Thursday, May 3, 2012

Papua New Guinea To See Mounting Tensions Country-Wide As Elections Near – Analysis

Summary
  • Further disruptions are expected as anti-government protests led by trade unions, civil society groups, NGOs and university students continue to increase political instability in the country.
  • Postponing June’s election has the potential to aggravate tensions to the point a state of emergency may be declared.
  • There is evidence of a proliferation of weapons across the country.
  • Foreign workers will continue to be targeted as the LNG project continues to widen fissures within society and between tribes. Increased criminality in the short to medium term is also likely.
Political Analysis

The current impasse between factions led by current prime minister Peter O’Neill and deposed prime minister Sir Michael Somare occurs at a time when the fragile central state apparatus is challenged by divisions both within and outside government. This has led to a number of concerns, particularly surrounding the elections, that business operations and the general public are becoming increasingly dissatisfied.
A Supreme Court ruling in December 2011 declared the government of Peter O’Neill to be illegal and ordered the restoration of his predecessor, Sir Michael Somare. The Supreme Court has ruled that the Judicial Conduct Act passed in March 2012 is unconstitutional. However, O’Neill and his supporters have persisted in their attempts to remove Chief Justice Injia. This has led to charges of judicial harassment against O’Neill. Even so, O’Neill has the backing of most of the civil service as well as a majority in parliament and has been treated as de facto head of state by foreign governments in spite of the Supreme Court ruling in favour of Somare.

This is set against the immediate backdrop of elections scheduled for mid-year but initially postponed for six months by parliament on 5 April by a vote of 63 to 11 due to ‘funding shortfall’, problems with the electoral roll and police not being ready to provide adequate security. Amid rising tribal and clan tensions and problems with voter enrolment in rural areas, protests have been held calling on the government to ensure the June election goes ahead. Despite O’Neill’s reactionary assurances that the vote will now go ahead as scheduled in June, postponing the vote could aggravate tensions to the point that a state of emergency will have to be declared in order to maintain order.

The political temperature is rising in PNG and it is getting increasingly hard for companies to continue their business-as-usual approach to the situation.  Further disruptions are expected in Port Moresby as anti-government protests led by trade unions, civil society groups, NGOs and university students continue due to the reluctance of the government to have the recently-passed Judicial Control Act 2012 repealed, a law which gives parliament the power to suspend senior judges and influences the legality of the current administration.

Furthermore, the Australian government has said little in public about the on-going impasse. It appears to have adopted a practical approach of working with whoever appears to be in charge of the state apparatus. Nevertheless, Australian statements on the situation will be listened to carefully in the country. The short-term outlook for Papua New Guinea is increased political instability and social unrest, with the possibility of mass violence if elections are postponed indefinitely and/or a state of emergency is declared.

LNG Related Concerns
 
In the Highlands region, PNG solders have been deployed where security problems are threatening two major resource projects. Landowner disputes have disrupted key construction work in Hela’s Hides area for Exxon Mobil’s LNG project, while Porgera’s gold mine has enduring complications related to illegal mining. Although currently there is no state of emergency in the region, troops are likely to continue assisting police despite local complaints regarding the military presence. The timing of deployment of the 30 soldiers to the region is indicative of continuing concern that growing lawlessness will deter foreign investors.

The risk that tribal conflict will disrupt preparations for the LNG project in the Southern Highlands in the short-term remains ever present, and will increasingly intensify as the project continues. There is evidence of amplified unrest in PNG as rival groups seek to capitalise on the increased capital flowing into the country. Attacks on the facilities directly linked with the LNG project are likely over the period of construction as clans try to use force to extract concessions or, more likely, fight with rival groups over what has already been allocated in terms of royalties. Increased criminality in the short and medium term is also likely. Further disruptions to the projects will likely be threatened unless contracts are negotiated and outstanding payments to landowners are received.

With the most significant increase to gross national income to occur with the production and sale of LNG in 2015, controversy surrounding the project is also likely to peak around this time. The major benefit of the PNG LNG project to the national and provincial governments and landowners in the country will come from distributions of mining and petroleum tax revenue, mining royalties and dividends on equity. However, due to the increasing frequency of attacks, unfulfilled landowner contracts and allegations of corruption, with an increase in revenue, there is also likely to be an increase in violence in the country.
This will likely be exemplified through the increased targeting of expatriate workers, protests at various project sites, work stoppages and storming of government offices, including the potential taking of hostages.

EURASIA REVIEW