Communities from Papua New Guinea’s Sepik region have today welcomed the findings of an Australian human rights body, which will pave the way for them to have a say on a giant copper and gold mine proposed to be built on their doorstep.   

The complaint was made to the Australian National Contact Point on Responsible Business Conduct (AusNCP),  an Australian government-sponsored independent body that has been set up to resolve complaints made against multinationals.  

The complaint was lodged in 2021 by two NGOs, Project Sepik and Jubilee Australia Research Centre, on behalf of 2,638 Indigenous members of 64 villages along the Sepik River. The complaint was brought against the Brisbane-based, Chinese-owned company, PanAust Limited and its PNG-based subsidiary Frieda River Mine Limited, in relation to their proposed Frieda River Mine and tailings dam project in PNG.  

The complaint alleged that PanAust had breached the OECD Guidelines for Multinational Enterprises by: (1) failing to gain the free, prior and informed consent  of communities who live along the Sepik River, (2) failing to adequately assess and mitigate environmental risks of the project and/or (3) inadequately disclosing key information to affected communities and stakeholders.  

The Final Statement of the AusNCP, released this week, observed that the process for seeking and obtaining the community’s consent was ongoing and therefore did not find PanAust’s conduct to be in breach of the OECD Guidelines in this area. However, the AusNCP did consider that prior consent would be necessary from certain groups, which could include groups who were represented by Project Sepik and Jubilee Australia in the complaint.   

The AusNCP made a number of other important recommendations, including that:  

• PanAust review its internal company procedures regarding free, prior and informed consent to ensure consistency with international standards;  

• any future stakeholder engagement must include Project Sepik and the communities it represents, and take into account the traditional governance groups or Haus Tambarans, which have already come out strongly against the mine.  

Although the AusNCP did not find the company in breach of the OECD Guidelines in relation to environmental assessment, it recommended that PanAust disclose the dam break analysis to relevant communities, which was one of the main requests made by the complainants in this process – something the Sepik communities have been calling for for years. The NGOs have long maintained that not enough information has been released about the proposed tailings dam, which several experts have argued is potentially unsound.  

Emmanuel Peni, Program Coordintor of Project Sepik said:  

This finding is a big deal for us. The process of doing this complaint has revealed what we already knew, that the Sepik river communities have not yet had the opportunity say whether they consent to the Frieda Mine. Our people deserve the right to FPIC—this statement is a first step to them getting it.

Mary Boni, the Executive Director of Project Sepik said:  

This AusNCP final statement is an important development in PNG: this may be the only time on mainland PNG that we have seen an organisation use a regional, rather than a global, mechanism to file a complaint and reach a final decision. It sets the benchmark not only for local but regional advocacy as well signifying hope that we might be able to protect the river. 

Luke Fletcher, Executive Director of the Jubilee Australia Research Centre, said: 

Although the outcome has been a positive one, we were disappointed that the company took an antagonistic approach to our complaint and yet cynically refused to take part in the good offices part of the process, thus denying the parties an opportunity to sit down and have good faith negotiations regarding our legitimate concerns about FPIC and the safety of the tailings dam.’

Fletcher went on to observe:

PanAust should release the dam break analysis at once, as recommended by the AusNCP. The Sepik people deserve to be able to know what will happen to their river and their way of life in the event that this risky tailings dam fails one day.  

Background  

The Australian National Contact Point 

The role of the Australian National Contact Point is to promote the use of the OECD Guidelines for Multinational Enterprises and to contribute to the resolution of issues relating to their implementation. The Australian National Contact Point is the only non-judicial grievance mechanism that Australia has for such instances. 

The OECD Guidelines for Multinational Enterprises set out international standards for businesses operating across more than one country. They are a set of recommendations, agreed to by governments, on how businesses can operate responsibly. The Guidelines cover a range of topics including: Environment; Human rights; Labour rights; Corruption; Transparency; and Tax.  

The Australian OECD National Contact Point, based in the Department of Treasury, has the power to investigate complaints made against Australian companies operating overseas, where those companies are alleged to have breached the Guidelines. The National Contact Point can issue findings on whether companies are in breach of their obligations under the Guidelines and recommend actions to address any breaches that have occurred.  

The Frieda River Project 

The Frieda River mine is a proposed copper and gold mine with estimated reserves of 12 million tonnes copper, and 19 million oz gold. The mine is projected to be operational from 33 to 45 years, with an estimated waste of 2.9 billion tonnes (50% tailings, 50% waste rock). 

The mine and its associated infrastructure have been proposed to be built across East and West Sepik (or Sandaun) Provinces, in an area that has been Tentatively Listed for World Heritage Status by the Government of Papua New Guinea for both environmental and cultural reasons.  

As at time of writing, the mine is currently being assessed by PNG’s environmental authority, Conservation and Environment Protection Authority (CEPA) and by the Mineral Resources Authority (MRA).  

The tailings dam, which would cover more than 31,000 acres, would need to safely hold waste from the mine forever. But it would be in an earthquake-prone area that gets heavy rain, with more than eight metres of rainfall a year. If the dam bursts, it could permanently damage the ecology of the Sepik River, and the livelihoods of 430,000 people who depend on it.  

Project Sepik    

Project Sepik is a not-for-profit organisation based in Papua New Guinea that has been working in the Sepik region since 2016. Project Sepik advocates for the vision of a local environment with a sustained balance of life via the promotion of environmentally sustainable practices and holding to account those that are exploiting the environment.     

Jubilee Australia Research Centre    

Jubilee Australia Research Centre partners with and amplifies the voices of local communities in the Asia Pacific region in the fight against an extractive and unequal economic system, produces quality investigative research and advocates for just solutions that centre communities.  

 

Project Sepik and Jubilee Australia spearhead the Save the Sepik campaign. Find out more at savethesepik.org    

 

Further reading: 

• Australian National Contact Point on Responsible Business Conduct (AusNCP)'s Final Statement in response to our complaint
  

• Project Sepik, Jubilee Australia Research Centre, The Sukundimi Walks Before Me, (March 2021). 

• Save the Sepik, ‘Supreme Sukundimi Declaration,’ 29 May 2020.   

• John Cannon, ‘Proposed copper and gold mine threatens the world’s second Amazon in PNG,’ MongaBay, 13 June 2022.