Ok Tedi Mining - 2006 Community Mine Continuation Agreements (CMCA) Review

A New Way Forward

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Case Status

According to Stuart Kirsch, “The Ok Tedi case is widely regarded as one of the most successful examples of a foreign tort claim made on environmental grounds against a multinational corporation. Although the case was not framed explicitly in human rights terms, it endorsed the right to a safe environment and established that a subsistence economy is entitled to protection under the law.”[1] Still, this case is a clear representation of the consequences for companies involved in cases without access to effective and unsatisfactory remedies. Stemming from the problems with the court settlement, communities were left frustrated and angry. From the company’s viewpoint, the lawsuit had been argued on the basis of damage to property, but from the community side, the basis of the lawsuit depended on the infringement of subsistence rights. If compensation was limited to property owners, a substantial proportion of those who made use of the land in question would be excluded from the settlement.

But in August 1999, BHP announced that none of the proposed tailings containment options would substantially mitigate the destructive processes already in train. The conditions downstream from the mine will worsen over the next 40 years, they said, regardless of whether the mine closes or continues to operate. The CEO of BHP publicly acknowledged that the impact of the mine was far greater than previously anticipated, and that its continued operation is incompatible with their corporate environmental values. The company, then, framed the debate as if only two options were available: that the mine stay open and continue to pollute the river, or that the company closes down its operations, causing extensive social and economic hardships at both the local and national levels. Furthermore, "the mine has destroyed the ecosystem that once supported the subsistence economy, and the government has largely squandered revenues from Ok Tedi that were supposed to enhance local economic opportunity…Not enough attention has been given to the possibility that traditional skills and knowledge of local resources might provide the affected communities with alternatives to their dependence on mining revenues. Moreover, by introducing a capitalist model of large-scale economic development to the region, the mine has restricted the communities’ ability to envision alternatives to external intervention. Thus the communities’ response to their problems has been confined to the terms of monetary compensation.”[2]

Story

According to Tim Offor of social issues consultancy Pax Populus, “It was a landmark process in terms of its transparency, genuine participation and leveling of power imbalances (real and perceived). Also, the speed with which it achieved a mutually agreeable outcome (18 months) was a successful outcome of the process. As a model, it successfully combined the Melanesian way of negotiating with the best of Western society's social and management theory and practice. Relationships between the operating company and the affected communities were far more robust at the end of the negotiation, and the process design enabled the communities to gain access to a far greater source of funding for their sustainable development goals through the participation of the PNGSDP (52% shareholder trust) and the national government. If the development foundation set up to implement the major projects arising from the review is successful, it will be able to deliver to the 95,000 people living in the impact corridor with real, long-term benefits. We don't know what has happened in the past three years, since the MoA was negotiated and our involvement ceased.” [3]

Outcome

This case implies that litigation to protect human rights may not achieve effective remedy or justice. Participation in legal proceedings and negotiations with the mine may have even perpetuated community members’ dependence on external intervention and constrained their ability to imagine an alternative to their situation.

1. Kirsch, Stuart. "An Incomplete Victory at Ok Tedi." Carnegie Council for Ethics in International Affairs. 6 Apr. 2000.

2. ibid.

3. Email Interviews with Tim Offor and Barbara Sharp in June, 2010. See also: Sharp, Barbara, and Tim Offor. Ok Tedi and Fly River Negotiation over Compensation: Using the Mutual Gains Approach in Multi-party Negotiations. IUCN Water Programme. Negotiate Toolkit: Case Studies.

BASESwiki Contributor(s)

This article was modified by Centre on Asia and Globalisation and Tim Offor.