Garnaut quits mining board after PNG travel ban


ECONOMIST Ross Garnaut has quit as chairman of Papua New Guinea's biggest-earning company, Ok Tedi Mining, as a result of PNG Prime Minister Peter O'Neill's declaration in parliament two months ago that he was barred from entering the country.

Professor Garnaut, who has been involved with PNG for 47 years, said in his resignation letter: "It is undesirable for development in PNG that the government's use of its immigration powers should be seen as having been effective in forcing changes in the board of a major private company.

"For this reason, there was value in allowing some time for the Prime Minister to lift the ban should he be of a mind to do so."

But now, he said, "it is not possible for me to fulfill my responsibilities as chairman of this large, complex mining company for an indefinite period while the government is preventing me from travelling to PNG" - which he had been doing seven or eight times a year.

Mr O'Neill said in November: "I want to put it on record that (Professor Garnaut) will be no longer welcome in this country until BHP surrenders control of PNG Sustainable Development Program to the government and people of PNG."

Professor Garnaut had then just stepped down as chairman of PNGSDP, the trust to which BHP-Billiton assigned control of Ok Tedi - which has an annual output of about $4.5 billion - when it ceased to operate the massive copper and gold mine a decade ago, following environmental controversies.

The trust, which has built $1.36bn in assets for those in the area since the mine's eventual closure, and disburses more than $100m annually for development projects, owns 63.6 per cent of Ok Tedi Mining Ltd.

The rest is jointly owned by the governments of PNG and of the Western Province that contains the mine.

Recently, BHP pulled back from appointing PNGSDP directors - who are now chosen by the board itself, which includes PNG government nominees. But BHP must agree to changes in the core terms of reference under which the trust operates.

Professor Garnaut said the Ok Tedi board must address three pressing issues: proposals to extend the life of the mine; a performance review of senior managers; and potential co-operation with mining giant Xstrata and Brisbane-based Highlands Pacific to develop nearby ore bodies.

Former prime minister Mekere Morauta took over the chairmanship of OTML at the weekend, after succeeding Professor Garnaut at the helm of PNGSDP in November.

"I believe Papua New Guineans will look back on (his) contributions with a sense of gratitude," Mr Morauta said. "I can think of no other person, Papua New Guinean and expatriate, who has contributed more to the making of good policies, outcomes and organisations in modern Papua New Guinea."

The Australian

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