Case Study on Natural Resources Group -E

Bougainville Island
Group E SUGANDHA SAHIL VERMA SHANJEET SINGH MAVI SATNAM DHIMAN

History of Bougainville
Bougainville is a province of Papua New Guinea. It was named after the French navigator Louis Antoine de Bougainville. On May 17, 1990 Bougainville Island spread across an area of 10,000 sq km with a population of about 1, 50,000 people, declared itself an independent nation.

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The island was a part of Solomon Islands under British Rule till 1899. Then, it was a part of New Guinea under German rule till 1914. In 1947, Australian Papua merged with Guinea and came under Australian administration under the United Nations (UN) trusteeship. Papua New Guinea (PNG) became independent on September 6, 1975.

Panguna mine
Bougainville is rich in copper, and possibly gold. The mining of copper has been the cause of considerable tensions over the last fifty years. In 1964, the first attempts were made to explore the island's resources, when CRA Exploration, a subsidiary of Australian company Rio Tinto Zinc, began drilling in the Panguna area. The Panguna mine opened in 1969.

Beginnings of the independence movement

The first independence movement began to arise in the late 1960s, as people began to air their grievances against the Australian colonial government over the handling of the Panguna mine. Australian External Territories Minister Charles Barnes was accused of telling the Bougainvillean people they would "get nothing".

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The issue of compensation went to the High Court of Australia,. It was found that the compensation was inadequate under ordinary federal Australian law. In 1972, Bougainville was granted some degree of autonomy, but this did not end the secessionist movement

Factors for conflict in Bougainville

The environmental destruction paradigm
This paradigm attributes the origin of indigenous disaffection with the mining project to severe environmental destruction Environmental and social activists argued that the environmental degradation was so huge that it bordered on gross human rights abuses. ( Bougainville) The inverse logic of the environmental destruction argument could be interpreted as saying that if there had been strict environmental monitoring and controls the conflict would have never eventuated.(PNG)

Panguna Mine A Resource Curse?

The original hypothesis of the resource curse is that natural resource abundant countries tend to grow slower than resource scarce countries. The resource curse is that valuable resources imposes imbalances upon society . The national government received a 20% share of profit from the mine of which the Bougainvilleans received 5% - 1.25% share of the total profit.

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Whilst there were Bougainvilleans who benefitted directly from the mine these were few in number and the benefits to society were limited and localized around the mine and Arawa. The rift between the haves and have-nots was thus largely confined to the national government and miners on the one hand, and the Bougainvilleans on the other

Panguna Mine A Resource Curse?

Another argument favoring the resource curse hypothesis in that the mine brought about severe upheaval in Bougainvillean traditional society which contributed to the onset of conflict. Bougainvillean leaders alleged that the mine had devastating environmental consequences for the island. They also claimed that Bougainville Copper had set up a system of apartheid on the island, with one set of facilities for white workers, and one set for the locals. They accused Bougainville Copper Ltd., of being responsible for poisoning the entire length of the Jaba River, and causing birth defects, as well as the extinction of the flying fox on the island.

Effect of copper mine on environment

Effect on Land
Deforestation Loss of Biodiversity Pollution

Effect on Water
Pollution Loss of Aquatic Life

Spread of Diseases

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Based on geological data from 1989,more than 1,000Mt of ore could still be mined, which is more than the 675Mt dug over 18 years the mine operated In 1988, its last full year of operation, the mine produced 166,000t of copper and 445,000oz of gold, worth US$1 billion at today's prices for both metals.

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Bougainville Copper's profits are now generated primarily as interest revenue on a range of investments. In 2000, it began to dispose of its Bougainville assets and has since developed a portfolio of debt and equity investments. Besides Rio's majority interest, Bougainville Copper is 27.36% owned by public shareholders and 19.06% by the government of Papua New Guinea.