The Commonwealth Observer

Canberra ponders crunch time in Papua New Guinea

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Murray Burt
Written by Murray Burt

The talk in Canberra is that the priority in Australia’s diplomacy for 2015 will be its own backyard in the Pacific.

This is long overdue, and may be too late. Mending diplomatic fences with Fiji may be one thing; Australia’s ability to have a positive impact on outcomes in Papua New Guinea is likely to be quite another thing altogether.

Despite its significant aid program in Papua New Guinea, which delivers more than half a billion Australian dollars in assistance annually to its former colony, Australia’s influence on outcomes in Papua New Guinea has taken a remarkable dive. This is partly because the resource boom over the past decade has played a much more important role in the PNG economy, although that is now in jeopardy with the tanking of commodity prices. More importantly it is because diplomatic initiative has been seriously compromised by Australia’s being beholden to the past two PNG governments over the delivery of its offshore processing strategy for refugees. The government led by Peter O’Neill would appear to have had the Australian government over a barrel with the deal it has done on refugees with recent Australian governments.

The last phase of Australia’s so-called ‘Pacific Solution’ — a response to the influx of asylum seeking refugees by boat through Southeast Asia — has seen first the Rudd government and then the Abbott government become totally reliant on Papua New Guinea as the final dumping ground for its unwanted refugees. Australia’s current policy is anchored on Papua New Guinea’s willingness both to host refugee processing facilities (the management of which have been subject to intense criticism) and to accept that all asylum seekers placed there only have access to re-settlement in Papua New Guinea or in countries other than Australia.

While the economy and government revenues grew strongly over the past few years… the boom is now coming to a rapid end with the collapse of oil prices.

Papua New Guinea was among the first developing countries to put in place a resource-rent taxation regime and it set up the PNG Sustainable Development Program (PNGSDP) in 2002 to manage revenues from the Ok Tedi mine prudently for investment in economic and social development. Yet the integrity of PNGSDP has been undermined since Prime Minister O’Neill nationalized Ok Tedi and sought to dismantle PNGSDP’s independent management structure, steps that are currently under challenge in international courts.

O’Neill came to power with the promise of being tough on corruption. He set up Task Force Sweep as a powerful instrument for investigating and bringing corrupt officials and practices to court. It had some wins. But over the past two years, O’Neill and his government has become mired in controversy and tainted by impropriety and corruption.

Ass this month opens, the prime minister will no longer be protected by constitutional provisions which, as amended by the parliament in 2013, prohibit a vote of no confidence for the first 30 months of a government’s term. Though it may be an unlikely prospect it would be ideal if such a vote were tied closely to the outstanding questions of national governance. The elections in 2017 are no longer that far away. If O’Neill is forced to stand down as a result of one or both of the cases now pending against him, there will be uncertainty in political leadership.

Whether there is a full-blown economic crisis in the making or not, it’s certainly crunch time for Papua New Guinea and, more than ever, Australia’s performance of its international and neighbourly diplomatic responsibilities will be crucially important to outcomes.

Source—EAF, Peter Drysdale

Photo credit: Taro Taylor / cc

About the author

Murray Burt

Murray Burt

Murray Burt has been a journalist for nearly 60 years, starting as a cadet reporter in New Zealand, and doing two stints with wire services on Fleet Street before settling in Canada in the newspaper business. He is a retired managing editor of the Winnipeg Free Press, and former city and national editor of The Globe and Mail in Toronto. He is a past-president of the CJA and has been a life member since 2003, participating in each of its conferences and CPU’s conferences since 1990. He is a director of the Advisory Council of the Commonwealth Human Rights Initiative, based in New Delhi; president of Manitoba’s newly-reconstituted Royal Commonwealth Society; and has directorships in the Duke of Edinburgh Awards and the Canadian Forces Liaison Council (western Canada).

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