doing business or png; or, something rotten in the state

Down the road at Kainantu there is a gold mine. The mine is owned and run by Highlands Pacific Ltd (Australian). From what I hear, the mine has a lot of potential. Last Wednesday, however, the mine was closed down and workers taken off the property after threats of violence. (The mine’s shares dived.)

The threats were coming from the Barola Kafe clan and other local groups who claim to own the land the mine is on. There is no currently no clear landowner. In May 2004, the PNG government’s Land Title Commission began trying to work out who has ownership, but they have not been able to finish the job because they repeatedly go into “recess” due to a lack of funding. They stopped after one year, resumed last November, and stopped again last December.

After Wednesday, two mobile squads were sent to Kainantu to guard the mine (the Goroka and Lae squads). They are there to guard property and employees. The mine was reopened on Saturday, but the mobile squads are staying on indefinitely. (The share prices rose slightly.)

What is interesting is how far the government is getting involved. The mine was only opened less than one month ago, by Grand Chief Sir Michael Somare (the prime minister) himself. The national government has assured Highlands Pacific that it will “convene” the LTC soon [presumably this means they are going to throw a bit more money at it]; they aim to have the land ownership issue settled in 6 months time. But the most overt signal is the appearance of the mobile squads. Almost all other private enterprises in PNG would be providing their own security. If troubled flared up, they would beef up their security forces; perhaps donate a car to the local police, depending on the problem. This time, the state security forces arrive, and the state pays.

I don’t know if the landowners have a legitimate claim or not. (A bit of context: there was a landslide not far from this area a few months ago; the road was damaged; locals were demanding one or two million kina compensation before they would let workers in to fix the road.) And I don’t know if the government is offering so much support because they stuffed up with their LTC. But it would be interesting to find out why the government is getting behind the LTC now, and why it didn’t before. And why – and how – the mine was allowed to open without the landowner issue being formally established – is probably a question no one will raise.

But there’s something wrong here, and with PNG and governance, money and business in general. I’m beginning to think Somare is way more corrupt than one might initially suspect. (There are other stories about other mines, and development in general.) A statesman? He’s as bad as he wants to be.