Up Front

with the Editor

It seems that the near-bonanza ich is the Bougainville copper pro t is not to be officially opened in vember after all. The decision to icel the formal tea party has been en since PlM’s presses printed the agraph on p. 51 of this issue.

Vs this page goes to press, the cial government/company explana i for the cancellation is that the ney for the ceremony, which was have been presided over by PNG’s ef Minister Michael Somare, jld be better spent as a gift to ? alleviate the food shortages in Highlands caused by drought and >t. 0 it would. But I believe the 1 reason for the cancellation is : Chief Minister Somare was re am to go through with it because political pressure from anti ipany colleagues and electors, his underlines the fact that there e been other recent noises issuing n PNG which appear to be ical of investment, oth Chief Minister Somare and les Minister Paul Lapun have cated that some business arrange

ments, including the one with Bougain ville Copper Pty Ltd, may have to be renegotiated after PNG becomes self-governing at the ond of 1973.

And Trade Minister John Poe has recently spoken oddly about “nationalisation” (see p. 101 for a report of an interview attended by a PIM reporter).

I don’t know what Mr Poe has in mind, but I have had a couple of recent opportunities to talk to Mr Somare, and I believe that he has no specific intentions about Bougainville, or any other company. He merely intends to remind people that changes are always possible in a situation of swift political development such as PNG is now undergoing.

But, as he said in Sydney in October, in any investment there has to be equity for PNG, for PNG “doesn’t want to be late in catching the boat as Australia has done in controlling overseas investment”. In short, he wants investment on PNG’s terms—and who could argue against that?

What concerns me is whether in vestment will be frightened away as

a result of the present uncertainty as to just how the policy will operate in practice. Even a hint of repudi ation of present contracts will cer tainly damage investment confidence.

If the present government has thought this out, and is fully expect ing to suffer a development slump while it consolidates its political power, then so be it. You can’t ex pect an emerging country to have the stability you get with a developed economy and parliamentary system; it can’t meet all its objectives at once.

But has it thought it out? From where I sit, it seems it is not fully aware of the extent of the uncertainty caused by recent loose comments.

Let’s look at one of these corporate monsters—Bougainville Copper.

The company has spent more than 5350 million in developing the mine to this stage, where it has only in recent months begun to produce.

That’s big, but I don’t think of Bougainville Copper as a giant with out a soul, but as a big, bluff, warm personality called Frank Espie. 1 first remember Panguna as a drill hole in a hill, reached by helicopter, with Frank Espie the competent organising engineer enthusiastically hopeful that one day she might be a “goer”.

Espie, climbing up and down muddy mountains, finally seeing that the dream can become airborne; planning it so that everyone can share (“what the hell’s the point of work ing in a country if the locals aren’t going to be happy to have you?”); planning Arawa town half-way up the mountain so nobody loses agri cultural land (in the end the town had to be built on the coast, mostly on white man’s land); being appalled when the Australian Cabinet insisted that the Bougainville landowners had no rights to royalties (“Jesus, we want to give ’em royalties—why should Australia stick to a British policy imported with the First Fleet?”) and being wildly delighted when the Cabinet gave in.

Espie, enthusiastically pushing a plan for a business co-operative for the benefit of Bougainvilleans so that

When former PNG House of Assembly member Warren Dut ton and Joy Moses (of Port Moresby) were married in Sydney in October, among the guests at the church were PNG Chief Minister Michael Somare (second from left), Minister for In ternal Finance, Mr Julius Chan (right).

Minister for Trade and Industry, Mr John Poe (second from right), and Mr John Yoklun, Mr Somare's private secretary (left). All were in Australia to attend a trade meet ing with Japanese ministers in Canberra.

jatriate firms couldn't corner the finess opportunities; Espie insisting racial equality and a real training igramme for New Guineans (at a ic when most PNG expatriate busi s was still paying lip service to twin aims); Espie organising an >ensive, territory-wide educational gramme to teach New Guineans >ut the intricacies of share scrip they will know of the advantages the copper shares issued to them par. remember that the company had nt something like S 5 million in specting money before it ap ached the then PNG Government guarantees that it could have tten into a “bankable document” ch would enable it to raise bank is to prove the copper deposit, hat document was thrashed out, i the endorsement of the PNG jse of Assembly, before either government or the company w the mine would be a “goer”, vas a lottery, with the company ing up the cash and being re asible to world banks for its repay it.

Tiose banks loaned a lot of money short term. If the mine was a r , they were to have first bite he cherry. The contract with the j government was so structured after the banks were repaid, the its were shared between govern it and company in what was ed to be a reasonable proportion, t’s without even taking into >unt the extra fillip to the tomy caused by the very existence he project.

D now you hear talk in PNG it the better deals the govern ts have in Zambia and Chile, doubt. But those mines have i operated for generations, not a few months. And the Bougain agreement has only been re ly negotiated in good faith, and oved by many of the same people in power. It’s not the kind of mous document foisted on the ispecting Ocean Islanders by ish phosphate exploiters at the of the century. his is not to say that PNG ildn’t try to get an improved deal can negotiate it. But the present ade of some smacks to me of dover tactics, which can’t do i’s reputation any good. Who blame Kennecott, which is sit on a potential copper mine in tern Papua, and who won’t move the PNG Government tells it what it is prepared to do to

—Stuart Inder