Terra nullius – When not in Rome

For those who seek to rationalize preposterous injustice that serves their expedient ends, the careful selection Latin words or phrases adds a touch of civility to inhumanity.  Need to violate the Geneva Convention with people who we love to hate in Cuba (an island that we officially love to hate unless it serves our expedient ends), easy.  Just claim the jus cogens principle of non-refoulement in which, are you ready for this?, we’re doing the Gitmo prisoners a favor by not exposing them to persecution should we return them to their own homes!  Need to steal mineral filled land in the Pacific, no worries!  Just blame the Romans and their principle of terra nullius – the legal right to take what doesn’t belong to you by stating that it doesn’t belong to anyone.

“Pleased as we are with possession, we seem afraid to look back to the means by which it was acquired, as if fearful of some defect in our title; or at least we rest satisfied with the decision of the laws in our favour.”

-          From Commentaries on the Laws of England (18^th Ed.) Vol. 2.  1823.

Now if you search on-line for terra nullius you will see copious references to the most recent nation-state founded on the principle: Australia.  And lest you think that the Crown conveniently invoked this international standard of land expropriation only on the big island down under – think again.  Under the direct auspices of the League of Nations and then the United Nations, Australia was given carte blanche to pillage the islands in the Coral Sea including the most egregious of all violations – the theft of Bougainville.

Now let’s be clear.  Melanesian communities from New Ireland settled Bougainville over 25,000 years ago and established a persistent social order that predates any of those who promulgate and then abuse “international legal conventions”.  When Louis de Bougainville (anyone still guessing how the island got its modern name?) arrived from France in 1768, he decided to name the place after himself.  Germans took control over it in 1899 and the Catholics (another contender for the gold medal in Latin-based land piracy) annexed the minds of the inhabitants in 1902 rewarding their Lord with some prime cocoa and coconut plantations for the inconvenience of stealing land in the name of god.  Australia got in on the act under the auspices of the League of Nations around the First World War; Japan held it briefly during World War II and then Australia – this time under sanction from the U.N. – took it back in 1946.

As I write this blog post, I’m sitting on land that was stolen from the Monacan under the 1722 Treaty of Albany.  Less than one mile from my dining room table are over a dozen white quartz burial mounds that entomb the remains of Monacan and Tutelo leaders.  The land I live on – like Guantanamo Bay – was not stolen under terra nullius.  In the United States, we are far less creative.  We entered into Treaties and Covenants with absolutely no intention to keep them.  We had the decency of looking Communities of Persistence in the face when we were lying to them!  In the case of Bougainville, neither the Australians, the League of Nations nor the United Nations had that much courtesy.  By invoking the Crown’s (that’s the United Kingdom for those of you who don’t know that the Queen and her off-spring still enrich themselves off of land that they and their ancestors stole) Roman legal conquest principle they actually committed a double crime.  Not just did they steal land and resources but they, by invoking the terra nullius justification, stated that the inhabitants of Bougainville were nobody. 

It’s one thing to maliciously lie, cheat and steal.  It’s still another (more egregious) thing to stipulate that the humanity that exists does not exist.  Terra nullius means, “land belonging to no one” or land that has never been subject to sovereignty.  The Bougainville situation is one in which Australia and the United Nations stipulated that 25,000 years of habitation did not happen.  The High Court of Australia, when challenged on this legal principle in their own backyard, has actually made the right decision.  On December 23, 1996 The High Court of Australia issued the highly controversial judgment acknowledging native title rights co-existent with pastoral leases in Wik Peoples v The State of Queensland.  This decision reaffirmed some of the principles in the 1992 Mabo v Queensland (No.2) in which “aboriginal title” was affirmed over terra nullius. 

Why did the people not exist?  Under the Mabo and Wik reviews, the answer was simple.  Because Communities of Persistence did not organize “land rights” under a system that matched the paternalistic, colonial, Westphalian sovereign models “understood” by occupiers and colonizers, the “leaders” with whom treaties could be signed could not be identified.  If no “owner” could be identified, “no one” existed so the land could be taken.  In other words, if you don’t “own” you don’t exist.  What the Crown and its minions failed to understand – spoiler alert – is that the men who were doing the conquesting were not tuned into the principles of matrilineal land rights that continue to exist in places like Bougainville.  They couldn’t find the “man” in control because the “man” wasn’t in control.  The women were.  And they were not consulted.

This week I sent the following document to the Australian Securities and Investments Commission, the Financial Conduct Authority of the United Kingdom, and the U.S. Securities and Exchange Commission.  I would welcome each of you to read it, consider it in light of this post, and inform others about the need to make a simple proposal:  if Mabo and Wik establish the legal framework to put a stake through the heart of the Roman conquest doctrine of terra nullius than isn’t it time for the doctrine to be retired once and for all?

Think about it.

An Open Letter to the ASIC, FSA, and SEC Re: Rio Tinto and Bougainville Copper Ltd.

Copied to Global Reporting Initiative, Transparency International, International Council on Mining and Metals, World Bank, and IFC

August 15, 2013

Sirs,

I have had two opportunities in the past 12 months to visit the Panguna Mine, the Arawa village and the Six Mine Lease Areas (SMLA) of the property formerly operated by Bougainville Copper Ltd (‘BCL’, majority owned by Rio Tinto with 53.8% of the issued shares).  Most recently, I spent two days at the mine on August 12-13, 2013.  Given the fact that both BCL and Rio Tinto report to their shareholders that, since 1989, they have not been capable of accessing the mine site for security reasons, I felt that it would be helpful to provide you and their shareholders with information that may be helpful clarification to material statements made by both companies.

Rio Tinto’s 2012 Annual Report has a footnote on the BCL project on page 206 which indicates that it’s incapable of safely accessing the mine site.  Rio’s Annual Report preamble statements about The Way We Work (page 14) are inconsistent with direct observations made during my visit to the mine, overburden deposition, and tailings discharge in the only major western riverbed at the Panguna Mine in the Autonomous Region of Bougainville, Papua New Guinea.  Dislocated communities, significant health and safety issues, and profound environmental degradation are evident everywhere.  While it would be convenient for the companies to attribute this to the conflict and post-conflict incapacity to manage conditions at the mine, the physical evidence of mining practice suggests that pre-conflict operations neglected to take appropriate consideration of Rio’s own stated standards.

Figure 1.  An aerial view of the BCL Panguna mine site.  From the mine pit to the end of the lower tailings is approximately 18km and at its widest is about .75km.  The diversion of the river around the mine site rejoins the former natural river bed below the Overburden primary deposition and diverts not more than 40% of the natural river flow (which now runs blue with copper beneath the overburden and through the tailings).

The following footnote is reproduced from Rio Tinto’s 2012 Annual Report.

43 Bougainville Copper Limited (BCL)

Mining has been suspended at the Panguna mine since 1989. Safe mine access by company employees has not been possible since that time and an accurate assessment of the condition of the assets cannot therefore be made. Considerable funding would be required to recommence operations to the level which applied at the time of the mine’s closure in 1989. An Order of Magnitude study undertaken in 2008 indicates that costs in a range of US$2 billion to US$4 billion would be required to reopen the mine assuming all site infrastructure is replaced. The directors consider that the Group does not currently realise a benefit from its interest in BCL and therefore BCL information continues to be excluded from the financial statements. BCL reported a net loss of US$2 million for the financial year (2011: net loss of US$2 million). This is based upon actual transactions for the financial year. The aggregate amount of capital and reserves reported by BCL as at 31 December 2012 was US$137 million (2011: US$139 million).

The Group owns 215,920,089 shares in BCL, representing 53.8 per cent of the issued share capital. The investment of US$195 million was fully provided against in 1991.  At 31 December 2012, the number of shares in BCL held by the Group, multiplied by the share price as quoted in the Australian Securities Exchange, resulted in an amount of US$111 million (2011: US$164 million).

This footnote represents the only material disclosure regarding BCL in the Annual Report.  As is evident, no mention is made of any liabilities that may arise from a closer examination of several important facts surrounding the Panguna Mine’s operation and cessation of operations.  These include:

• a.       Unquantified environmental remediation costs.  To consider re-opening the mine under rudimentary compliance with global environmental best practices would entail reclamation of land that could far exceed the estimated costs in the 2008 Order of Magnitude study.  Given the affected watershed, surface and groundwater damage covers an excess of 18km at depths of over 100m in many locations (Figure 2).

Figure 2.  The Middle tailings deposit completely filling the valley and riverbed.  The riverbed field of view in this image is approximately 3km. 

• b.      Management of landowner claims.  To date, the landowners and ex-combatants have identified several claims against the companies that have not been adjudicated by any court of competent jurisdiction.  In the event that BCL or Rio Tinto are exposed to prosecution for these matters, civil and criminal liabilities arising therefrom could represent material impact on performance. 
• c.       The legality and corporate complicity with the formation of the 1967 Bougainville Copper Act which exists as a supra-Constitutional agreement affording Bougainville Copper Ltd rights in direct conflict with the Constitution of the Independent State of Papua New Guinea.  As evidenced in related cases (including inquiries into Indigenous Rights in Australia), this unilateral agreement benefiting BCL’s interests over those of the right holders under the Organic Law of Papua New Guinea could be subject to challenge potentially opening inquiries into Fraudulent Inducement.  This observation is made from both the facts surrounding the establishment of the Act as well as the incapacity for local landowners to fully understand the structure and consequences of the Agreements into which they entered.  Should improprieties be found, BCL and its shareholders could be liable for considerable financial damages including, but not limited to, complete remediation of the sites impacted by the mine.
• d.      Securities reporting compliance.  Shareholders have been inadequately informed as to the nature of the assets of BCL and may have economic harm arising therefrom. 

At present, the Autonomous Bougainville Government is being advised on its proposed new Mining Act by Australians (including ANU's AusAID funded Anthony Regan) who are advocating for many of the status quo pre-conflict conditions and the possible reinstitution of the conditions similar to the 1967 Bougainville Copper Act.  With no capacity to consider this advice in light of global best practices (another risk of Fraudulent Inducement), the interests of the companies are being advocated at the expense of a fully transparent, globally informed process.  Most problematic is the fact that the negotiations including the companies are being done without competent and complete understanding of the facts on the ground.  A simple example of this is the reported Asset Value of property at the mine.  No single building on the mine site is intact.  No operational equipment remains on the mine site.  The 2010 Annual Report estimated Plant & Machinery depreciated value of PNG K 296,094,000 is grossly inflated.  The most intact building on the site is pictured in Figure 3 below.  Metal is being sold as scrap and infrastructure damage (including considerable landslides) make the asset estimates grossly inflated.

Figure 3.  A view of the location of ball crushers and concentrators. At this location, only one defunct crusher remains on its stand with the others destroyed for metal salvage.  Twenty four years of metal salvage has left the remaining structures damaged beyond reasonable repair.

Setting aside the considerable questions surrounding the establishment, operation, and violent cessation of operations of the Panguna Mine, it is important to note that the companies and their shareholders can now benefit from direct, on the ground observations and photo documentation.  As such, in accordance with the reporting standards set forth by Australian, United Kingdom and United States regulators, it is important for the companies to more accurately state their condition with respect to the Panguna Mine and offer a more realistic assessment of their asset and liability condition.

Given the recent trading activity stimulated by press statements regarding the possible re-opening of the Panguna Mine, it is important that regulators closely monitor this situation.  While regulators and the corporations involved may continue to seek refuge in the reasonability of their defense of misleading and erroneous statements due to their limited access, the availability of that access to an independent third party severely curtails the assertion of insufficient visibility.

I would strongly recommend that an independent inquiry into the matters articulated above be commenced as failure to do so may lead to further damage to shareholders’ interests and those of the affected communities.  I will be delighted to offer a more detailed assessment as and when required.

Respectfully Yours,