Forest Canopy

Update on the Panguna Mine

We acknowledge the Australian National Contact Point (AusNCP) in November accepted, and offered its “good offices” to provide a forum for conciliation of, the complaint filed with them by the Human Rights Law Centre (HRLC) and Bougainville community members in September 2020 in relation to the Panguna mine site in Bougainville, Papua New Guinea. The complaint alleges Rio Tinto’s involvement in human rights and environmental harm relating to its stake in the mine site through its former subsidiary Bougainville Copper Limited (BCL). We no longer hold any interest in BCL.

We take this complaint seriously. 

We support National Contact Points (NCPs) which help drive implementation of the OECD Guidelines for Multinational Enterprises, a set of guidelines around responsible business conduct. Through non-judicial grievance mechanisms, NCPs also provide conciliation services to resolve complaints against multinational enterprises about alleged breaches of those guidelines at home or abroad. We continue to recognise the role of the AusNCP, housed within the Commonwealth Treasury Department, in providing a forum for different stakeholders to engage.

Whilst we do not wholly accept the claims in the complaint, we are aware of the deteriorating mining infrastructure at the site and surrounding areas, and acknowledge that there are environmental and human rights considerations.

We are considering the AusNCP’s offer and remain ready to enter into discussions with the communities that have filed the complaint, along with other relevant parties such as BCL, the Autonomous Bougainville Government (ABG), the Papua New Guinea (PNG) Government and other relevant communities around the Panguna mine site.

We are also aware of concerns being raised, in the wake of the Juukan Gorge events, about the Group-wide implementation of our voluntary commitments and policies around environmental, social (including human rights) and governance issues on the ground. We understand these concerns and reiterate our commitment to core international standards, including the OECD Guidelines, and our readiness to meet those commitments in practice.

Background

The Panguna copper mine in Bougainville, Papua New Guinea, was discovered in the 1960s by one of our founding companies, with first production commencing in 1972. BCL, a former Rio Tinto subsidiary and a publicly listed company on the Australian Securities Exchange, managed operations at the mine. At the time, BCL was owned jointly by Rio Tinto (53.83%), the PNG Government (19.06%) and public shareholders (27.11%).

Community unrest that began in 1988 forced BCL to suspend operations in 1989. A civil war took place from 1990-2001, which caused BCL to evacuate all staff in 1990 due to safety and security considerations. This withdrawal did not constitute a closure of the mine site. 

While the Bougainville Peace Agreement was signed in 2001, circumstances remain complex and the mine has not been redeveloped. There are ongoing security issues.

In June 2016, having considered a broad range of options, we transferred our full interest in BCL for no consideration to the PNG government and the ABG, with the result that both governments had an equal share in the mine (both now hold approximately a 36.4% share in BCL). By doing so, we hoped to create a platform for the ABG and PNG Government to work with all stakeholders on future options for the resource. The PNG Government has since stated its intention to give its shares to the ABG and landowner groups.

From 1990 until 2016, when we transferred our shares, we do not believe that any Rio Tinto personnel had access to the mine site due to ongoing security concerns. For the same security reasons we are not aware of any Rio Tinto or BCL on-site environmental or social impact assessments being conducted during that time.

From 2013-2014, we understand that various desktop and baseline studies were undertaken in preparation for a proposed independent environmental impact assessment to be facilitated by the Joint Panguna Negotiation Coordination Committee, a multi-stakeholder group including representatives from the ABG, PNG Government, United Panguna Mine Affected Landowners’ Association and BCL. This assessment did not proceed.

We understand that this assessment did not proceed for a variety of reasons, including because of a lack of certainty about BCL’s ability to input into decisions relating to the site due to changes in its tenure linked to new ABG mining legislation.