BHP achieved this by announcing the closure of the mine.
The effect of the closure of the OK Tedi Mine would have completely destroyed Papua New Guinea’s economy, and, of course, BHP was at all material times well aware of the consequences of such a declared intent.
At the same time BHP offered an arrangement whereby the Papua New Guinea government would give a complete indemnity and total immunity from prosecution over the OK Tedi disaster in exchange for BHP handing the disaster (and the OK Tedi Mine) to the PNG government.
The reasons for this disaster are complex.
The original plans included an Environmental Impact Statement (done by an Australian Consultancy) called for a tailings dam to be built near the mine.
This would allow heavy metals and solid particles to settle, before releasing the clean ‘high-water’ into the river system where remaining contaminants would be diluted.
The plan was seriously flawed.
In 1984 an earthquake (common in the area) caused the half built dam to collapse.
The company continued in developing operations at OK Tedi without any dam.
This was initially because BHP argued with the PNG government that it would be too expensive to rebuild it.
Subsequently, the cash-strapped PNG government, under huge economic pressure from the closure of the Angina Copper Project on Bougainville, was compelled to agree with BHP or face economic collapse.
In 2010 BHP decided to re-enter PNG and applied for a massive area of exploration license in the Central Highlands of PNG with riverine systems running off in a northward direction into the Sepik River system.
The story, about these applications is rather interesting but to cut a long story short the applications for grant of the tenements were forwarded to the then Minister for Mining, the Honorable John Pundari in mid 2010 for approval or rejection.
The Minister is on the Public Record as having stated, under parliamentary privilege, and in response to matters raised in parliament, "I personally find it very difficult to allow the return of BHP Billiton into this country, given its legacy with the Ok Tedi mine project” and, the “environmental problems of the Ok Tedi river systems were real and huge, and the company should have looked for remedial solutions instead of making a decision to walk away from them".
The Honorable Minister went on to say that the failure (by BHP) to provide "real large tangible projects and programs" in the Western province, where Ok Tedi was located, was "an act of cruelty, and we must not continue to condone this type of conduct in this country".
Clearly, like the rest of the nation, and right thinking people throughout the international community, the Minister was of the view that BHP was, and is not, a good corporate citizen.
There after the Minister rejected BHP's applications, as he was lawfully entitled to do under Section 20(1) of the Mining Act.
Thereafter as a matter of Law, the matter was closed, finished, end of story, etcetera.
What then happened in the latter part of 2010?
Firstly, there was a change of government and an attendant change of Mining Minister.
BHP then threatened to litigate with the PNG government over the rejection of the tenement applications.
BHP made this threat conditional on the applications not being granted.
The threat was made notwithstanding that BHP had no legal basis for such litigation.
In the context of Section 20(1) of the Mining Act the rejection of the applications was entirely valid under the broad discretion's given to the Minister for Mining.
Then, apparently, under the threat of litigation BHP brought improper influence on the Chairman of the Mining Advisory Council, the administrative body responsible for making recommendations to the Minister on matters of grant.
An agreement was reached under color of the threat of litigation and other matters, that the Chairman of the Mining Advisory Council would simply ignore the Ministers decision to reject the applications, and that thereafter they would wait for another person to be appointed as Minister for Mining, and try again.
This conduct is, OBVIOUSLY, both illegal under the Mining Act, a clear abuse of process, and, a corruption of the independence of the Mineral Resources Authority.
It is also action displaying a completely disrespect and disregard for the lawful authority of the office of the Minister for Mining and due process thereunder.
Needless to say, the Minister for Mining is the only office legally entrusted by parliament with the decision to grant or not grant.
In this case, once the Honorable John Pundari made his decision, and directed that to the Chairman of the Mining Advisory Council, as a matter of Law, that was the end of the matter.
The Chairman was then obliged to simply communicate the Ministers determination to the applicant, BHP.
It needs to also be stated that there is NO review process available to either BHP, nor to the Mining Advisory Council who themselves now have NO JURISDICTION under the Mining Act to re-consider the matter of BHP’s applications under the doctrine of Functus officio.
Nor can the Chairman of the Mining Advisory Council ignore the Ministers decision, which he clearly has, apparently, under pressure from BHP.
In so far as the purported applications have been purportedly re-submitted under pressure by BHP to the office of the Minister for Mining the applications are void, they do not exist, and they are a legal fiction under the doctrine of Functus officio.
However what does BHP care about the law in PNG?
Clearly, BHP cares naught for the Laws of the Independent State of Papua New Guinea and whether or not the consequences of these applications, in all the circumstances, amounts to a corruption of the Laws of Papua New Guinea
Again, in the words of UN Secretary-General, Ban Ki-Moon, “ Corruption undermines democracy and the rule of law. It leads to violations of human rights. It erodes public trust in government. It can even kill”.
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