Bougainville Copper down -5% on new PNG class action as ghosts haunt company

Talk about bad timing. Shares in thinly traded Bougainville Copper (ASX:BOC) are up +71% YTD as the company has been the beneficiary of strong copper momentum.

However, shares were down -5% in lunchtime trades on Thursday to 58cps as the company highlights it’s being taken to court in PNG as part of a class action against it in relation to the Panguna mine.

“Bougainville Copper Limited (BOC) has been served with notice that class action proceedings have been commenced against the company in PNG’s national court on behalf of Bougainville residents,” the company wrote in a very brief announcement released on Thursday.

The class action could be seen as a ghost from the past.

Before we continue, here’s some crucial context: Bougainville Copper is effectively a Rio Tinto (ASX:RIO) subsidiary. This is just the latest iteration of a legal attempt against Rio Tinto for its actions at Panguna in the 80s and 90s, which includes accusations of war crimes and environmental damage.

Bougainville residents have been going after Rio Tinto for years over Panguna, and the US court system has been the subject of multiple attempts to launch the proceedings. Rio Tinto, through Bougainville Copper, operated Panguna during the Bougainville Civil War in the late 80s to late 90s.

Ultimately, Rio Tinto (and thus BOC) – as well as the Australian government – have been accused of being complicit in war crimes. At the same time, claimants also claim the company destroyed natural ecosystems permanently.

To date, Bougainville residents have never been able to quite get to the point where serious compensation ever looked likely. But Australia was worried about the case at one point.

The Business & Human Rights Resource Centre provides an overview of an almost identical lawsuit lodged in September, 2000 – nearly a quarter of a decade ago.

By 2002, the Sydney Morning Herald was reporting the Australian Howard government was lobbying the US to get that class action in the US court system thrown out. (That article isn’t online anymore, and one has to use the Wayback Machine to find it.)

Ultimately, the 2000 claim was dismissed. Australian lawyers Slater and Gordon helped prepare the case, despite it being held in the Los Angeles US District Court.

A quarter of a century later, and the same carousel appears set to begin turning again.

“The action seeks compensation for claimed environmental and social harm associated with the Panguna mine which closed in 1989 due to militant activity,” BOC added to its announcement on Thursday.

BOC is now directing its legal team (and likely other resources) towards fully considering all matters introduced in the claim.

You can make an informed guess that the claims against BOC will be those lobbed at Rio Tinto by Bougainville residents in the past.

The 2000 lawsuit was two-pronged: first, on environmental grounds, it alleged 1 billion tonnes of waste and tailings were dumped into the Jaba and Kawerong rivers, destroying the integrity of those wilderness assets and further affecting an area some 4,000h in size.

Secondly – and this is where it gets interesting – claimants have previously accused Rio Tinto of facilitating war crimes, given that the mine was ultimately shut down by the 1988 – 1998 Bougainville Civil War.

Rebel troops in Bougainville told SMH reporters in 2002 that the Australian government had provided armed helicopters and weapons to PNG troops during the war years. In 2011, former PNG PM Michael Somare said RIo Tinto helped finance the actions of PNG troops at the same time.

What happens next remains to be seen – but clearly, the past isn’t ready to become the past.

BOC last traded at 58cps.

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