Policy

Where property is affected, its value is assessed and appropriate compensation mutually agreed. Bougainville Copper Limited (BCL) works with others where frameworks do not exist to encourage and help governments put appropriate consultation processes in place.

Bougainville

Mine leases were on custom owned land and it was essential to maintain harmonious relations with traditional landowners in Bougainville . In the early days of development BCL enlisted the services of anthropologists and sociologists in order to gain a better appreciation of the village culture. This enhanced the understanding of traditional values. Throughout the lifetime of the mine, a group of community liaison officers continued to monitor the effect of BCL operations on adjacent villages.

In some cases villages were relocated to positions less affected by mining operations. In all cases compensation was paid for land occupancy, physical disturbance and disruption to traditional bush and fishing rights. Compensation payments, which were about K1 million a year, played a major role in accelerating the transition to a cash economy in the vicinity of the mine.

Compensation and occupation fee payments were finalised when settlement of land titles and occupation fee rights were completed. On 31 December 1973 AU$1,613,000 was paid. Annual payments of approximately AU$400,000, including a portion of the royalties paid to the Government was paid to the 2,000 residents of the leased areas.

In July 1980 an agreement was reached with the customary landowners of lease-held land on the levels of compensation to be paid over a five-year period. Both National and Provincial Governments participated in negotiations and contributed to the formalisation of the Agreement. The new Compensation Agreement provided for payments of K5 million to landowners over five years.

In 1981 areas where lease boundary extensions would be desirable in the Jaba River Valley area had been delineated, and discussions commenced with the landowners.

Cash payments to local landowners by way of restitution for various losses associated with the operations of the mine totalled K1.5 million in 1988. The level of payments was based on a 1986-1990 Agreement with the landowners, and was well in excess of amounts required by legislation.

The landowners received K19 million in cash compensation to 1988 although this was seen as restitution for losses rather than a benefit of the mining operation. In August 1988 BCL and landowners developed a K3 million program of works for the next two to three years. This latest program included bridges, crossings, major roads to some isolated villages and upgraded water supplies to some villages around the mine. Sabotage slowed progress on some projects. Very little work was done from May 1989. However, landowners received K0.1 million in royalties. Considerable assistance was provided to set up some care centres for displaced local villagers and tangible support was given to the Government's survey and planned rehabilitation program of destroyed village property.

Since the commencement of operations until 1988, total income generated by BCL was distributed as follows:

In the years from 1989 to 1998, the Directors had made provision for ongoing compensation to landowners with these funds being set aside in a separate interest bearing deposit. The Directors considered that the provision held at 31 December 1998 was adequate to cover the claims to which BCL may be liable and accordingly no further provision was made from 1999.

In 2001 BCL was a defendant to an action commenced in the National Court of PNG by two plaintiffs seeking declarations that they are the lawful representatives of mine site and tailings disposal area landowners and that the Mining Warden is the proper judicial officer to determine what, if any, compensation is due to landowners for the period since the mine close. The company made a provision in its accounts to cover an award of landowner compensation.