UPDATE ON THE RESULTS OF THE FAILED BCL LITIGATION AGAINST PANGUNA LANDOWNERS 26 JULY 2021
The Special Mining License Osikaiyang Landowner Association (SMLOLA) is pleased to provide an update on an unprecedented level of baseless litigation, initiated by Bougainville Copper Limited (BCL) (ASX:BOC) and four of its associates.
This systemic campaign involved no fewer than seven cases brought by BCL and its four associates. All cases were completely unsuccessful, with costs awarded against them in every case, and in two separate instances the highest Courts in Papua New Guinea (PNG”) held the actions were an abuse of the Court process.
The judgements of the highest Courts in both PNG and in Australia are an absolutely resounding vindication of the unique status afforded the ABG established SMLOLA.
PAPUA NEW GUINEA COURT PROCEEDINGS SMLOLA (through its JV entity) was successfully joined as a party to the BCL Judicial Review proceedings (referred to below) to support the Autonomous Bougainville Government. BCL lost its appeal to the Full Bench of the Supreme Court of Papua New Guinea to SMLOLA’s joinder application.
The significant PNG litigation which was also unsuccessful included: 1. PNG National Court OS No. 208 of 2018 (CC3) and two unsuccessful appeals; 2. PNG SCA No. 110 of 2018 - two appeals against the decision by the PNG National Court OS No. 208 of 2018; 3. PNG National Court OS (JR) No. 29 of 2018 and the appeal to the Supreme Court; 4. PNG SCA No. 159 of 2018 being the appeal of a decision in PNG National Court OS (JR) No. 29 of 2018. To search PNG National Court cases readers are referred to the following website– http://www.paclii.org/pg/cases/PGNC/. To search PNG Supreme Court cases readers are referred to the following website - http://www.paclii.org/pg/cases/PGSC/.
BCL LITIGATION IN THE SUPREME COURT OF VICTORIA
BCL initiated this action and chose the jurisdiction in Victoria, Australia which was unusual but presumably because the BCL-Rio Tinto 30-year long Bougainville legal team, which BCL deployed, are based in Melbourne.
Claims made by BCL, the former owner of the Panguna mine, against RTG Mining (“RTG”) (ASX:TSX), Central Exploration Pty Ltd (“Central”) and indirectly SMLOLA in the Supreme Court of Victoria, Australia were fully dismissed by order of the Court.
In addition, RTG and Central received a substantial cost judgment against BCL for their costs in defending the proceedings.The full judgment is available on the public record (Bougainville Copper Ltd v RTG Mining Inc & Anor [2021] VSC 231 (5 May 2021)).
SALIENT ASPECTS OF THE JUDGMENT The primary judgment is 254 paragraphs spanning 100 pages. It is in summary a resounding endorsement of SMLOLA and its actions. In view of the length of the judgment, it is necessary to summarise the key aspects to understand its significance to SMLOLA.
The key findings in the judgment are a complete vindication of the entire position taken by SMLOLA and its members.
SMLOLA’s Status & Actions
1. The Supreme Court of Victoria held that the members of SMLOLA ‘are the relevant and dominant customary landowners and it will be their views and objections that count when it comes to any assessment of Landowner attitudes to the grant of any exploration or mining tenement over the former Special Mining Lease’ [46].
2. The existence and role of SMLOLA is of crucial importance. It was registered on 7 September 2011 under the Associations Incorporation Act (PNG). Under its Articles of Association, membership of SMLOLA was of natural persons who were ‘an osikaiyang [defined to mean original inhabitants in the Nasioi language of Central Bougainville] of Moroni, Pirurari, Pakia, Dapera, Guava, Kokore and Kupei Villages in accordance with the Nasioi custom in the Special Mining Lease area of Panguna Mine’. The Articles also state that ‘a person’s right to being a member of this Association is determined by being born or adopted into the landowning clan in the Special Mining Lease area’. [44].
3. The stated objectives and purposes of SMLOLA in its constitution state that, at paragraph ‘(g) to be partners in development and operation of Panguna Mine ....’ in the words of the judgment at [45].
4. ‘Thus for customary landowners (as owners of the minerals under their land) to commercialise their interests, they would have to form commercial engagements with mining companies’ [27].
5. ‘It is clear that SMLOLA was a legitimate entity, active and providing something resembling the auspices or representative voice for its members’ commercial interests as customary landowners in the redevelopment of the Panguna mine …’ [47].
6. ‘The customary owners were given ownership of the minerals under the 2015 Mining Agreement. It appears to be sound and commercially and politically appealing … to satisfy all interests with a well resourced mining outfit and customary owners as joint venturers’ [238].
7. ‘For such [Joint Venture] activities, people would have to be employed and properly paid’ [241].
The Supreme Court on the BCL Legacy Issues1. In key findings the Court at [238] found the legacy issues for BCL were an ongoing issue for Landowners and in that context ‘the refusal [of BCL’s extension] based on the absence of a social licence, could not be said to be objectively incredible or surprising’.
2. ‘It seems to me that with all the ‘heavy baggage’ of the legacy issues, this is what BCL was up against in obtaining what was termed the ‘social licence’ to redevelop the mine [247].
3. ‘I trust it is not controversial or damaging to say (according to materials in this application) that BCL’s operations of the mine had major adverse environmental and social impacts on Bougainville, and brought with it serious grievances among Bougainvilleans about matters such as the limited share of mine revenue and inadequate, unfairly distributed, and unpaid compensation for damage done’ [21].
4. BCL Had & Still has no Landowner Access Agreement at Panguna
When the ABG refused to extend the BCL EL the Court noted at [248] the objective evidence is that Landowners had already refused to make any agreement to give BCL access to any land that was the subject of BCL’s two year exploration licence.
THE SIGNIFICANCE OF THE JUDGMENTS
The Supreme Court of Victoria held that the members of SMLOLA ‘are the relevant and dominant customary landowners and it will be their views and objections that count when it comes to any assessment of Landowner attitudes to the grant of any exploration or mining tenement over the former Special Mining Lease.’ [46].
The Supreme Court judgement completely vindicates SMLOLA’s members opposition to the BCL EL 01 extension renewal on the grounds that, BCL was never able to negotiate a land access agreement with the Customary Owners at any time, and because of the BCL Legacy Issues (no fair compensation has ever been paid to the members of SMLOLA). This position was supported in writing by over 2,000 members.
Following this, BCL incorporated their own Landowner company – Panguna Development Corporation Limited (PDCL), which then claimed suddenly and unilaterally to represent all Landowners. Unlike SMLOLA, PDCL was not established nor incorporated by the ABG. It is this BCL created, sponsored and funded entity, which has attacked SMLOLA unlawfully. The Chairman is Mt Michael Pariu who is from the Upper Tailings Landowner Association, quite separate and distinct from the SMLOLA, which represents the members who own the minerals under the Bougainville Mining Act and the customary land where the mine, the processing plant and associated infrastructure was located.
BCL has officially stated it has supported this unsuccessful litigation brought by four officers of PDCL all of which failed, was without merit, and held in two instances to be an abuse of the Court process.
In the opinion of SMLOLA this is a damming indictment on the actions of both BCL and PDCL.
The Supreme Court also provided judicial clarification on the role of the other 8 Panguna Mine Affected Landowner Associations established by the ABG. These Landowner Associations represent customary owners of land outside the Panguna Mine area which was nevertheless adversely affected by Rio Tinto and BCL operations at the mine.
Contrary to the assertions of BCL, the Supreme Court judgement noted it is only the members of SMLOLA who can enter into an access agreement or deny access to the Panguna Mine, being the land contained within the Special Mining License (SML). That is why the ABG named SMLOLA accordingly.
SMLOLA respects and supports the role of the ABG as regulator under the Bougainville Mining Act. It is only the ABG, acting pursuant to the powers conferred to it under the Bougainville Mining Act that can grant either an exploration or mining lease.
Philip Miriori SMLOLA Chairman
ABOUT THE SMLOLA (SPECIAL MINING LEASE OSIKAIYANG LANDOWNERS ASSOCIATION INC)The SMLOLA was established by the Autonomous Bougainville Government (“ABG”) on 7 September 2011 with its Constitution being drafted by the ABG Mining Department. The SMLOLA was established uniquely for and on behalf of all the Customary Landowners who own land contained within the area covered by the former Special Mining Lease at Panguna (which became the subject of the now expired EL 01), including the land used for the Panguna Gold Copper Mine Pit, industrial processing areas, Panguna Township, and the areas around the mine within the area contained in EL 01. The stated purposes of the SMLOLA pursuant to its Constitution are set out in detail in Clauses 1.2 (a) – (h), and include amongst other things, the duty to maximise the commercial benefits of their members in the Panguna Mine and promote peace, unity, and co-operation amongst landowners in a sustainable manner. The Customary Landowners and their families are members of the SMLOLA by right of birth within the 7 named villages, in accordance with the Naisoi Custom, and as set out in Clause 2.1.1(a) of the SMLOLA Constitution. The SMLOLA has more than 3,500 members. The governing body of the SMLOLA is democratically elected every three years as required by clause 4.3.3 of the Constitution, by the members so that its structure and Board is truly representative of the owners. The current Board was elected on 21 December 2018. Section 8 of the Bougainville Mining Act states that “all minerals existing on, in or below the surface of Customary Land in Bougainville are the property of the owners of the Customary Land”. This is exactly the same as Bougainville’s customary law on minerals ownership that has been in effect for millennia.
BOC Price at posting:
46.0¢ Sentiment: Sell Disclosure: Not Held
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