Renaming the Pacific: How About Civil War Ocean... Again

Back in the good old days the seeds of conflict and warfare could be sowed anonymously by a few unscrupulous actors and the fruit of those efforts could be born generations later in violence, bloodshed and, in some instances genocide.  One hundred sixty years ago this Spring, an aspiring young man from Nashville Tennessee embarked on such an adventure.  Setting out with a band of 58 armed men, William Walker sailed from San Francisco to Nicaragua where he engaged in a set of campaigns which landed him as President of Nicaragua one year later.  Not only was he recognized as President by the 14th President of the United States Franklin Pierce but he found himself courted and hated by industrialists - Cornelius Vanderbilt notably among the latter - who had designs on Nicaragua as a possible continental crossing.  Among his more notable accomplishments was the establishment of an English speaking pro-slavery regime in Central America.  He was shot by a firing squad in Honduras at the age of 36.  The seeds sowed by Walker gave rise to persistent tyrannical power struggles that culminated in one of the bloodiest revolutions in the Americas.

Since the Romans and Goths recognized the strategic placement of the region we now know as Ukraine, Austrians, Lithuanians,  Russians, Poles, and Mongols all took turns taking "control" over this strategic resource region and shipping convergence for the Black Sea trade.  Governments across the whole of Europe and Asia made decisions effecting the inhabitants of Ukraine while little time or attention was paid to the interest of the people themselves.  History is filled with small mercenary bands of foreign monarchs, emperors and tsars who all arrived in, and took temporary control of a land that had been home for nomads, farmers and traders for over 40,000 years.  Now, the world waits on the brink of uncertainty as the entire Black Sea region sits atop a powder-keg that could go critical at any moment.

You know about Ukraine.  You probably never heard of Tennessee's own William Walker.  And I know that you've been asleep while the next seed of future conflict was sown last week.

While we were watching bad theater in Congress, brinksmanship in Geneva, and planes crashing, an atrocity was committed in the Coral Sea.  Architected by Adam Smith International (ASI) - a "professional services business that delivers real impact, value and lasting change through projects supporting economic growth and government reform internationally" - the Autonomous Bougainville Government (ABG) passed a Mining Act drafted by Adam Smith Institute putting in motion the re-opening of mineral extraction in Bougainville.  The Mining Act is damaging for the public interest of the citizens of Bougainville and puts the region once torn by mining fueled civil war on a collision course with more harm in the future.  In addition to several careless typographical errors (which evidence that no one proof-read the final copy), the Act does not afford landowners any meaningful rights or benefits to the lease of their land.  This is not economic development - this is colonial robbery.

The following are some of the more egregious elements of this Act which will harm the landowners, the region and the world.  And worst of all, like other lit fuses for future harm, this one was lit while few were watching.  I do want to explicitly acknowledge the careful work of Jubilee Australia for their review of a draft of the Act (http://www.jubileeaustralia.org/2013/campaigns/notonmywatch/Mining%20Legislation%20Comment%20Feb%2012.pdf).  Tragically, their input was not integrated in any meaningful fashion.  You will note that I have reproduced my comments to the Act below but I have not included the Act.  The reason is because I want to make the observation that the ABG, if it was serious about transparency, would have published it for public comment PRIOR to its passage.  Priest turned President Grand Chief John Momis appears to be more concerned with his near term political fortunes than the future of his countrymen and women.

Critique of the Adam Smith Institute draft ABG Bill for:

AN ACT Entitled Bougainville Mining Bill 2014

Section             Critique                                          

1 (2)                 Exploration and Mining Purposes are declared to be "public purposes".  This definition has profound implications as it may conflict with the Organic Law rights accorded to landowners which state that landowners have the stewardship of their Customary Land.

1 (3)                 Compulsory seizure of land is inconsistent with the PNG Constitution and the Organic Law, neither of which are suspended under the Bougainville Peace Agreement and both of which are unacceptable. 

3 (1)                 While an exploration license holder is required to develop a community engagement plan, this plan is NOT subject to community approval under the section 3 definitions.

10                    The penalty for the influencing of a tender is K1 million and up to ten years in prison - the monetary penalty is nowhere near appropriate.

14                    The rights of landowners are set for in the Mining Lease approval section in §108 which makes no reference to the Exploration Lease phase.  In other words, this document does NOT provide a mechanism for the landowners to block the Exploration Lease phase of a project.  While §34 provides for "landowner permission", there is no suitable consultation mechanism.

20                    This section is in conflict with the Constitution and the Organic Law and should be fully removed.

26 (4) (a)         The idea that a law would be written that says that a person as no "major criminal records" is not acceptable.  The issue is not the existence of a "record".  An appropriate law is that the person has not be charged with or found guilty of felony or misdemeanor charges in any court of competent jurisdiction.  This provision allows criminals to operate in the Autonomous Region!  By the way, this clause is inconsistent with the more appropriate language in §81 (2)(a) which conforms to a more conventional standard and is much more consistent with international standards.

35 - 36             The Bougainville Executive Council is essentially taking full control of the landowner associations, Customary provisions and all elements of Constitutional and previous Organic Law.  The Bill states that the BEC may approve from time to time one or more landowner organizations and provides NO mechanism for the public to directly influence the BEC's decision.  In short, the public interest is entirely subject to the whim of the government and there are no provisions for citizen redress in any form. 

38                    While a qualified landowner organization must have K500,000, there is no mechanism to insure that these funds are available to the organization.  In other words, for landowners to have a voice, they must come up with K500,000 or be beholden to someone who provides them with such funds.  This is a recipe for - if not a guarantee of - rampant corruption.

42 (7) (a)         This provision of a 5% equity fee MUST be in a liquid traded equity on a recognized exchange - not in a subsidiary or illiquid company in which no material benefit is monetizable.  In short, the SENIOR MOST REPORTING interest must be the provider of the equity stake or the publicly traded vehicle on an internationally recognized exchange.  This cannot be equity in a local, illiquid entity established by the consolidating company.

43 (1)               This clause gives the ABG unrestricted power to comply with or ignore this ACT and gives the ABG uncontrolled power to act unilaterally.  This is immoral and unethical.

100                  This is an unusual provision.  If there is an interest in multiple projects, limiting the country to 2 major mines is of interest to mining companies but not to the economic development of the country!

104                  The ABG and any other party should be able to acquire equity in liquid, traded equities - not the customary practice of buying illiquid shares subsidiary companies.  This provision is NOT in the public interest and should not be capped at 20%.  In Mongolia, for example, it's taken over 8 years to get to a 51% ownership interest in the Oyu Togoi project.  This shouldn't be repeated here in Bougainville.

116                  Employment should be based on % of total payroll monetary distributions, not number of employees.  This type of provision allows expats to take small numbers of jobs but be highly compensated while locals gather little benefit.

123                  Both the compensation and the penalties for non-compliance are far below international averages.

131                  Mediation is fine for civil complaints but should be waived in the event of tax or criminal violations.

139                  Adam Smith International didn't proof-read their own act and it contains a typographical error.

One day our grandchildren can ask about how the resources war in the Pacific began.  We can shake our heads and say, "No one saw it coming."  But here's the trouble.  We did!  Sleep well because the nightmare in your head is something that you can distract with a goofy cat video on YouTube which can get 5 million views while humanity can't get one.

The Mountain Home of my Dear Friends in 1966:

The Mountain Scourge in 2015:  

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