The Ok Tedi mine is a classic example in the study of ethics, sustainability and social responsibility, as both sides of the argument are presented in this case. BHP, the operator of the mine until 2002, did not build a suggested tailings dam to retain noxious sediment, resulting in massive pollution of the Fly River and the surrounding environment on which many local villagers depended for their livelihood. High concentrations of cyanide and acid rock drainage in the river killed many fish. Many trees along the river course also died. However, the company provided employment for many villagers, built infrastructure — including a hospital — and helped increase life expectancy and reduce the malaria and infant mortality rates.

BHP left the mine early in 2002, shifting the company’s 52 per cent stake to a trust fund for Papua New Guinea’s people. The PNG government took over ownership of about 30 per cent of the stake in the mine. Agreement was reached that the mine should be closed in 2010, although this was later extended to 2025, with the government seizing 100 per cent ownership in 2013. A class action by law firm Slater & Gordon in Melbourne, on behalf of 50 000 PNG villagers whose environment was severely damaged by the mining operations, was abandoned in early 2004.

Nevertheless, the mine proved very profitable, producing about 10 per cent of PNG’s gross domestic product (GDP) and contributing 20 per cent of its export income. Also, it is argued that life expectancy increased in the area near the mine from about 30 years to more than 50. Malaria decreased more than fourfold for children and from 35 per cent to less than 6 per cent for adults in the region near the mine. The infant mortality rate improved from 129 per 1000 live births to 15 per 1000 live births.

However, the environmental concerns were not fully addressed, other than continued dredging of the polluted Fly River and the planting of some new trees by local villagers. When the PNG government took full ownership of the mine in 2013 they also passed legislation that removed BHP’s immunity in relation to environmental claims.

QUESTION

Does BHP’s social responsibility programme of employment, building of a hospital and other infrastructure and health improvements let it off the hook for the damage it did to PNG’s environment?

Transcribed Image Text:

83 BHP's Ok Tedi mine is a classic example in the study of ethics, sustainability and social responsibility. As part of the project, BHP provided employment and health facilities for villagers. However, the company was also responsible for massive pollution of the Fly River and the surrounding environmentan ecosystem on which many villagers depend on for their livelihood.