OECD Guidelines


The OCED Guidelines for Multinational Enterprises [Guidelines] provide clear standards for the appropriate behaviour of multinationals from 34  OECD3 and 12  non-OCED countries4 (OCED Watch, 2014). Although Papua New Guinea is not a signatory to the Guidelines, they are applicable to the MMJV operations through Australia’s binding commitment to implement them, making the Guidelines applicable to Australian companies. This commitment would apply to Newcrest and also its Australian suppliers and funders including ANZ, Westpac and the NAB (Profundo, 2012).

In recognising that the primary governmental responsibility for mining in PNG clearly lies with the National, Provincial and Local level governments, Newcrest also has an obligation to meet the standards. Furthermore, although the Guidelines are perhaps more enforcable for an Australian than a South African company, both joint venture partners are responsible for the outcomes and shortcomings of the development and operation of the Hidden Valley mine.

While Australia emphasises the voluntary nature of the principles they still maintain “…Australian companies operating overseas are expected to act in accordance with the principles set out in the guidelines and to perform to – at a minimum- the standards they suggest” (AUSNCP, 2014).

They brief assessment below examines the impacts from the Hidden Valley operations against some of the individual standards in the Guidelines (2011). While not intended to be a complete assessment, a more detailed assessment would provide valuable information to improve performance and outcomes. Nor does the assessment indicate success or failure in meeting the remaining, unassessed criteria. Common themes in the assessment table are: a lack of consultation both geographically and over time; inadequate response to impact; indirect human rights impacts; lack of transparency; not learning from in-country experience; lack of FPIC; and poor initial project assessment.

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The assessment indicates that the Hidden Valley project and, by extension, any future operations in Morobe, by MMJV could be significantly improved through the adherence to and reporting against the OCED Guidelines for Multinational Enterprises. MMJV have the power to implement this immediately and should commit to and fund an independent assessment against the guidelines with the aim to inform and improve practice rather than prosecute. Such an assessment would not only assist the MMJV’s efforts to improve operations, but would also inform affected Communities about international standards leading to a more fair and balanced engagement.

Alternatively, if MMJV refuses to comply with and report to the Guidelines, then the Communities could seek assistance from external bodies to undertake their own assessment with the aim to negotiate improved outcomes, or, if necessary make a complaint to the Australian Contact Point. On a Provincial or even National scale, mandatory independent reporting to the Guidelines could be implemented for all large scale mines leading to improvements in practice and process for Government, companies, communities and the environment.

On a national scale this assessment does not mean that Hidden Valley is worse than its PNG contemporaries, but rather it identifies the extent to which it and other multinational projects need to improve to adhere to the intent and the specifics of the Guidelines within PNG.