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Case: Ok Tedi Copper Mine Perspective: Society

The development of the Ok Tedi Mine based in Papua New Guinea has lead to several issues and debates regarding its operations and their effects on both the environment and tribal societys surrounding the mine. This issue has an impact on all three sectors of the BS-P relationship and is outlined in the case The Ok Tedi Copper Mine. Through the perspective of the Society, an analysis has be completed based on how the establishment of the Ok Tedi Mining Company has affected the society in which it operates as well as the issues that have developed as a result of the mine. The ideological model of the tribal society based near the Ok Tedi and Fly River before the development of the mining company was that of the Keynesianism/welfarism model due to the societys traditional lifestyle revolving around the river in regards to their everyday needs. As stated in the case, There were few schools, no health care, and little infrastructure such as paved highways, public buildings, electricity, etc., Velasquez (2006). As a result, the child mortality rates were high while life expectancy remained short. This reinforced the need for government intervention in the economy due to the inadequate resources the tribes survived on. The development of the Ok Tedi Mine has created several issues which are outlined in the case. One issue is the loss of lifestyle within the tribal society due to the mine. The Ok Tedi Mining Company has changed the tribal lifestyle from a simple economy which relied on their traditional values, beliefs and way of life to that of a money flowing economy which has discarded their traditional clothing for Western-cultured attire. As a result of the shift in lifestyle values, the societys culture has changed to that of a Western dominated culture. This change has led to the tribal societys ideological model to shift to mixed market ideology in which a combination of liberalism and Keynesianism are evident. The tribal societies rely on the government and business to help them support and develop their economy by investing and providing infrastructure to the villages while also working independently by developing their villages themselves and changing their lifestyle from traditional to a more western developed economy. Thus, the social contract of the villages altered from one in which the society lived from a traditional lifestyle where the land provided for their needs to a contemporary society in which the government and the economy worked to create a modern economy where tradition was replaced with a more western lifestyle. The second key issue which affects the society is the functioning of the mine and its affect on the environment and the villages. As the case outlined, since the start of the mine in 1984, for almost two decades there has been a discharge of 200, 000 tons of waste rock and mine tailings daily into the Ok Tedi River which leads to the Fly River. These rivers are the same banks which the villagers really heavily upon for their daily resources. The continuous build up of this waste damages the ecology ad rainforest and riversides as well as the 120 villages residing near the river and its 50, 000 citizens who rely on the river for food and daily needs.

1 Group Assignment: Society Perspective Shibani Murthy

The sediment levels in the rivers increased by more than quadruple from their previous natural levels and in some places both the sediment and rock levels raised the river beds by up to six meters which increased the occurrences of floods and overflows. Also, over the years continuous raining and floods pushed the sediments to the grounds of the forests that surrounded the rivers. The waterlogged forest grounds lowered the oxygen concentration in the oil which in turn starved tree roots and vegetations leading to the dieback of the forest. The depositing of both mud and sediments into the gardens of the villages due to the flooding has also killed the crops which the villages rely on. The extorting of copper in the mines has also led to copper flowing into the rivers which has resulted in the decline of fish in the rivers by 90 percent; this has also led to the decline of many unique aquatic specimens in the river. Due to this issue, fishing in the river has decreased and a resource which the tribes had depended on has now disappeared. Furthermore, the study conducted to analyse the social and environmental aspects as well as the risks in 1996 found that the impact of the mine on the environment as well as the harm caused by the pollution was greater than originally indicated. The results showed that the closing of the mine would not stop the harm caused to the environment while also outlining that the closing of the mine would not prevent the killing of the neighbouring forests. The pollution of the rivers has caused some landowners residing near the rivers to raise awareness to the government in hopes of forming some course of action to stop the discharge of waste and sediment into the rivers. The legal battle has lead to little compensation being provided for their damage. However, the ethical dilemma faced by the society is their agreement with the government in the belief that the mine should continue to operate. Due to the society acting as both internal and external stakeholders to the business, they have disregarded the ecological ethics in relation to their social responsibility. As stakeholders to the business, they must consider how the actions of the business impact on the environment they live in. The society has not considered the legitimacy of the mine or its impact on the environment or even the problems the environment suffers as a result of the mine. This outlines the lack of societys ethical responsibilities which is emphasised by Peery (1995) as making decisions by considering the consequences of an action, by honouring the rights of others, by fulfilling duties and by avoiding harm to others. No action has been taken by the society during the two decades of the mine, this emphasises the notion that the society has not developed a social consciousness when considering the actions of the mine on the environment. Their main issue is the ongoing function of the mine and the benefits they gain from its operation. This is evident in the statement provided by one of the tribesman, If it [the water] is safe for people, then they should continue to dump tailings into the river. They will never fix this river it is already dead. They should give us money instead, Velasquez (2006).The society must consider the actions of the mine on the environment regardless of the benefits provided by the company. The final issue which affects the society is the closing of the mine once it has completed its full life cycle. By closing the mine, both economic and social risks will increase and this would negatively affect the communities that rely on the mine and its benefits. The villages depend on the mine for jobs in order to support their families with 3,000 employees working either directly or through second parties, while others provide either services or goods to the families of the miners. This makes the society a primary stakeholder in the business as well 2 Group Assignment: Society Perspective Shibani Murthy

as a public stakeholder. The mine has played an important role in acting as the main agent within the tribes by providing many services, such as educational and training programs, health schemes, providing infrastructure and developing local businesses. Therefore, the decision of the closing of the mine affects the society drastically due to the important role the mine plays in the social and economic responsibilities it has taken within the nation. As both primary and public stakeholders, through the relationship of employees and local communities, the closing of the mine affects the tribes due to their dependence on the mine for both their jobs and the benefits the company provides to the local communities. In relation to the Numerous Stakeholders Model, the villages and tribes are the main cause for the organisations wealth due to their direct relationship with the mine, so the mine must consider the needs of their major stakeholders when deciding the future of the mine, this means considering how the closing of the mine affects the society as a whole and not just as its stakeholder. The stakeholder identification of the society in regards to the mine is an important one due to the mine relying on the society as employees as well as the importance of the services they provide, and the society relying on the mine for both jobs and benefits. As a result, the society has a high level of stakeholder urgency and legitimacy due to the negative impact of the closing of the mine and its affect on the communities which rely on the mine for jobs and social benefits they are not able to provide for themselves. As emphasised by the modern theory of stakeholder management, every individual is valued as a stakeholder of the business, regardless of their relationship to the business.

3 Group Assignment: Society Perspective Shibani Murthy

Reference Freeman, R.E. (2005), Stakeholder theory of the modern corporation in Collins-Chobanian, S. (ed.) Ethical challenges to business as usual, Pearson Education, Upper Saddle River, New Jersey, pp. 258-269. Peery, N.s. Jr. (1995), Business, government & society: managing competitiveness, ethics and social issues, Pearson Prentice Hall, Upper Saddle River, New Jersey, pp. 255-275. Velasquez, M. (2006), The Ok Tedi Copper Mine in Business ethics: concepts and cases, 6th edn, Pearson, Prentice Hall, New Jersey, US, pp. 250-254. Woodward, D. (2005), Australia unsettled: the legacy of neo-Liberalism, Pearson Education Australia, Frenchs Forest, pp. 33-46.

4 Group Assignment: Society Perspective Shibani Murthy