IISES International Academic Conference, London

DO THE INDIGENOUS PEOPLES OF PAPUA NEW GUINEA BENEFIT FROM MINING?

LONDARI YAMARAK, KEVIN PARTON

Abstract:

Mining in PNG has had a controversial past with many negative social, political, environmental and health impacts. Our approach is to acknowledge these problems and move on to focus directly on some measurable effects on economic wellbeing of the Indigenous population. This was achieved by using a sustainable livelihood framework with mining-poverty-reduction linkages to assess how livelihoods have been impacted by mining operations. We applied four mining-poverty-reduction linkages: inside capital of households (measured by televisions, VCR/ DVD players, refrigerators, freezers, and cars), human capital (measured by years of schooling), security (measured by food eaten in the last 30 days, square meals in 12 months, and income satisfaction), and empowerment (measured by village participation to help and information volunteering). In addition, we measured overall poverty reduction, the fifth component of the mining-poverty-reduction model, according to position on the rich-pool ladder. The question reads: “please imagine a 9-step ladder where the bottom, the first step, stands for the poorest people, and on the highest step, the ninth, stand the rich. On which step are you today?” It is called the Economic Ladder Question. It does not presume that income is the relevant variable for defining who is poor and who is not but leaves that up to the respondent. At the same time, by using the words poor and rich, the question focuses on a broader concept of economic welfare than income. It is a subjective living standard measure. In our analysis we compared four types of communities: those in the Ok Tedi region close to mining operations, those in the Ok Tedi region distant from mining, those in the Porgera region close to mining operations and those in the Porgera region distant from mining. A well-known confounding problem of this type of analysis is that there are no observations prior to the arrival of mining, so how do we measure the impact of mining? If you simply compared current data from mining households and non-mining households, it would not be possible to claim that the differences between them are entirely due to mining. The approach is to use a technique called matching, whereby similar households from different regions are first paired with each other. Then, the differences observed can be diagnosed effectively. We briefly introduce the method of propensity score matching and emphasise the way in which it overcomes the biases of ordinary least squares (OLS) regression and dummy variable regression. The results show that residents of mining villages have received some small improvements in their wellbeing (more at Ok Tedi than Porgera). Two important questions flow from this work: Is the small improvement worth the disruption that has taken place? Are there ways to improve things so that new mining ventures can deliver more substantial improvements in wellbeing for Indigenous people, perhaps with less disruption?

Keywords: Livelihoods, Mining, Poverty, Indigenous, Papua New Guinea