Sustainability of economic benefits given to impacted communities of the mining project in Western Province, Papua New Guinea: A Case Study of Ok Tedi Mine

Abstract

It is perceived by the mine impacted communities, and the respective stakeholders including key government officials, that the economic benefits received from the compensation agreement, also known as the social license to operate scheme, has not made any significant positive impact on the local economy of the study area covering Mine villages, North Oktedi, Highway and Lower Oktedi mine trust regions of the North Fly District of Western Province in Papua New Guinea. This paper investigates the sustainability performance of the economic sector benefit and the mitigation strategy of the lack of mine downscaling and closure negative impact on the mine impacted communities of the study area. A stratified random sampling method was adopted for the collection of primary data from the representative sample of 170 population interviewed from the study area to examine the adequacy and sustainability of the economic benefits invested in the local economic development area using research questions and hypotheses. The descriptive and inferential statistical analysis technique were employed to measure the sustainability performances of the economic dependent variable indicators (rubber, vanilla, eaglewood and investment) against the independent variable (environmental compensation benefit package). The results concluded that the compensation benefit received and invested in the local economic development area for the four trust regions is asserted to be inadequate and unsustainable as a result of lack of stakeholders’ collaboration and project counterpart funding. This paper, therefore, recommends for adoption of stakeholder project counterpart funding agreement to collaborate with compensation benefit agreement to deliver sustainable local economic development programs for sustainability of the mine impact communities, the province and the country.