the national parliament, and agreement between
the autonomous government and Port Moresby on the timing of the vote is contingent
on judgments about the disposal of weapons and good governance in the province.
"The truth is that we may need to rely on international community support
at that time," Momis told the provincial parliament in March. HAMISH
MCDONALD, Contributing writer
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