PNG

PNG

Friday, September 20, 2013

Who owns OTML and The PNG Sustainable US$1.5 Billion Long Term Fund

By GABRIEL RAMOI

If OTML  Files  for voluntary  liquidation  after it licence to operate as a miner in  Mt. Fubulan  is not renewed by the PNG Government next year, What will  happen to its assets ? Does its asset include the Singapore based US$1.4 Billion long term fund currently managed by HSBC and Schroeder’s?

Facts: The Long Term Fund is Governed  by  Trust Deeds which was Drafted by the Law Firm  Allens Arthur Robinson on behalf of its client  BHP Billiton and relayed to PNG via Gadens Lawyers  who presented the final document to the then Prime Minister Sir Mekere  who acquiesce with its content and  got his Cabinet to approve the 22 Different Agreement and Trust Deeds that set the legal framework  indemnifying  BHP Billiton  from  any  future claims over the  the Destruction of the Fly River System through a compensation Package which included,

1.Transfering BHPs majority interest in  OTML to  PNG Sustainable Program LTD and that PNGSDP receives every year an income stream from the Mine.

2.  The PNGSDP uses 15 %  of the income to mitigate against additional hardship and suffering faced by the 6 Different Communities that are impacted by the Destruction of the Fly River System  through  the continued operation of the OK TEDI Mine.

3. That the income received by PNG Sustainable Program be held outside of PNG and that its purpose is to settle any future  claims against BHP  over the destruction of Fly River system in the event that a competent court finds in the future against BHP Billiton.

4. The Trust deed has a life of 50 years and Trustees are also appointed for the same duration. That of the 7 trustees ,3 are appointed by BHP and the other 3 by the PNG Government. The 7th trustee is a  Singapore resident and owes his appointment to the fact that you need a Singapore Residential Address for Purposes of incorporating a resident company in the Republic of Singapore.

5. BHP walked out of O.K. Tedi   following a Law Suit file in Melbourne by Slater & Gordon for a claim of K4 Billion by over 30,000 People of the Lower Fly led by Rex Dagi for environmental Damage and that this case is not technically  over

There is veil threat now immerging in the O.K  Tedi  Debate  from  the  Trustees of the Long Term Fund to trigger the break up of the fund in the event that PNGSDP no longer receives an  income stream from the mine.

 I believe that is not necessary and that it is the role of the Trustees and the Fund Managers to continue to grow the  current fund without additional Cash injections from the O.K.Tedi  mine every year and to use the current income generated from the Long Term Fund which is estimated at 5% per annum or approximately  K100 million  to maintain the excellent work and Program that PNGSDP and the trustees are currently carrying out in the Western Province and in PNG. Sir Mekere as Former Prime and durng his watch was instrumental in nominating  Professor Helen Hugh and Dr Ross Ganaut as PNGs trustees on PNGSDP and needs to inform the current Prime Minister among other things that  now with the passing of Professor Helen Hugh in June  wether  the PNG Government will be  involved in a appointing a replacement.

It is important  for Sir Mekere to Inform  and reassure  the Prime Minister that he would not be a party to any attempt aimed and breaking up the Long Term Fund and that  there is sufficient Capability  within PNGSDP to grow  the Long Term Fund without additional injection of funds from OK Tedi and that the Fund will not be eroded  during his Watch  as Chairman of PNGSDP and that the fund will continue to serve the Purpose for which it was set up, anything thing falling short of that  including the threat to break up the Fund will add to the speculation that  that the Long Term Fund is a Trojan Horse owned and controlled by BHP Billiton .

PNGSDP and the Long Term Fund  stands as a lasting legacy to  Sir Mekere , Ross Ganaut and Helen Hugh  and their contribution to  the development of PNGs Financial Sector. It is now time to move on and to allow Peter Oneill and Ben Micah  to make a lasting contribution to the betterment of  our Country and People. It is important that Peter Oneils agenda on  OK Tedi and subsequently Freida is not derailed but be allowed to blossom so that we  can judge him fairly on his contribution to the Development of our County.