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Pacific Islands Society

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Domestic Non-Profit Organization
The International Threat to
National Sovereignty in Papua
New Guinea
By H.E. Winnie Kiap
Published: March 19, 2013

I find in my interaction with the government, as
well as with the commercial sector in London,
that very little is known about the Pacific region.
Much is known about Australia and New
Zealand, our larger Pacific members. And much
is known in London about Africa, Middle East,
even the Caribbean. But the potentials the
Pacific region has to offer and the challenges
we struggle with, are little known. Perhaps this
series of lectures will open the door a little,
trigger curiosity to find out more about the
region. The world is connected. What happens
in one of its corners will affect the rest.
In this discussion, the Pacific Island countries or
PICs as we refer to ourselves exclude Australia
and New Zealand for the very important reason
that they are developed countries. They are also
our development partners. Our challenges are
not shared by them.
I am going to concentrate my remarks on Papua
New Guinea. Fundamentally, the PICs share
similar threats. It is only a matter of scale. Some
threats are more magnified in some PICs, for
example, Kirabati and Tuvalu face existential
challenges from rising sea levels. Other threats
are more emphasised in PNG, for example, the
impact of large-scale investments on the lives
and livelihood of Papua New Guineans. I want
to explore in particular how such impacts
through engagements through group
memberships, bilateral relationships, inward
investment, have on national sovereignty.
PAPUA NEW GUINEA
PNG is the largest of the Pacific Island
Countries. It occupies the eastern half of the
island of New Guinea. The other half is the
Indonesian province of Papua, formerly Iryan
Jaya. PNG also includes three large islands of
New Britain, New Ireland, and Bougainville and
over 600 smaller islands.
At a glance PNG has:
Surface Area: 462,840 sq km
Population: 6.2 million (July 2011)
Population growth: 2.8% per annum
GDP: US$12.53 billion (2011)
GDP per capita: $1880 (2011)
Languages: Over 800 or one-tenth of the
world languages
PNG is geographically diverse with terrain
ranging from high interior mountains to jungle
lowlands, in addition to tiny islands and
archipelagos. Rainforests cover approximately
75% of the country.
PNG remains largely a rural country, with only
13% of the population living in urban areas
according to 2010 figures. It is home to all the
ethnic groups of the Pacific: Melanesians,
Micronesians, and Polynesians. Of course in
modern times, it is now home also to other
races.

Winnie A. Kiap is the High Commissioner to the
United Kingdom from Papua New Guinea.


Ambassador Series
Pacific Islands Society Ambassador Series | March 19, 2013
Government

The government is a constitutional
parliamentary democracy. The British monarch
is the Head of State, represented by a
governor-general.

The national government determines the
policies, laws and the budget. While the 22
provincial governments are mandated to
implement development programmes funded
by the national government. Below the
provincial governments are the district and
local-level governments, concentrating on
development of small groups of villages.

Natural Resources

2009 figures show that PNG exported $2.8bn
worth of minerals (mostly copper and gold).
This constituted about 62% of all exports.
Main primary exports are palm oil, coffee,
cocoa and tea. In 2010, PNG produced 0.7% of
world coffee, making it the 15th largest exporter
out of the 50 producers. Palm oil accounted for
1.3% of global exports putting PNG among the
top 6 producers from the 27 exporting
countries. Of the 19 world cocoa exporters,
PNG ranks as the 9th largest exporter with
41,000 metric tonne.

SOVEREIGNTY AT RISK

What is sovereignty? I have an understanding of
the concept of sovereignty, but I decided to
look up the term. And these are some of the
definitions I came across:
Sovereignty entails the right to self-
government in a political system which
must operate independently of foreign
rule or control.
Sovereignty means supreme and
independent power or authority in
government.
Sovereignty of nation-states is exercised
on their territory with no role for external
agents in domestic structures.
Sovereignty is connected to the ability of
a state to guarantee the best interest of
its own citizens. If it does not act in the
best interest of its citizens, then it is not
sovereign.
Sovereignty is a matter of legitimacy and
requires reciprocal recognition.

Sovereignty then is about exercise of authority
without external interference. Exercise of
authority for the good of citizens. Inferred or
imposed is the aspect of moral authority.

GLOBAL MEMBERSHIP

PNG is a member of many international
organisations. In the South-East Asia-Pacific
region, there are groupings such as the Pacific
Islands Forum presently composed of 14 island
countries and Australia and New Zealand.
There is the Melanesian Spearhead Group
(MSG) consisting of PNG, Fiji, the Solomons,
and Vanuatu. Asia Pacific Economic Co-
operation or APEC which is the larger economic
grouping including the US, Canada, Russia and
all other Pacific-rim countries. With an observer
status in the Association of South East Asian
Nations or ASEAN, PNG is working on full
membership. There is the United Nations of
course and the Commonwealth and the EU-
ACP.

There are bilateral arrangements between
countries. Then there are economic
partnerships through investment by multilateral
corporations.

Membership of groups imposes compromise.
To what extent should a nation relax its moral
and legal boundaries to accommodate rules of
the different groups it buys into? Some rules
may not necessarily be in the best interest of its
citizens. Would it be in the best interest of its
citizens if a nation were to structure its
government policies and concentrate its
resources in servicing membership
requirements?

PNG has entered into some agreements and
treaties for which it has no infrastructure
including legislative, to uphold. Ten years ago
for example, an agreement was entered into
with Australia for provision of Australian federal
Pacific Islands Society Ambassador Series | March 19, 2013
police to enter into and work within the PNG
government police structure. The Australian
police personnel however were not subject to
the laws of PNG. PNG courts eventually ruled
that the agreement breached the PNG
Constitution and the facility was quickly
dismantled. Here was a situation where the
facility clearly suited Australias security
arrangements, but it was not in the best interest
of PNGs own security. It was both an
interference from one sovereign state not
respecting the sovereignty of the other, and it
was an act of a state absconding from its moral
responsibility to protect its own sovereignty and
its people.

Globalisation is a fact which cannot be ignored.
It has to be embraced. But the pace at which
developing nations attempt to bridge the gap
between themselves and the industrialised
nations should be determined to a greater
degree by each individual developing nation.

As 2015 approaches, the Millennium
Development Goals (MDG) become a focus of
discussion and assessment. There is nobility in
the underlying reasons for the MDGs. We
cannot pretend that poverty or wealth creation
is not a domestic concern. Nor can we ignore
the importance of protecting the environment.
And certainly, our social indicators are a horror
even to ourselves.

The architects of the MDGs should have
gauged the capacity and capability of each
participating nation for best-fit structured
programmes. I take a couple of MDG goals to
illustrate this statement.

Let us now take Goal No. 3: Promoting gender
equality and empowering women.
PNG will fail in achievement of this goal.

Because the MDGs fail to recognise the
generational dimension of gender equality. In
the space of 15 years it is not possible for
generations believing that women and girls are
less deserving than men and boys to die out.
Nor is it possible for the entire nation to suffer
amnesia so that the slate is wiped clean and a
new culture is born free of the baggage of
gender disparity.

Let us take Goal No. 6: Combating HIV/AIDS,
malaria and other diseases.

Targets included universal treatment for victims
of HIV/AIDS by 2010. But by 2010, the spread
of the virus in PNG outpaced all mitigation
programmes against the virus. One of the
threats to the treatment programmes was
reporting requirements. Drugs could be
released only upon receipt of reports from
implementing agencies. If reports are slow in
reaching the capital, patients died.

For malaria eradication, much money was
poured into PNG from various sources including
multilateral, as well as private foundations. The
capacity on the ground to absorb such
resources is still limited and creates a crisis in
credibility and sustainability. International
response was to the MDGs, not to demand.

There were also emerging challenges
surrounding malaria that subsequently became
apparent. Firstly, the mosquito insect began to
change its feeding habit in response to the use
of mosquito nets by the people. Secondly, it is
now surviving in higher altitudes where the bulk
of the population is found as a result of climate
warming. But PNG is judged to be failing the
MDGs.

Goals must be set in response to demand by
PNG. Goals imposed from outside are more
likely to be cause for sovereign risks rather than
development catalysts because they are not
likely to be sustainable.

Inward investment should contribute directly to
an agreed Delivery Strategy to complement
what PNG is already doing. It is not only the
question of relevance but more so the question
of impact and sustainability. While partnership
engagement is a key factor in development
programmes, the question of demand is also
key. Assistance programmes must be demand-
driven.

Pacific Islands Society Ambassador Series | March 19, 2013
Bilateral approaches must also be aligned to
Delivery Strategies of PNG. And PNGs foreign
policy must be premised on the definitions of
sovereignty previously quoted. PNG appears to
be in the habit of contracting itself out as a
partner in solving immigration problems of
another state. Its vulnerability in terms of
development fund appears to be the instrument
of consent, overriding important considerations
of human rights interests of the refugees,
domestic legal infrastructure support, and moral
justification for such decisions.

Economic development proceeds in an orderly
manner from carful policy. PNG has reached its
present stage of development on the back of
revenues from minerals and crude oil. The
mining industry has dominated PNG economy
since the 1970s. Careful policy will increase
investment and productivity in the sector and
will avoid conflicts such as we had in
Bougainville in the nineties and during which
many lives were lost and a whole generation
came of age without having gone to school.

During that time mercenary soldiers from Britain
attempted to participate in the conflict resulting
in the downfall of a prime minister from office.
Mine tailings impact on the lives and livelihood
of the land owners and others living along river
ways. Careful legal and policy frameworks by
the state will ensure protection of its citizens
and the environment. BHP Billiton pulled out of
OK Tedi Mine as a result of polluting the Fly
River system through dumping of waste tailings.
The environmental damage will remain unsolved
for some time.

Land is not a saleable commodity in PNG. It has
to be negotiated between the government, the
investor, and the land-owning clan. Security of
investment and production rests on the
understanding of the relationship between the
people and the land. Lack of understanding or
worst, misunderstanding of this crucial
relationship can stall or cripple production.

Land dispute is a growing problem and
effective mechanisms are required to address
the problem. Protracted land dispute resolution
effectively ties up land and hinder investment
and can lead to serious conflict between the
landowners and the investors and government.
Careful policy needs to be in place to address
this important problem.

Displacement of people from land acquired for
investment projects, creates security challenges
as well. It is not possible to be permanent
guests on other peoples land where freedom to
hunt, gather, garden or own is not possible. A
measure of a man is determined by how much
land he owns. The State and the investor must
necessarily take these aspects into account
during the initial negotiations and policy
decisions.

Socio-cultural aspects of life undergo major
shifts in societies where mining projects exist.
Destruction of forests, presence of foreigners,
and machineries bring about changes in the
relationship to land as already mentioned and in
the interdependence between people and the
fauna and flora within that space. The scene is
also set for spread of STDs and the HIV virus
and further victimisation of women and girls.

The resources being extracted from beneath
the land and sea by the living generations are
not renewable. Smart leadership and smart
management policies will ensure that the rights
of the future generations born after these
resources have been depleted, are taken into
account. That they too benefit from the wealth
bequeathed to them by virtue of birth as Papua
New Guineans.

In February 2012 legislation on sovereign
wealth fund was established. The SWF will
receive the first lots of revenue in 2014 from the
$15bn LNG project now under construction. The
past 20 years has seen poor financial
management and un-defendable levels of
corruption. In 1994, PNG was on the brink of
bankruptcy and had to devalue its currency. Its
reserves were voraciously consumed without a
thought to its own sovereignty. Someone said at
the time that PNG ate up its own sovereignty.

Poised now to receive wealth through gas
revenues, will the leadership rise to the higher
moral plane in terms of accountability and
Pacific Islands Society Ambassador Series | March 19, 2013
sustainability of the fund? Will infrastructure be
in place to protect leadership and the fund from
risks?

The magnitude of the wealth from one or two
sectors poses risks in terms of economic
sustainability. Food security should not be
compromised by concentration of resources
away from the agriculture sector. The higher
annual population growth rate is already a
threat to the lower food production rate.

Climate change impacts on food production on
land and in the sea. A substantial percentage of
the SWF funds should be invested in agriculture
and food production. Manufacturing should also
be seriously promoted especially outside of the
capital Port Moresby. Population centres should
be promoted outside of the major urban
centres.

The LNG gas project is driving the economy at
present. While it is driving healthy growth it is
also causing instability in areas such as housing
affordability for low-income earners who are
Papua New Guineans. Labour demands on the
early construction phase saw high levels of
imported labour. This is a very possible risk as
PNG may be said to have succumbed to
investors agenda without preparing itself to
respond appropriately to investment.
Unemployment among young school leavers is
relatively significant. At professional levels, the
gap meant import of engineering skills, for
example. The demand had not been present
before and the country did not have careful
policy in terms of its own ability to respond and
sustainability of undertakings.

Beneath the land in PNG are minerals and gas.
PNG is almost licensed out in its entirety to
prospectors. All the mining on land and beneath
the sea will bring wealth but will also bring
threats to the environment, the eco-system,
socio-cultural structures, language loss,
displacement of people from their land, internal
migration and accompanying social problems.

I listened to the sermon delivered by Francis 1
this morning during his consecration as the
266thth Pope. Many important advice and
instructions are given by the Pope in that
homily. One that captured my attention most,
perhaps because of this speech, is the call for
care, the duty of care. Care by everyone, for
everything and for the creation we inherit. I
mentioned in instances the phrase careful
policy. I think the Pope and I are on the same
wavelength. High authority should be exercised
with care for people, and for national
sovereignty.

In this respect I am pleased that the PNG 40
yearlong term strategy referred to as Vision
2050 gives topmost priority to human capital
development. In order to achieve that vision of a
Smart, Wise, Fair, Healthy and Happy Society
by 2050, we must be skilled in setting the
frameworks to lead us there. Careful planning
will take our people forward to the space of
advanced societies. At the same time it will
protect our sovereignty. One of the priorities
concerns Spiritual, Cultural and Community
Development. This priority underpins the need
for moral responsibility and the duty of care by
government.

CONCLUSION

Opportunities for investment and development
are greater in PNG as PNG has more resources
than other Pacific Island Countries. In the short
and immediate terms it has to concentrate on
education, health, and infrastructure, which are
its priorities even in the current budget year. But
with careful planning in the interest of all people
and environment, PNG should in the long term,
be able to share its knowledge and wealth and
play a greater role in the development of the
region. Indeed it has begun in small ways by
investing in some of the countries already. It is
perceived as the senior and influential member
of the region so it must extend that duty of care
even to the other member countries of the
region.


The views expressed are those of the author.