07/12/00
Title: Differences mar Ok Tedi signing
Source: Copyright, 1999, Post-Courier Online.
Date: July 12, 2000
LANDOWNERS from within the Special Mining Lease area of the Ok Tedi mine may
continue to get royalty payments using an old formula because they have yet to
sign the revised agreement.
Mining Minister Sir Michael Somare visited the mine this week among other things to sign the revised agreements.
However, continued disagreements between the villagers and the provincial government over the legalities of the agreement may see the State resorting to the formula that had been used since 1991 to pay the villagers their entitlements.
Under the deal, the landowners got 30 per cent of the payments while the provincial government received 70 per cent.
Under the new deal, which was revised last year and became effective on January 1 this year, the landowners will receive 50 per cent while the provincial government receives 50 per cent.
Of the 50 per cent paid to the landowners, 19.5 per cent will be held in trust by the Government through the Minerals Resources Development Company, 30 per cent will be paid out in cash as royalty and 0.5 per cent will be used for the fund's administration. The planned signing of the agreement on Monday in Tabubil did not happen after the landowners refused to sign, accusing the Government of cheating on them.
The agreement also states that 40 per cent of the Special Support Grant paid out by the National Government to the province be paid to North Fly, 40 per cent be paid to South Fly while Tabubil would get 20 per cent. However, the landowners are arguing that the clauses that refer to these arrangements are incorrectly worded.
In a letter to Mining Secretary Kuma Aua, the landowners through Henao Lawyers asked that changes be made to the revised agreement.
They said that in that agreement, "20 per cent of the special support grant referred to in Clause 3,1 shall be made available to the Lower Ok Tedi Fly River Development Trust to implement approved infrastructure projects".
However, they are arguing that the Lower Ok Tedi area is not part of Tabubil and should not be included in the trust.
"In any case, Clause 3.2 be incorporated into one that ensures that at least 20 per cent of the special support grant paid to provincial government be made available for use in the Tabubil area of the North Fly District through the Star Mountain local level government," they said.
Clause 5 (C) refers to the payment of 19.5 per cent of royalty to Minerals Resources Star Mountain Ltd, a company incorporated by the Government and managed by MRDC, for the development of the future generation trust fund.
In regards to this, the landowners argued that the money should be paid to the Mt. Fubilan Landowners Trust to be invested in productive investment where they see fit. According to Loani Henao, legal adviser for the landowners, the 30 per cent that the people have been receiving in royalties since 1991 have not been invested and they see this as a chance for them to do so before the mine shuts down in 2010.
However a frustrated Sir Michael, who had to wait for more than five hours for the landowners leaders to sign the agreements, said he could not negotiate with them.