Bougainville considers options for economic independence
An advisor to the Autonomous Bougainville government says there are limited opportunities for the region to grow its economy as it considers independence.
An advisor to the Autonomous Bougainville government says other than mining, there are limited opportunities for the region to grow its economy as it considers independence.
Anthony Regan was in New Zealand last week to give a lecture on issues around Bougainville ahead of its independence referendum.
He says as Bougainville moves into this critical phase, there will be a need for considerable help from the international community over the range of complex issues that need to be negotiated with PNG in this phase.
Mr Regan told Johnny Blades there's been relatively little focus among PNG's national politicians on the approaching window for the referendum.
ANTHONY REGAN: And there's a sense that the Bougainville issue has been largely dealt with. And there's so much happening at the national level, there's limited room to focus on the referendum. As the wind down approaches, and the window involves a referendum that has to be held no earlier than 2015 and no later than 2020, and as that date has to be agreed between the two sides, Papua New Guinea can effectively set the date as late as it likes up until 2020 so I think there's a sense in Port Moresby that that's probably what will happen. Although Bougainville can of course request an earlier date, it's most likely that it's going to be late.
JOHNNY BLADES: And what's your view on the mine, is it is inextricably linked to Bougainville going independent?
AR: The future of the Panguna mine, which was a very large copper and gold mine, one of the world's largest, has become inextricably linked to the referendum issue because Bougainville sees it as the easiest way to have sustainable revenue. It's far from clear that the mine will reopen. There's huge legacy issues. It's far from clear that it's going to be economically viable. There's only been limited studies so far as to its long-term viability. So it's not certain. If it doesn't reopen, then the options for Bougainville become more difficult because although there are other highly prospective areas, the average time for proving a prospective area that hasn't been explored, proving and then getting established is fifteen to thirty years. Whereas the Panguna mine could reopen within six or seven years.
JB: What about those other sectors like fisheries or forestry?
AR: Quite frankly, the assessment from the Bougainville side is that there's limited opportunities. The cocoa industry which is quite significant in Bougainville, brings in between 160 and 200 million kina a year. Even a ten percent tax on that gives you 16 to 20 million kina. The Bougainville revenue from the national government is around 200 million kina. So to replace the revenue from the national government and donors they need several hundred million kina a year and they are looking for more than that. So agriculture, contrary to what a lot of outside observers think, is a difficult one and brings with it many problems of its own in terms of land pressures. Bougainville's population has almost tripled in the last twenty years and land pressures are already very great. Land being locked up in cocoa plantations of one kind or another, both small-scale and large, puts incredible pressure on land availability for gardens. So there's a lot of issues that the Bougainville government's sorting out. Outside commentators, especially from the activist community, who say there are obvious other ways of getting a sustainable economy in Bougainville have yet to establish the viability of any alternative model unfortunately.
JB: You're a believer in small-scale mining having great potential.
AR: The small-scale mining industry is already the second-most productive sector, almost certainly, for Bougainvilleans. No one really knows how large...
JB: Because a lot of it is illegal?
AR: It's illegal at the moment but Bougainville is about to pass probably its own mining legislation and that will make it almost all legal. There's no point in it being illegal. And if the Bougainville copper mine were to reopen with Bougainville Copper Limited running it, they would have to live with small-scale miners as well. But there are probably sales of fifty or sixty kilogrammes of gold a month out of Bougainville at the moment. So that's three or four million kina a month to Bougainvilleans. But again, taxing that is very difficult.
JB: The illegal nature that people attach to it, is it about being on someone else's land?
AR: No, it's illegal because under Papua New Guinea law which currently applies on Bougainville, the only legal small-scale mining is alluvial mining which is in river beds, within thirty metres of a river bed, on your own land and with no mechanisation. So nearly everybody's mining outside of river beds on somebody else's land and often with some sort of machinery. So the Bougainville legislation which is being developed will allow people to mine anywhere, provided they have the permission of the landowners.
JB: Do you think BCL should pay the ten billion kina compensation payment demand that Me'ekamui have made?
AR: There's all sorts of demands for compensation. The majority of people in the public forums that the Bougainville government has held have wanted the mine to reopen and have wanted Rio Tinto, BCL, as the devil they know that accepts that it did some things wrong and wants to do something about it, they say they want the devil they know rather than a new devil that won't take any responsibility perhaps. The question of what... I think BCL accept absolutely that there's compensation to be paid. The issue is, what's going to be the level of compensation that will enable the mine to be viable. No mining company is going to pay up front massive amounts of compensation. The compensation is essentially going to come from production, from profits. And the negotiations that will eventually happen, if it's decided to press ahead, will have to determine that and BCL is well aware that there will be significant demands for compensation.
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