29 Aug 2022
Penny Wong needs to deal Beijing out of PNG
By Anthony Bergin and Jeffrey Wall
China sees Papua New Guinea as more strategically important than Solomon Islands. That’s why it’s good news that on Monday Foreign Minister Penny Wong will make her first official visit to PNG, our closest and most important regional neighbour. Wong’s visit is an opportunity to reset our relationship with the newly re-elected James Marape government.
It’s also a smart move that Anthony Albanese has invited Marape to the Prime Minister’s X111 rugby league match to take on PNG’s national side in Brisbane next month. PNG is the only country in the world where rugby league is the official national sport.
There are five issues Wong might consider raising with PNG’s new government. The first is China’s interest in the strategically important port of Daru, the closest reasonably inhabited community to northern Australia.
We shouldn’t be surprised if by the end of this year the multimillion-dollar proposed Chinese fishing and port facility on Daru is pushed up Beijing’s regional agenda.
Australia needs to be watching closely what China might be planning for PNG’s southern coast. We should be lifting our infrastructure funding and services on Daru and in the adjoining Western Province. We should give the people of Daru, upwards of 15,000, the same level of basic services that are enjoyed by Australian citizens on Thursday Island and other residents of the Torres Strait.
The second matter Wong should raise concerns over is an area close to Daru that’s arguably of greater risk to our national security. The Ihu-Kikori special economic zone in Gulf Province has already secured a $37m “grant” from China. That’s unusual given that China has shifted completely from grant aid to tied project support and loan funding.
China has achieved quite cheaply a strategic advantage on our northern border, and in an undeveloped PNG province that has enormous untapped gas, and probably oil, resources. In a recent interview on 60 Minutes, Marape admitted he had no knowledge of the Chinese plans for Gulf Province. Australia needs to consider a comprehensive counter proposal given the proximity of Ihu-Kikori to northern Australia.
The third issue the Foreign Minister might discuss is one Marape himself highlighted post-election and that’s electoral reform. The whole process of the recent PNG elections eroded public confidence in parliament and democracy: out-of-date rolls, suspicious counting practices and attacks on counting centres. And there was violence, including murders.
Australia should grab the opportunity to offer PNG assistance from federal and state electoral bodies for detailed reform. That will help ease community unrest and secure a measure of political stability at a time when the country faces massive fiscal challenges before the next election in 2027.
Marape has a big enough majority to be bold when it comes to cleaning up the electoral processes. Australia can offer him expert help in doing so. It’s something the Chinese dictatorship would never be able to match.
The fourth issue relates to the acquisition of Digicel, the largest telecommunications operator in PNG. The $2bn funding by Telstra and the Australian government to buy Digicel is our largest individual investment in our closest neighbour. Telstra needs to upgrade services and focus on meeting the unique needs of a vast and diverse nation. Wong should encourage Telstra to look at enhanced community engagement, a downward revision of charges and seek the support of Marape’s government in doing so.
Finally, there’s the issue of the Conflict Islands that lie in the Milne Bay Province of PNG, less than 1000km from Cairns. An Australian, Ian Gowrie-Smith, purchased the 21 atolls in 2003. He’s now saying he’ll sell the islands to China if he can’t get the price he wants from Australia. The Albanese government’s position isn’t unreasonable: it’s a private transaction, under relevant PNG law and we can’t be on the hook for every island in the Pacific.
But at the same time, we don’t want China buying the islands. They’re situated near one of Australia’s main shipping routes, the Jomard Passage. Perhaps Wong could suggest the Australian and PNG governments encourage a group such as the Nature Conservancy to buy the islands. That would be a sustainable solution for environmental management with no negative security implications. Maybe Australia could offer Nature Conservancy a long-term government loan for this purpose. Whatever Wong does in reshaping our relationship with PNG needs to be firmly focused on Australia’s national interests and the future stability and economic progress of PNG. The two objectives aren’t incompatible.