- A proposed copper and gold mine threatens the biologically and culturally diverse Sepik River Basin in western Papua New Guinea, according to community leaders and conservationists.
- They’ve raised concerns about the impact that potentially toxic waste from the mine would have on the region’s forests and waterways, which are critical to sustaining human, animal and plant life in this region.
- Proponents of the mine say it would bring jobs, infrastructure and development to the region’s communities.
- Today, a renewed campaign to list the Sepik River Basin as a UNESCO World Heritage Site is gaining momentum and would permanently keep projects like the mine at bay, say organizers of the movement.
The Sepik River takes an unhurried 1,126 kilometers, or 700 miles, to snake from the lush highland rainforests of western Papua New Guinea, swerving momentarily across the border into Indonesia’s Papua province, before wending out to the mangroves abutting the Bismarck Sea on the northern coast of New Guinea Island.
Along the way, the river unspools into the lowlands like a disheveled deck line, its looping bights draining more 7.77 million hectares (19.2 million acres) of montane and lowland rainforest — an area about the size of the Czech Republic.
It’s the island’s longest river and today still flows freely throughout its entire length. The biodiversity there still fills zoological and botanical journals with new species whenever biologists brave the arduous trek into the region’s interior. And around 430,000 people speaking some 300 languages, from as distinctive a collection of riverine and forest cultures as exists just about anywhere, live within its reach.
“Given the land area and the population, it’s probably the most culturally diverse place in the world,” said Emmanuel Peni, the coordinator of Project Sepik, an initiative that aims to protect the river system from harmful development. “In terms of biodiversity, it’s probably the second to the Amazon.”
The waterways provide fish and fertile land to grow vegetables, said Peni, who’s from the village of Korogo in East Sepik province. The river and its tributaries carry the water that the people of the region use for drinking, washing and bathing. And they sustain the rich tapestry of life that provides everything from meat for their hearths to wood for their homes.
“It really is our life,” Peni said, adding that the value of the system to communities like his goes beyond sustenance to help answer existential questions about the time humans have on this planet.
“The river is a mother to us,” Vernon Gawi, a Project Sepik volunteer who’s also from East Sepik, told Mongabay.
Around 2006, a push to have UNESCO name the Upper Sepik River Basin a World Heritage Site began. But the campaign lacked leadership, and the government’s environmental agency didn’t have the resources to do the on-the-ground work to establish the basin’s natural and cultural significance. The effort soon sputtered, leaving the region unprotected.
In the past decade and a half, the future of the ways of life in the Sepik River Basin has been in question.
Beneath the drape of the region’s impossibly green forests lies the hardened lava and magma known as porphyry, first discovered in the late 1970s. It’s flecked with quantities of gold and copper that mining companies think could be worth billions of dollars in what may be one of the world’s largest untapped deposits of copper and gold.
In 2007, new plans began to emerge for a massive mine near the headwaters of the Frieda River, a tributary of the Sepik. In 2014, Australia-based but Chinese-owned PanAust Limited acquired a majority stake in the project. As PanAust worked its way through the regulatory process in Papua New Guinea, opposition to the mine grew. Peni said opponents of the mine are worried about the destruction of forest, predicted “shifts” to the waterways, and the prospect of a toxic chemical legacy likely to outlive their children’s children. They’ve also voiced concerns that the environmental impact statement (EIS) released publicly nearly a year after it was completed had gaps as wide as the maw the mine would leave in the region’s expansive forests.
In 2020, a team of 10 United Nations special rapporteurs carried out their own analysis of the project and the EIS. They then sent copies of the letter to the Australian, Chinese and Papua New Guinean governments, along with PanAust’s local subsidiary that owns the mining project, Frieda River Limited.
The report’s authors cited allegations that the development of the mine thus far seems “to disregard the human rights of those affected.”
“We note that given the nature of the project it could undermine the rights of Sepik children to life, health, culture, and a healthy environment, including the rights of unborn generations,” they added.
Also in 2020, the global COVID-19 pandemic ground the approval process to a halt. But with business easing back to normal in Papua New Guinea and around the world, the country’s Conservation and Environment Protection Authority (CEPA) still hasn’t handed down a decision as to whether the company should be allowed to move forward. Peni and his team have continued to work to delay the mine’s construction, marshaling a near-universal published rejection of the mine from more than two dozen key leaders around the region. In the background, the campaign has sought a permanent solution that would block what Peni calls destructive extractive uses of the region.
Still, Peni said it’s been unsettling to see a region so central to the identity of not just the people of the Sepik, but all of his countryfolk, sit in existential limbo.
“We are frustrated,” he said.
A mega mine in the forest
According to the EIS and documents from the company, developing one of the world’s largest mines will involve four components, beginning with the mine itself. The open-pit mine would cover 1,145 hectares (2,829 acres) on the Frieda River, the mountain-born tributary that supplies the Sepik with 5% of its total water volume on its serpentiform journey to the sea.
Crews will also construct the necessary roads to ferry people and supplies, a task currently accomplished by helicopter.
Dwarfing the mining pit itself, the massive, 12,700-hectare (31,400-acre) tailings dam built to house the nearly 3 billion metric tons of mining waste, 35 km (22 miles) above the confluence of the Frieda with the Sepik River, will double as a hydroelectric dam to supply the mine with the required power.
The entire project area will cover 16,000 hectares (395,400 acres). Project plans also call for the construction of a 325-km (202-mi) pipeline to shuttle the copper- and gold-containing slurry from the mine to the port city of Vanimo on Papua New Guinea’s northern coast, where a facility will further concentrate the ore before it’s shipped abroad.
The most vociferous criticism the company faced once the EIS became public in late 2019 was that the tailings dam was ill-conceived and potentially insufficient for the task of retaining the hazardous byproducts from mining at scale, especially in a region that receives as much as 8,700 millimeters (343 inches) of rain per year.
The authors of the EIS said that, despite being in a seismically active area, the proposed location of the tailings dam was not on a “large fault structure.” They did, however, note that “several small faults of limited width were encountered” in their analysis. Critics also note that the EIS contains no analysis of what possible factors that might cause the dam to break, or the consequences of a rupture.
“When the threat is out there, we come to understand that mine tailings and mine waste, all of this — eventually it will seep down into the river,” Project Sepik’s Gawi said. “We’ve learned from the past. We’ve seen other provinces.”
Gawi and other sources Mongabay spoke with pointed to Papua New Guinea’s Ok Tedi mine as an example of what can go wrong the disposal of the toxic waste that mining produces. Ok Tedi sits near the geographic center of New Guinea Island, near the border with Indonesia’s Papua province.
The original plans for that mine called for a tailings dam, much like the one PanAust plans for the Frieda River mine. But a landslide destroyed the Ok Tedi tailings dam as it was being built in the 1980s, and BHP, the mining company, elected to dispose of the tailings in the region’s streams and rivers. Researchers estimate that by the time the company wrapped up ore extraction from Ok Tedi in the early 2000s, waste from the mine that was full of heavy metals toxic to aquatic life had wiped out most of the fish that around 40,000 people in the vicinity depended on.
What’s more, the planned life span of the Frieda River mine’s dam is too short, according to concerns cited by the U.N. rapporteurs in their letter.
“The risk of major earthquake causing damage to the dam will persist for millions of years,” they wrote. “The EIS only considers a 200-year timeframe.”
That means that when the mine stops producing ore after about 33 years, which is the mine’s projected life span, and the company has closed up its facility and left the area, at least 30 villages downstream of the dam would remain at risk — only now from the potential failure to a structure that’s no longer being monitored, the U.N. report says.
Since the COVID-19 pandemic brought mining operations, along with most other economic activity in Papua New Guinea, to a halt, PanAust declined Mongabay’s request for comment on the Frieda River mine. Still, Peni and others said they heard the company may be considering alternatives to the tailings dam. One possibility would be another pipeline that would ferry the waste hundreds of kilometers to the coast and then out into the deep sea for disposal, which is a solution that companies have used elsewhere in Papua New Guinea.
Deep-sea tailings disposal comes with its own set of attendant problems, including the potential for spills along the pipeline and destruction of the seabed where the effluent ends up being deposited. In Papua New Guinea’s Madang province, communities have fought the dumping of waste from Ramu NiCo’s inland mine, arguing that it harms coastal fish populations and potentially exposes humans to deadly levels of toxic chemicals.
Deep-sea tailings disposal would offer only a marginal improvement for the people and ecosystems of the Sepik over the “terribly risky” tailings dam, said Luke Fletcher, the executive director of the nonprofit research organization Jubilee Australia. In March 2021, Jubilee Australia teamed up with Project Sepik on a report highlighting the dangers with the mine.
“There’s still a lot of earth to move,” Fletcher told Mongabay. “There’ll still be this huge environmental footprint.”
The mine’s impact is likely to be extensive and long-lasting, especially for such a remote area that bears few signs of human use. The EIS notes that more than 90% of the 16,000 hectares required for the project will be “unavailable for rehabilitation,” effectively leaving a hole nearly the size of Lichtenstein in the Sepik River Basin forests for generations to come.
Critics of the dam, like Fletcher, Peni and Gawi, argue that such scars on the landscape would be only the most visible impacts of the project, with other surreptitious tendrils of potential devastation radiating outward and infiltrating myriad aspects of the environment and daily life in the region.
When the mine is shut down three to four decades after it begins operating, the company plans to flood the area over the subsequent three years. The EIS suggests that monitoring of water quality downstream of the mine will have to continue for at least 50 years after the company decommissions the mine.
And the knock-on effects won’t be limited to just those from the mine.
“Access roads will open up more of the rainforest, which is one of the largest intact rainforests in the world, to logging,” Fletcher said. Research has long shown that much of the deforestation in the tropics occurs within a few kilometers of a road or navigable river. Logging is a significant driver of forest loss in Papua New Guinea. Fletcher and others said they’re worried that the infrastructure and roadbuilding aspect of the project, necessary for the functioning of the mine and touted by mine proponents for the connections it would provide to markets for local communities, will open up swaths of primary forests rich in carbon and biodiversity that had formerly been protected by their remoteness and inaccessibility.
Biodiversity surveys for the company’s EIS turned up 85 species of plants and animals that were new to science among a haul of more than 2,220 species in total. Such striking results were expected in a region that’s so little known to Western scientists, the EIS authors write. According to their findings, only five of these new species of animals live directly in the “Project disturbance area.”
Again, though, many concerns about the mine aren’t limited to impacts solely on the 16,000-hectare location. The fear is that negative consequences from this sort of development will ripple outward. For example, the EIS predicts “major indirect impacts” on eight species of animals that people in the Sepik region hunt. Several, including two marsupials — the black-spotted cuscus (Spilocuscus rufoniger) and the Telefomin cuscus (Phalanger matanim) — as well as an egg-laying mammal called Sir David’s long-beaked echidna (Zaglossus attenboroughi), are listed as critically endangered on the IUCN Red List. Two species of cassowary, a large, flightless bird, are noted as “culturally significant” and may also be affected by the development of the mine.
What’s more, the EIS notes that mining activities could change the complexion of aquatic ecosystems. The authors acknowledge that a surge in the amount of sediment suspended in the basin’s streams and rivers could shift the ecosystems’ balance in favor of nonnative fish and other aquatic species that are able to better tolerate murkier waters, to the detriment of native animals.
Along with the sediment and the potential for higher levels of chemical pollutants, the EIS also warns that increased boat and barge traffic on the rivers could limit fishers’ access to the river or result in damage to their nets during the construction period. Fishing provides not only a steady supply of protein to river communities, but also income, as fishers typically sell their excess catch, Emmanuel Peni said.
But the role of the river and the broader landscape that it anchors goes deeper, he added.
“We don’t just see it in its physical sense,” Peni said. “We also see from the spiritual level too and how it’s interconnected.”
The allure of the mine
In recent years, there’s been a contest for the support of the communities living in the Sepik region. Proponents of the mine argue the project would be a net positive for communities — providing a potential source of hydroelectricity, for example, and new and upgraded roads. The authors of the EIS also figure it will provide as many as 5,190 jobs, though most of those will be in the first seven years of the project during the construction of the mine. The EIS estimates an “operating workforce” of 2,510 people, though it is not clear whether that is an annual figure or a total for the mine’s 33-year operational life span. Coffey Services Australia, the firm that wrote the EIS, didn’t respond to a request for clarification on this point in time for publication.
It did acknowledge in the document, though, that bringing the whole system online will disrupt the social order. Construction of the tailings and hydroelectric dam alone will require the relocation of 1,316 people from four villages. The rapporteurs’ report notes that no resettlement plan has been made public. The EIS holds that these communities can expect upgraded accommodations “to a standard greater than current facilities.”
The EIS also emphasizes a substantial number of potentially negative effects from “in-migration” — that is, the influx of people from outside the region looking for economic opportunities as a result of the mine’s development. Leaders like Peni say they’re concerned these groups may not share the value system that connects the Sepik’s 430,000 people to the land. And, as the EIS acknowledges, local spikes in the number of people can stress local infrastructure, fuel crime and drug use, and increase the chance of conflict over land and resources.
It’s likely the company will purchase land for the mine from several landowners, which could exacerbate tensions in a place where land is typically held under customary title and official mapping is limited. In addition, the EIS notes that the rise in wealth of a small subset of the population could be enough to drive shifts in the dynamics of many communities.
“Substantial landowner incomes generated can also result in strains on social relations within and between communities, changes to traditional lifestyles and systems of governance, and the consumption of alcohol and drugs that has the potential to lead to increased public and domestic violence,” the EIS authors write.
But what happens if those benefits, to landowners in the form of revenue streams or more broadly to community members hoping for employment, don’t materialize at all?
“I’m more worried about those kinds of expectations,” Allan Bird, the governor of East Sepik province, tells Mongabay.
“When those expectations aren’t met, obviously, you’ve got another problem you have to deal with,” Bird said. “Managing that is difficult, even at the best of times.”
Project Sepik volunteer Kenneth Muo voiced his concerns more directly about the company’s promises of economic returns and development.
“We understand that these are just words from them, [and] things never really eventuate from what they say,” Muo said. “They are not here for bringing this development. They won’t really care about what we need or things like this.”
The consent and consultation process that the company has carried out to this point is not clear. There are few specifics in the EIS about how this process has, or is continuing, to occur. The company’s annual report from 2020 does reference a “Community Leaders Forum” involved “key stakeholders in the lead up to the final permitting of the Frieda River Project.” The report also says the forum “is pivotal to achieving FPIC” — free, prior and informed consent from local communities — “in the Papua New Guinea context.”
“[W]e wish to express our serious concern regarding the potential and actual threats to the human rights to life, health, bodily integrity, water, food, and others, of the project and the environmental impact assessment process,” the authors of the U.N. letter wrote. “Further, allegations of violation of the right to free, prior and informed consent of the affected indigenous peoples are concerning.”
The information that the EIS does contain found that many community members were most interested in the possibility of power generation and the addition of roads that connected them both with other towns and villages and the coast. But they also voiced their reservations about the project in 2015, 2016 and 2018 meetings involving 7,400 people in 97 communities mentioned in the EIS.
“Sepik River communities strongly expressed the feeling that they stood little to gain and a lot to lose from the Project,” the authors wrote.
Such skepticism echoed a fuller-throated rejection of the entire project organized by Project Sepik and released in March 2021.
‘Unprecedented’ response: The Supreme Sukundimi Declaration
In Papua New Guinea, the Haus Tambaran is a focal point around which life revolves in many communities. These community “spirit houses” are a place for discussion and debate, where decisions affecting community members are made by leaders. In a nod to their importance, the parliament building in Port Moresby, the country’s capital, mimics the architecture of these communal governance houses.
While only initiated men are allowed inside, Papua New Guineans say women in some cultures will sit around the outside of the structure, listening to the debate and helping to break any deadlock that might arise inside.
“They’ve always been important because they were like the parliaments of those independent nations along the river and elsewhere,” Peni said. But more recently, he added, the traditional processes employed in the Haus Tambaran — or N’gego as they’re called by the Iatmul people who live along the Sepik River — are particularly effective for sorting out land-related issues. In response to surging outside interest in Papua New Guinea’s land and its resources, many villages have continued to employ the forums for discussion that Haus Tambaran provide.
In 2020, leaders from 28 of these houses, representing 78,000 people, debated the mine project and then signed onto the Supreme Sukundimi Declaration that unequivocally rejected the mine, highlighting the negative ramifications they anticipated would accompany it. “Sukundimi” is a name for the river god of the Sepik, but also captures to the “collective voice of the traditional clan leaders of the Haus Tambarans,” according to the authors of the declaration.
In few other places in the world has there been such a unanimous reaction to this kind of large development project, Jubilee Australia’s Luke Fletcher said.
“It’s really hard to get so many groups to speak with one voice, but also the way that it was done using the cultural processes that have long preceded European settlement,” he said. “It was a tremendously significant and pretty unprecedented.”
While the declaration wasn’t intended to carry legal weight, it does thrust the will of the people to the fore, Fletcher added.
“Most important of all is really empowerment and education of local communities because that’s where the issue is going to be won or lost,” he said.
The declaration also calls into question the presumption that the extraction of resources will lift Papua New Guinea into a higher echelon of development as measured by metrics such as life expectancy, literacy and GDP. The country currently ranks 155th out of 189 countries in the 2020 Human Development Index from the U.N. Development Programme.
The assumption for decades has been that extractives would lead the way in that transition, given Papua New Guinea’s wealth of raw natural resources.
“I don’t want to downplay the challenges that a country like PNG faces in development. It’s not a simple thing,” Fletcher said. “You can understand the frustrations for people who say it’s happening too slowly.”
But he said he’s skeptical that a potentially destructive mine offers an avenue to economic growth. In 2018, Jubilee Australia reported that a liquefied natural gas project by U.S.-based ExxonMobil elsewhere in Papua New Guinea stirred up conflict and exacerbated inequality while failing to deliver promised increases in incomes and employment.
“The issue that we see with this type of project is that it’s sort of doubling down on that model,” Fletcher said.
Alternatives in the offing
It may be time to question that extractives-led school of thought, say leaders like Bird, the East Sepik governor, in favor of other types of investment.
He pointed to the Ok Tedi mine. In addition to the environmental problems with Ok Tedi’s tailings disposal, Bird said it’s not clear that the project as a whole has been beneficial for the people of Western province.
“Not that I’m against mining,” he said. “I just don’t think that we should have very large expectations of mining projects delivering significant development outcomes for impacted communities. We just don’t have any evidence at the moment,” especially when sharing any benefits is left to the country’s leaders.
“In our case, government has never really been an equitable, fair distributor of national wealth,” Bird added.
PanAust suggests the tax and royalty income Papua New Guinea stands to receive could substantially benefit the country’s bottom line. But the details on how the mine will benefit Papua New Guineans aren’t clear. According to public estimates, the mine could bring in as much as $1.5 billion a year in revenues from copper and gold, as well as silver, once it’s operational.
But a recent investigation by the Dutch nonprofit research organization Profundo found that PanAust reported a loss in 2018 of around $215 million, per its 2019 annual report. As long as the company is able to continue reporting losses, it can avoid paying taxes to Papua New Guinea.
Jan Willem van Gelder, Profundo’s director and the author of the report, noted that the company didn’t publish a 2020 annual report and didn’t respond to questions as to why it neglected releasing this standard update for its investors.
As van Gelder dug further into the company, several elements of its financial structure stood out. Despite its roots in Australia, PanAust is actually owned by Guangdong Rising (H.K.) Holding Ltd. in Hong Kong, a Chinese state-owned company. PanAust Limited Australia wholly owns the Frieda River Joint Venture Papua New Guinea.
However, van Gelder and his colleagues found that a series of other companies are layered in between the two.
PanAust Australia owns PanAust Pte. Ltd. Singapore, which owns PanAust SPV 1 Pte. Ltd. Singapore. This latter company owns Frieda River Ltd. Papua New Guinea, which in turn owns Frieda River Joint Venture, the company that officially owns the project itself.
PanAust declined Mongabay’s invitation for comment.
Composite structures like PanAust’s can be used at times to reduce the amount of tax companies have to pay, van Gelder said.
“The fact that there are many different layers, holdings and support links on top of each other — that’s a clear warning,” he told Mongabay.
For example, while Papua New Guinea taxes profits on ore sales at 30%, Singapore levies a rate of just 17%. This disparity means that if Frieda River Limited sold raw copper and gold ore at bargain rates to a Singapore-based sister company, which then sells it at higher rates on the global market, it could realize significant tax savings.
In this scenario, only the relatively small profit made in the initial transaction would be taxed by PNG at 30%, whereas the higher-figure sale from Singapore would be taxed on only 17%. Frieda River wouldn’t be hurt by a low profit from the initial sale, because it’s effectively transferring the ore to a sister company within the same financial pool. But Papua New Guinea — and by extension its citizens, for whom tax income could mean upgrades to infrastructure, health care and education — would lose out.
“It’s not completely illegal,” van Gelder said. “But it is a way of avoiding, in this case, tax payments in Papua New Guinea.” Profundo’s report does not allege any illegal activity has occurred, rather the report states the company would have a financial incentive to create a trading subsidiary in Singapore once ore trading is operationalized.
He added it’s something of which the leaders of Papua New Guinea should be aware. Mongabay made several requests to government officials at CEPA for interviews or comment on the financial structure of the companies involved in the Frieda River mine. One person from CEPA asked for questions after an initial email, but Mongabay received no further responses from the office.
Bird said he knows that PNG’s leaders must act to address poverty in the country.
“We need economic development,” Bird said. “There’s no doubt about that.”
But he said he has more faith in community-based industries, pointing to the recent growth of cocoa production in East Sepik. Along with vanilla, which farmers in the province have been growing for sale and export for at least two decades, cocoa has become a cash crop, particularly for smallholders who grow the majority of Papua New Guinea’s production, and East Sepik is now the country’s leading producer.
“I personally think that those sorts of things are more sustainable and distribute incomes much more equitably,” Bird said.
In a similar vein, Kenneth Muo said Project Sepik has been working on financial literacy campaigns in Sepik communities. He said the goal is to provide an alternative to seeing the extractive industries as the only avenue for improving the health, education and economies of communities.
Fletcher said the Sepik River serves as a symbol that inspires people from all over the country. Mongabay spoke with several volunteers from Project Sepik who weren’t from river communities but nonetheless chose to work with them on the issue of the mine.
“It’s such a mighty river, and it’s such a tremendously important ecosystem,” Fletcher said. “But the fight is far from over.”
Lately, Emmanuel Peni has been fielding reports that the company may have started ferrying staff back into the site by helicopter, presumably to begin scaling operations back up after the pandemic-induced shutdown. But CEPA hasn’t approved the company’s EIS, meaning that construction shouldn’t start on the mine.
“Our question is, why are they continuing to work?” Peni said. “It’s a bit concerning.”
The stakes are high, Peni said, and such rumors reinforce the notion that the threat posed by the mine has only been delayed. In addition to Project Sepik’s work with the communities to fill the need for economic development, opponents of the mine are backing politicians like Governor Bird, who have taken a stand against its construction as the July 2022 national elections approach.
“We want to support people who will go onto the floor of parliament and support us and move this agenda forward,” Gawi said.
This mine on the Frieda River, Gawi said, would mean the end of the region as it exists today, with a cascade of consequences extending far beyond the boundaries of the mine, the Sepik River Basin or even Papua New Guinea.
Peni and his team are also working to reinvigorate the push to list not just the Upper Sepik but the entire Sepik River Basin as a UNESCO World Heritage Site. He said he has funding to pursue recognition, and is actively working with researchers from the University of Papua New Guinea and officials at CEPA to make that dream a reality.
The alternative, Peni added, would entail a bleak future for the region’s inhabitants. If the mine is built, “There will be no Sepik, there will be no forest, no nothing.”
And it’s not just the communities who would suffer. The forests of the Sepik River Basin are globally important as well, he said.
“We have some of the largest carbon sinks in the world, so we understand the significance of our work,” Peni said. “We’re not just protecting our home, we’re not just protecting our river. We’re protecting a river that belongs to the world and forests that are lungs of the world.”
John Cannon is a staff features writer with Mongabay. Find him on Twitter: @johnccannon
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