One of World's Worst Mine Disasters Gets Worse – BHP Admits Massive Environmental Damage at Ok Tedi Mine in Papua New Guinea, Says Mine Should Never Have Opened

Mineral Policy Center – MiningWatch Canada – MineWatch UK

Environmental Groups to BHP: "Don't Abandon Environmental Responsibilities or Affected Communities"

Stephen D'Esposito, Mineral Policy Center, 202.887.1872
Joan Kuyek, MiningWatch Canada, 613.569.3439
Geoff Evans, Mineral Policy Institute, +
Danny Kennedy, Project Underground, 501.705.8981

(Washington D.C. and Ottawa) — Today in Papua New Guinea the Ok Tedi Mining Ltd. (OTML), a subsidiary of BHP, announced that the environmental impacts of the Ok Tedi mine on the surrounding environment "would be far greater and more damaging than predicted." OTML was expected today to formally hand over to the PNG government, documents describing the environmental impacts of the mine. OTML was also expected to publicly release 25 scientific reports and a risk assessment report. The company also announced that none of the solutions it has studied, to date, would adequately solve the mine's environmental problems.

According to a press statement from BHP, "From BHP's perspective as a shareholder, the easy conclusion to reach, with the benefit of these reports and 20/20 hindsight, is that the mine is not compatible with our environmental values and the company should never have become involved."

In a significant related development, BHP has hired a law firm to determine whether it has already met its "legal" obligations to PNG landowners from environmental damage caused by the Ok Tedi gold and copper mine. In 1996, landowners got an out-of-court settlement from BHP which obligates the company to dredge the river, to compensate some of the affected communities, and build a tailings retention system. BHP's recent actions have prompted concerns, amongst environmental groups and community leaders, that BHP will abandon its commitment to environmental cleanup and social compensation. BHP's CEO has announced that he will consult with NGOs and other before making a decision on BHP's future role.

The Ok Tedi mine dumps 80,000 tons of contaminated waste rock and tailings per day from the mine-site into the Ok Tedi and Fly Rivers. According to OTML, mine waste could impact up to 1,350 square kilometers along the rivers.

OTML has three major shareholders: BHP owns 52 per cent, the PNG Government owns 30 per cent, and Inmet Mining Corporation, a Canadian owned company, owns 18 per cent. The Ok Tedi mine contributes an estimated 20 per cent to PNG's exports, and 10 per cent to its gross domestic product.

Today in PNG, environmental groups including Mineral Policy Institute of Australia, Greenpeace Pacific, and the Environmental Law Center called on BHP to "bear the environmental cost of mine closure, and should not be allowed to offload their environmental responsibilities onto the PNG taxpayer and the government of PNG." They also stated that "river systems should not be used to dispose of mine waste." Mineral Policy Institute called for BHP to channel its Ok Tedi profits back into cleanup costs, compensation for the landowners, and economic transition costs. A full statement is available from Simon Divecha, Mineral Policy Institute, +61 (2) 9387 5540 or Brian Brunton, Greenpeace Pacific, +675 326 0560.

In Washington D.C. and Ottawa, Mineral Policy Center and MiningWatch Canada announced that North American and European NGOs were endorsing the call for BHP and OTML to live up to their environmental and social obligations. In a letter, environmental and human rights groups including Mineral Policy Center, MiningWatch Canada, Mineral Policy Institute, MineWatch UK, Calancan Bay Villagers Support Coalition, the Environmental Mining Council of British Columbia, Friends of the Earth, Pacific Environment and Resources Council, Project Underground, and others endorsed the position of Pacific-based NGOs.

"BHP is right. This is an example of a mine that should never have been built, but now that they've made this toxic mess they have no choice but to clean it up, completely," said Stephen D'Esposito, president of Mineral Policy Center. "BHP's new leadership is being put to its first environmental test. How BHP responds will determine their environmental reputation for the next twenty years. Unless they want a label as mining's worst polluter, they need to cleanup their mess."

"We wouldn't let a mining company walk away from a mess like this in Canada and we shouldn't let BHP and Inmet walk away from this in Papua New Guinea," said Joan Kuyek, national coordinator of MiningWatch Canada. "If BHP wants to be taken seriously as an environmental leader they have an obligation to cleanup Ok Tedi, whatever it costs."

"BHP would never have been allowed to dispose of toxic mine waste directly into rivers in Australia. Yet BHP does this in Papua New Guinea, and continues to do so," said Geoff Evans, director of Mineral Policy Institute, an Australian NGO.

"Before a bulldozer hits the dirt, mining companies and the financial institutions that back them need to assess the true costs of operating and closing a mine responsibly," said Dr. Brent Blackwelder, president of Friends of the Earth - US. "In a case like Ok Tedi, the human, environmental and financial costs simply were far too great."

"BHP has known since 1984 that direct dumping of mining waste into the Fly river system is hazardous to everything except its profits. Having irrevocably despoiled the environment of the Fly river and the territory of its peoples, having tried (yet failed) using questionable methods to silence opposition, protest and appeals for compensation from the affected land owners the OTML now offers the alternatives of further pollution or abandoning the area and people to the mess they willfully created. OTML are fully responsible for the current situation. Their motives now are to squeeze extra profit from the area and at the same time divert attention from the real issue which is their obligations arising from past gross abuses. OTML needs to clean up the area that it knowing despoiled and compensate local landowners adequately for the destruction of their future. After this the blackmail of the current choices may be replaced by a real choice for local people," said Geoff Nettleton, coordinator Minewatch Asia Pacific Project, MineWatch UK.

"BHP's announcement comes as no surprise. For years, reports of the mine's impacts have been ignored by the company. In 1989, I published an editorial in the Times of PNG where I predicted that if they didn't stop dumping, at stake was nothing less than the future of the entire Fly River. The company ignored these reports and unfortunately did nothing to prevent these problems from coming to fruition. Now they must bear full responsibility for cleaning up the mess," said Professor Stuart Kirsch, a cultural anthropologist at the University of Michigan.

"BHP's backflip raises red flags for other companies pursing similarly destructive mines such as Freeport McMoRan Grasberg mine in Indonesia or Newmont's Yanacocha Complex in Peru," said Danny Kennedy, director of Project Underground. "Such mines may simply be too big to be sustainable, as Ok Tedi has proven to be."

"Now that BHP finally acknowledges the severity of the damages it has caused at the Ok Tedi mine, an ecological disaster the company has for years denied in engagements with concerned NGOs, it will be interesting to see whether Placer Dome Inc. will finally respond to calls for that company to stop dumping its tailings from the nearby Porgera Mine into the same river system," said Catherine Coumans of the Calancan Bay Villagers Support Coalition.