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Ross Garnaut: mining + the environment « Previous | |Next »
September 16, 2010

Ross Garnaut has built an enviable reputation as one of Australia's leading public intellectuals.He is known for his key role in opening the Australian economy as part of the team that came into office with Bob Hawke in 1983, for his seminal 1989 book Australia and the Northeast Asian Ascendancy, and he is the Australian Government's chief adviser on climate change and carbon emissions.

Garnaut is currently in the news as a result of a critique by the ABC of his association with Lihir Gold Limited. This has operatesd one of the world's biggest gold mines on Papua New Guinea's Lihir Island under the under leadership of its founding chairman Professor Ross Garnaut. The ABC raised concerns over the environmental record of Lihir Gold Limited with respect to its use of Deep Sea Tailings Placement (DSTP) rather than land-based tailings disposal. Garnaut has defended his actions.

Garnaut has a long history in PNG, having helped establish the country's post-independence monetary and mining policies. He now sits on the Ok Tedi board and is chairman of PNG Sustainable, the mine's current majority owner. The key question is: do the externalised environmental costs of mining exceed the benefits of income earned from mining?

Garnaut puts it this way:

There are genuine dilemmas in resources development anywhere, including in poor developing countries. Mining inevitably generates waste and tailings. The disposal of waste and tailings inevitably involves some disruption of the natural environment—as does almost all human economic activity. The important judgements are always about making responsible choices between alternative means of managing waste and tailings, and about whether, when the best possible means of managing waste and tailings have been chosen, the benefits of a particular mine exceed the costs.

There is a growing reliance by Papua New Guinea on mineral exploitation for foreign direct investment, government revenues, and foreign exchange. The greater the insistence on environmental protection the less attractive a resource exploitation opportunity becomes. That resource exploitation and minimal environmental attention occur most commonly in developing countries is not coincidental.

Despite the public evidence of the damage to the environment and the ensuing affect on the people of Papua New Guinea by mining activities; and despite universal condemnation of these activities and the companies responsible; the companies continue to conduct these activities without official hindrance and with little apparent concern for the long-term ramifications of their actions.

BHP, the original owner of the OK Tedi mine, did not find a balance between the need to generate income and to protect sensitive areas and respect the wishes of indigenous populations. BHP's Ok Tedi mine over-relied on a tailings dam that proved unsustainable in that geology, and then sent the tailings down the Ok Tedi – Fly River system ( the waste is dumped into the Ok Tedi and Strickland rivers which are tributaries of the Fly River and form part of the Fly River system).

I remembered pictures showed tons of mud and mine waste polluting the river and the land around it, indicating that the company’s practices resulting in “severe environmental damage. The toxic river of waste killed the fish and crops, destroyed thousands of square kilometers of rainforest and caused terrible hardship for local people. Ok Tedi owner BHP agreed to pay more than $100 million in compensation to the local people for this eco-catastrophe after being taken to court to force it to adopt environmental management systems and to pay compensation.

In 1995 Garnaut said in defence of the Ok Tedi gold and copper mine mine in Papua New Guinea:

Take Ok Tedi - it's currently in the news, BHP being much criticised for the environmental impact. Without taking a view on the pros and cons of that current debate on the environmental issues, it is, I would have thought, a relevant part of the debate that the people of the Star Mountains, where the Ok Tedi mine is related, were some of the poorest, most miserable people on earth when this mine was first conceived, twenty years ago. Life expectancy of women was nineteen years. There has been a very substantial improvement in nutritional standards; in general health and welfare the opportunities for those poor and miserable people have expanded very considerably. That is part of the Ok Tedi history that is just as real as the environmental problems in the Fly River. There is no quick and easy solution to the task of development in a poor, underdeveloped economy. What I hope for Papua New Guinea is that there will be a gradual building, a gradual learning, over a long period of time, a gradual strengthening of institutions.

For Garnaut the economic benefits outweigh the environmental costs according to a utilitarian calculus. The standard way was to focus on the amount of money that was being invested in community rather than how the pollution problems were actually impacting on sustainability or long term sustainable development.

In 2002, BHP withdrew from the project and gave its 52 per cent share to the PNG Sustainable Development Program. With the transfer, BHP gained legal indemnity from PNG government action with respect to all the pollution and destruction it has already caused and will cause in the future. The PNG Sustainable Development Program is designed to provide long-term benefit to local communities, but whose income is dependent on the very mine killing the local environment.

PNG Sustainable was specifically set up to invest in projects on behalf of Papua New Guineans to help soften the impact when the mine closes in five years' time. Before leaving, BHP set up a dredging program to return the river to a safe state and avoid further destruction. For the past decade, this dredge has been sucking waste out of the river near Bige village and stock-piling it close by. The dredge has only removed a fraction of the amount of waste required to keep the river safe.

| Posted by Gary Sauer-Thompson at 10:15 AM | | Comments (6)
Comments

Comments

I remember Garnault's '89 paper.
It had a few good points, the awareness that were no longer part of Europe, nor even the USA for that matter except from the POV of sharing the Pacific, for example but was really a deeply flawed study.
Notwithstanding that it fitted neatly into the economic rationalist free market ethos at the time and thus garnered a praise that it did not merit.
Its major fault, AFAIR, was that it persisted in viewing economic activity and trade in particular as occurring between nations.
This was transparently not the case then and even less so today.
Trade was/is between multi national corporations, from one to the other and even between subsidiaries of themselves, left hands and right hands. I seem to recall that the era of such accounting for most of the world's trade occurring between multi nationals, and very few of them relatively, had been reached years before Garnault wrote.
But he was oblivious to this as was Hawke and the media and the report gained a reputation it did not deserve.
Academically it was well received generally, such was the paradigm of the time, but not by all.
Its false presumptions and their snowball effect on all that followed within the report were savaged in some academic quarters, I recall some Flinders Uni folk being totally unimpressed.

So it was with a certain degree of trepidation and scepticism that I viewed his climate change report and I must confess my quiet scepticism has led me to not comment on his climate report or utilise it as I read the various discussions around the blogs on climate change policies.

This latest brouhaha has not added to his reputation.
In fact it verifies some of the criticisms of his ’89 report in that the power differential between transnational corporations and citizens [and governments] of individual nations is huge and this latest episode is a clear illustration of that.
Interestingly I understand that the OO has come out in his defence, with friends like that .....

In reference to the climate debate I think I will continue to place little import on Garnault’s work,
That may not be entirely appropriate, he has perhaps written something valuable there, but it would be against the flow if that is the case.

I have no doubt that his gold mining is having major environmental effects, but attacking the one miner Labor is friendly with? It's suspicious.

john,
Suspicious how? Is the ABC now biassed against the ALP?

Papua New Guinea has a history of rapid resource-based growth failing to trigger broader-based development. There has been a history of huge resource projects that had come and gone without providing lasting benefits to the people of new Guinea.

We do need to be critical of the ABC given the way that it's news coverage/commentary on Radio National Breakfast often follows the agenda set by the Australian closely, rather than cutting an independent path based on good research.

On the other hand, Garnaut is a public intellectual and does advocate that the benefits from resource development outweigh the environmental negatives. That should be questioned.

Well, I'm flummoxed. Apparently in ALP circles Garnaut is God, and must never be criticised.

Who is Garnaut?

He played a big part in supporting the so-called National Reform Agenda - the neocon privatisation/
deregulation Tea Party in Australia.

He wrote an emissions trading report which was so business friendly it was obviously futile from the day it was published.

Is this what it takes to get the ALP on side these days?