Case Study
Restoring Social Licence to Operate amid global protest
The Problem:
The disposal of mine waste from the Ok Tedi Mine threatened the livelihoods of 95,000 Papua New Guinean villagers.
They took their story to the world with pictures of dead fish dumped at BHP's AGMs, and legal action in three jurisdictions.
The mine provided much needed tax income and jobs and benefits as the other side of the coin to the environmental impacts.
With renegotiation of its compensation agreements looming, the mine's CEO and board knew they needed to negotiate with the impact communities in a way that rebuilt trust and reduced the risk of continued mine stoppages and get out of the headlines and courts - to restore its Social License to Operate.
The Response
Pax Populus designed and project-managed a 1st Principles-based, fully independent (funded, facilitated, observed), stakeholder round-table process.
It was designed to overcome the distrust of villagers and other stakeholders, and to allow external critics to see that village communities were free from duress and able to negotiate in their own interests.
As a multi-party dialogue process, it had to manage conflicting and competing interests in a volatile social and political context, so drew on “mutual gains” processes including mediation and interest-based negotiation.
It deepened the standard Free Prior & Informed Consent model adopted by the World Bank.
The Outcome
A $400 Million agreement struck for sustainable development projects for all communities in the Fly River impact region.
Extensive, inclusive engagement process comprising 600 meetings, and hundreds of boat, canoe and walking visits to remote villages to consult with 95,000 people.
Completed within two years, breaking mining industry records for negotiating complex mine impact compensation.
Ok Tedi's mining operations were able to continue undisrupted.
The World Bank described out Informed Consensus process as “internationally groundbreaking”.
RMAP Working Paper: Renegotiating a PNG Compensation Agreement: Apply an Informed Consensus Approach.
World Bank Group Briefing Note: “We Want What the Ok Tedi Women Have!” Guidance from Papua New Guinea on Women’s Engagement in Mining Deals.
