Nupela Masta? Local and Expatriate Labour in a Chinese-Run Nickel Mine in Papua New Guinea¹

1. “Nupela masta”: literally “new rulers”. The word “masta” was used to refer to the former white (variously German, British and Australian) colonial administrators of PNG.

Abstract

Studies of mining projects in Papua New Guinea, since the development of the Panguna copper mine in Bougainville during the 1960s, have contributed to our understanding of the politics of interactions between resource companies, host governments and landowners. The Ramu Nickel mine, situated in northern Papua New Guinea, is China’s largest investment in the Pacific to date at US$1.4 billion. The project is managed by a state-owned enterprise, China Metallurgical Corporation, and financed by China ExIm Bank. This venture presents an opportunity to understand Chinese resource investment in a comparative perspective. While many issues, such as conflict over land, internal migration, and the limited involvement of the Papua New Guinean state, are constant, one aspect specific to Chinese resource investment is the use (or non-use) of host country labour, and the high proportion of Chinese labour employed at the mine sites. This practice differs from the relatively limited, short-term use of expatriate labour common to Western mining projects in developing countries. The attitudes and experiences of local and Chinese workers and managers will be examined to determine what is new in this approach to resource extraction.

Keywords:

• China
• governance
• labour
• mining
• Papua New Guinea
• SOE

Acknowledgments

The author would like to acknowledge the invaluable support of Sinclair Dinnen, Sonja Litz, Paul D’Arcy, Sue Rider, Kate Barclay, Patrick Matbob, David Hegarty, Heather Goodall, Hans Hendrischke and Colin Filer, the intrepid efforts of student enumerators from Divine Word University, in particular Eva Wangihama, Schola Chapok and Emil Yambel, and the guidance of two anonymous reviewers. All errors are of my own making.

Notes

1. “Nupela masta”: literally “new rulers”. The word “masta” was used to refer to the former white (variously German, British and Australian) colonial administrators of PNG.

2. In some regions, hybrid forms are emerging. In New Caledonia, where the local population is insufficient to staff the numerous mine sites, laws have been passed to allow Chinese construction workers at the Koniambo nickel mine to be employed under different working conditions from local and (French) expatriate labour. Workers of a further 30 nationalities (including Korean, Indian, Indonesian and Filipino workers) also operate outside the country’s labour laws. Other mines in PNG have made extensive use of Asian (usually Filipino) labour during the construction phase. It is alleged that dual-track industrial conditions are also emerging in Australia, including on the Sino Iron project, where MCC is the lead contractor (Lucas, 2012).

3. For further details on the technical aspects of the project, see www.highlandspacific.com/pdf/Ramu_Nickel_Cobalt_Project.pdf, accessed 17 July 2011.

4. A Mining Development Contract was eventually signed between Highlands Pacific and PNG partners in 2000, resulting in the issuing of Special Mining Lease 8.

5. The EU’s most recent list of “critical raw materials” includes antimony, beryllium, cobalt, fluorspar, gallium, germanium, indium, magnesium, niobium, platinum-group metals, rare earths, tantalum and tungsten (Buijs and Sievers, 2011, p. 8).

6. For details on CDB’s involvement in Fiji, see Dornan, 2010.

7. In Afghanistan (Aynak Copper Mine, a $4 billion investment), Pakistan (Saindak Copper and Gold Mine; Duda Lead and Zinc Mine), Argentina (Sierra Grande Iron Mine), and Australia (lead contractor on the CITIC Pacific Sino Iron project).

8. A Human Rights Watch report notes similar problems with contractors at the Indian-owned Konkola Copper Mines in Zambia (HRW, 2011, pp. 67–68).

9. Author’s interview, Madang, November 2009.

10. Local level governments (LLGs) have the power to enact by-laws relating to labour and employment, while provincial governments have some discretion to enact laws on land and land development issues. More power rests with the central government, and the Mineral Resource Authority’s Chief Inspector of Mines, Mohan Singh, has applied significant pressure on the Ramu Nickel project to meet health and safety standards (Matbob, 2009).

11. Many Chinese workers were equally unimpressed with their salaries and working conditions. Existing employees were generally paid a 20 per cent loading on their base salaries, with some overtime. In contrast to other expatriate workers in the resource sector, who generally work two weeks on, one week off (in mining), or four weeks on four weeks off (in oil and gas), Chinese workers at Ramu Nickel are on a five months on, one month off roster (usually returning to China for their break). There are suggestions that this will improve when the project is running well.

12. At the time of writing, one PNG Kina was equivalent to 0.485 USD.

13. Author’s interview, November 2009.

14. Al Jazeera International, 9 October 2009.

15. Author’s interview, February 2010.

16. Other (smaller) enclaves have emerged at construction sites elsewhere in PNG, usually associated with infrastructure projects. The lifespan of these enclaves is much shorter, however.

17. Author’s interview, Apia, Samoa, December 2011.

18. Author’s interview, Madang, February 2010.

19. Author’s interview, Madang, October 2009.

20. Author’s interview, Madang, September 2009.

21. Author’s interview, Madang, February 2010.

22. Author’s interview, Madang, October 2009.

23. Author’s interview, Madang, November 2011.

24. Author’s interview, Madang, November 2009.