Nearly forty years ago the Ok Tedi Fly River Environmental Disaster destroyed our home.
In 1994 we began the legal battle to get the help we needed to rebuild our lives.
To this day we haven’t received it.
Mining company Kennecott Ltd discovers the copper and gold deposit at Mount Fubilan, in the Western Province of Papua New Guinea (PNG).
Seven years after discovery, Kennecott Ltd withdraws from the project after negotiations with the PNG Government broke down.
After approaching international mining companies, the PNG Government contracts BHP Group Limited to develop the open-pit Ok Tedi Mine at Mount Fubilan.
Ok Tedi Mining Limited (OTML) is incorporated in Papua New Guinea on 23 February.
Shareholders include BHP Minerals Holdings Pty Ltd (BHP Minerals), the Independent State of Papua New Guinea; Inmet Mining Corporation; and Mineral Resources Ok Tedi No 2 Limited (MROT).
OTML begins construction of facilities at the mine, including a dam to contain waste tailings generated by mining.
A 136km highway is constructed between the towns of Tabubil and Kiunga to provide transport for mining activity, cutting through existing villages of the north Ok Tedi, and lower Ok Tedi areas.
Dec 1983 – Jan 1984
Major landslides cause the tailings dam to collapse while under construction. OTML ceased further construction of the dam, allowing tailings to flow directly into and pollute the Fly River system.
Instead of deferring gold production, the PNG Government permitted mining works – and riverine waste disposal – to proceed while monitoring effects on the environment.
BHP takes over control, supervision and direction of OTML’s operations at the mine.
The PNG Government extends approvals for riverine disposal, with conditions to monitor and report on environmental effects of mine waste on the river system.
1994 – 1995
Clan leaders of affected communities lodge legal proceedings in the Supreme Court of Victoria and the National Court of Justice of Papua New Guinea.
Cabinet decides on an independent study involving international experts on tailings dam options for the Ok Tedi mining project.
The PNG Government, BHP and OTML complete “in-principle” talks about tailings mitigation options which the companies agree to submit to the Government for its consideration by August.
The PNG Prime Minister announced the inquiry and that once an alternative tailings and waste management scheme is agreed upon, it will be implemented.
BHP and OTML reach a settlement agreement with the plaintiffs, ending all OK Tedi litigation in the PNG courts and BHP agreeing to pay legal costs.
The landowners became eligible to receive compensation payments made under the legislation.
OTML completes a risk evaluation of several options for waste mitigating schemes and recommends an 18-month dredging trial on Lower Ok Tedi and continuing to assess the feasibility of tailings storage pipelines, with a final decision on a long-term mine waste management plan subject to the outcome of both efforts.
Their report titled “Environmental Financial and Risk Analysis of Various Dredging and Tailings Storage Schemes to Mitigate Mining Impacts in the Ok Tedi Fly River System” is filed in December 1996.
After obtaining government and landowner approval, OTML begins dredging and sand storage program on the Lower Ok Tedi. A strategic review of BHP’s investment in OTML suggests BHP is exposed to substantial financial loss, further litigation and compensation claims, reputational damage through the media and loss of shareholder value as a result of its investment.
OTML and landowners enter into the Lower Ok Tedi Agreement in which a full compensation scheme, administered by the Alice River Trust, is established for all loss and damage in respect of disturbance to the land in the Lower Ok Tedi area.
May – July 1998
Project review and capital cost update prepared by Venton and Associates finds the value of the mine and project to be approx. $1.5 billion; sufficient to meet the costs and ongoing costs of the waste pipeline and storage option at an estimated capital cost of $US125 million – 146 million.
Final report by OTML on the Waste Management Study provides basic designs for two options to store dredge sand and one option to store sand and tailings at a site on the floodplain of the Ok Tedi River. Long-term river migration, flooding and erosion are raised as concerns for all three options (especially the third).
Managing director of OTML, Roger Higgins, announces completion of the study and that a draft on how to solve the environmental problems along the Ok Tedi River has been finalised.
Ken Voigt, at a presentation of tailings mitigation options draft discussion paper in Melbourne, says the cost of the tailings pipeline option was US$160 million and “not unfeasible”.
OTML and BHP admits in media and market statements that the environmental impact of the mine and the area of land affected would be “significantly greater” than previously stated.
PNG Government commissions an independent review of the Ok Tedi studies, which will advise the government as to how it might respond.
PNG Government decides to carry out consultation with all groups in the Western Province who would be affected by continuation or closure of the OK Tedi mine.
Environmental peer review group report for OTML points to evidence the mining activities have so far caused major aggradation and flooding in the river valley, causing extensive forest dieback. Signs of loss of species biodiversity and adverse decrease in fish numbers in the Fly River are also reported and closing the mine is suggested as arguably the best environmental option.
The affected communities who were part of the 1996 Settlement launch a class action in the Supreme Court of Victoria against BHP and OTML, arguing they are in breach of the agreement for failing to reduce the environmental impact of the OK Tedi mine.
Then Prime Minister, Sir Mekere Morauta, says the terms of reference for the Ok Tedi Mine Review will cover the environmental impact of the mine, BHP’s mine closure plans and its social and economic impacts. Confirms that all who might be affected by any closure will be involved in consultations. BHP announces its intention to exit as a shareholder of OTML and cease all involvement in the Ok-Tedi mine. Extensive discussions and negotiations begin between OTML and the affected communities about a resolution to the class action and compensation payable for the environmental disaster.
OTML appoints NM Rothschild and Sons Limited to facilitate negotiations between stakeholders to allow BHP to exit from OTML and for the mine to continue operating. PNG Government-led negotiations between representatives of affected communities and OTML commence. 150 of the 153 affected communities are involved in negotiations.
Cabinet endorses proposed terms for BHP’s withdrawal from the Ok Tedi mine, with BHP to transfer its 52% stake in the mine and cease involvement by January 2002. Under the agreement, a fully independent company would be set up, with further details to be discussed. In addition, a new environmental
BHP transfers shares in OTML to a new company that would be incorporated in Singapore – the PNG Sustainable Development Program Limited (PNGSDP), which would apply income generated by the mine to development projects benefiting communities in the Western Province and wider PNG.
PNGSDP agrees to indemnify BHP Billiton Group against any liability under a claim for environmental damage arising out of the operation of the mine after the effective date of the transaction (7 February 2002) and from prosecution for any prior breach of environmental laws. Mining (Ok Tedi Mine) Continuation (Ninth Supplemental) Agreement Act is passed on 20 December.
BHP transfers 52% shareholding in OTML to PNGSDP.
The Ok Tedi Development Foundation is established under the Mining (Ok Tedi Mine Continuation (Ninth Supplemental) Agreement) Act 2001, for the purpose of developing projects in the Western Province to benefit the affected communities.
The PNGSDP program company commences operations on 5 November.
The PNGSDP permanent Board is appointed.
Claimants reach a settlement and agree to drop the 2000 class action suit against BHP and OTML.
PNGSDP is able to begin its full range of functions and responsibilities.
Minister for Finance, Bart Philemon, establishes the Western Province People’s Dividend Trust Account (“WPPDTA”) to hold funds received from OTML paid to the people within the Community Mine Continuation Agreement (CMCA) regions as compensation under the 1996 Settlement.
Report on environmental and health issues presented by Dr Alan Tingay for the CMCA Review found more than 1 million tonnes of copper had already been discharged into the Ok Tedi and Fly River systems and the total waste disposed into the river system during the life of the mine will be more than 1.7 billion tonnes. The report also found heavy declines in fish populations in Ok Tedi, Middle Fly and Lower Middle Fly regions, severely affecting local access to food and clean water supply from the river, and that the impacts from the mine will continue to worsen long after closure.
Ok Tedi Mine Environmental Management and Community Mine Continuation (CMCA) Region Assistance Package is approved. The package is to include establishment of an independent CMCA entity to give the communities greater control over resources and programs within the region.
Review of the PNGSDP is prepared by Dwight H. Perkins of Harvard University. Chairman, Ross Garnaut AO writes to the leaders of the CMCA communities, encourages them to set up the new CMCA entity as soon as possible and the PNGSDP are committed to co-operating in the development of the CMCA regions. Representatives of the affected
Minister for Finance, John Hickey, revokes the first trust and establishes two new trust accounts, both to share proceeds of payments equally between the CMCA and non-CMCA regions of the Western Province. A Memorandum of Agreement on the outcomes of the 2006/2007 CMCA Review is released. OTML meets with representatives in villages throughout Fly River impact area to revise payments under the CMCAs. 90% of the villages chose to provide representatives and the offer of a 10% payment increase for each region was accepted, due to mistake in dieback predictions. OTML agree to help communities set up a new CMCA entity to give communities within the CMCA regions greater ownership and decision-making power over resources, programs and projects arising from the review. The Ok Tedi Fly River Development Foundation will eventually replace the role of the Ok Tedi Development Foundation, currently operated by OTML, to deliver sustainable development programs in the Western Province and deliver on OTML’s commitments under the CMCAs.
OTML pays approx. 390 million kina to the trust, to be shared equally between the people within and outside the CMCA regions of the Western Province, pursuant to the Hickey Trust Instruments. The Board of Trustees transfer 111.5 million kina from the trust into a new ANZ bank account which is intended to be a trust account for the CMCA people, and 244 million kina into a new BSP bank account (Non-CMCA People’s Account). The Non-CMCA Account received 113 million kina more than the ANZ CMCA People’s Account, not in accordance with the terms of the Hickey Trust Instruments.
Dr Alan Tingay sets out suggestions for PNG and OTML to establish a permanent body that has task of managing acid rock drainage, implementation of social and community improvement programs and medical services plan for affected villages.
Tanorama Limited are engaged to prepare a report on the design of a new entity under the agreed terms of reference arising out of the CMCA review.
OTML commence consultations with communities on the proposed extension of mine operations and proposed compensation, and meetings are held with village representatives and regional delegates over the coming year.
April – May 2012
OTML provides regional delegates with a revised proposal for compensation, further updating the feasibility and environmental studies and updates the CMCA Extension Agreement draft.
Prime Minister Peter O’Neill is informed of Ross Garnaut’s resignation as PNGSDP Chairman.
PM O’Neill expresses his intention to take control of appointments to the PNGSDP Company Board, appoints former PM Sir Mekere Morauta as director and chairman.
Ross Garnaut banned from entering PNG. CMCA Extension Agreements reached between OTML and various Ok Tedi and Fly River communities.
Sir Mekere writes to the Prime Minister advising of the Mine Life Extension investment.
Sir Mekere writes to CEO of OTML referring to an initial subsidy of $30 million to start feasibility work for Mine Life Extension.
Sir Mekere states at PNGSDP’s 2012 Annual Report Meeting that “PNGSDP is especially mindful of the fact that it holds its 63.4 percent share in the Mining Company in trust on behalf of the people of Western Province. PNGSDP’s priority is to protect their interest first.”
Sir Mekere criticises PM O’Neill’s announcement of the State’s expropriation of the Program Company’s shares in the Mining Company, saying: “Those shares are owned by the people of Western, not PNGSDP. PNGSDP is merely the custodian of the shares.” Mining (Ok Tedi Tenth Supplemental Agreement) Act 2013 is passed and PNGSDP’s shares in OTML are cancelled and acquired by the PNG Government. The Act also grants the Prime Minister the power to declare whether compensation will be payable at all to any person and the terms under which compensation is paid.
In an article published by PNG Facts on 20 April, Sir Mekere states that PNGSDP had to suspend its development program because the Prime Minister “…illegally expropriated the company’s 63.4 percent shareholding in Ok Tedi in 2013… at great social and financial cost to the people of Western Province”.
Mining (Ok Tedi Mine Continuation (Ninth Supplemental) Agreement (Amendment) Act 2018 is passed.
In the PNG Post, on 18 September, Sir Mekere states: “PNGSDP was created to achieve three main aims; to hold in trust the shareholding gifted to the people of Western Province by BHP Billiton as part of its agreement with the Government to exit the mine… The reason at that time the government decided that the shares were to be owned by the people of Western Province, rather than the state, was recognition that it was the people of Western Province who had experienced the environmental impact of the operations of the mine, and would live with that impact for decades to come, whereas the rest of PNG had benefited and would continue to benefit from the mine through the taxes and dividends paid to the state, and through the mine’s operating expenditure and employment”. On 23 September, upon the instructions and consent of the leaders of the affected communities, the Ok Tedi Fly River Development Foundation Limited (OTFRDFL) is incorporated.
OTFRDFL commence proceedings in the National Court of Justice in PNG.
Judgment – High Court of the Republic of Singapore  SGHC 68 – Independent State of Papua New Guinea v PNG Sustainable Development Program Ltd (2 April) On 30 April, the Foundation commenced claim against PNGSDP’s unfulfilled promise to spend agreed monies on projects to benefit the affected communities.
Judgment – Supreme Court of Justice of Papua New Guinea (19 August).
Judgement – Court of Appeal of the Republic of Singapore  SGCA 44 (30 April).
Statement of Claim OTFRDF and Ors v OTML and Ors (13 July).
Defendants strike out application in Singapore proceeding supported by affidavits of PNGSDP CEO, John Wylie.
Dr Alan Tingay’s draft report, The Environmental and Social Impacts of the Ok Tedi Mine Papua New Guinea states:
“There has been a collective failure on the part of the companies and key individuals associated with OTML, the Government of Papua New Guinea, the Ok Tedi Development Foundation, the PNG Sustainable Development Program, and the Government of the Western Province to investigate and understand the issues confronting the people of the Fly River, to develop and implement effective programs to alleviate their situation and to develop and fund a comprehensive long term strategy that addresses the dire situations that will confront future generations”.
On the 19 and 20 August the High Court of Singapore will listen to the defense of the OTML Statement of Claims in a hearing on a strike out application.