Peter O’Neill Screwed Up Ok Tedi In Only A Year!
PNG BLOGS CONTRIBUTOR NETWORK
In June 2012, Ok Tedi’s managing director heralded the company’s profit as one of the most impressive in the world. In its first year of being fully owned by Papua New Guineans, the mine posted a profit of 1.2 billion kina - equivalent at the time to 577 million US dollars. This was profit, not revenue (which was K4.5 billion). It was indeed a hallmark. The following year, 2012, the profit was lower but still impressive: US$350 million. And then came the collapse, representing the company’s performance during its first year under the forced nationalisation of Peter O’Neill: less than US $20 million.
Nine years prior to being 100% owned by Papua New Guineans, via the PNG Sustainable Development Fund, Ok Tedi was started on the pathway of compensating for the tremendous environmental damage caused by decades of mining without a functioning tailing dam when an Act of Parliament created the PNG Sustainable Development Fund to own the mine and ensure that the profits went back to the people of Papua New Guinea. Mekere Morauta was joined by other, mostly respected individuals in managing the new company. Then came Peter O’Neill.
The collapsing Ok Tedi profits obviously was going to blow a hole in the PNG national budget, which received 16% of its entire income from Ok Tedi in 2011. In great part the collapse in earnings was due to copper price declines and some natural weather calamities, but that doesn’t explain it fully. The fact is, everyone at Ok Tedi, was pissed off at the Prime Minister. They all know that what he did was to help Peter O’Neill and not the people of Papua New Guinea, especially those living beside the Fly River all the way down to Kiunga.
One of the most common stories going around to explain why Peter O’Neill nationalised Ok Tedi was that he was fully intending to milk Ok Tedi to fund PNC candidates for the 2017 elections. He had managed to do this in 2012 using an illegal K500 supplemental budget engineered by himself and his then-sidekick Don Polye, money that was then channelled into DSIP and other local funds that could be tapped by the candidates and their supporters. It became clear that this maneuver would be stopped if it were tried again in 2017. That’s when Ok Tedi came into the picture as the Great Tabubil Goose that would lay many golden eggs for Peter O’Neill.
O’Neill’s manuever has only succeeded in demoralising those that had been part of the grand plan for Ok Tedi to be a world role model of giving back to the people in direct and tangible ways that had everything to do with development and nothing to do with politics. His greed accidentally freed landowners from the legal ban on suing Ok Tedi and seeing the writing on the wall, several lower Fly River communities are now taking the PNG government to court over the continuing tailings spillage into the Fly River and resulting environmental damage.
The PNG Sustainable Development Fund had managed to contain that tit-for-tat unhappy community relationship model, but O’Neill plans to hit the Fly River people hard, saying that there would be “massive and unintended consequences” of their lawsuit against the government.
What is most ironic is that Ok Tedi has essentially become a SOE, not purchased, but confiscated by the very government that has told the people of PNG again and again that it can’t afford SOEs.
At least, that may prove to very much be the case with Ok Tedi, if the projections of a loss for next year starts dragging the government down with it. Many could not be more pleased, as this would be the ultimate payback against the Prime Minister who spoilt everything and has the axe ready to kill the goose that was laying the golden eggs.
In June 2012, Ok Tedi’s managing director heralded the company’s profit as one of the most impressive in the world. In its first year of being fully owned by Papua New Guineans, the mine posted a profit of 1.2 billion kina - equivalent at the time to 577 million US dollars. This was profit, not revenue (which was K4.5 billion). It was indeed a hallmark. The following year, 2012, the profit was lower but still impressive: US$350 million. And then came the collapse, representing the company’s performance during its first year under the forced nationalisation of Peter O’Neill: less than US $20 million.
Nine years prior to being 100% owned by Papua New Guineans, via the PNG Sustainable Development Fund, Ok Tedi was started on the pathway of compensating for the tremendous environmental damage caused by decades of mining without a functioning tailing dam when an Act of Parliament created the PNG Sustainable Development Fund to own the mine and ensure that the profits went back to the people of Papua New Guinea. Mekere Morauta was joined by other, mostly respected individuals in managing the new company. Then came Peter O’Neill.
The collapsing Ok Tedi profits obviously was going to blow a hole in the PNG national budget, which received 16% of its entire income from Ok Tedi in 2011. In great part the collapse in earnings was due to copper price declines and some natural weather calamities, but that doesn’t explain it fully. The fact is, everyone at Ok Tedi, was pissed off at the Prime Minister. They all know that what he did was to help Peter O’Neill and not the people of Papua New Guinea, especially those living beside the Fly River all the way down to Kiunga.
One of the most common stories going around to explain why Peter O’Neill nationalised Ok Tedi was that he was fully intending to milk Ok Tedi to fund PNC candidates for the 2017 elections. He had managed to do this in 2012 using an illegal K500 supplemental budget engineered by himself and his then-sidekick Don Polye, money that was then channelled into DSIP and other local funds that could be tapped by the candidates and their supporters. It became clear that this maneuver would be stopped if it were tried again in 2017. That’s when Ok Tedi came into the picture as the Great Tabubil Goose that would lay many golden eggs for Peter O’Neill.
The PNG Sustainable Development Fund had managed to contain that tit-for-tat unhappy community relationship model, but O’Neill plans to hit the Fly River people hard, saying that there would be “massive and unintended consequences” of their lawsuit against the government.
What is most ironic is that Ok Tedi has essentially become a SOE, not purchased, but confiscated by the very government that has told the people of PNG again and again that it can’t afford SOEs.
At least, that may prove to very much be the case with Ok Tedi, if the projections of a loss for next year starts dragging the government down with it. Many could not be more pleased, as this would be the ultimate payback against the Prime Minister who spoilt everything and has the axe ready to kill the goose that was laying the golden eggs.
