Annex

ENVIRONMENTAL MANAGEMENT AT OK TEDI: A CASE STUDY

Introduction

A. Natural environment

B. Mining and the environment

C. Environmental impact

D. Policy directions and implementation

E. Conclusion

Introduction

[ I | A | B | C | D | E ]

This case study discusses the Ok Tedi submission to the Government of Papua New Guinea on waste management options related to water discharges into the Fly River. The Ok Tedi mine, which is one of the largest open-cut mines in the world, commenced operations in May 1984 in the Star Mountains of Western province. Waste rock and tailings are dumped into the Ok Tedi River, a tributary of the Fly River. The mine development has been surrounded by controversy concerning potential environmental impacts. The Mount Fubilan deposit is located on the borders of West Sepik and Western provinces, while the Fly River forms, for a short part of its length, the international boundary between the Indonesian province of Irian Jaya and Western province of Papua New Guinea. In addition, at the mouth of the Fly River the maritime boundary between Australia and Papua New Guinea reaches within a few kilometres of the coast and discharges from the Fly River enter the Torres Strait area of Australian territorial waters.

A. Natural environment

[ I | A | B | C | D | E ]

Mount Fubilan, which is part of the Star Mountains range, rises to a height of 3,000 metres above sea level. It forms part of the central cordillera of the island of New Guinea in which the central mountain chain forms a major divide separating the drainage between catchments of the Fly River to the south and the Sepik River to the north. The Fly River is the second largest river in Papua New Guinea with a discharge of about 200,000 million tons of water per annum. Various aspects of the natural environments and habitats of the Fly River

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* Social and Cultural Studies Division, National Research Institute, Papua New Guinea.

Basin and the Ok Tedi catchment are summarized in the Ok Tedi Environmental Study by Maunsell and Partners and others (1982).

The environment surrounding the Ok Tedi mine is humid and tropical, with a natural vegetation of moss forest between the elevations of 1,800 and 2,200 metres, and replaced by upper montane forest beyond. Rainfall levels are extremely high, with over 8 metres per annum being recorded at the mine site. As the Ok Tedi drops towards the mining town of Tabubil, the environment changes from dense tropical rain forest, typical of the montane region, to a characteristic lower montane forest associated with foothills, but still with a closed canopy. At DAlbertis Junction, where the Ok Tedi River joins the Fly River, open rain forest and swamp forest commence with habitats that gradually merge with the more open, seasonally flooded savannah vegetation that dominates the middle Fly as far as its estuary.

B. Mining and the environment

[ I | A | B | C | D | E ]

Papua New Guinea is perhaps unique in having environmental management and protection enshrined in its Constitution. The fourth national goal is concerned with natural resources and the environment. A series of Directive Principles were accepted by Parliament in 1977 for application in the development of Papua New Guinea. The Directive Principles conform to what has now come to be know as "sustainable development" following the release of the Brundtland Commission Report in 1987. The government has recognized the role and importance of environmental management, as evidenced by the passing of the Environmental Planning Act (EPA) and the Environmental Contaminants Act (ECA) in 1978.

In any discussion of the environmental impact of the Ok Tedi mine, it is interesting to note that the mine development and operation were specifically exempted from the conditions of EPA and ECA. The conditions concerning environmental monitoring and regulation of contaminant substances were incorporated into the initial 1976 agreement and reinforced by the 1980 supplemental agreement. The major weakness of the 1977 agreement was that it specified that the consortium should spend no more than K 150,000 on environmental investigations. The preconstruction environmental investigations by the company were therefore totally inadequate. The government hired its own experts in hydrology, heavy metal pollution, and it utilized personnel from the Bureau of Water Resources and the Division of Fisheries to produce the additional studies.

Following the 1980 agreement, a more extended environmental impact study was undertaken by Ok Tedi Mining Limited. Those investigations, which were completed by the consultants and published as a series of volumes covering various aspects of environmental management, recommended a programme of future monitoring. The mining involved the extraction of 30 million tons of gold ore, using ferricyanide, and on-site smelting to produce gold ingots containing significant quantities of silver. During the construction phases, Ok Tedi Mining Limited argued that passing cyanide residues over a 50-metre weir prior to impoundment in a tailings dam would result in complete oxidation of the cyanide to relatively innocuous compounds. The government successfully argued that the construction of a cyanide destruction tower and the monitoring of cyanide levels in the tailings dam should be undertaken.

Copper ore processing involved grinding the ore and mixing it with water prior to passing through the concentrator systems to form a concentrate of 30 per cent copper. It was calculated that copper concentrate represented about 3 per cent of the processed ore. The concentrate was to be piped to Kiunga and barged to the mouth of the Fly River. The remaining 97 per cent of the processed ore (the tailings) were to be confined in a tailings dam to be maintained in perpetuity by the company (clause 9.1 of the 1980 supplemental agreement).

Following its first amendment in 1980, the 1976 Ok Tedi agreement has been subject to a series of supplemental agreements. In 1984, the government agreed to an interim tailings disposal system following a landslide which destroyed the partially-built tailings dam in January of that year. The interim disposal scheme involved treating the tailings with hydrogen peroxide to lower the cyanide content prior to dumping the "fines and slimes" in the Ok Tedi River system. At that time the cost of the tailings dam and the unsuitability of the dam construction site were both used as arguments by the company to defer construction.

The sixth supplemental agreement of 28 February 1986 permitted Ok Teki Mining Limited to proceed with the mining of copper-rich ores and to postpone the construction of a permanent tailings dam until 1990. The interim tailings disposal scheme was to continue to operate despite the fact that the State had never set acceptable levels of suspended sediment. The State allowed the company to continue unrestricted sediment discharges until January 1990. After this date, the State was to set, on the basis of data collected by the company, acceptable levels for future discharges.

C. Environmental impact

[ I | A | B | C | D | E ]

The environmental effects of the mining operations at Ok Tedi result from increased sediment load and particulate copper concentrations associated both with ore residues and the overburdens. The discharges into the Ok Tedi and the Fly Rivers have been numerically modelled and predictions of the river bed aggradations for the life of the mine have been produced. Aggradations have resulted in local erosion of the channel banks and some traditional gardens (farms) in the OK Tedi area have been affected as a result of over-bank deposition of sediments. Near-bank tracts of vegetation in the lower Ok Tedi are affected because of the effects of sediment inundation on nearby flood plain terraces. Sandbanks have formed at various locations along the Ok Tedi River, partially blocking several tributary streams and causing inconvenience to the villagers in the area. Those effects are attributed to the landslide which occurred in the upper Ok Tedi catchment in 1989 that resulted in 160 million tons of material washing into the river. Bed aggradation in the lower Ok Tedi has now reached equilibrium along the affected reaches.

Increases in bed elevation in the Fly River are localized to areas immediately downstream of DAlbertis Junction, extending to the border area. Bed aggradation is not expected to occur in the middle or lower Fly or the estuary, although the material does deposit on the prograding front of the estuary. The total sediment load and suspended sediment concentration have increased in the Ok Tedi and Fly River systems. There has been a threefold increase in the total sediment load and a fourfold increase in the sediment concentrations to 450 parts per million in the middle Fly. Nevertheless, the increased sediment concentrations represent just 50 per cent of the natural sediment loading of the Strickland River and are within the ranges measured in other natural river systems in Papua New Guinea.

D. Policy directions and implementation

[ I | A | B | C | D | E ]

The current initiatives undertaken by Ok Tedi Mining Limited illustrate that the multinational company is at least trying to solve the problem of sedimentation and tailings along the Ok Tedi River. The State and its various institutions involved have either been bystanders to the whole exercise, or simply weak and unable to implement the various policies and Conventions signed by the Government of Papua New Guinea. The decision on the above waste management exercise was the result of the clear demands made by the people living along the Ok Tedi and the Fly Rivers when they instituted legal action against BHP, the major partner in the consortium, in a Melbourne court. The case clearly demonstrates the point that the Ok Tedi Mining Limited has to come up with an option for the mitigation of physical environmental impacts which are being experienced by the people along the river system.

The submission made by Ok Tedi Mining Limited takes into account the various Acts on environmental monitoring and mitigation, such as EPA which sets out the various environmental obligations. Ok Tedi Mining Limited has argued that the Ok Tedi agreement indicated the river system to be the Fly River and not the Ok Tedi River. The ad hoc committees which were set up to discuss the issue were ill-informed prior to making their decisions. Various issues related to land use and possible compensation demands by the people living along the Ok Tedi River have since come to light.

Ok Tedi Mining Limited will continue with mining operations in the area because of economic considerations. However, if the environmental concerns of the people are not given due attention there is the possibility that the people will disrupt the mining operations. Following the Melbourne litigation, the Green lobbyists have portrayed Ok Tedi Mining Limited in a very unfavourable light. The idea of the mitigation scheme would also clarify further that the company cares for the environment and is willing to undertake environmental mitigation. Ok Tedi Mining Limited still has some economically viable deposits around the Mount Fubilan prospect. In order to carry on with future exploitation of those deposits, adequate consideration needs to be given to resolving the current environmental problems.

E. Conclusion

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Papua New Guinea is blessed with environmental diversity. The national goals enshrined in the Constitution seek to protect the environment and natural resources through various institutions such as the Department of Environment and Conservation and other government line departments. The mission statements of the various government departments charged with environmental monitoring and enforcement are backed by various types of parliamentary legislation and Acts. However, in practice, it has been quite difficult to monitor and enforce the various Acts in the case of the minerals sector, which is the backbone of the economy. The mining companies have been forced to conduct their own monitoring with quarterly reports being submitted to the State at quarterly meetings. Although several international Conventions have been signed, their implementation has been difficult to achieve. This case study of the Ok Tedi waste management scheme demonstrates the role that the mining companies have undertaken to monitor their operations and mitigate adverse environmental impacts.

Source: Moaina, 1996.

Source: Moaina, 1996.

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