RESEARCH AND PRACTICE
IN HUMAN RESOURCE MANAGEMENT

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Kanaparo, P. (2010). Employment and Retrenchment Issues in the Porgera Gold Mine, Papua New Guinea: A Strategic Approach to Leave Behind a Better Porgera, Research and Practice in Human Resource Management, 18(1), 96-106.

Employment and Retrenchment Issues in the Porgera Gold Mine, Papua New Guinea: A Strategic Approach to Leave Behind a Better Porgera

Peter Kanaparo

Abstract

The issue of retrenchment is a topic of considerable relevance for the Papua New Guinea (PNG) mining, petroleum and gas industries. The unique environments in which Porgera Joint Venture (PJV) and other similar operations operate are likely to confront these industries with particular dilemmas that will require a range of investments to mitigate the problems associated with retrenchment and employment. This paper discusses retrenchment and employment in the PNG mining industry using the specific case study of PJV. The paper deals with the issue of employment and retrenchment of local workforces in the PNG context, which presents a serious challenge for the resources industry and the achievement of sustainable development objectives. The issue of future retrenchment of the workforce as a result of mine closure is an obvious challenge for both PJV and the Porgeran community at large, who have now come to rely upon both the employment opportunities presented through the mining. The paper also discusses downsizing, strategic practices and holistic approaches of retrenchment and employment, and in doing so the paper highlights issues that have been overlooked in both academic and applied studies from global and local perspectives in the PNG mining sector. The latter sections articulate the relevance of the information provided by the case study in the wider context of retrenchment, and the conclusion promotes a perspective that a great deal more investment will be required by all stakeholders to respond to the challenges of managing retrenchments and mine closure.

Introduction

A major challenge for PNG mining companies is how to effectively formulate, implement, plan and administer a workable retrenchment programme that is consistent with sustainable development objectives. Developing strategies to address the formidable problem for mining companies in PNG, and in particular for PJV, which is a contributor to the PNG mining, petroleum, oil and gas industries has become a priority. For far too long, retrenchment issues in the PNG mines have been neglected, even as landowner associations, parliamentarians, leaders and practitioners in many forums have attempted discussions on this topic. The question of implementing a strategic retrenchment programme in the PNG mines is now very important and a valid focus of PNG leaders, practitioners, academics and other researchers to formulate a workable strategy in accordance with the 2050 Millennium Goals developed by the government. The dimensions of retrenchment are manifold, and some are canvassed from a PNG perspective, especially PJV’s strategic retrenchment programme contributing towards ‘leaving a better future’.

PJV is one of the largest gold mines in the Pacific Islands. It is an integral member of the Porgera community and is committed to playing an active and constructive role as a member of the mining site to leave Porgera a better place before operations cease. The mine, therefore, shares the economic, social and political aspirations of its employees, landowners and other neighbours. Retrenchment and other related problems raised are not just specific to PJV, but are likely to be experienced by other large PNG gold mines in the foreseeable future. This paper critically examines the role that PJV is playing in these retrenchment and employment programmes. The key question addressed is: what are the prospects for PJV to play a leading role and contribute to the retrenchment issues to best serve the people of Porgera, Enga and PNG as a whole.

This paper explores a range of contemporary retrenchment and employment issues essential for developing strategic plans. In doing so, it provides a valuable insight into the complex retrenchment challenges that confront PJV and other mining companies. The available evidence on the nature and extent of retrenchment and employment is considered. In addition, the origins of changing public perceptions about retrenchment and employment issues in PJV are revealed, drawing on observation, administrative records, company reports and interviews with interested parties. Finally, the paper draws attention to the investments that have been undertaken by PJV, and indicates how an integrative and participative approach to retrenchment can provide the basis for more effective management practices.

Brief History of the Porgera Gold Mine

PNG attained self rule from Australia on 16 September 1975. The country is endowed with rich natural resources, but the rugged terrain and the high cost of developing infrastructure have hampered exploitation of mineral resources. Agriculture provides a subsistence livelihood for about 85 per cent of the population. Mineral deposits, including oil, copper, and gold account for 74.98 per cent of value of export earnings in 2008 (Kanaparo 2008, PNG Mineral Resource Authority 2008). The important industries of the country include copra crushing, palm oil processing, plywood production, wood chip production, mining of gold, silver, copper, crude oil production, construction and tourism. The products that the country exports are gold, copper ore, crude oil, timber, palm oil, coffee, cocoa and marine resource. Gold alone accounted for 12.13 per cent of value of total exports of the country in 2008. Thus, mining and exporting of gold is an important economic activity of Papua New Guinea (Imbun 2002, Kanaparo 2008).

The country is endowed with gold mines. There are six mines under operation at present and two more are under construction. The current operating mines include: Porgera, Tolukuma, Lihir, Hidden Valley, Kainatu and Ok Tedi. Porgera gold mine is the biggest gold mine at present, in terms of production among these six mines. Porgera gold mine is in the Enga province, one of the 20 provinces of Papua New Guinea.

The Porgera gold mine is situated in rugged, mountainous terrain at 2500 metres elevation from sea level on the floor of the Porgera valley, which rises to 3850 metres at the rim. The annual rainfall is approximately 3.7 metres and daily temperatures range from 10°C to 25°C. The mine is approximately 200 km west of Mount Hagen the capital of Western Highlands Province by road, and 680 km from Lae, the capital of Morobe Province, which is the sea port of entry for most of the mine’s supplies. The mine’s electricity is supplied via a transmission line from a gas fired power station at Hides in the Southern Highlands Province. Neutralised mine tailings are discharged into the Porgera River, which flows into the Lagaip River, and then the Strickland River before becoming the Fly River and entering the Gulf of Papua. Therefore, the mine’s influence extends across numerous provinces of PNG (Ipara 1994, Kanaparo 2008).

The Porgeran society and culture known as the Ipili language speaking group, as in many other highland societies, are both an adaptation to the environment within which they evolved over many generations and an evolving set of activities governed by the Ipili world view of life (Talyaga 1984, Burton 1991). Before the mining operations began in 1989, Porgera station was only a small out station with an administrative office and several trade stores. The people were involved mainly in subsistence farming and small scale alluvial mining (Gibbs 1975).

The discovery of gold at the Porgera valley marked the culmination of more than 60 years of exploration in PNG by Australian prospectors. Looking for fresh fields as the Australian gold rush ended, miners first prospected in Northern Queensland and later in southeast Papua. They found payable gold on Sudest Island in Milne Bay in 1888. The existence of gold in the Porgera valley was first documented in March 1938 during the John Black and Jim Taylor exploratory expedition. No action was taken until 1948 when Taylor returned and small scale alluvial mining began. Serious exploration and drilling began in the mid 1970s (Biersack 1990).

The Mining Development Contract between the PNG government and the then Placer Dome Incorporation (PDI) was signed on 12 May 1989, and a Special Mining Lease was granted. Construction of Stage One of the project commenced immediately after this signing (Biersack 1995). PDI formed a joint venture with other companies and formed PJV. There have been changes in the composition of partners of the joint venture over the life of the mine, and the major partners of the joint venture as at 31 December 2002 include PDI with 75 per cent, followed by Oil Search Limited with 20 per cent, and Mineral Resources Enga Limited with five per cent.

There have also been changes in the composition of partners of the joint venture and management. In early 2006, Barrick Gold Corporation acquired PDI in a US$10.4 billion takeover thereby, acquiring its interest in Porgera, in which Placer had increased its own holding from 50 per cent during 2002 following its take over of Aurion Gold Ltd. Barrick Gold Corporation, the world’s largest gold mining company, is the majority shareholder in the PJV and serves as the operator. Emperor Gold Mines holds a minority stake of 20 per cent, which it announced in April 2007 that it sold to Barrick. This has given Barrick almost complete ownership (95 per cent) of the operation. The remaining five per cent is owned by Mineral Resource Enga Limited. The major partners of the new joint venture as at February 2008 include Barrick Gold Corporation with 95 per cent followed by five per cent with Mineral Resources Enga with a small per cent as reported (Mining-technology.com 2009). The PJV started its production immediately after signing of the Mining Development Contract. The production of gold by PJV during the period 1990 to 2008 is reported in Table 1. It is observed from the data in Table 1 that the decline in gold production started just after a few years of its operation, and it is more significant from the year 1995 though the decline started from 1992. The quantity of production in 2008 is less than half of that produced in 1992.

According to the PJV Project Information (2002) and PNG Mineral Resource (2008), the shipment value increased by 63.72 per cent between 1992 and 2002. This is due to the increase in the gold price.

However, the share value of gold exports in the total exports of PNG declined from 26.43 per cent in 1992 to 12.13 per cent in 2002. This result is attributed to the growth rate of total exports of PNG (567 per cent), which is higher than that of gold exports (157 per cent) during the period.

Table 1 shows the production and exporting of gold by PJV between 1990 and 2008. It is also revealed in Table 1 that in the early stages of the production of gold has increased dramatically and in the early 2000s it dropped, but for the 2008 quantity of gold production there was substantial growth, but by the mid 1990s production levels were considerably less while monetary values firmed. In summary, the gold exports in value increased over the period due to increase in the gold price, the production of gold declined substantially during the period 1992 to 2002. This decline is mostly due to the exhaustion of ore in the Porgera gold mine. This trend is likely to influence the size of employment in the mine.

Table 1
Production and export of gold by PJV between 1990 and 2008
Year Quantity of gold
production
(in ounces)
Gold exports
(shipment value – kina)
PNG total exports
(kina millions)
Percentage of PJV
gold exports to total
exports of PNG
1990 265,890 91,011,247 1,122 8.11
1991 1,216,101 424,564,536 1,391 30.52
1992 1,485,077 492,361,251 1,863 26.43
1993 1,156,670 410,526,969 2,527 16.23
1994 1,032,768 405,042,681 2,662 15.21
1995 848,870 417,366,379 3,400 12.26
1996 854,822 441,548,735 3,314 13.32
1997 712,693 335,956,895 3,052 11.01
1998 726,806 448,268,441 3,688 12.14
1999 754,754 515,615,076 4,985 10.34
2000 910,434 701,247,142 5,586 12.55
2001 760,622 699,368,416 6,085 11.49
2002 641,811 772,645,118 6,367 12.13
2005 845,000 416,356,377 3,379 12.25
2007 600,000
2008 632,542

Note: Sources: PJV Project Information, 31 December 2002 and PNG Mineral Resource Authority, 2008.

Table 2 presents the category wise and total number of employees in PJV from 1990 to 2009. The content of Table 2 shows the total number of employees from Porgera, Enga PNG national, expatriates, years increase and total percentages. This continuous increase occurred in a work setting where the quantity of gold production decreases and retrenchment peaked. In spite of the lower levels of gold production after 1994 the Porgeran workforce increased. Engineers, researchers, academics, locals and PJV employees have advanced that the quantity of gold not extracted is the pull factor of this increase in employment levels, which is information for PJV human resource managers and other parties to formulate and implement good policies to minimise retrenchment problems, and foster better practices in the workplace.

Table 2
Category-wise and total number of employees in PJV during 1990–2002, 2004 and 2009
Year Porgerans Engans
(less Porgerans)
PNG nationals
(less Engans)
Expateriates Total Nationals total (%)
1990 384 228 275 261 1, 148 77.26
1991 637 245 343 403 1, 628 75.25
1992 481 294 402 410 1, 587 74.17
1993 583 332 463 392 1, 770 77.85
1994 653 314 589 322 1, 878 82.85
1995 756 278 683 335 2, 052 83.67
1996 805 254 707 302 2, 068 85.40
1997 703 202 645 257 1, 807 85.78
1998 875 187 487 264 1, 813 85.43
1999 991 188 488 259 1, 926 86.55
2000 1, 046 182 496 248 1, 972 87.42
2001 1, 171 86 499 211 1, 967 89.27
2002 1, 263 79 515 224 2, 081 89.20
2003
2004 1, 424 625 188 2, 237 91.36
2009 1, 288 1, 013 161 2, 462 95.79

Note: PJV Project Information as on 31 December 2002, June 2004 and May 2009.

The number of employees from Porgera has continued to increase since 1990, except in 1997. This is despite the decline in the production in the mine, as well as a decline in the total number of employees in the mine between 1997 and 2001. The number of employees of Engan origins had receded over the period as Porgerans took the vacant positions, reflecting the PJV policy that Porgerans should be given priority over other Engans.

The two presented Tables reveal the levels of production and employment for PJV. This relationship might have been purposely designed to satisfy the Porgerans. Thus, the increase in employment of Porgerans at the time of decline in the production is a set back to the financial position of PJV. In addition, PJV contributes money during the periods 1990 to 2002 to the landowners in the form of a royalty. These royalties are substantial: The contributors were Porgera Development Authority (K5.45 million), Enga Provincial Government (K61 million), Children Trust (K10.9 million), Porgera Landowners Association (K10 million), and Young Adults (K6.72 million) (PJV Project Information 2002).

Plans for Mine Closure and Downsizing of Employment

The life of the mine is estimated to be between 20 and 30 years (Richard & Banks 2002). However, Barrick recently indicated that the mine’s life span might be extended to another 15 to 20 years depending on the new explorations taking place (Post Courier 21 2008). Currently, there are a number of geological exploration sites, where the geologists are discovering more gold and the plans for mine closure is not steady. Therefore, PJV’s operational lifespan is cloudier, but the need for properly designed retrenchment programmes remains.

A closure consultation document was completed at the end of 2002 involving all departments of PJV and its joint venture partners. The vision articulated in this policy is ‘leaving behind a better future’. The document does not specifically propose a closure plan, but provides information and a range of possibilities for closing the mine, in response to various complaints from landowner groups. It was proposed to develop a detailed plan incorporating the varying needs of different stakeholders based on wider consultations.

No single plan accommodates everybody’s wishes and a process to arrive at mutually acceptable solutions is required. PJV is aware of its own limitations in the field of social and economic development, and is also aware that achieving sustainable outcomes and leaving behind a better future is likely to dependent on the participation and contribution of relevant stakeholders.

The consultation document integrates sustainability into closure planning and aims, through communication and a consultative process, to build a plan that is likely to:

The closure plan of the mine mainly affects the local employees. The reduction in the production and other consequent operations will reduce the number of jobs, and thereby, result in retrenchment of employees (PJV Sustainable Report 2000). It is indicated in the PJV Project Information (2002) document that the process of reduction in the size of the workforce, starting in 2004, and will continue retrenching the local employees until the mine is completely closed. However, the interests of the expatriate and national staff are considered by PJV because they have the qualification and experience and are likely to go back to their own places and countries and get a job, or otherwise “… would be posted to other Barrick mines in PNG and other countries because of their job demand.” (p. 7).

Retrenchment

Retrenchment of employees refers to the planned reduction of a workforce by involuntary means. According to the legal perspective (PNG’s New Organic Law standpoint), retrenchment is interpreted as the termination of the services of a workperson by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action. What is not considered as retrenchment is voluntary retirement of the workman on reaching the age of superannuation. Employees are often considered simply as commodities that are either profiting or costing the company, and are, therefore, either a necessary expense or a financial liability. Not surprisingly, retrenchment can have a negative impact on those affected. This ranges from those affected feeling lost, uncertain about their futures and as well as experiencing low self esteem. This is not only true for employees facing retrenchment, but also affects those involved in retrenching. For those who have already reached or are approaching retirement age this might have a different impact on them as they might already be considering the idea of ceasing employment.

The factors influencing retrenchment may vary depending on the internal and external environment settings. Milton (1981) stressed that when an applicant is successful and is recruited and selected for the job the applicant is very happy to take up the new job. However, when the person is retrenched, he or she can be demotivated, culminating quite often in psychological and physical problems. This will probably also be experienced by many in the Porgeran labour force when the mine closes. The retrenchment exercises for the Porgera mine closure started in earnest during 2004, even if this was largely achieved by natural attrition, the number of employees will still be reduced in the few years. This is the very first concrete aspect of closure to have an impact on the local Porgeran community, far earlier than most other closure matters that are likely to become evident as the mining life comes to an end.

No formal retrenchment packages have been developed as yet for Porgerans and other employees. Existing award rules on retrenchment entitlements and applicable legislations on the New Organic Law (NOL) seem likely to be applied for proper closure and retrenchment plans for an effective mine closure. The National Parliament passed the NOL on Provincial levels in July 1995. The NOL decentralises significant powers down to Local Level Governments (LLG), and thus, provides the potential for a system of planning for the mine closure, which gives greater emphasis to local level decision making and human resource management, especially the local labour force which are likely to be reduced during the mine closure. Retrenchment packages, measures to assist retrenchees and other benefits should be planned before exercising the retrenchment programme.

One of the measures that will be needed to assist PJV and the employees with retrenchment is the ‘social plan’, which aims to avoid job losses and the impacts of employment decline. Where retrenchment is unavoidable, the social plan seeks to actively manage retrenchment to improve outcomes for individuals and the economy. This would include the assistance of the Department of Labour and Employment, Mining Department, Department of Industrial Relations and Environment and Forestry Department in providing services to assist in easing the process of retrenchment. For example, where a company is facing retrenching 1,000 workers or 30 per cent of the labour force within a period of one year, the employer would be required to notify the Department of Labour and Employment.

The Department of Labour and Employment would then assist by setting up a retrenchment response team competent in employment services, human resources development and unemployment insurance fund (UIF). Porgera Joint Venture has set up a committee which includes workers, other stakeholder and employer representatives, where they further discuss the type of services to be provided to the retrenchees. This includes providing the retrenchees with information on how to start their own businesses; how much additional services would cost and who would pay for them; the time, people and technical resources needed to deliver the services and how to inform retrenches about the potential to access a job advice centre.

This paper argues that the ‘job advice centre’ is one of the needed areas and suggests PJV consider opening one or two of these facilities in the mine site or Porgera station. The aim of this would be is to provide the retrenchees with information packs consisting of comprehensive information and support measures available to retrenchees such as UIF benefits, financial management, training and elsewhere job seeking skills.

Appraisal of the Employment Practices

The data presented in Table 2 reveals that management is increasing the number of Porgeran employees, knowing the quantity of ore and production levels have been on a declining trend since 1994. Updates from the human resource department in March 2002 and the Post Courier (2005) reveal that PJV has recruited and selected 1424 Porgerans as ‘award workers’ (only Porgerans and others who are married to and have traditional links with the Porgerans) and 625 as ‘national staff’ (other Papua New Guineans who secured employment through applying). This gives a grand total of both award and national workers of 2237. A key question arising from the research done with Professor Albert Mellam in 2003 and Dr Benedict Imbun in 2004.

What would be the skilled labour needs of the Porgera area as closure approaches and after it is occurred? (Mellam 2003: 7–9). Following this, can those PJV employees; especially the Porgeran workforces made redundant (progressively) as mining operations wind down, fill those needs? (Imbun 2004: 98)

The answer to the first question is inherently difficult and is based on the best estimates of a few individuals. A broad estimate that was made available in a mining conference in 2002 is that:

Concurrently, a full investigation of specifically what is likely to be covered by ‘trades assistants’ would indicate how many of the above positions could be potentially filled by former PJV employees. For instance, it seems doubtful that the staff positions in the accounting section be readily filled, as only eight or nine Porgerans are currently employed by PJV in this area and fewer still at senior levels of management.

A Comprehensive Package Strategy for Downsizing and Retrenchment

The downsizing of the mine is likely to have a dramatic impact, particularly for the employees from the Porgera region. Nearly 90 per cent (Taila 2008, Interview) of the respondents described their feelings regarding the closure of the mine as follows:

We should not be abandoned by PJV during the process of the Mine Closure as well as after the mine closure. PJV has dug the gold out from our ancestral land. And in addition, PJV has trained us to work in various fields or trades in the operation. Therefore, PJV should help us to find jobs elsewhere or create jobs for us before they leave … (Palma 2008, Interview).

PJV’s retrenchment and employment policies are likely to play a significant role in the success or failure of overall closure policy. Since major retrenchment exercises are planned to start within a short period of time, PJV understands that there is an urgent need to consider what policies they should adopt. Clearly, the roles of PJV’s Human Resource Department (HRD) in closure issues are significant and this department has the potential to take the lead on many aspects of this process. The comprehensive package of the retrenchment plan is likely to include:

A suggested course of action for PJV is to establish a working group reporting to the mine manager. The primary objective of this working team would be to facilitate a consensus with Porgera agencies, other PJV sections and some stakeholders to enable retrenched workers to participate in any social and economic projects that may be developed by these agencies. This outcome would enable them to work hand in hand to provide assistance to local contractors to plan the use of their assets to generate post mine revenues. An important activity of this group is likely to delineate a pathway for the ultimate formulation of policy in relation to all facets of retrenchment and further employment. By consulting with all stakeholders, like the Porgera Mine and Allied Workers Union, and Porgera-Paiyela Local Level Government during the policy formulation and implementation phases and then publicise that policy extensively amongst the workforce a more sustainable document is achievable.

Such a policy might include, but not be limited to, the possibility of making redundancy compensations available to non Porgerans, Engans and Huli workers in their district of origin. Training needs to be offered to the non Porgerans, Engans and Huli workers in their home districts. Some of the methods used in the South Deep CARE programme, such as the retrenched Porgera worker being able to nominate another family member to take his or her place for retraining, need to be considered. Retraining could be centred on the Porgera Vocational Centre rather than on the mine site (Hess 2001).

Relevance of the Present Skills

It is clear that quite a large number of Porgerans in PJV employment might not find the skills they have developed with the company of much value in the post PJV Porgeran economy. It seems probable that they might also be the ones most open to attempts to retrain for future economic opportunities because the lower Porgera valley is a fertile area where there is potential to fulfil PJV’s dreams of establishing a ‘secondary industry’ (coffee factory) (PJV Sustainable Report 2000). Any success in establishing post mine economic or livelihood alternatives for them might help to create a diffusion effect to others less involved in the cash economy, such as other Porgerans living in the lower Porgera valley. A positive aspect is that a considerable workforce has obtained modern skills and is trained in perceptive and knowledgeable work practices, communications and hygiene. However, punctuality is a dilemma for many Porgerans. Imbun (1999) argued that Porgerans ‘snail phase’ towards punctuality and snicks off any time has been vigorously improved because of various on-the-job and off-the-job training programmes. These people are assets now, wherever they go with their portable attitudes and skills.

PJV has to find alternative employment for the local employees who have been retrenched, mostly through arrangements with the other Barrick gold mines in PNG and other countries. This is so that the training provided by the company will not be a waste. An alternative strategy is that the company has to provide training in various skills that will probably be in demand either in employment or to support former employees to start up their own businesses. An employment policy that either placed ex PJV employees in industries and service sectors within a growing local, non mine economy or in jobs elsewhere in the country (or even outside it) can either provide a source of locally accrued cash or external sourced cash (via remittances). This can probably serve to partly retain, and possibly further enhance, the labour skills acquired during PJV’s operations. PJV can assist not only in helping local employees find further employment at the time of redundancy, but during the last years of the mine’s operations, prepare employees for such further employment.

Other mines such as the former Misima Mines Limited (MML) and Bougainville Copper Limited (BCL) have faced exactly the same kinds of problems that PJV is likely to experience. PJV should seek to draw on the lessons learnt at other Placer and Barrick operations such as South Deep in South Africa, Kainatu and Misima mines, as well as others such as the Rio Tinto PT Kelian mine in Indonesia (Temu 2003).

A Holistic Retrenchment Strategy

National Parliament passed the New Organic Law in July 1995 to guide PNG mining companies to effectively formulate, implement and evaluate policies on mine closure, such as further employment and retrenchment policies. Generally, this paper has argued that some of the policies in the mine might not comply with its documented policies due to locals’ intense pressure on the company to do things that the company promised to do during its usual operations. Almost every aspect of closure policy development and implementation involves the willing efforts of many parties other than PJV. Perhaps, it would be challenging and demanding to obtain such cooperation (Omundsen 2003). The preparation and implementation of a workable policy for retrenchment and further employment requires only the cooperation of PJV, the union and the workers themselves, with the National Government giving its assent to any agreement that might be determined. For this reason, PJV believes it is likely to be attainable rather more readily than other closure policy matters, and is strongly minded to put in place a world class programme.

Any retrenchment policy that might extend the value of wages received between now and when the mine closes has potential to provide a source of cash to the employees for local investment and capital accumulation. However, retrenchment should not be dealt with only at the end of employment; employees need forewarning in order for them to get ready for other, locally based work, or to apply to other companies. An example can include an agreed increase in superannuation contributions or other forms of contributions. According to Mr. Jonathan Paraiya, the chairperson of Ipili Investment and Porgera Development Authority, PJV’s National Employees Welfare Fund has been initiated, creating savings of 20 per cent of net income. The Porgeran and Engan labour force can, with proper inducements, place part of their redundancy pay outs into locally based investment trusts.

Vision for the Integrated Package

The broad principles underpinning PJV’s draft closure policy are:

Specific objectives include: optimising benefits, communication with stakeholders and providing capacity building. A carefully designed retrenchment and employment policy can match all these aims (Nita 2001). Placer Dome Inc has put considerable effort into this aspect of mine closure restructuring, as PJV is aware. The experiences of PDI in the Care Project in Southern Africa in particular, and the efforts of the Misima Mines Union in developing a joint venture partnership, are also relevant. The goal should be to formulate a successful retrenching and retraining programme that aligns with international best practice. For example, MMSD and PDI can work closely with the National Government’s draft mine closure policy and guidelines. However, ‘proper provision for the orderly retrenchment of the workforce from closing mines and retention of their skills for the benefit of the country’ (Independent State of PNG 2002) is a critical need.

Conclusion

Now is an appropriate time for PJV to formulate retrenchment and other human resource strategies in order to minimise the effects of mine closure on employees, particularly those from the Porgera region. Barrick Gold Corporation, PJV, Porgerans and other stakeholders need to develop an agreed approach to facilitate redeployment and retraining, rather than arguing for additional employment when the mine does not have the ability to take on more workers. If these issues are not addressed, Porgera might become another Bougainville where human resources been retrenched, made redundant and displaced—a great loss to the nation.

Papua New Guinea is endowed with mineral resources, and as such, mining is an important economic activity in the country. Most of the mines are likely to have similar experiences of closure of Porgera gold mine in one way or another. The strategies outlined in this paper provide guidance to the management and employees of Porgera gold mine and a basis for further research particularly, in the area of human resource management in PNG mines as well as in other countries. There is a great need for further work in this area in order to develop relevant and novel strategies to minimise the consequences of mine closure for all stakeholders particularly, local employees and, in doing so, provide the basis for a more sustainable economy.

Author

Peter Balone Kanaparo comes from Par village in the Enga Province, Papua New Guinea. He completed his primary education (Grs. 1-6) at Par Primary School from 1984-1989, and High School (Grs. 7-10) at Wabag Secondary from 1990-1993. 1994 and 1995, he stayed home and in 1996 he went to Saint Fidelis Seminary to study Priesthood. In 1997 he completed his studies and left the Seminary or Priesthood studies. And from 1998-2001 he completed his Bachelors Degree in Industrial and Organisational Psychology and in 2002 he did his Postgraduate Studies in Industrial and Organisational Psychology. In 2003, he started tutoring Business, Psychology and Human Resource Management courses at the University as a ‘temporary’ tutor. In 2005, he did his Honours in Political Science because in 2003 and 2004 he has published two different research papers in the field of politics. In addition, he has published in overseas and domestic refereed journals.

Email: peterk@upng.ac.pg

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