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"INTRODUCTION:  Industrial and Employment Relations in the Mining Industry"

By:  Benedict Y. Imbun - UPNG Press 2000.

| Existing literature on PNG mining | Overview of the general literature on industrial relations in PNGPluralism & exceptionalismPresentation of bookTable of contents |


Firstly, the introduction provides the reader with the aims of this book. Secondly, it includes a review of the existing literature on the PNG mining industry is given; and thirdly, an overview of the general development of industrial relations in this country is presented. Fourthly, an analysis of two important concepts and theoretical models is presented which has implications for this book. Finally, a discussion of the methodology used in this book is presented.

This book sets out to examine industrial relations in the PNG mining industry with special reference to the Porgera mine. It also uses empirical data from other mines namely, Bougainville, Ok Tedi and Misima. The book is based on my original empirical fieldwork carried out at the mines. The existing literature on industrial relations in the PNG's mining industry is sparse. No detailed or systematic studies exist. This study attempts to bridge this gap by examining the character and operation of labour relations, with a focus on Porgera mine in the context of the whole mining industry. The study aims to generate new findings which can be used to test existing theories and research questions about industrial relations in PNG and developing countries and to identify promising avenues for future research.

My own interest in this topic springs not only from having a scholarly interest in the PNG mining industry, but also from the vantage point of coming from the locality of the Porgera mine.  I have long observed local workers' attitudes and the alien arrangement of worker-employer relationships brought about by industrial development.  Notably one observation which is worth mentioning in the outset is how tribal miners perceive work.  To them work belongs to those who are their managers and not to the mining company.  Therefore their attitudes to and respect for their work reflects the on going inter-personal relationship they have with their managers.  There are peculiarities in tribal reactions to western industrial institutions and for a better appreciation of what goes at the workplace, one must make allowance for variable local situations.  In examining industrial relations in the PNG mining industry, in part influenced by the impact of technologically advanced industry on subsistence farming communities, I will rely on personal experience and background in a way which hopefully strengthens my book.

Existing Literature on the PNG Mining Industry

As mentioned, the literature on industrial relations in the PNG mining industry is very limited. Recent works are predominantly anthropological and sociological examinations of local people around mine sites going through the changes brought about by the mines. Nearly the entire literature is non-labour oriented. It consists mostly of social impact studies (Filer and Jackson, 1989) social and cultural change studies (Hyndman, 1987, 1990, 1991) and general economic and socio-political writings done on the aftermath of the Bougainville mine closure (Filer, 1990; Oliver, 1991; Quodling, 1991).

The scattered literature on labour consists of a range of articles and monographs which focus on the theme of development and which divide the growth of the PNG mining industry into three main stages (O' Fairchealliagh, 1982; Titon et al., 1986; Nelson, 1992; Filer, 1993). Each stage is marked by the development of a sudden upsurge of interest in the country's mineral prospects and a distinct phasing in the adoption of technical methods, economic interests, social and labour relations and political struggles in the development and exploitation of these prospects. In what Filer (1993) defines the three stages of PNG labour history, from 1878-1988, analysis of the mining industry was little more than a distant rumble in the minds of industrial relations scholars who came to concentrate heavily on the institutional transfer of industrial relations machinery from Australia to the then colony in the 1960s and mid-1970s (1993:17).

The historical accounts agree that the first of the three phases started when independent white alluvial miners and their temporary native 'boys' worked the diggings during the fruitless Laloki gold rush of 1878 (Gibney, 1972). The first major discovery of gold was at Edie Creek in the Wau and Bulolo valleys in 1926. The magnitude of this discovery prompted the Australian colonial administration to put in place new legal and financial institutions. These institutions facilitated significant access to much needed capital and high technology in the development of the Morobe goldfields and led to the development of an orderly framework for controlling the local population of miners (Parr, 1974; Nelson, 1976; Filer, 1993).

The hallmark of this period was the indentured system of labour whereby the independent miners with the assistance of the colonial state and the chiefs or 'bigmen' in the traditional social system recruited able labourers to work for them. The indentured system and the bonding of labour, often convict, was common in 18th and 19th century European colonies including Australia (Murray, 1980). The Australian colonial administration had inherited this system (with little modification) from the previous German and British occupation of the island in 1884. In this system the mine labourer (who was a native) was subject to criminal penalties if he 'deserted' his 'boss' or failed to work diligently. The colonial governor Hubert Murray at the time described the system as 'really rather like slavery' (Fitzpatrick, 1978:100). Unlike chattel slavery, the admission into employment was in theory voluntary.

The historical analysts (Parr, 1974; Nelson, 1976; Filer, 1993) also drew attention to other main aspects of the system in the shape of a package of measures that protected the 'native' from exploitation by the miner. The labourer worked and remained at the mine for at least eight months before he was sent home. The system was carefully policed by the Administration, which ensured the interests of both the employer and the safety, health, and general physical welfare of the labourer (Fitzpatrick, 1978:106). The relationship between the miner and labourer were generally characterised by a bland paternalism but the labourer's discontent with some aspects of his work or employer were met with withdrawal of his labour for a day or total disappearance (Newbury, 1975; Nelson, 1992).

In this quasi-work arrangement one of the significant influences was the employer's practice of holding over a part of an indentured labourer's wages until the end of his period of work. Jackson, writing in that era, justified retention of up to five sixths of a labourer's wage in this manner as being based on 'native custom'. In his words, 'The whole system of the protection of a native labourer's wages and purchases, rests not only on the moral obligation of the government to ensure the native fair treatment, but also on the principle that it is considered advantageous that the native labourer gets back to his village with as good a return as possible in the shape of trade goods and money for his period of indentured labour ' (Jackson, 1924:54).

In the late twenties the colonial mining economy underwent considerable change as the result of gold rush and the registration of New Guinea Goldfields Ltd (NGG) and Bulolo Gold Dredging Ltd (BDG). Both companies brought in significant capital and skilled manpower from Australia and Britain to develop the leases around the original discoveries at Edie Creek. The former established cyanide plants to process gold from both alluvial and underground mining operations. The latter established a large-scale dredging operation along the Bulolo River, where a total of eight dredges were deployed in the 1930s. This was the period which saw a sharp change from labour-intensive to capital-intensive enterprises. A spectacular achievement was the use of aircraft in exploiting the Bulolo and Wau dredging leases by the companies. The aircraft were used to transport bulk supplies of mining equipment around the various mine airstrips and bring in workers and goods from Australia and elsewhere as well as to export the gold. By 1939 the two companies provided 80 per cent of the territory's gold production and met the bulk of the industry's royalties and gold tax (Newbury, 1975:28). But large scale mining did not entirely supersede the alluvial independent gold miners. A significant number of single lease holders clung to their plots while other lease holders were absorbed into the large operations.

The historical analysts also agree that in the eight years preceding the Japanese invasion of January 1942 there was an average of between eight and ten thousand indentured native labourers and between a thousand and five hundred Europeans working in the Wau and Bulolo goldfields. As Nelson (1992) mentions, this manifested a tenfold increase over the numbers normally deployed in alluvial prospecting and mining in the entire colony during the earlier period which ended in the gold rush of 1926. The industry was not without industrial relations activity. There were racial clashes mainly between skilled white workers and native labourers over employment issues.

According to Filer (1993) and also synthesis of the literature indicate a second phase in the history of the PNG mining industry characterised by large scale capital intensive company mining which lasted from the late 1920s to the mid-1960s. The historical detail of this period varies according to individual accounts. The great technological impact in the industry is documented by Healy (1967), followed by Radford's (1972) account of the problems and achievements which the Europeans went through in the exploration phase in the same period. The colonial administration of the industry is well documented by O'Fairchealliagh (1989). But the only writing on labour relations which appears to do justice to this facet of the industry is Newbury's which explains the colour bar and labour conflicts in the industry from 1935-1941.

The hallmark of this period in the history of PNG native labour was that the bulk of the former pick and shovel boys had actually acquired semi-skilled work ranging from firing steam boilers, working winding gear, and driving lorries in the mines in Wau and Bulolo.

The shift up the occupational ladder for indentured labourers was the cause of racial and labour disputes amongst the overwhelmingly skilled European workers. Of the four strikes that were recorded in this period three of the principal trade disputes concerned NGG and the fourth the employees of BDG. The issues ranged from an increase in wage rates to increased recruitment of indentured New Guineans by the two companies, matters of concern to the expatriate mine workers' union. For the natives their work conditions were not an issue until the old system of indenture was abolished in 1948-50 (Newbury, 1975:28).

Because the natives had no collective organisation to bargain for them in issues affecting their welfare they continued to resort to a series of individual manifestations of protest. There are two plausible reasons as to why an early attempt was not made to incorporate them into the mainstream of labour relations. One was a widely held paranoia that the 'Rabaul effect' might strangle not only the whole mining industry but other economic sectors as well. The 'Rabaul effect' was mainly a concern shared by colonial administrators and planters. It resulted from the Rabaul strike of 1929 by native domestic servants. It was the first ever strike by an group of native workers and the speed and skill used by this group to carry out the strike surprised the Europeans. The white community's long held perception of natives as 'savages' was tarnished by this strike. The administrators continued to be anxious about the possibility of industrial strikes if legal rights were given to natives to form industrial organisations (Waiko, 1993). The second reason was the overriding concern of the colonial administration to isolate New Guinea from the 'disruptive' effects of social and economic change implicit in labour mobility and wage bargaining' (Newbury, 1975:38).

BDG ceased its operation in the mid-60s at the same time Conzinc Rio Tinto of Australia (CRA) began exploration of the significant copper deposit on the island of Bougainville. NGG kept its operation going on a small scale in Wau until 1991. It is only in the 'modern' era which in PNG did not begin until the 1960s, that the process which led to the documentation of the development began in a serious way. The few writings on labour aspects of the mines appeared to lean towards sociological analysis (Lawrence, 1964; Martin, 1969) and are really part of the literature of anthropology and political economy.

Filer (1993) and rest of the literature agree that the third phase in the development of the PNG mining industry came about with the discovery and development of the Bougainville copper deposit. Although there is agreement that this phase has come to an end as Filer (1993:23) notes, there is as yet no further agreement on the point at which it ended nor the characteristics of the phase which constitutes the 'modern period'. In general terms this is the period in which the formal legal enactments which ended the colonial administration also heralded the formal establishment of industrial relations machinery. In the early 1970s and 1980s the development of the giant Bougainville copper mine by CRA and the Ok Tedi gold and copper mine in the remote Western Province of PNG by Broken Hill Properties (BHP), both well established Australian companies, superseded the Wau-Bulolo complex. Both mines epitomised the model mines of the developing world by bringing state of the art technology and work practices under the stimulus of foreign trade and investment (Hyndman, 1987). The large-scale open cut techniques used by both mines brought novel forms of work and new complexities of management control to the PNG mines.

Anthropologists and political scientists have made some significant remarks on industrial relations in relation to the two mines. Ali and Mamak (1979) claimed that the Bougainville MineWorkers Union (BMWU) resulted from of a period of intensive industrial awareness created in the campaign by the government to get the largely non unionised workforce into unions. The BMWU became one of the largest unions in the country and was able to gain significant recognition from workers and the company. After seven years of registration the BMWU staged one of PNG's most militant strikes which developed out of patronising mine management's attitudes, wage differentials, and more generally, the alien nature of the mine within agricultural communities on the island (Good and Fitzpatrick, 1979:144; Quodling, 1991:39). Mine management paternalism as well as organisational problems haunted BMWU from its beginning (Ali and Mamak, 1979) and continued to do so (Peterson, 1991). But in the mid-1980s before the closure of the mine, BMWU was one of the very few labour organisations in the country which enjoyed any real industrial muscle2 .

Another major project, the Ok Tedi mine went through a turbulent period of political and environmental turmoil in the late 1970s and early to mid-1980s (Jackson, 1982, 1991; Pitz, 1984). In the industrial relations context national white-collar workers and blue-collar workers were represented by separate unions with the former having a third of the 1800 strong workforce while the latter claimed the rest. Gissua and Hess (1992) commented that the major industrial dispute at Ok Tedi in 1988 resulted from unresolved issues including housing, training, and localisation to changes in the shift system. They claimed that the strike resulted from the operational problems of the union and an acute absence of systematically trained industrial relations officers who could have avoided the initial wildcat strikes by the pre-emptive handling of workers' grievances. In addition the large scale destruction of properties by workers could not have happened if the disputants had easy and rapid access to industrial dispute settlement mechanisms, often a major hurdle in the operation of the industrial relations in PNG (Gissua and Hess, 1992:49-50). However, the authors were unable to suggest how these mechanisms are to be set up and kept functioning.

In Peterson's (1991) analysis of industrial relations in Ok Tedi he found that the same issues that triggered the 1988 strike still freshly surfaced in meetings with the unions. But he also found that other unique issues such as 'unequal' ethnic representation in the workforce and recruitment drives aimed at local land owning areas around the fringe of the mine impacted on the function of trade unions and also the entire industrial relations framework at Ok Tedi.

Since 1988 there have been changes in the technical, economic, labour and occupational structures of the industry which is the source of my study. As Filer (1993) mentions, the dramatic changes in the political context with the formation and maintenance of 'the national mineral policy' with implications for unionisation and labour are still manifesting themselves and cannot be ignored in a fieldwork based study.

In short, according to the occasional literature emanating from a number of disciplinary traditions, PNG mining history has been characterised by various stages since foreigners, with the assistance of natives, explored various areas for precious metals. From 1878 to the 1920s the natives had to labour while relying on the mercy of their 'masters'. This relationship was replaced for most of the period from the late twenties to the early early sixties by the indentured system which spelled out the obligation of the native assistants and the responsibilities of individual white miners and mining companies. But it was with the establishment of the Bougainville mine in the late sixties that formal employment relationships developed in the mining industry. The sixties and the seventies were the beginning of the 'modern' period for PNG industrial relations in which the country came to embrace the Australian system of collective bargaining and arbitration.

Overview of the General Literature on Industrial Relations in PNG

The general literature on industrial relations in PNG can be divided into several themes. First are those works which document the Australian colonial labour policy in the territory of Papua and New Guinea. These writers (Jackson, 1924; Timperley, 1947; Rowley, 1958; West, 1958a, 1958b and more recently Ward 1990) examined the various Australian labour policies in the territory. Most of them discussed in detail the indenture labour scheme and in particular the highlands labour scheme which was established in the 1950s to meet a particular suite of economic, political and social interests of the colonial power. Fitzpatrick (1978) and Hess (1983) respectively discussed the adverse impact the policies had on the natives who participated in these schemes. They argued that the policies were not simply paternalistic, as various commentators (West, 1958a, 1958b and others) have suggested, but were aimed quite consciously at laying the foundations of capitalism in Melanesia.

The second theme to be derived from the general literature on industrial relations in PNG concerns the viability of the newly introduced Australian style of industrial relations machinery to the colony (see chapter two). Most of the authors expressed reservations about the effectiveness of the machinery on the disorganised and indentured labour force in a largely tribal society. Isaac (1969) pointed out that the poor level of union development undermined the machinery's potential for dispute resolution and wage fixing. Rowley (1968) blamed the colonial background for not preparing a local workforce for organised industrial relations. Bailey (1970) and Patterson (1969) respectively discussed workers' lack of education and their 'misconceptions' about how unions should operate in the new system. In addition, Chapman (1965) doubted the ability of the union leadership to recruit members and to maintain a stable membership. Two works (Spaull, 1974; Hess, 1986) examined the handful of exceptional organisations which were able to develop both the membership and leadership prerequisites for effective operation within the system of compulsory conciliation and arbitration. One was the PNG Teachers' Association (PNGTA) which was registered in 1971 and managed to claim membership of a significant portion of teachers in the country. Spaull (1974:74) identified several factors for its success including the widespread and genuine desire by teachers to create an effective teachers' organisation and also expatriate teachers' commitment and dedication in doing 'most of the spadework' in creating a national organisation in which local teachers were openly encouraged to become leaders.

Another was the Central District Waterside Workers' Union (CDWWU) which certainly proved itself to be an exceptional industrial organisation. Hess (1986) mentioned that unlike many unions in PNG it did not bear the hallmarks of weaknesses but had the capacity to take up members' issues efficiently. Like PNGTA, CDWWU seemed to have several key factors which helped consolidate its industrial role. Hess (1986:45) identified three main factors: a strategic position in the economy, a nationalistic political environment and a strong and stable leadership which were responsible for shaping CDWWU as one of the few militant unions in the country. Unlike many other unions in the country, these two unions were exceptional in that they had competent leaders and a membership base which understood the function of unionism and fulfilled its commitments accordingly.

The third theme of the general literature on PNG industrial relations in 1980s onwards consists mainly in post-mortem exercises which explain the reasons behind the poor performance of the adopted industrial relations system. Hess (1982, 1983, 1986, 1989), Stevenson (1982) and Jimson (1993) mentioned the long legacy of an indentured system, and an unprecedented series of factors such as tribalism and subsistence farming combined and very limited modern economic enclave with very weak state institutions as some of the major reasons for the dismal performance of the union movement. This, in turn, adversely affected the effectiveness of the entire industrial relations machinery. The industrial relations system PNG inherited at independence from Australia was at its most successful at a bureaucratic level. It was largely a paper creation. But as a mechanism for expressing and resolving industrial relations grievances in the workplace it was frustrated by a lack of adequate union organisation (Hess, 1989:115).

In the 1990s two works documented the general development of industrial relations in PNG. Hess (1992) gave a historically definitive account of the emergence of various unions in the country, although the study only provided details of the few which seem to provide landmarks in the history of union development in PNG. The unions were mainly private sector organisations and were viewed in the general context of economic development in the country. Hess took the view that PNG's workers were an essential part of the nation's story and that their labour was basic to the achievement of economic progress. Additionally, Gissua (1993) looked at the operation of the industrial dispute settlement process in PNG since independence. He mainly examined contemporary development including some examples of disputes in which the formal system was operating.

Finally, supplementing the general industrial relations literature is a number of works which document labour market issues in PNG. Mainly written by labour economists, wages and unemployment are the two most significant issues in these writings. In relation to the wage issue, relevance and the ability of the country to sustain a high wage structure has for many years been the major debate (Brogan, 1980; Boas, 1982; Colclough and Daniel, 1982; Garnaut and Baxter, 1982; Ganguli, 1982; Goodman, Lepani and Morawetz, 1985:61; McGavin, 1986, 1991). In particular Colclough and Daniel (1982) and Garnaut and Baxter, 1983) made reference to the disadvantage of an indexed wages system. Boas (1982) and McGavin (1986, 1991:128) condemned the highly centralised and regulated wage system that was inherited after PNG's independence in 1975. All acknowledged the high wages and their centralised determination as being major constraints in the economy and maintained a consistent view of the need to adjust wages policy in PNG if the economy was to attain its full potential. As anticipated, the 'innovative' 1992 Minimum Wages Board (MWB) determination did just that by shifting away from the long cherished order of centralised wage fixation and introducing a productivity-based wage system aimed at increasing employment opportunities for the unemployed (MWB, 1992).

In relation to the employment issue, several writers (Gupta and Polume, 1984; Lodewijks, 1988; McGavin, 1991, 1995; Fairbain, 1993; UNDP/ILO, 1993) have commented on the country's alarming rate of unemployment in common with much of the Third World. Although there are no accurate statistics on unemployment in PNG, their observation is that the level is high and rising. Particularly, reference is made to the chronic youth unemployment which is contributed to by a lack of new job opportunities to balance the 50 000 youths leaving schools each year. One study (UNDP/ILO, 1993:45), in examining the problem, blames 'structural rigidities' (i.e. high minimum wages, undeveloped infrastructure and regulatory framework, and a lack of skilled labour) for hindering the development of small-scale enterprises and slowing growth with consequent law and order problems for the country. In general, the studies acknowledge the problems are inter-related and that tackling one set of constraints will not simply solve the unemployment problem. Therefore, they call for a holistic approach, with particular reference to government policy which should promote investment in all sectors of the economy as a priority.

The existing literature in general describes and analyses aspects of the PNG industrial relations and employment system. Yet work to date falls short of a complete, systemic picture. Many aspects of labour employment in PNG remain unclear. Much work is required before the body of knowledge on PNG employment relations approaches the level of the national literatures on employment in the developed world with their vast range of empirical data and numerous explanatory theories focused on specific issues such as trade union growth and decline, workplace bargaining and rule making. Research on employment and industrial relations in PNG, as is the case in most of the developing world, is still in a pre-systemic stage. The theoretical explanation of industrial relations in PNG is perhaps clearest in the context of general macro systemic theory about labour and the global industrialising process.

Pluralism and Exceptionalism

A concept in the theoretical literature of relevance to PNG's industrial relations system is pluralism. The pluralist approach to industrial relations recognises the settlement of conflict by collective negotiation as central to the relationship between employers and employees. According to Fox (1966) and later Clegg (1975) both of the Oxford School, within organisations there are a variety of groups with divergent interests, objectives and aspirations. Often these separate sectional groups compete with each other to achieve their own goals. Conflict is bound to arise as people enter the employment relationship with expectations that cannot be matched with scarce resources and as groups form with conflicting interests and values. In industrial relations the pluralist approach focuses on the existence of independent trade unions, and interprets them as part of an institutional framework operating through defined procedures. The pluralist model allows for a 'participation approach towards improving industrial relations practices, changing workforce attitudes and possibly significantly reordering the authority relations between the workforce and their managers and supervisors' (Cressey, 1985:117). There is an assumption industrial relations actors have that the existence of different interests can be negotiated within an agreed common framework of industrial democracy. Thus, important for the pluralist approach is the existence of industrial democracy and participation within institutionalised forms of industrial relations.

Pluralism is also a concept which focuses on the reconciliation of conflicting expectations and demands on limited resources, where there are no perfect answers capable of satisfying everyone involved. The competing groups in the pluralist society are diverse in nature and membership, expressing disagreements about matters of values and different ideas about what is best for society (Palmer, 1983). In the 'pluralist' form of industrial relations, issues of mutual interest to employees and employers are resolved through the process of collective bargaining. In the wider socio-political process, it is through the processes of compromise, concession, and accommodation, but not through authoritarian command, that solutions are reached. Pluralist theory does not describe or prescribe egalitarianism . Rather, it postulates that groups are led by an elite within each which, at the same time, reflects the opinions and demands of the mass membership in a rough form of democracy (Clegg, 1975:311).

The concept of pluralism also permits competition for power in both industrial relations and politics. Groups, whether trade unions or political parties, compete for power where no one group or combination of them obtains a dominant position, for it will always be matched by an opposing group or set of groups. Yet despite the competition, power seems to be 'distributed in some acceptable fashion among individuals, organised groups and the state' (Kerr and Seigal, 1955:3). Apart from the British 'Oxford School' much pluralist analysis illuminates interest group competition in politics and has been undertaken by American political science pluralists. Lindlom (1959) and Dahl (1967) criticised the unitarist and elitist theories and discussed the open access to political decision making in America. Few pluralist analysts find evidence to support this concept in the developing countries.

However, the pluralist model is not without its critics. Gahan lists several problems with pluralism including its failure to 'consider and account for the theoretical implications oscillating between analysis at the level of the firm and the level of society' (1990:63). Hyman (1975), another critic of pluralism, found that it unrealistically assumes that all parties involved have equal influence. He also pointed out an inherent contradiction in the assumption of the legitimacy of conflicting interests on the one hand, yet an assertion of an overall public interest on the other hand (Hyman, 1975, 1978:17-18). Moreover, pluralism is criticised for its ambiguity in relation to the role of the state and its failure to provide an adequate explanation of the inequalities in the distribution of power. Despite the criticisms, the pluralist approach has provided 'the theoretical perspective for the great majority of recent academic work in industrial relations' (Deery, Plowman and Walsh, 1997:18).

The application of pluralism into PNG's industrial relations system and its polity is at its best relevant and fitting. The existence of competing industrial relations institutions and other interest groups emanates from the country's political system which accommodates all the ingredients of a liberal state where competing parties produce decisions of industrial and political consensus. Mining and other trade unions in PNG operate as independent institutions in the industrial relations system very much in the pluralist tradition. Although unions may be organisationally weak (Hess, 1989), they enjoy a wide range of worker and state support which places them as equals in the bargaining environment with employers. Negotiated outcomes often reflect the achievement of a pluralist consensus by both parties. Generally, the PNG state and the employers accept unions as part of the industrial landscape which allows them to resolve industrial issues through the industrial bargaining process. This, in turn, consolidate the pluralist relationship (Gissua, 1993). In essence, pluralism in PNG reflects the heritage of a robust British-type parliamentary democracy and an Australian style industrial relations system which effectively serves the needs of both unions and employers.

As this book will demonstrate, PNG's mining industrial relations have developed embryonic pluralist independent unions, capable of operating and negotiating with employers and government in resolving issues. In this PNG is an 'exception' when contrasted with a number of developing countries. In these countries it is usually the state and employers that exercise unbridled authority over unions and labour. For example, in the neighbouring South East Asian countries there is very little participation by trade unions in their industrial relations systems which are strongly governed by authoritarian states. Often solutions are offered whenever there is an industrial dispute between unions and employers which reflects the paternalistic style of government. Deyo (1989) in arguing for a structuralist explanation of the general weakness of Asian labour unions points out the prevalence of various autocratic systems of labour control, the export orientation of the expanding industrial sector and the increasing extent of government intervention. Littler (1994) argues that the role of the state in East Asia has been the most decisive in shaping industrial relations systems, partly because of the lack of a well-organised employer class. In contrast to these countries and others in Africa and South America, a pluralist legal and political framework exists in PNG. This allows for a liberal environment that encourages the exercise of freedom of association and collective bargaining. The right to strike is not seen as a barrier to economic development (Hess, 1992). Third World protagonists of the authoritarian view of development policy thus regard the institution of unionism as an import from the west which should only be considered and implemented in the light of local conditions and needs (Casey, 1978:11). To them accelerated development and industrialisation can only be achieved by incorporating the union movement into the state machinery so that it can be directed towards the main stream of development. This is contrary to the PNG situation where industrial relations institutions exist independently in the economy and the role of the state resembles more that of a mediator for competing interests. In this sense, PNG, and its 'pluralism' is an exception. Although 'exceptionalism' is often associated with American industrial relations (Adams, 1995:34-62) and its atypical business union strategy and decentralised bargaining, in contrast to the European centralised and socio-democratic industrial relations systems, PNG, is in a different way 'exceptional'. It has a liberal pluralist industrial relations system that is quite different from those found in most of the developing countries including its near neighbour Indonesia. Exceptionalism is demonstrated in PNG's 'pluralism' with the existence of independent unions and employer organisations all of which pursue their interests in a relatively liberal and democratic environment. In contrast, in much of post-colonial Asia, Africa and South America, unions are incorporated as administrative arms of the state with the primary responsibility of maintaining discipline and furthering productivity, in a typically unitarist approach. This is often done to the exclusion of any effective interest in wages and conditions of work (Kasslow and Damachi, 1978; Deyo, 1990). Surprisingly for a newly developing country, PNG is something of an exception with a legal and political framework which allows for a pluralistic environment that encourages the exercise of freedom of association, collective bargaining and the right to strike (Smith, 1975).

Further Theoretical Settings

In addition to the concept of pluralism and exceptionalism, there are two theoretical approaches that can offer some explanations for the unique character of PNG's industrial relations system and the general process of human resource development in the country. The first 'model' relevant to the theoretical underpinnings of this book is contained in the idea of convergence in the field of industrial relations developed by Kerr, Dunlop, Harbison and Myers (Kerr et al., 1960). According to Kerr and his associates the inevitability of industrialisation in developing countries would push aside culture, tradition and economic conditions to reach the same destination in development as the west, although at a different speed and with varying degrees of success. Thus, 'the primacy and universality of science and technology will eventually lead these diverse societies towards a common destination - pluralistic industrialism' (Ramaswamy, 1981:49). The idea of convergence was heavily criticised in the 1970s and 80s by social scientists (Strauss 1986; Sorge & Warner, 1986) on the grounds that world economic crises, natural disasters, and political upheavals saw various Third World countries with very little convergence in such processes as economic development and industrial relations. However, despite the bold and optimistic predictions, the theoretical framework established by Kerr et al. in their book explaining the features of the Third World industrial relations system are still sound and relevant today. For example, in the case of PNG mining, development illustrates the 'logic' of industrialisation, as they termed it. This process has been facilitated by the importation of expatriate management and state of the art mining technology.

According to Kerr et al. (1960) no country is endowed with a full-blown industrial labour force and in order to create it a process comprised of four major, logical, interrelated, and sequential phases: recruitment, commitment, advancement, and maintenance, is required (1960:166). These four processes may overlap in the course of time. They can be analysed in the context of PNG's development of human resources in the mining industry.

Kerr et al. were of the opinion that of all the processes of labour force development, recruitment is the easiest to handle. Managers are generally able to recruit the number of employees required. The initial scarcity of human resources particularly for geographical remote 'greenfield' sites may favour compulsory recruitment in one form or another. But in post-colonial societies the investment of time and resources in the actual recruitment, commitment and advancement of the new industrial workforce is more characteristic than in the 1920s. This adds to the productivity of labour, and in turn creates grounds for greater capital intensity as technology substitutes for scarce human resources. Although Kerr and his associates did acknowledge the scarcity of human resources for industrial development, they did not articulate the enormity of the problem in some countries relative to others. In PNG particular difficulties were faced by mining companies at the outset of the development process. The establishment of a regular and skilled workforce has posed challenges for the transnational mining corporations because available human resources have consisted of farmers and hunter/gatherers to whom the concept of regular employment is unfamiliar. The unique issues, concerns, and constraints which characterise the recruitment phase of building the industrial labour force in such a context was underestimated by Kerr et al. Nor did they think of the dilemmas enterprises would face in the recruitment of workers. In PNG mines, the cash economy and the acquisition of western consumer goods provides a basic incentive to join the labour force. However, clan and ethnic loyalties influence the structuring of the labour force. The recruitment process in PNG's mining sector has arguably been more problematic than the general assumption of human resource availability made by Kerr et al. allows.

The second process in Kerr et al.'s model is commitment and consistency at work, which was seen as a more difficult process to achieve. The model identified four stages or points on the continuum of behavioural change which mark the transition of the worker from a traditional way of life to an industrial way of life. These stages are: 'the uncommitted worker, the semi-committed worker, the generally committed worker, and the specifically committed worker' (Kerr et al., 1960:170). In this model, the temporary worker has no intention of entering industrial employment on a continuing basis. By contrast, the semi-committed worker is at the crossroads. He works more or less regularly in industry, but maintains connections with land, tribe and village. The 'generally committed' worker is one who has completely severed connections with the ancestral village to become a permanent member of the industrial workforce. The 'specifically committed' worker is one who is attached not only to the industrial way of life but also to a particular employer or occupation.

As will be seen in the book, the PNG experience lends support to Kerr et al.'s continuum of behaviour change as tribal workers engage in mining work. This is demonstrated by the interviews conducted with the Porgeran mine workers whose attitude to employment differed according to previous work experience and educational attainments. Those who had a strong commitment to work in the mine did so because of a work orientation produced by educational attainments, work experience and previous training while the new workers were there only because of the monetary rewards with no plans to remain in industrial employment. However, the mine has not only introduced these subsistence farmers to industrial work but has also brought social and economic changes to their once traditional life styles (see chapter seven).

However, for the new employees advancement in Kerr et al.'s sense of a separation from ancestral patterns of village life in the PNG context has been more gradual than were the cases cited by them where freshly recruited and uprooted industrial workforces were provided with public or company housing on a mass scale. In PNG, such provisions have been limited. Preference for local employees has meant that mining workers often remain commuters from their traditional villages and for many 'commitment' to the industrial way of life is still partial and viewed as temporary despite the attractions of the cash economy.

Maintenance is the final step in Kerr et al.'s typology of developing the industrial labour force where general welfare and security needs are provided either by the employers or government. Although it is now uncommon in developed western countries, in the developing countries including PNG people resort to traditional social systems such as the wantok system of extended family for food and shelter. In Kerr et al.'s model a country's ability to sustain a maintenance system which not only provides security for the old and unemployed but also creates jobs reflects the status of a developed country. This stage in human resource development is far from materialising in PNG, in the near future. However, one feature of the PNG employment arena which is not a component of Kerr et al.'s model is the role of expatriate employees and the often problematic process of 'localisation' (see chapter four and five).

The second and later model which has implications for this book is based on the role of the state in developing countries and was developed by Siddique (1989). He describes an explanatory framework for understanding developing countries' industrial relations systems in which the key element is the government rather than the industrialising elites as in the Kerr et al. model. According to him the main distinctive feature which characterises a developing country's industrial relations system and which distinguishes it from a developed country is a dualistic economic structure, where a pre-capitalist (subsistence) economic system still dominates the economy (1989:385). He emphasises the process of industrialisation and the role of the state as two unique features of the developing countries' industrial relations system.

Siddique's model of the developing countries' industrial relations system has six components, each of which can shed some light on the emergence, development and operation of PNG's industrial relations system. First, the present industrial relations systems of most Third World countries are the products of colonialism. They were basically imposed during the industrialisation process when colonial powers used their colonies to supply raw materials and markets. Siddique argues that the very different processes of industrialisation in the developed countries and in the developing countries enormously influenced the development of the two separate systems of industrial relations existing in them. For example, in the case of PNG, its inhabitants at the beginning of European expansion in the nineteenth century consisted of a large number of small-scale farming tribal societies, which is still evident today despite rapid modernisation. The largely uninhibited existence of a large subsistence sector owes much to the very limited economic penetration which occurred during European colonisation from the 1800s to 1975. As in other developing countries, this resulted in the development of an industrial relations system in its basic parameters such as size and composition of the labour market, rate of urbanisation, and the speed and coverage of industrialisation which was different from its coloniser and in a weaker form (Hill and Thurley, 1974). In the case of PNG Amarshi, Good and Mortimer (1979:3-57) blamed Australia for this 'sub-standard' development which saw weak capital penetration in the colony thereby allowing the precapitalist economy to be maintained intact with an absence of industrial infrastructural developments. As Siddique (1989:390) argues, there developed two completely separate patterns of industrial relations systems with different class structures and legal frameworks in the developed countries and the developing countries.

Siddique's second point is that the colonial state played a dominant role both in the industrialisation process and in establishing the industrial relations system of the developing countries during the colonial era. The colonial state made sure that, in order to fulfil the economic needs of the home country, both the industrialisation process and industrial relations in the colony followed a desired path (Kasfir, 1983). The argument is valid in the context of PNG. The Australian colonial government did much to maintain a predominantly small plantation and mining economy that was favourable to the expatriate planters and miners under a highly regulated indentured native labour system (Fitzpatrick, 1979). Siddique's third point is that industrial development in colonies was restricted and failed to absorb the entire indigenous population, as a result of the colonial state's interventionist policies in the colonies. Indeed that is what happened in PNG where the colonial state deliberately allowed minimal employment of native labour because of a 'traditional concern to isolate New Guinea from the disruptive effects of social and economic change implicit in labour mobility and wage bargaining' as experienced in colonial Africa (Newbury, 1975:38; West, 1958; Ward, 1990). In Siddique's argument the maintenance of such a labour policy was not only paternalistic but a cautious and determined attempt to allow a dual economy to exist that could effectively reduce the costs of its administration.

Following from the above, Siddique's fourth point is that the weak class formation in the present developing countries is due to the dualistic nature of its economy. Its notable feature is surplus labour market conditions which began in the colonial period and still continues in most developing countries. This has allowed an emergence of a small working class and capitalist class with less power in society than their counterparts in the developed countries. The weakened position of the working class is not only contributed to by its dual economic structure, but also by other inherent factors like politics, ethnicity and culture inherited from the subsistence economy which make up the social and cultural fabric of a developing country. The outcome is a weak and divided working class whose wage is supplemented by earnings from the subsistence sector (Siddique, 1989:390). The description well suits PNG's emerging but small working class whose position today is a testimony to colonial policies, pre-industrial socio-cultural conditions, and ineffective government policies.

The state in the developing countries plays a dominant role both in the economic and industrial relations system, as a result of the weakness of both the working class and capitalist class. This is Siddique's fifth point and to qualify he asserts that the role of state in the developed countries is not the equivalent to the one found in the developing countries. The developed countries generally accommodate a laissez-faire approach to both industrial relations and the economy. This approach allows the state to act as a referee only in times of disputes. However, otherwise everything is left to the contract of employment or existing regulated terms and conditions of the respective occupations to dictate industrial relations practices. However, in most developing countries automatic state intervention in both economy and polity has become more of an 'indispensability' than an emergency obligation (Caire, 1977). Siddique argues that in an enormous effort to develop industrialisation right after independence, governments in developing countries control every aspect of industrial relations in the best interest of economic development. Arguably countries such as Singapore, Indonesia, Philippines and Brazil would be examples of a state that advocates maximum pro-capital intervention to the exclusion of labour in industrial relations practice (Ross, 1966). In PNG's case, the state's role in industrial relations has been neither interventionist nor progressive but mediocre. In a self constrained social and economic environment the state's role in industrial relations has been rather minimal and confined to interacting with the established institutions. However, surprisingly and in contrast to the Siddique model earlier governments have gone to some length to advocate unionisation at the workplace which was quite unusual for a developing country (Hess, 1986:117).

At the present, the state in PNG does not resemble an interventionist state, although it does have policies which aggressively promote economic growth at the same time appealing for enterprises to take due care of workers' rights (Hess, 1992). In view of its sponsorship of unionism, the evidence from PNG's industrial relations does not completely conform with Siddique's general model.

Siddique's sixth and final point is that the state's dominating role in the Third World has led to the development of a corporatist framework in the field of industrial relations in the developing countries. He describes a 'corporatist' state as one which makes the union movement 'an administrative arm of the state, charged with the primary responsibility of maintaining discipline and furthering productivity', thus making the unions a 'partner in development' (Galenson, 1962:10; Kassalow, 1978:7-8). In such a system, the government has very liberal economic policies on investment and eliminates any form of collective bargaining thereby allowing multinational companies to have the luxury of setting their own conditions of employment for their workers (Shaheed, 1977; Damachi, 1978). In various developing countries, government involvement in industrial relations is pervasive and qualitatively different from that of the developed countries (Shaheed, 1977). Siddique's model of the Third World industrial relations system is built on the core fundamental issue of state intervention and its possible theoretical implications for industrial relations systems of various developing countries. With the caveats noted, much of PNG's industrial relations conforms to Siddique's model with the unions often but not always sponsored by a 'corporatist' state bureaucracy.

The two models introduced above (Siddique 1989 and Kerr et al., 1960) focus on some very relevant aspects of PNG's industrial relations system and the development of human resources respectively. Siddique's model, grounded in Marxist theory, is largely internally focussed and identifies the past and prevailing socio-economic and political conditions as explanations for the current state of the industrial relations system in developing countries. Most importantly, the role of developing states play in industrial relations is the premise on which his model is based. A consistent theme in his analysis is that the post-colonial state in a developing country like its colonial predecessor, is very much interventionist in nature and tries to control every aspect of its industrial relations system. Yet in the case of PNG, the state is not that highly interventionist. It maintains a more limited role than Siddique implies as a provider and facilitator of basic services and investment in the country. In a way Siddique's arguments concerning the corporatist state of developing countries is less applicable to the PNG's situation. By contrast, Kerr et al.'s model nominates the prime mover of human resources development in developing countries as the importation of technology from the developed countries and the role of industrialising elites, whether national or expatriate. This is exemplified in PNG's case in the mining industry (see chapter four).

The models in one way or another focus on the economic dimension of a country's development as an engine to stimulate more employment and, therefore, an active and responsible industrial relations system. Although the models both emphasise the dynamic nature of roles played by the government, the foreign companies, and the workers, they do not adequately articulate the local community's role in this evolving relationship which this book hopes to demonstrate is not as passive as Kerr et al. and Siddique assume.

Both models address only part of the wider picture of what is happening in the developing countries and with their industrial relations systems and human resources development. Siddique (1989) acknowledges that the state's dominant role manipulates and prevents the industrial relations participants in the developing countries from advocating a more equitable system at workplaces. Where as Kerr et al.'s general model of human resource development is concerned with externally imposed initiatives and investment. What both models do not discuss are the very unique issues, concerns, and constraints which characterise each industrial relations and human resource system and the local community, to which, in PNG's case the systems are inextricably linked. One of the objectives of this book is to examine the interface between community and industrial relations in a developing country setting. PNG and in particular the Porgera mine will hopefully generate empirical evidence of relevance to pluralism and Kerr et al.'s and Siddique's general theories of developing countries' industrial relations.


This book is a result of, amongst other things, several trips made to Porgera mine, in the capacities of a consultant and later as a PhD researcher. While teaching at the University of Papua New Guinea (between 1991-2) I was part of a team of consultants which was assigned the task of carrying out a social monitoring program on the local Porgeran community and the mine. On one of these trips I began to study the industrial relations in this mine. However, the bulk of the data used in this book was collected through fieldworks conducted in 1994 and follow up visits to the mine in 1995 and 1996.

I used two primary research tools to collect information. These were in-depth interviews, and an analysis of primary documentary evidence from trade unions, government and company files. A questionnaire survey was deemed inappropriate because a significant number of manual workers were semi-literate and there was a real possibility that they would misunderstand the questionnaire. Also an attempt by another researcher to circulate questionnaires to workers about local attitudes to work and reward in the mine was a failure when the majority of the potential interviewees did not cooperate with the researcher.

Further, because of past and other circumstances, the Porgera mine management decided that I should not use a survey questionnaire on the workers as part of data gathering for my study. As a consequence of the inappropriateness of a formal written survey instrument, I endeavoured to use other techniques to collect as much data as possible. The use of in-depth interviews and document analysis were two principle techniques for the collection of information and they are discussed in some detail below.

In-depth Interviews

I had ready access to the senior and middle management of the mine for in-dept interviews. Limited time was spent with line managers but it was with the industrial relations officers that I had most interaction. I also ran 'focus groups' with several groups of workers from different sections of the mine and had private interviews with some of them. Several times I met influential trade union officials and government labour officers. In these visits and interviews I managed to obtain various significant documentary data from the mine management, unions, and Department of Labour and Employment (DLE), and from other existing secondary sources as well.

Apart from the management-sanctioned interviews and other interviews with national government officials, I also interviewed Porgeran villagers, town folks and local government officials whenever I had the opportunity. The informal nature of the interaction made them more comfortable with the author because almost everyone had an opinion on the operation of the mine. On some occasions, impromptu group interviews and further individual interviews developed as the principal interviewee immediately referred me to other tribesmen near by. In all the interviews notes were taken. The amount of time spent on the interviews varied depending on the circumstances involved. An hour was spent in the case of senior company and government industrial relations officers. In some cases two to three hours were spent with Porgeran and Engan villagers interviewing them on their views on employment, the mine and the general economic and social changes that were occurring as a result of the establishment of the mine. At the mine site individual workers representing each of the four ethnic groups (Porgerans, Engans, other nationals and expatriates) were interviewed. The line of questioning in general was directed towards areas of interest and issues such as worker interaction, recruitment, training and localisation, trade union activities and industrial work in the mine (see chapter seven). A list of interviewees is contained in Appendix A and B.

Documentary Data

Copies of relevant documentary data was collected during the many meetings with Porgeran mine personnel and also with bureaucrats, private sector and trade unionists concerned not only with industrial relations but also with the employment and training of Papua New Guineans in the country. The data ranged from company and trade union reports and files, correspondence, memoranda and written agreements to newspaper clippings. Whenever possible, data from the different sources were compared.

I also benefited from going through the limited existing primary and secondary literature and took valuable notes. The various documentary sources enabled me to examine the history, problems and issues associated with the PNG industrial relations system. In particular the history of mining and the trade union movement provided much of the background information with which I familiarised myself before embarking on fieldwork. This prepared me for an interpretative style of fieldwork interviewing which produced current and reliable data. In this way, valuable interview time was not spent in basic fact finding. An amplified presentation of this methodology is in Appendix A. The existing literature and documentary data referred to in the text is listed separately in the bibliography.

Presentation of book:  Some General Remarks

The abstract and the introduction briefly summarise the purpose and significance of the book. The organisation of the book is centred around the key institutions and issues in the context of the existing socio-economic landscape of the country with which industrial relations in mining is inextricably placed. I considered this choice of organisation to be the logical method of structuring the data and building up discussion on the 'institutional' character of the topic. A notable feature of this approach to analysing labour in the PNG mining industry is that individuals and particular groups are examined as to their roles both in the industrial relations institutions and the broad spectrum of monetary employment. I have analysed the performance of the institutions and the behaviour of tribal groups in regard to monetary employment. This approach, in other words, has allowed me to examine what seems to be some inherent issues, problems and dilemmas faced by a transitory workforce in emerging from subsistence farming into the formal structures of modern employment. Given the unexplored research terrain and therefore the existence of limited literature on the area, coupled with problematic logistics involved in a prescribed research plan, I relied on qualitative interviewing and the analysis of primary written sources as my major research instruments.

Further, given the nature of the topic and the problematic logistics of the research methodology, it was considered that the use of 'participant observation' as a research tool was appropriate.

The 'participant observation' used in some parts of the research proved to be useful in that it made sense of the sheer scale and complexity of the community level cultural, social, economic and political aspects of employment in mining in PNG. However, an overview would have been difficult to achieve if research energies had been concentrated simply on micro-level participant observation. This has generated potentially interesting data, particularly of the 'informal' kind, reflecting the 'feel' of the situation. But to concentrate on one or two perhaps atypical cornerstones using this method would have prejudiced the tracing and analysis of the industrial relations and employment issues in PNG mining as a whole.

Although not ignoring 'participant observation observer' techniques, I decided to concentrate on the 'broad brush' techniques of in-depth interview with a variety of persons at different levels in different organisations associated with industrial relations and PNG mining, particularly in the Porgera mine. As noted above, I have also made a through review of the available documentary record on both the mine, industry, trade union movement and government agencies associated with overseeing of industrial relations in PNG. This material is related where germane to the existing literature on industrial relations in PNG which is acknowledged in the text. The interpretation is my own.

   Benedict Y. Imbun - UPNG Press 2000.

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  • 1999 the Canadian Globabl Almanac / John R. Colombo, general editor - Macmillan Canada, Toronto - ISBN 0-7715-7616-1 - pp.478

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