Posts Tagged ‘MCC’

Papua New Guinea a Neo-colonial state

August 6, 2014 4 comments

The prophetic words of Ghana’s first President , Kwame Nkrumah, written in 1965 captures Papua New Guinea’s reality today…

Kwame Nkrumah

Kwame Nkrumah

THE neo-colonialism of today represents imperialism in its final and perhaps its most dangerous stage. In the past it was possible to convert a country upon which a neo-colonial regime had been imposed — Egypt in the nineteenth century is an example — into a colonial territory. Today this process is no longer feasible. Old-fashioned colonialism is by no means entirely abolished. It still constitutes an African problem, but it is everywhere on the retreat. Once a territory has become nominally independent it is no longer possible, as it was in the last century, to reverse the process. Existing colonies may linger on, but no new colonies will be created. In place of colonialism as the main instrument of imperialism we have today neo-colonialism.

The essence of neo-colonialism is that the State which is subject to it is, in theory, independent and has all the outward trappings of international sovereignty. In reality its economic system and thus its political policy is directed from outside.

The methods and form of this direction can take various shapes. For example, in an extreme case the troops of the imperial power may garrison the territory of the neo-colonial State and control the government of it [ADF + AFP have frequently been garrisoned in PNG]. More often, however, neo-colonialist control is exercised through economic or monetary means [e.g. huge foreign owned resource extraction, boomerang aid, or concessional loans from ‘friends’ like China]. The neo-colonial State may be obliged to take the manufactured products of the imperialist power to the exclusion of competing products from elsewhere. Control over government policy in the neo-colonial State may be secured by payments towards the cost of running the State [AusAID], by the provision of civil servants in positions where they can dictate policy [e.g. seconded Australian civil servants and academics], and by monetary control over foreign exchange through the imposition of a banking system controlled by the imperial power [e.g. Westpac, ANZ + Bank of PNG, which is groomed by, and run in the economic style of, imperial powers].

Where neo-colonialism exists the power exercising control is often the State which formerly ruled the territory in question [e.g. Australia in PNG], but this is not necessarily so [e.g. China in PNG]. For example, in the case of South Vietnam the former imperial power was France, but neo-colonial control of the State has now gone to the United States. It is possible that neo-colonial control may be exercised by a consortium of financial interests which are not specifically identifiable with any particular State [eg Exxon-Mobil, Rio Tinto, BHP, MCC, Rimbunan Hijau]. The control of the Congo by great international financial concerns is a case in point [in PNG, how much control do foreign financiers wield, the big construction firms, the mining and logging companies, etc].

The result of neo-colonialism is that foreign capital is used for the exploitation rather than for the development of the less developed parts of the world. Investment under neo-colonialism increases rather than decreases the gap between the rich and the poor countries of the world [and also between the rich elite and the rest of the population within the country].

The struggle against neo-colonialism is not aimed at excluding the capital of the developed world from operating in less developed countries. It is aimed at preventing the financial power of the developed countries being used in such a way as to impoverish the less developed.

Neo-colonialism is also the worst form of imperialism. For those who practise it, it means power without responsibility and for those who suffer from it, it means exploitation without redress. In the days of old-fashioned colonialism, the imperial power had at least to explain and justify at home the actions it was taking abroad. In the colony those who served the ruling imperial power could at least look to its protection against any violent move by their opponents. With neo-colonialism neither is the case.

Above all, neo-colonialism, like colonialism before it, postpones the facing of the social issues which will have to be faced by the fully developed sector of the world before the danger of world war can be eliminated or the problem of world poverty resolved.

‘Africa’s Black Star’ is a documentary on Kwame Nkrumah, which plots his revolutionary efforts to free Ghana from dependency, establish an entirely independent economic base, provide free health and education as a human right, stimulate pan-African unity, and the subsequent US-UK conspiracy to bring down his government (who were bad for foreign business) through a military coup: 

MCC not the only major Chinese enterprise on World Bank corruption blacklist

November 17, 2013 3 comments

The PNG government should be wary about its new open door policy towards Chinese companies and loans.

Two years ago Chinese state-owned corporation MCC, operator of the controversial Ramu nickel mine in Madang, was exposed as having been labelled corrupt and blacklisted by the World Bank and other international banks.

MCC is clearly not the sort of company you want pumping millions of tons of toxic mine waste into your pristine marine environments. It is a shame Michael Somare did not do a better job of due diligence before jumping into bed with these particular Chinese!

In April we exposed the criminal antecedents of the China Harbour Engineering Company in Bangladesh, Cayman Islands and Jamaica – but in June Powes Parkop gave the company a K300 million contract!

But it appears the rot in China runs much deeper as MCC and CHEC are far from the only Chinese enterprises blacklisted by the World Bank for corruption and other unsavory practices.

The list also includes:

  • CHINA COMMUNICATIONS CONSTRUCTION COMPANY LIMITED (as the successor or assign to China Road and Bridge Corporation)

It is not only the World Bank that has bared these companies for fraud and corruption. The companies are also on the blacklists of the Asian Development Bank, European Bank for Reconstruction and Development, and Inter-American Development Bank.

PNG government beware!

Landholders beware!

Military expansion to guard foreign corporations not protect PNG citizens

February 20, 2013 3 comments

From PNG Mine Watch

Analysis and commentary on the Papua New Guinea government’s plan for a five-fold increase in the size of its military force has painstakingly ignored the obvious.

The increase in military personnel from the current 2,000 to around 10,000 is not a move designed to increase security along PNG’s border with Indonesia, nor to deal with international people smuggling and drug trafficking.

The move to increase the size of the military has everything to do with guarding the huge operations of foreign corporations like Exxon-Mobil and MCC. These companies operations are coming under increasing pressure from dissatisfied local communities as they realize the promised material benefits are not going to arrive and instead they must bear the social and environmental costs while vast profits are shipped overseas.

Already this week, the government had approved the call out of the PNG military for an initial 12 months deployment to protect the interests of US based Exxon-Mobil. The troops will be deployed all the Highlands Highway, the only transport corridor leading to the LNG sites, to provide protection for Exxon’s truck convoys.

This is not the first time Exxon has called on the PNG government for military assistance. A number of para-military police mobile squads, notorious for their ill-discipline and brutal tactics, are on almost permanent deployment around the LNG sites providing protection alongside Exxon’s own private security contractors – mainly from G4S.

Meanwhile, MCC, the Chinese operator of the controversial Ramu nickel mine, is becoming increasingly nervous about community unrest as it moves into full production. As well as anger at the dumping of toxic waste just 150m off-shore along the Madang coastline, inland communities are increasingly frustrated about the environmental impacts of the mining operation itself and the failure of MCC to properly relocate displaced families.

The new Yandera mine, also to be built by a Chinese company, China Non Ferrous Industries, and the Pacific Marine Industrial Zone are seen as other potential flash points for community anger directed at foreign corporations.

Civil strife serious possibility in PNG due to vulture capitalism

February 17, 2012 Leave a comment

Antony Loewenstein

The story led the busi­ness pages in Papua New Guinea’s Post-Courier in early Feb­ru­ary. “An­a­lyst: PNG on verge of change” screamed the head­line. British-based mar­ket an­a­lysts Bdaily Busi­ness Net­work praised the $US17.3 bil­lion Exxon-Mo­bil led LNG pro­ject. “[It] is the most im­por­tant sin­gle de­vel­op­ment in the his­tory of PNG”, it stated, com­ing on­line for over­seas mar­kets in 2014.

But the re­al­ity away from cor­po­rate spin is a sim­mer­ing con­flict. A source close to the South­ern High­lands land own­ers, the site of the major LNG pro­ject, pre­dicts civil strife in the com­ing years. Lo­cals are start­ing to col­lect weapons and grenades for the com­ing fight. Sab­o­tage and at­tacks on pipelines are likely. Weapons are being smug­gled in from In­done­sia, in­clud­ing West Papua and Thurs­day Is­land near Aus­tralia.

“I fear what is com­ing un­less some­thing changes soon,” he says at a local Chi­nese restau­rant cov­ered in Coke-coloured wall­pa­per. “We are not being heard and feel we have no choice. We know we will be out-gunned, and Exxon, being an Amer­i­can com­pany, may re­ceive US gov­ern­ment sup­port, but this is about dig­nity and our rights.”

Stan­ley Mamu, ed­i­tor of the LNG Watch blog, fears a Bougainville-style war over re­sources. It is al­most in­evitable, he ar­gues, un­less Exxon and the gov­ern­ment lis­ten to the griev­ances of the local peo­ple. Ten­sions are al­ready high after a deadly land­slide in Jan­u­ary was blamed on nearby min­ing blasts.

LNG pro­ject man­ag­ing di­rec­tor Peter Gra­ham told Radio Aus­tralia last year he was sat­is­fied with the “ex­tra­or­di­nar­ily con­sul­ta­tive process” with the landown­ers. That would be news to most of them.

A story in PNG’s Sun­day Chron­i­cle in mid-Feb­ru­ary high­lights their anger. Two landowner chiefs de­manded Exxon “ful­fil re­lo­ca­tion” plans pre­vi­ously agreed to. They com­plain about Exxon-hired pri­vate se­cu­rity firm G4S — the com­pany has im­planted it­self in the high­est ech­e­lons of the na­tional gov­ern­ment, I am told by count­less NGOs — and local po­lice using ex­ces­sive force to re-open a key ac­cess road to the LNG pro­ject. They warn that other res­i­dents will heed a call to join them in re­sist­ing the de­vel­op­ment.

A for­mer com­man­der in the PNG army dur­ing the Bougainville “cri­sis” of the 1990s warned in 2010 that the pres­ence of a for­eign mili­tia com­pany such as G4S height­ened the chances of an­other con­flict:

“They [G4S] have no ap­pre­ci­a­tion of the local cus­toms, cul­ture and the peo­ple.”

I re­cently trav­elled to Papa Lea-Lea, about 30 min­utes from down­town Port Moresby, to in­ves­ti­gate a key LNG hub of the pro­ject. Dri­ving through im­pov­er­ished com­mu­ni­ties liv­ing along­side the shore, we pass small vil­lages along the cracked road — small houses built of stilts to keep them from sink­ing. “They would have to move if a cy­clone hit,” an Oxfam PNG staff mem­ber who ac­com­pa­nied me says mat­ter-of-factly.

Pass­ing a road­block — our dri­ver is forced to pay a small bribe to a po­lice­man be­cause he doesn’t hold a dri­ver’s li­cence — we soon see kilo­me­tres of high fences be­hind which sit LNG fa­cil­i­ties in var­i­ous stages of com­ple­tion. Se­cu­rity guards watch us drive past. On one side of the road is the beaten-up land of the pro­ject, the other is lush, rolling hills. Oxfam tells me some landown­ers have done deals with Exxon for the use of their prop­erty while oth­ers com­plain they aren’t prop­erly con­sulted be­fore work has begun.

Oxfam re­cently re­leased a re­port on the LNG’s im­pacts in the area after en­gag­ing an LNG Im­pact Lis­ten­ing Pro­ject. The re­sults were de­cid­edly mixed and ex­plained how al­co­hol abuse by men and women was lead­ing to a spike in HIV in­fec­tion, do­mes­tic as­sault and in­fi­delity. One woman from Pore­bada said that road con­struc­tion caused ex­ces­sive dust that af­fected the growth of ba­nanas, man­goes and paw paws. “Every time we go to find our gar­dens pol­luted.”

The cur­rent Peter O’Neill gov­ern­ment sup­ports the LNG pro­ject as strongly as Michael So­mare’s. Aus­tralian bil­lion­aire Clive Palmer re­cently an­nounced his likely entry into the LNG race, say­ing: “If we find gas, we de­velop it and make bil­lions of dol­lars out of it.” Dur­ing my visit the re-en­try of Shell into PNG was also warmly em­braced as a key dri­ver of LNG op­por­tu­ni­ties.

Aus­tralia still pours mil­lions into the coun­try as a sup­posed in­sur­ance pol­icy against im­mi­nent col­lapse. For­mer for­eign min­is­ter Alexan­der Downer re­cently wrote in The Na­tional that his gov­ern­ment “re­built PNG’s econ­omy” and “helped end the Bougainville cri­sis” when in re­al­ity — as Crikey has re­ported —  the Howard years en­trenched the rot that has con­tin­ued under the ex­panded Labor aid pro­gram (much of which goes on “boomerang aid”).

My time in Madang with the pro­gres­sive NGO Bis­marck Ramu Group (BRG) was a wel­come change, one of the few or­gan­i­sa­tions in the coun­try that be­lieves the only sus­tain­able way for­ward for PNG is to re­ject all Aus­tralian sup­port and find al­ter­na­tives to min­ing and forestry pro­jects, such as agri­cul­ture.

BRG’s Rosa Koian tells me there were count­less ex­am­ples just in her province — a pol­lut­ing Chi­nese-owned Ramu Nickel mine and an equally pol­lut­ing Fil­ipino-run can­nery — that show how cor­po­rate gi­ants can mis­lead lo­cals. Poor com­mu­ni­ca­tion was a fac­tor so BRG’s com­mu­nity work­ers take lo­cals being ro­manced by cor­po­ra­tions to areas where such firms have set up. “We have had 250 years of failed cap­i­tal­ism here,” Rosa says.

Terry is a key los­ing lit­i­gant in a re­cently com­pleted case by landown­ers against the Chi­nese-owned MCC, which runs the Ramu Nickel mine in Madang. He claims vi­o­lent in­tim­i­da­tion by the com­pany and has wit­nessed pol­lu­tion in the water near his vil­lage.

“Every day I hope the world comes to an end,” he says to me in de­spair. The top courts, min­is­ters and fed­eral gov­ern­ment are all col­lud­ing to sup­port the mine, he says.

MCC ad­ver­tis­ing in the local press claims the com­pany is “ready to de­liver”. But per­haps not for the peo­ple in Madang.

*Antony Loewen­stein is an in­de­pen­dent jour­nal­ist cur­rently work­ing on a book about vul­ture cap­i­tal­ism. 

Papua New Guinea: Proxy for the great powers?

February 16, 2012 1 comment

By John F.M. Kocsis, Harvard Political Review

In one of the coming decades’ most important developments, tensions between the United States and China have begun to escalate on a whole host of new fronts. Prospects for the presidency have soared to new heights of monetary nationalism, the Obama administration has announced plans to station 2,500 marines in the Pacific, and Chinese diplomats have turned up the heat on American allies in the South China Sea.

As in all great rivalries, China and America both have proxies whom they support, provided the junior partners act in their interest.  One such proxy nation is Papua New Guinea, the resource-rich Pacific nation whose domestic political instability has made it a surprising focus of American and Chinese geopolitical maneuvering.

Of potential flashpoints for conflict in the Pacific arena, Papua New Guinea is generally less studied than its regional counterparts, such as the Philippines and Vietnam.  New Guinean history is primarily viewed through the lens of Jared Diamond’s Guns, Germs, and Steel.  This ignores the island’s long history on the world stage.  A battleground between Allied and Japanese forces in World War II, the country was restored to Australian ownership at the campaign’s end.  Sir Michael Somare, a perennial leader of Papua New Guinea, finally won his people independence in 1975 – but ever since, the Melanesian state has been fraught with conflict.

Despite recent military developments, Papua New Guinea is ostensibly in the throes of a petty constitutional crisis.  Sir Michael Somare, in his fourth nonconsecutive role as prime minister until this past August, has returned from his convalescence in Singapore claiming to be the country’s rightful legislative chief.  The person serving in that position now, Peter O’Neill, toppled the placeholder Somare who appointed in August and was voted by the parliament as the rightful prime minister.  The small nation’s supreme court ruled that because Somare left for heart surgery with full intention to reclaim his seat, he is legally entitled to the role of prime minister. By and large, parliament disagrees – and Papua New Guinean ministers strongly support the new prime minister, Peter O’Neill.  This vehement disagreement at the highest levels of government led to a mutiny attempt to remove O’Neill and restore Somare.

The rebellion was successful at first.  Hired by Michael Somare, the Indonesian colonel Yaura Sasa and his troops seized control of the military barracks in Port Moresby, the capital, and captured Brigadier-General Francis Agwi, the Commander of the PNG Defense Force.  After days of escalation, soldiers surrendered their weapons on January 30.  They promised to stand down instead of facing prison time.  The colonel was jailed but later released on the grounds that he was merely operating under government commands.  The government of Sir Michael Somare, which the Supreme Court deemed legitimate, had, after all, executed the order.

A surface-level reading of this scenario focuses on an internal struggle within government leadership over political control and resources, a common occurrence in developing nations. However, a broader and perhaps more accurate view of the situation requires putting it in terms of American and Chinese interests.  Papua New Guinea is an attractive destination for investors due to its untapped 22.6 trillion cubic feet in natural gas, not to mention its copper and gold wealth.  Exxon Mobil is working on a $15.7 billion liquefied natural gas project that should due to be completed in 2014.  The China Metallurgical Group Corporation (MCC) is developing China’s largest overseas mining investment, a $1.6 billion attempt to exploit 140 million tons of nickel.

As is typical of situations in which foreign investment is involved, outside nations require government compliance in forging ahead with their designs.  China had an easy time injecting itself in the nation when Somare was in charge.  The once and perhaps future prime minister supported Chinese interests in his Environment Act, which amended the law so that landowners could no longer contest damaging activities on their land – a move that authorized the MCC’s plan to dump toxic mine waste into the Bismarck Sea.  This provision was repealed by the O’Neill government, which claimed to look out for both the environment and the rights of its constituents.

The acts of Peter O’Neill are not necessarily so principled.  While Somare instituted a “look north” policy during his tenure, O’Neill has increasingly conducted his primary business with Julia Gillard and her Labor government in Australia.  Sir Michael Somare saw China as the country to emulate.  He invited members of the People’s Liberation Army to train the Papua New Guinea Defense Force.  He also established a program for PNG officers to undertake military training in the People’s Republic of China for up to three years.  Historically, since Papua New Guinean independence, training aid had been under the aegis of Australia, New Zealand, and the United States.  In the past couple of months, O’Neill has attempted to revert to those days, inviting Australian troops back to the island.

Last spring, Secretary of State Hillary Clinton admonished Somare for getting too close to his neighbor to the north. She warned of a “resource curse,” insinuating that he would fail as leader if he lacked commitment to good governance, transparency, and accountability.  Clinton has taken a Kissinger-esque stand when it comes to the nation, urging the U.S. Congressional Foreign Relations Committee, “Let’s put aside the moral, humanitarian, do-good side of what we believe in and let’s just talk straight, realpolitik.” She bluntly claimed that China is trying to “come in under us” regarding “Papua New Guinea’s huge energy find.” As if there was any doubt, she strongly asserted, “We are in a competition with China.”

U.S. diplomats aren’t the only ones to recognize the recent skirmish’s implications on the Chinese-American divide.  Resentful PNG citizens have circulated text messages claiming, “The Somare regime existed through Asian mafia’s funding.” Papua New Guinea has experienced the rapid rise in Chinese immigrants to which the entire Pacific region has become accustomed.  Nativist anti-Chinese riots ulcerated in 2009; accordingly, most citizens strongly prefer America to China. However, as America’s unipolar moment fades into a period of increased Chinese assertiveness, it is not hard to imagine a future of Chinese dominance in Papua New Guinea.

Pacific Islanders might not like their new neighbors, but many established politicians have a tendency to get along with Beijing just fine.  As China’s aggression continues, its influence is unlikely to go anywhere but up.

Parliament revokes Environment Act amendments

January 20, 2012 3 comments

Alexander Rheeney

Parliament-elected Prime Minister Peter O’Neill continued to up his popularity stakes when his government yesterday nullified a law which shielded resource companies from environmental damage lawsuits.

Reports from the Papua New Guinea capital Port Moresby indicate that the O’Neill government has revoked the 2010 amendments to PNG’s Environmental Act, which the then Somare government pushed and got parliament to pass to protect the $1.5 billion Chinese-owned Ramu nickel mine.

It is understood MP Thompson Haroquave, who is the environment minister in the O’Neill government, tabled the legislation and was able to get the parliament to vote in favour of the contentious provisions being invalidated.

However, Supreme Court-reinstated PM Sir Michael Somare has vowed to review all of the O’Neill administration’s policies and undertakings “when it gets back into office”.

The 2010 amendments by the Somare government were widely criticised and opposed by PNG landowners, who own 97 per cent of land in PNG but following the legislative changes could not sue resource companies for environmental damage.

Civil society in PNG, led by Port Moresby-based advocacy group Act NOW!, campaigned against the law and collected over 18,000 signatures in an online petition. They were later joined by Mr O’Neill’s deputy and then Opposition Leader Belden Namah who said the legislation was not in the “national interest”. Another MP linked to the Somare government, Ken Fairweather, also quit and moved to the middle benches in protest against the amendments.

The revoking of the controversial law coincides with Mr O’Neill’s announcement of free public health care after a tour of the Port Moresby General Hospital, PNG’s largest government-funded public hospital. The new health policy as well as the free education policy, which the parliament-elected PM announced last August, has been welcomed by ordinary Papua New Guineans as they battle to overcome some of the region’s worst social indicators.

The amendments’ revoking comes a month after the PNG Supreme Court rejected an appeal by landowners to stop the Ramu nickel mine from dumping its waste off the coast of Madang in the north of PNG.

MCC outed as fraudulent and corrupt by the World Bank

December 12, 2011 1 comment

Papua New Guinea Mine Watch

The Chinese Metallurgical Construction Company (MCC) Ltd, majority owner of the controversial Ramu nickel mine in PNG,  has been barred from doing any projects or works involving the World Bank,  Asian Development Bank, European Bank for Reconstruction and Development, and the Inter-American Development Bank.

This is because its sister companies, China First Metallurgical  Construction Company and China First Metallurgical Group, have been found guilty of fraud and corruption in a World Bank investigation into the construction of a bridge in Bangladesh as part of the Dhaka Urban Transport Project. The investigation found the bridge was so poorly constructed it was condemned before it was opened for fear it would have collapsed when people started using it – potentially killing hundreds of people.

The Ramu nickel mine has been heavily criticized for stealing land from indigenous people, poor construction, use of imported convict labour, appalling health and safety standards, the planned dumping of toxic mine waste into the sea and the highly favorable tax holidays that it secured from the heavily pro-Chinese government of Michael Somare.

MCC was introduced into PNG by Australian based mining company Highlands Pacific, a junior partner in the Ramu mine.