“A higher calling – how can the wealth of the country lead to better lives for the people?”

An address to Parliament by SIR JULIUS CHAN

Wednesday June 23, 2010

I rise today for a simple purpose.  I want to bring a cautionary tale to this debate on Environment.  I want to bring a cautionary tale to the Parliament, the country of Papua New Guinea and our peoples on rights to live in clean natural environment and in peace.

We often seek to model ourselves after the West.  We often seek to model ourselves after countries such as England or America or Australia that we think have become “modern” – that we think have become “developed”.

Alright.  That is not a bad goal.  But sometimes the so-called “advanced” countries can provide us not only with lessons about how we should develop – sometimes they can provide us with lessons about how we SHOULD NOT DEVELOP.

I have visited America more than most politicians in Papua New Guinea.  I have come to know America over the years.  And I have come to respect America.  This is the country that has been in the forefront of promoting democracy around the world.  This is the country that has elected a black man as President of the country – the first country in the West to do so.  Germany has never had a black president.  England has never had a black president.  Australia has never had a black president.  America has one.  Now.

I respect America.  But sometimes even those you respect the most make mistakes.  Or maybe not mistakes.  Maybe they just provide us with lessons.  And that is what America is doing today.  America is providing us with a lesson and we are foolish if we do not heed it.

You might have heard that British Petroleum has had a bit of a problem in America recently.  Specifically, BP has a deep-sea oil well in the Gulf of Mexico, just to the south of Texas in America that had what they call a “blowout”.  The well was over two miles under the sea.  They had a drilling platform floating in the Gulf of Mexico, and they had a pipe going two miles down to the floor of the sea, and going another two miles underneath the floor of the sea.  But the connection at the link between the floor of the sea and the levels underneath the floor of the sea – well, it broke.  And it broke big time.  They now estimate that somewhere between five and fifty thousand barrels of oil are spewing out of the broken link every day.

Fifty thousand barrels!  That is enough oil to cover downtown Port Moresby from the Yacht Club to Deloitte Tower by a foot of oil.  Every day!

And this is in the most technologically-advanced country in the world.

And it is not the first time.  This event is being compared to the 1989 spill in the Prince William Sound in Alaska.  That was a huge environmental disaster in which a ship broke up and spilled over ten million US gallons of oil into the sea, and that oil coated hundreds of miles of shoreline.

So what do we learn from these disasters?  I will give you a hint.  In America, the most technologically advanced country in the world and the most democratic country in the world the Congress – the Parliament – has begun investigations into the BP disaster.  And that is what it is.  The BP disaster!

Of course, BP says it is not their fault.  It is not their fault because they only ran the oil well.  But they had another company responsible for the systems that were supposed to prevent leaks.  And they say that company failed.  And what does that company say?  Well, they say that the company that did the construction of the pad at the bottom of the sea is to blame.

So when things go badly wrong it appears no one is to blame.  This should make us very cautious in Papua New Guinea.  If no one is to blame when things go wrong in the most powerful country in the world, then what will happen when things go wrong here?  Do you think ExxonMobil will think that a demand from the Parliament of PNG is as important as a demand from the Congress of the United States of America?

One thing is clear – we need to be very certain that the companies that are coming into Papua New Guinea are going to be good partners.  We need companies that are not only going to be our friends when the times are good, when they are making billions of dollars from LNG that is being exported to Australia and China, but who will be dependable partners when things go wrong?

Given what is happening in America today, I am not so certain.  I think our government needs to be very careful we have a failsafe system in place to ensure that ExxonMobil will take care of problems when they arise.  I am afraid that sweetheart deals might have been made that mean that the politicians in control right now benefit, but in the long run if things go wrong we will have no way of making certain that the company takes responsibility for its errors…

There is another aspect in which the American experience has lessons for us.  In America, the granting of licenses for offshore drilling, for mineral licenses in general, is the responsibility of the Minerals Management Service.  This is a government agency that grants licenses for mineral exploration, and it also monitors the operation of mining activities.  But the US Congress has been looking into the MMS in the past month, after the Gulf Oil Spill and they have found that the same division that is responsible for granting licenses to oil companies is also responsible for monitoring their activities.

And guess what.  They found that the Minerals Management Service was too close to the oil companies.  They found that MMS did not require that the oil companies do all the work they should have done for environmental studies and impacts.  They found that the MMS even allowed the oil companies to leapfrog the regulations – they let the oil companies start drilling years before they should have without proper environmental reports being internationally tested by independent group of scientists.

My friends, this is America.  It is supposed to operate fairly.  It is supposed to operate transparently.  This reminds me of Mineral Resources Authority (MRA) here.  Have you Minister filtered the Environmental Studies through competent, independent environmentalists?  Can you give unequivocal guarantee on damages to my people on Simberi and whole of West Coast in which two thirds of the water is being dugged miles underwater?

If this is the kind of damages happening in America, then can you imagine what is happening here?  Do you have any idea how big and influential the LNG project has become?

And we cannot get information.  We do not even have the power to ask questions about the LNG Project.  Parliament is really helpless because it is so controlled by the sitting government.  Never in the history of Papua New Guinea has a government controlled and gagged so many members of Parliament.

Think about it.  The Prime Minister has managed to collect 89 of 109 members of Parliament into its coalition.  This means that he is unassailable.  He cannot be challenged.  But how was he able to do this?  Only by promising the leaders of ten or fifteen party’s big ministries.  Ministries where those big men stand to make big money.  Let us be honest.  The many members of Parliament who are in government have been promised goodies – and they have been bought with the promise of having ministries, five more are now available to dish out that they can run as they like, so long as they support the Prime Minister and refrain from a no confidence vote.

So the Prime Minister has put people in charge of mining, of forestry, labor, foreign affairs, over whom he has no control.  All he wants is to be immune from a vote of no confidence.

And maybe he thinks he is immune.But the country is not.

Papua New Guinea is being used.  Do you understand? The LNG Project is worth billions and billions and billions of dollars.  And already much of that money has gone into the pockets of people who have no right to it…The LNG Project threatens to be the worst example open to abuse and malfeasance in the history of our country.

We need to take a step back.  We need to be certain that ExxonMobil understands that the reason for the LNG Project is to improve the lives of the people of PNG.  I am not certain that they do understand this.  I fear that they have engaged in sweetheart deals with various agencies and influential people of the country in order to smooth the way for the implementation of the project.  I can only ask that they consider carefully how their actions will affect the people of the country.

But ultimately it is not the responsibility of BP or of ExxonMobil or of any other multinational corporation to ensure that exploration and production are done in a responsible and efficient manner.  America has shown that when the political and bureaucratic structures do not demand compliance, then compliance will not occur.

We need to demand compliance.   We need to demand transparency.  We need to demand accountability.

And to achieve this we need open and honest discussion.  There is no discussion now because the Leader of Government simply closes the Parliament at his discretion.  There is no discussion because the responsible ministries simply do not provide us with information.  They are insulted that we even want to know where the money has gone and who has benefitted.

I rose today to provide you with some information about what is happening in the most-powerful country in the world.  It is important that we know this as we are in the process of making some of the same mistakes America made with respect to the Exxon Valdez oil spill in Alaska and the BP spill last month, which continues as I speak.  The LNG project must be closely examined.  Nautilus must not be allowed to drill, destroy and disappear.  Allied Gold has not compensated Simberi landowners for the ongoing environmental damages to water and the reefs.  Government must provide us with full disclosure concerning investment and expenditure and environmental studies and ultimate responsibility for potential environmental disasters.  For example, does operating companies hold assets enough to compensate these damages.  Through smart and legal savvy most of these giant companies split incorporation to escape liabilities.  Can the government guarantee a security fund for such contingency?

But I suspect Government will not provide us with that information.  Because I suspect the LNG project has already been the source of great influence than any other project in the history of Papua New Guinea.  But can we talk about this honestly and openly???

ExxonMobil, Nautilus, Lihir Gold, all Forests and Fishing investors, you are working in Papua New Guinea.  You are exploiting the resources we have here and you expect to make a major profit by working here.

But we ask that you take the idea of Corporate Responsibility seriously.  We ask that you refuse to pay those who ask to be paid.  We ask that you refuse to enter into an agreement that will benefit the government, and the politicians who constitute government, at the expense of the people of this country.

And I want to say one more thing to these big boys especially ExxonMobil.  The key partner in your venture may appear to be national government.  But it is not.  The key partner is the people of this country.  If a multi-billion dollar project is implemented in this country, and it does not result in improvement of the lives of the people on the ground, then it will not result in smooth sailing for you over the course of the next twenty or thirty years.

We, in New Ireland, are tired of outside companies coming into the Province and making billions of kina only to see our rate of maternal mortality, infant mortality, and other key indicators rising.  This is not acceptable.  Worse, the National Government has continuously breached the MOA signed.

ExxonMobil, Asian Development Bank, World Bank, European Union, Australian Agency for International Development.There comes a time when you are responsible as much as Papua New Guinea.  There comes a time when you have to tell the Government of Papua New Guinea that you will not continue to pump in billions – billions! – of Australian or US dollars to a country where the maternal mortality rate has not dropped for twenty years.

Are you blind?  You call yourselves developed?  And yet you provide funds year after year to no effect!

And shame on Papua New Guinea if we do not learn from the experience of the most advanced country in the world.

So today, I only want to say one thing.  Development is not a matter of the rate of growth of the economy.  Development is not a matter of fiscal flows.  Development is only real if the lives of the people in the villages of this country improve.  In the past twenty years, the lives of the grassroots people have not improved, despite the billions of kina of wealth generated from their land.

This cannot continue.  And I ask all foreign investors to consider this.  It is a sad truth that the government of this country is not – is not looking out for the people of this country.  I ask all our international partners to recognise this.  Please!  Recognise this.  And help those of us who are tired of “business as usual” to force government to change….to force government to do what it should do.  Improve the lives of our people….Protect the young and those yet unborn.