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In terms of its community policy, the MMJV is committed to benefiting the communities in which we operate through sustainable socio-economic programmes, mining and business skills development, ethical behaviour and safety, health and environmental management.

Community relations activities across the MMJV are provided by two community relations teams – at Wafi (including regional exploration) and at Hidden Valley, with support and guidance provided by the Manager: Government and Community Projects, PNG Central Services.

The MMJV’s social investment priorities for FY09 were health, education, capacity-building and business development, and this approach will continue through FY10.

At the executive level of government, the operations hosted a luncheon for the National Executive Council Summit in Lae which included national government ministers, provincial governors, members of parliament, departmental heads and senior government officials. Guests were briefed on the activities of the MMJV including an update on the commissioning at the Hidden Valley mine, advanced exploration activity at Wafi and widespread exploration activity within the Morobe Province. The MMJV called for a partnership approach in dealing with some of the infrastructure issues that need to be addressed and expressed confidence in the current processes of government.

Establishment of a royalty payment process for Hidden Valley has been in accordance with the MOA between the operation and various levels of government and community beneficiaries. A high level of interaction with government has taken place to establish payment processes, relevant trusts and community distribution processes.

At the local level government level lands officers and liaison officers engage with government in communications with communities particularly to assist in dispute resolution and verification of compensation claims.

Community liaison takes place through a number of venues ranging from formal meetings with landowner executives, village liaison officers and meetings with community members. We maintain an active programme of meeting with people in their villages. Social development officers engage communities in health, women and youth activities. Partnerships have been developed with Business against HIV & AIDS (BAHA), Digicel Foundation (infrastructure for education) and Rotary (anti–malaria and supply of school books and medical equipment).

Wafi landowner business development planning is focussed on capacity-building and training of landowner executives in business structure and organisation, office management and administration, book-keeping, personnel management, business protocols, financial management, operations and banking.

Compensation and land

Compensation is paid for loss of economic trees and plants, land use and excavated land in accordance with the PNG’s Valuer General published rates. Damage is recorded and verified by the landowner, government officers, and two MMJV personnel in accordance with our compensation procedures. Where a long-term use for land is identified, occupation fees calculated at rates set by the PNG Valuer General are paid. Occupation fees can also apply for helipads and environmental stations.

Our objective for compensation is to ensure compensation payments legally due are paid accurately, transparently and promptly in accordance with compensation procedures to the rightful beneficiaries and to ensure a new Wafi compensation agreement follows on the resolution of land ownership.

Community liaison

The main community liaison activity at greenfield exploration sites is arranging with the landowners for access to land for exploration purposes and the payment of compensation. This involves facilitating the settlement of land disputes through involvement of government. As part of their community engagement activities, community relations personnel also assist in the recruitment of casual labour from the community for camp and exploration work.

In the case of Wafi, community liaison involves maintaining a formal relationship with landowner leaders, village leaders, day-to-day village meetings, dealing with community issues and complaints, on-going land disputes and claims, access road issues, and dealing with peripheral communities.

Specific initiatives include a plan to undertake social mapping over the likely Wafi project footprint area and for a forum of senior government officers to map out ways to address Wafi landownership.

Our aims are to: maintain and develop open and honest relationships with all stakeholders, including communities and their leaders; implement an effective two way communication plan; ensure appropriate response to any concerns, complaints, issues raised by the community; and support the social mapping and resolution of landownership projects.

Wafi social development

At Wafi, social development activities are currently confined to the Wafi footprint area in which a high expectation of mining development has built up over many years. Wafi was downsized in early 2009 and its status now is that of an advanced exploration project. To maintain harmonious community relations in this highly-prospective region, social development activities will continue with emphasis placed on maintaining and completing existing obligations where applicable, and continuing self-help, small-scale activities.

Health

The MMJV in conjunction with government maintains a clinic at Wafi where over 75% of the people treated are community members. Services provided include consultations, immunisations, child birth and medivacs. Community awareness is provided on a regular basis and focuses on HIV, TB and malaria prevention. The MMJV is actively involved in programmes to reduce malaria and recently assisted in support of a Rotary against Malaria campaign through distribution of mosquito nets at a cost of some K17 000 (R54 000).

Clinic staff also work with the community affairs department to provide health extension work to nearby communities. This includes medical patrols being conducted on a regular basis to assist with treatment, awareness, family planning, nutrition, sanitation education and immunisation. The MMJV medical support to the community in Wafi was provided at a cost of some K50 324 (excludes wages) (R160 000).

Medivacs from Wafi and associated remote communities are carried out by the MMJV using helicopters or road transport (if accessible). In 2009, 24 medivacs using helicopters and 36 by road took place for members of the community. Helicopter costs for this service amounted to K83 012 (R265 000).

Education

The MMJV provides school fee assistance to communities within the Wafi and Hidden Valley footprint areas in accordance with our education policy. MMJV’s objective is to improve the level of education in the Wafi and Hidden Valley project areas and to increase the availability of local people for employment, working in co-operation with government to ensure local schools are appropriately supported with staff and education supplies. This includes the maintenance of the existing education programme and encouraging government support for local schools. The MMJV also assists with the adult literacy programme in direct partnership with Adventist Development Relief Agency.

Water supplies

The MMJV recognises that a quality water supply will improve the health and wellbeing of communities. The MMJV’s objective is to improve village water supplies for communities in the Wafi, Hidden Valley and other affected areas in co-operation and alignment with government programmes. The MMJV is undertaking the installation of rainwater collection systems and sealed community water tanks using the MMJV’s maintenance team’s resources.

NKW Holdings Limited (NKW)

NKW is a landowners’ business company (supported by the MMJV) which has been operating for two years for the benefit of the three landholder groups, namely, Nauti Investment Limited (NIL), Kuembu Investment Limited (KIL) and Winima Investment Limited (WIL).

The MMJV has issued seven major contracts to NKW, generating K5 million per month or K60 million per year for the landowner groups. These were in the following areas: freight (bulk fuel and general haulage); plant and equipment hire (HBS); civil works (HVC); catering (NCS); casual labour hire; transport (employee transport); and security (Koima HVJV).

The cash flow from NKW is intended to provide seed capital to encourage individual landowners to start small businesses. Most of these smaller sub-contracts will only become available some time after commercial production has been achieved and operations have stabilised. However, the MMJV issued three sub-contracts in 2008, with another five issued in 2009. The mine has therefore met the requirements of the MoA, and will continue to offer business development opportunities to landowners as the mine enters its production phase, opportunities become available and business development training progresses.

Government officials have indicated that NKW is one of the most significant landowner businesses established in PNG during the construction phase of any mining project.

Benefit share process

Under the terms of the MoA there is a provision for the landowners and the Morobe Provincial Government to acquire a 5% stake in the ownership of the mine on a commercial basis.

It was recognised by the MMJV that the landowners and the government would find it difficult to access finance to purchase an equity interest in the project. Therefore, Hidden Valley proposed converting this 5% equity entitlement into an economic equivalent royalty on behalf of the landowners. This benefit share mechanism will run over the life of the project at no input cost to the landowners, payable based on the value of gold and silver produced by the mine, into a set of agreed trust funds. This approach will ensure that the landowner community does not incur the substantial debt needed to purchase an equity stake and will not be required to make contributions to future capital and exploration expenditure as and when required. It also allows them to immediately start participating in project benefits once production starts.

The agreed objective of the benefit share programme is to assist in developing community skills, capacity and infrastructure so that landowners and local communities participate in economic benefits during operations and enjoy self-sustaining social infrastructure benefits following mine closure.

Other community projects		Details	Beneficiaries
Company housing estate	Lae	Using a PNG fund to invest in building a housing estate that is leased back to the MMJV.	Local business for construction.
Female life skills training in the community	Wau, Bulolo, Wafi and Lae	Assisted PNG Chamber of Mines and Petroleum in facilitating life skills training for women in the mine-impacted communities in Lae.	Empowered 20 women from Hidden Valley, Wafi-Golpu landowner communities.
HIV & AIDS awareness	Wau, Bulolo, Wafi and Lae	Promoting HIV programmes available through government agencies to employees and the surrounding communities.	All mining communities without access to government HIV & AIDS management programmes and services.
MMJV school infrastructure project	Morobe Province	Supporting education facilities in those areas affected by  mining and assist in re-invigorating government programmes, upgrading education facilities to a standard that allows schools to develop and educate their communities.	All village schools in the communities surrounding the MMJV to be upgraded to ensure effective education of their children.