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Pacific Ecologist

Plea for justice for Fiji's mining communities

Wretched conditions have persisted for Fiji's impoverished mine workers since the industry began under British rule 70 years ago. The following article is an abridged version of a speech by Labour SENATOR DR 'ATU EMBERSON-BAIN moving a motion to establish a Senate Committee to look into the long-standing problems of the Fiji mining industry.

The mining industry has been running for close to 70 years in Fiji. It has had a chequered history. There have been many fatalities; hundreds of injuries; all kinds of health problems; and polluted or dried up domestic water supplies. The subsistence fishery has been contaminated; and the industry has been generally opposed to the idea of an effective and independent union.

There have been several government enquiries into the mining industry. They have focused mostly on economic and industrial issues relating to the country's principal mine at Vatukoula. The reports contain valuable information and insights into the impact of gold mining in this country, at different times. They draw attention to the various environmental, social and labour problems associated with Vatukoula, and provide helpful economic data and analysis of the Emperor group operations. The most recent enquiry was conducted in 1995.

Australia dominates Fiji's mining sector

The mining sector has been dominated by the operations of a single group of expatriate Australian companies, Emperor Gold Mines Ltd, at Vatukoula. Its management and shareholding have at various times included non-Australian players, notably South African and New Zealand. There have been changing configurations in the company structure as well as a partnership at one time with the much larger and well-known Australian company Western Mining.

Mt Kasi is the only other operating gold mine, a lower grade mine with a less consistent history. It operated for a number of years during the 1930s and 1940s, and then off and on since independence. It could roll into operation again later this year, this time under the helm of the Burdekin Pacific Ltd, a company based in Perth. Burdekin expects operations at Mt Kasi to be "highly profitable at the current gold price with relatively low operating costs."

For close to 20 years now, Namosi has been the focus of exploration and development activities over its massive low-grade copper deposit. Placer Pacific, the developer of the Porgera and Missima mines in Papua New Guinea, has driven this work. The Namosi mine has been described as one of the biggest in the world, geologically similar but even larger than the huge Panguna copper mine, which was closed down by landowners in an insurrection on the island of Bougainville in 1989.

Profitability of Fiji mining

The fortunes of EGM and its partners have fluctuated, due to factors like the gold price and rising costs of production, but the Vatukoula ore bodies have included very high-grade reserves. In fact, the rich deposits of the early Loloma and Dolphin mines were a cause for celebration, as was the Nasomo mine much later.

EGM has mined around 6.5 million ounces of gold since the 1930s and reaped handsome returns. However, its corporate structure combined with what are euphemistically called tax-efficient accounting practices, has helped to disguise the true picture of its profitability.

Mine Labour

Underground mining is probably the toughest form of paid employment there is. It carries inherent and high-level risks. As a former Inspector of Mines recently noted in a government memorandum, it takes a special type of individual to work in an environment that is pitch dark, dusty, wet, noisy, dangerous and very hot. Vatukoula is also described as one of the harshest mining working environments in the world.

In the years before the Second World War, hundreds of young Fijian men were plucked out of their villages and away from their traditional customs and lifestyle, and thrown into an austere and alienating industrial environment. They came from all of Fiji's 14 provinces to raise money for their communities, and to help pay the provincial tax levy imposed by the colonial government. They were paid just 2/- a day for work on the surface and 2/6 underground, in addition to basic rations and housing.

Low wages & worker poverty

Today, contrary to the general rule elsewhere, mining in Fiji is a low-wage industry. For much of our post-independence history in fact, average mine wages have lagged significantly behind those in other sectors like construction, transport and service sectors. Elsewhere in the world, mining is usually a highly paid occupation because of the special skills, risks and health and safety hazards.

Today, Vatukoula's most experienced and highest paid miners do not earn much more than FID$15,000, if that. The majority earn much less. A decade ago, earnings for an experienced underground contract miner at the Mt Isa Mine in Queensland were AUD$65,000. A top paid miner at Vatukoula would be lucky to earn one-quarter of this.

Low incomes have produced a high incidence of worker debts, in the form of salary advances, credit advanced at the company supermarket, or loans from private moneylenders. Private loans are needed not for luxuries but for basic day-to-day needs like school fees, food and family obligations. Ultimately, the Vatukoula community remains very poor despite the fact that it has been the backbone of growth and foreign exchange earnings for the sector.

The Vatukoula laager

The mining town is usually a fairly unique type of community, isolated and artificially built around the industry. The origins of the Vatukoula township lay in the company's realisation that it was economically more prudent to have a permanent rather than a migrant workforce. Although this brought some benefits for workers such as schools and family housing, there has been a price to pay in the disempowerment and dependence associated with a company-controlled town.

At Vatukoula, a colour bar defined the job and wage system, the allocation of housing, and access to recreation. Fijians who formed the bulk of the mine workforce were at the bottom of the pile in every respect.

Degrading housing

Poor housing has been a source of complaint and a strike issue for workers at Vatukoula since as far back as 1947. Today housing continues to carry the scars of discrimination typical of the colonial past. Although it is now allocated according to occupational or income status, rather than ethnicity or race, the result is much the same. Most low-earning Fijian workers still live in separate settlements whose dilapidated houses were mostly built 60 -70 years ago, in the 1930s and 1940s, and of the poorest standard.

Kitchens consist largely of outdoor lean-tos. Substandard showering and toilet facilities are organised in grim communal blocks, shared by three to four families, some distance from individual houses. The women in particular face problems visiting the toilets at night, especially when they are pregnant, when it is raining, or when their children are sick. The Narau barracks, built in the 1930s to house single men, has in recent years packed whole families into single rooms approximately 18 feet by 12 feet.

Health problems

Not surprisingly, the Vatukoula community is extremely unhealthy. Poor health standards are linked to high poverty levels and unhealthy living and working conditions, including water and atmospheric pollution. Health issues include respiratory/chest problems, diarrhoeal diseases, sinus problems, skin complaints, and deafness. Services are very basic, and despite repeated requests, the company has never built a hospital.

Both underground and surface mill (especially roaster) workers have long suffered a range of respiratory problems like asthma, shortness of breath, respiratory tract infections, and nose and throat infections. These have been linked, by medical opinion, to poisonous industrial gases, particularly sulphur dioxide, pumped out into the atmosphere every day by the roaster; nitrous oxide and other gases underground; and rock dusts underground and in the mill.

Water and atmospheric pollution

Government inspections and reports have periodically confirmed water and atmospheric pollution at Vatukoula. Cyanide traces have been found in fish and water declared unfit for human consumption. The 1981 ESCAP report confirmed the existence of significant environmental hazards at Vatukoula, and recommended that Emperor's lease should not be renewed in 1983 unless the company prepared a satisfactory programme for monitoring the environmental impact.

A major environmental audit in 1994 for EGM confirmed higher than safe levels of mercury and cadmium in water samples taken from the Nasivi River. It also agreed that the non-chlorination of the drinking water was probably the main reason behind the prevalence of gastro-intestinal disease in the community.

Mine waste harms fisheries

A few years ago, the people of Wailevu, on whose land the Mt Kasi Mine is lodged, felt the full brunt of toxic industrial discharges into their river system. The pollution forced the closure of the mine. At Namosi, Placer's preliminary Environmental Impact Assessment admitted that mine waste seeping into the local rivers would be likely to harm important subsistence and income earning fisheries, including the fresh water kai harvested far downstream by women for their families.

Another potential hazard from mining at Namosi could result from the proposed method of tailings disposal off the south coast of Viti Levu. If this occurs, there is a strong likelihood of harm being done to marine life, even if the dumping is done at deep levels. The settlement of tailings on the ocean floor will smother or choke deep-sea snapper. This tailings disposal method has already caused this problem at the Missima Mine in PNG.

Deaths and serious accidents

Vatukoula also has a poor track record of serious accidents, with at least 18 fatalities since 1986. Any cost benefit assessment of mining for a developing country like Fiji must take into account the toll on human life and the environment on which human life depends. We must set the highest possible safety standards and be vigilant in monitoring them.

Priority should be given to listening to the most important stakeholders, the mineworkers and their families, on occupational health and safety issues. At Vatukoula, many of today's workers have been labouring deep in the underground mines, or in the mill, for 20-30 years. They know just about every nook and cranny of the mines and understand fully the personal risks they take every day. They also know the full extent of sickness in the mining community - the respiratory illnesses, asthma and chronic bronchitis resulting from mine dust and gases; the skin diseases and diarrhea linked to the polluted water; and the deafness from dynamite blasting.

Inadequate mining regulations

Regulations governing mining operations are woefully inadequate. The Mining Act has remained pretty much unchanged since the mid-1960s despite many government-commissioned reports recommending proper environmental standards, pollution control, and other improvements to legislation.

One of the controversial aspects of the mining sector's regulatory framework is the exclusion of the industry from the orbit of the Occupational Health and Safety Act. Another is the discretionary powers vested in the Minister for Mineral Resources under the Mining Act. The Vatukoula Tax Agreement exemplifies the dangers of these powers, and how they can be misused.

The Mining Act has been under review for more than eight years. Why are we still waiting for an amendment Bill to come before Parliament when the work was completed about three years ago? Disturbingly, it appears that the Mines Department has been told to take its time with the review, and to aim for 2005 or so, by which time a new tax agreement will have been negotiated by EGM. This has serious implications. If a new special tax agreement is concluded with the EGM first, the company will escape the more stringent measures that may find their way into the new Mining Act.

More transparency, accountability needed

It is imperative that we improve the regulations governing the mining industry without further delay. Most importantly, our regulatory regime, including any tax agreements negotiated with foreign companies, should be reviewed and endorsed by Parliament. The review should involve consultations with the local community, as in Papua New Guinea. The power to make such important decisions should not be in the hands of an individual Minister or Cabinet. We need more transparent discussion, and Ministers accountable to Parliament, or there will be more back room deals struck between unscrupulous or ill informed, ill-advised Ministers and private mining companies.

For all new mining projects in Papua New Guinea, the PNG Mining Act requires three-party consultation and contractual agreement between mining companies, local communities, and government on the nature of operations, compensation, and royalties. The terms of the PNG tax agreement are published and accessible, and an Act of Parliament is needed for an agreement, ruling out secrecy. This gives less room for backroom deals.

Land and royalties

A long overlooked aspect of our mining industry is the land used for mining, and the system of royalty payments and compensation for environmental damage. I began researching and writing about this in the early 1980s, and the Labour Party took up the issue during the 1987 elections.1 A full investigation into the compensation system was scheduled for 1987, following the election of the Labour-led Government, but the coup put a stop to it.

In a nutshell, the interests of indigenous resource owners have been compromised from the earliest days of mining. Although colonial 'land' policy was at least theoretically based on the principle of inalienability and paramountcy of Fijian interests, colonial 'mining' policy, by contrast, explicitly threatened indigenous land rights from the 1930s.

Dispossession of indigenous resource owners

Under the 1908 Mining Ordinance, Fijian landowners had the right to compensation (royalties) from the exploitation of their mineral wealth. However, in 1934, as prospects for a gold industry proved positive, these provisions were repealed and a new Mining Ordinance was introduced. One of its main aims was to dispossess Fijian resource owners of their claim over mineral rich land. Mt. Kasi landowners were the main targets, being principal owners of a 2,000-acre area with proven mineral wealth. The CSR also held claim to a part of this area at the time.

After 1934, both royalty and subsurface rent (which were fees for mining leases) were paid into general revenue. Interestingly, in its draft form, the 1934 Mining Ordinance gave landowners 25% share of royalty revenue. This was hotly debated within the British Government, and by the time the bill was in its final form, the anti-royalty lobby had won the day. Indigenous landowners lost their right to any compensation for the exploitation of their mineral wealth.

Back door tactics

In Fiji, the colonial authorities knew they could not get away with tampering with the native lands legislation. They anticipated strong opposition and that they would have to pay compensation. So they sneaked in the back door, bringing in fresh mining legislation instead. This enabled mining land to be absorbed as Crown land, with no compensation going to landowners, and, as predicted, provoking no opposition.

The removal of landowner rights over mineral rich land was achieved by another device: the introduction of a distinction between surface and subterranean tenure. This enabled the state to claim ownership over land beneath the surface, and reduced the property rights of Fijian landowners to the surface. The distinction was an invention of the British Government designed to secure its claim over mineral wealth found in colonies like Fiji and Ghana (then the Gold Coast) where land rights had already been vested in the traditional owners.

Under customary land tenure, there was, and is, no such distinction between surface and subterranean land. Just as land rights do not end where the land meets the sea (but extend through qoliqoli - customary fishing grounds), so too they are not confined to a certain depth of the soil. But back in the 1930s, the cultural definition of land ownership was pushed aside for economic and political expediency, and all precious metals and minerals, including gold, became the property of the Crown.

This early history of the mining industry truly captures the ugly face of imperial conquest - the opportunism and the greed. Fijian resource owners could not protect their interests largely because they did not know what was really going on. Even when they tried to find out, they were not told the facts. The consequences of these dubious tactics have been far reaching. In financial terms, they have meant that landowners with mineral-rich land have been deprived of any form of income from its exploitation, apart from the usual surface rent. This still continues despite the fact that section 186 of the Constitution on customary laws and rights provides for a more equitable arrangement.

The land issue is just one of the many features of our outdated mining law that urgently need reform. We must ensure that this is done comprehensively and honestly, and that there are no more incidences of legislation being sneaked in the back door.

Struggle of the Nasomo people

Not all the problems inflicted on landowners by the mining industry took place during the colonial period. Nor is this a colonial legacy over which we have had no control, or that we could not have reversed. In fact, it is arguable that more damage has been done during the 30-odd years SINCE independence. The sad case of the Nasomo people is a case in point. They lost control over around 1000 acres of their land when a 21-year special mining lease was granted to EGM and Western Mining in 1983 without their approval and despite their strong objections. This land included a bulubulu (burial ground), a water catchment area, streams and farming land.

The Nasomo people were given only a 17-month guarantee that their water supplies would be protected, despite the fact that the mining lease over their land was for 21 years. They wanted a guarantee for a continued and uncontaminated water supply; compensation for damage to fishing reserves and crops; and protection against the toxic roaster fumes. Their pleas fell on deaf ears.

For the last 20 years, the Nasomo landowners have been embroiled in a legal struggle to regain control over their land and acquire a fair share of the revenue derived from mining. They have argued that both the mining companies and the state have breached the existing mining and land laws; that there have been acts of trespass, unlawful dispossession and appropriation, physical danger and environmental damage.

A judgement on this case last year awarded some compensation to the landowners. However, as a FID$1 million pay out, it falls well short of the FID$10 million claimed, and lawyers fees have eaten up about 25% of this money.

EGM's power and influence

EGM has wielded significant influence over successive governments. From the earliest days, the companies knew what they wanted, and how to go about getting it. Their tactics ranged from promises to tantrums. They wooed and they threatened. And there was always the same trump card to play. Whenever government did not succumb without a fuss, it would threaten to lay off its workforce and close down the mine. This threat, verbal or unspoken, always worked.

EGM has always recognised the importance of good public relations. Unlike the mineworkers, it has had the resources to counter any bad publicity, to promote its own message, and to opt for lengthy court battles when it suited. It has been astute in using the chiefly system to its advantage, especially when extra workers were needed, or a strike had to be put down. The mineworkers' unions have been no match for the company. It has always been a David and Goliath battle, although in this case unfortunately, Goliath has usually been the victor.

Over the years, the combined stick and carrot approach became EGM's trademark. After independence, New Zealand Manager Jeffrey Reid continued the tradition, making no secret of his strong anti-union views. He also moved from the shallow to the deep end of Fiji politics, by helping to bring down Dr. Timoci Bavadra's2 Labour-led Government in 1987. He did so because for the first time the company faced the prospects of a government that was going to stand up for the indigenous mineworkers, and the Nasomo landowners. It was not going to be bullied or bought.

Economic and Tax Issues

The power of the EGM group is probably best illustrated in the financial assistance and tax regime it has secured from the state and taxpayers. Fiji has been stripped of millions of dollars in development revenue due to an excessive and distorted tax and concessions regime benefiting this single expatriate group of companies. Financial assistance began during the colonial period and continued after independence. The group has enjoyed exemptions or reductions in income tax; waivers of export tax and royalty; million dollar grants; subsidies; and soft or interest free loans.

The Emperor group has made substantial profits but paid woefully inadequate income tax. In the first 16 years of independence (1970-86), the turnover in gold exports (excluding revenue from silver and thus conservative) came to around FID$200 million. Total tax payments amounted to only about FID$1 million, representing a negligible proportion (some 0.5%) of the market value of Vatukoula's mineral wealth.

Secret Vatukoula Tax Agreement

In 1983, the government approved 21-year mining leases and a special prospecting license for EGM and its Australian partner Western Mining. The icing on the cake was the VTA, a secret tax agreement that was not submitted for parliamentary scrutiny, nor even gazetted. Three Commonwealth economists have described it as "a generous and expensive subsidy probably far greater than necessary to induce investment in relatively high-grade deposits." It is regarded as unparalleled when compared with mining tax regimes in other countries, with the exception of Australia up until 1990.

Apart from the 7-year tax holidays on new mines, the VTA applied a royalty formula of 2.5% on net profit. This is quite out of line with the formula prescribed by the Mining Act, namely 5% of the value of production.

The principle of linking royalty to the value of extracted minerals is in my view a fair one, and this is what the Mining Act has laid down. Gold, silver, copper or other minerals are finite, non-renewable resources. You cannot "replant" them like mahogany or other valuable hardwoods. Once they are dug out, and processed, they are gone. In PNG, a production-based royalty is paid to landowners and the provincial government.

The special VTA royalty formula has been at great cost to the country and the landowners. Taking a 14-year period during the 1980s and 1990s, the country lost around FID$45 million in royalty revenue. Some years, returns were pathetically low, and even paid up to two years in arrears. In 1984 and 1985, for example, the group paid just FID$584 and $80 respectively. The $564 for 1984 was not paid until 1986. The $80 levy for 1985 also took two years to come in. In 1990, when EGM received nearly $77 million from gold sales, it paid nothing at all in royalty.

A Senate Select Committee would do Fiji great service if it gave serious attention to the matter of royalty compensation and tax levies in the mining industry. The VTA has set a dangerous precedent, and other mining investors are hopeful of securing a similar deal. Moreover, as the life of the VTA and EGM's 21-year mining leases draw to a close, the company may be hoping to breathe more life into them. The government faces a real challenge to stand firm. It also faces a test of its own integrity. It has the chance to do the right thing by this country, and the landowners.

Problems getting justice in court

The problems of Vatukoula's indigenous workforce have been eclipsed by an industrial strike now 11 years old. These workers feel so passionately about their grievances that they still have a picket line after all this time. I don't know whether this has happened anywhere else in the world. Their plight continues to be ignored, their cries unheard.

The 1995 arbitration enquiry set up to look into the strike made many recommendations. These have unfortunately come to nothing due to a legal challenge by EGM. The matter has been in court now for nearly 10 years. I have a special interest in the enquiry as I appeared as a witness.

In many ways, the arbitration was typical of how business has always been done at Vatukoula, and why it has been so hard for the community to get justice. There has never been money to hire lawyers who will match the accomplished legal high flyers engaged by EGM. Many times in the past, the workers had to represent themselves, and they were out of their depth. The cards were always stacked against them and many an industrial battle was lost.

In 1995, as witness after witness was produced by the union, the pattern was always the same. A shy and nervous man or woman would take the stand to answer questions, and to offer information. Always cooperative, never obstructive. But fearful perhaps lest the truth should shine through too strongly from the testimonies of these simple, honest people, the company lawyer shouted and screamed, rebuked and denigrated. The intimidation and the shame were something I will never forget. "Do you speak English? Tell me, do you speak English?"

Company censorship

I have had my own experience of such heavy-handed tactics. In 1994, the company tried to stop the publication of my book by Cambridge University Press,3 as it was about to go to print. Last year, during the Human Rights Film Festival, company lawyer Sahu Khan forced a local cinema to stop the screening of a documentary I made 10 years ago, highlighting the plight of the mineworkers and the 1991 strike.

The need for Senate investigation

The 21-year old mining leases being held by EGM and the infamous Vatukoula Tax Agreement are drawing to a close, and are likely to be renegotiated. There are moves to recommence mining at Mt Kasi. Recent media reports have detailed some expected new mining investments in the country.

Evidence pointing to the adverse effects of mining activities in Fiji has been around for a long time, highlighted by the recurring accident fatalities at Vatukoula; the huge loss of revenue caused by distorted mining tax regimes; the harmful impact of environmental pollution on community health and livelihoods; and diverse worker grievances.

These problems are only the tip of the iceberg, and remain largely unresolved. A Senate committee should investigate the mining industry. Every villager, mineworker, resource owner, or other stakeholder should feel assured that if they come forward to offer information or a personal perspective, they will be treated with respect, dignity and fairness.

Mining policy should not be based simply on economic or financial considerations, or the foreign exchange to be earned from exporting gold. If ever there was an industry that has touched the lives and livelihoods of ordinary people to such an extent and in such drastic ways, this is it. We owe it to those who have given their lives to this industry and who have laboured away in the bowels of the earth, not simply to reduce this industry to the dollars and cents it generates.

There is no simple solution or single answer to the problems of Fiji's mining industry, but remedies are likely to be found in better legislation; tougher corporate standards; more stringent environmental, health and safety regulations; a more equitable mining taxation system; greater protection of landowner interests; and improved employment conditions. There is a need to break free from the shackles of a company-controlled town.

We need to ensure that government is more responsive to the plight of the marginalized and powerless in our community. It is our duty to help forge development polices that are more just, sustainable and people-centred. This is not only in the interests of today's generation, it is also in the interests of generations to come.

[Postscript: The motion for a Senate investigation into the Fiji mining industry was defeated. An article in the next issue of Pacific Ecologist will discuss the reasons for this. ]

Article abridged from a speech to the Fiji Senate by Dr. 'Atu Emberson-Bain on 20/3/03 for a Motion to establish an ad hoc Senate Select Committee to look into the mining industry Senator Emberson-Bain was appointed to the Fiji Senate by the Labour Party in 1999 and held prisoner in the armed coup against the elected government in May 2000. Emberson-Bain is author of many publications, including Labour and Gold in Fiji, Sustainable Development or Malignant Growth? Perspectives of Pacific island Women; Labouring under the Law and of video's Caught in the Crossfire, and In the Name of Growth, reviewed in issue 3 of Pacific Ecologist.


[1] see speeches by Bavadra, Prime Minister, Statesman, Man of the People: Selection of speeches and writings 1985-1989, edited by 'Atu Bain & Tupeni Baba, Sunrise Press, Nadi, Fiji, 1990

[2] The late Dr. Bavadra served time as a doctor in Vatukoula. He had first hand knowledge of the problems faced by the mining community.

[3] Labour and Gold in Fiji by 'Atu Emberson-Bain Cambridge University Press, first published 1994 228x152 mm 270 pp., tables, maps, photographic essay ISBN 0 521 36372 1 hardback Paper back edition published 2002 - ISBN 0 521 52321

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