The
International Centre for Settlement of Investment Disputes (ICSID) has
registered PNG Sustainable Development Program Ltd's request for international
arbitration over the expropriation without compensation of the company's 63.4%
shareholding in Ok Tedi Mining Ltd.
This
means that ICSID has accepted the case and that it will proceed.
The
arbitration hearing is separate to all other litigation relating to the
expropriation of the mine, including the latest National Court action.
The
chairman of PNGSDP, Sir Mekere Morauta, said PNGSDP is seeking restitution of
the 63.4% of OTML illegally expropriated by the State, or failing that,
compensation for the shares.
"The
State's expropriation of the shares through the 10th Supplemental Agreement Act
last year, without compensation, is in breach of international law," he
said.
"It
also breaches the normal standards of behaviour of a State towards a foreign
company.
"PNGSDP
is well within its rights to seek restitution," he said.
"PNGSDP believes it has a strong case and
looks forward to having its property returned to it."
Sir
Mekere said the next step was for an arbitration tribunal of three eminent
international jurists to be set up.
“The
members will be appointed by agreement between PNGSDP, the State and ICSID,” he
said.
“It is
likely that this will happen towards the middle of the year, with hearings possible
soon afterwards.
“When
the mine is returned to PNGSDP, the company will begin talks with the Western province
community so that agreement can be reached on the most appropriate arrangements
for the future of the province
“PNGSDP
is very keen to resume its social and economic development programme in Western
province.”
ICSID
is an international institution set up under the International Convention on
the Settlement of Investment Disputes Between States and Nationals of Other
States.
It
facilitates arbitration proceedings allowing independent tribunals to
decide cases under its rules, and all contracting member states agree to
enforce and uphold arbitral awards in accordance with the Convention.
PNG
became a signatory to the Convention with the passing of the Investment
Disputes Convention Act in 1978. One hundred and fifty other countries are
signatories.
International arbitration by ICSID is available to PNGSDP under
Section 39 of the Investment Promotion Act.
From its
creation in 1965 to 30 June 2012, ICSID has registered 390 investment dispute
cases, of which 250 have been concluded.
Of the
outcomes for arbitration proceedings, as of June 30. 2012, 62% of
disputes have been resolved and 38 percent have been settled or discontinued.
Further
information about ICSID and the registration of the PNGSDP case can be found at
https://icsid.worldbank.org/.
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