Sep 21, 2019 Last Updated 3:13 AM, Sep 21, 2019

By Stephen Howes

There was a time when the Australia lectured the Pacific. John Howard said in 2004 that Australia had a “special responsibility” to help the Pacific but that we sought “reforms and better governance as conditions of that assistance.” Those days must seem a long time ago to the current Australian Prime Minister Scott Morrison, who has been attending this year’s Pacific Island Forum in Tuvalu. In a complete role reversal, the Pacific now lectures Australia to do more on climate change. And fair enough too. Australia should do more on climate change. Our emissions are still rising.

The days of Australia hectoring the Pacific are unlikely to return. Now we just want to be part of the family, and regarded as more so than China. Nor are those  days to be missed. Perhaps our intentions were good, but we overestimated our ability to bring about change. When, with a few notable exceptions, that change didn’t happen, our lecturing grew repetitive and annoying to those on its receiving end. Moreover, the aid put forward in support of our overly-ambitious reform hopes began to appear wasteful, and of more benefit to the consultants and public servants who provided it than the countries who were meant to benefit. If we were serious about helping the Pacific, we would have tried more practical approaches, such as the promotion of labour mobility which we are now, belatedly, pursuing, but which in the Downer-Howard “governance first” days was taboo, and regarded as a distraction from the main reform game.

And, yet, something has been lost. We might have gone about it the wrong way, but Australia was right to be concerned about governance in the Pacific.

The World Bank publishes annual updates of its list of fragile states, or “fragile situations”. This has nothing to do with climate change. The Bank rates as fragile poor countries (the 76 countries eligible for its concessional funding ) based on assessments undertaken by both it and one of the regional banks (either the Asian or the African Development Bank) of the strength of a country’s policies and institutions. Developing countries are rated as fragile if they get an average governance score from the two institutions of less than 3.2 out of 5.

Fragility lists have been published by the Bank for every year since 2006, but data completeness at least for the Pacific seems to have been an issue prior to 2012. After 2012, there are minor changes every year, but overwhelmingly the story is the same, year after year. For this post, I draw on the Bank’s most recent list, published in mid-2018. In that list, out of the 76 countries assessed,  27 (about one-third) are rated as fragile due to having governance scores of less than 3.2 (i.e., poor governance).

Ten Pacific nations are included in the Bank’s annual fragility assessment exercise. Six are rated fragile. They are (starting at the bottom): the Marshall Islands (2.74), the Federated States of Micronesia (2.82), Papua New Guinea (2.91), Tuvalu (2.96), Kiribati (2.97), and Solomon Islands (3.08). Niue, Palau and Cook Islands are too rich to be included in the exercise, and are in any case far from fragile. Fiji, Samoa, Tonga and Vanuatu are, to their credit, assessed as non-fragile. Nauru would be rated as fragile if it were assessed. (It is not a member of the World Bank, but is of the ADB, and the latter rates it as the worst governed of all Pacific countries.)

Credit to the Pacific countries who have kept off the list, or graduated from it, in the case of Tonga and Vanuatu.  But overall the results are worrying. The Pacific Islands Forum represents 14 Pacific island nation states (plus Australia, New Zealand and two French colonies). Of the 14, seven are fragile due to poor governance (the World Bank six plus Nauru). So, half compared to the global average of one-third.

It’s no surprise that Asia does much better than the Pacific. There are only three Asian countries with governance scores of less than 3.2: Timor-Leste, Afghanistan and Myanmar. It’s more surprising that Africa does better than the Pacific. Yes, Africa has the only countries in the world with governance scores below two: South Sudan on 1.69, and Eritrea with 1.99. But in total only 16 out of the 39 African countries examined get governance scores of less than 3.2: about 40%.

That the Pacific emerges from this analysis as perhaps the world’s worst governed region is not a matter of being judgemental, or of allocating blame. There are any number of reasons why governance is poor on average in the Pacific. And improving governance is, at best, a slow process.

Nor is it something that donors can fix, whether by lecturing or by aid. The history of global aid shows that, as does Australia’s own experience. Indeed, in some ways, aid can make governance worse: something that has been completely forgotten in the current rush to give. Regional agencies can sometimes help, though efforts by the African Union to introduce “peer review” mechanisms sounded promising at the time, but have not delivered. Ultimately, domestic governance is a matter for each country to determine.

What certainly doesn’t help is when the problem is denied. At a recent speech, Pacific Islands Forum Deputy Secretary Cristelle Pratt said

“Of course, Pacific Islands Countries face challenges. But we are not fragile and we are not failing. Our Blue Pacific narrative has strengthened our resilience and regional solidarity enabling a paradigm shift from being small, vulnerable, fragile states to one of a Blue Pacific continent consisting of large oceanic states.”

I’m a fan of the Blue Pacific narrative. The ocean is a source of wealth for the Pacific region and a critical pathway to overseas jobs. But that doesn’t change the listings, and the fact that half the independent Pacific island countries are fragile due to poor governance.

All countries face both external and internal challenges. The risk of too great a focus on the external (in this case, climate change) is that it deflects attention from the internal. And it is the internal challenges that the Pacific countries have the best chance to actually do something about. Better governance makes everything easier. It provides a stronger foundation for responding to climate change. More importantly, it provides a basis for facing down the many other serious problems many countries in the Pacific face, from non-communicable disease epidemics to low levels of effective literacy to high levels of unemployment to drug trafficking to dealing with natural disasters and multiple aid donors.

The days of Australia lecturing the Pacific on poor governance are gone. But that doesn’t mean that poor governance itself has disappeared. New narratives can be useful, and external threats are important, but neither should be allowed to obfuscate the clear governance weaknesses that many Pacific countries suffer from. I hope for the sake of the Pacific people that the fundamental challenge of governance reform, once championed by Australia, is one day soon taken up by the region’s leaders and peak bodies.

Note: A country can also be rated as fragile even if it gets a governance score of above 3.2 if its instability has led to the arrival of a peace-building or peace-keeping mission. Some African and some Middle-East countries are rated as fragile for this reason (8 in total). I ignore this in the analysis since (a) my focus is on governance and (b) all developing countries, even rich ones, can be rated as fragile for this reason, which complicates the analysis of ratios. Also, no governance score is provided for Somalia or Syria, both of which are rated as fragile. For the analysis, I assume that the former has a governance score of less than 3 and the latter less than 3.2.

Stephen Howes is the Director of the Development Policy Centre and a Professor of Economics at the Crawford School of Public Policy, Australian National University.

 

By Nic Maclellan in Funafuti, Tuvalu

Fiji Prime Minister Voreqe Bainimarama has again called for a 10-year moratorium on sea-bed mining, at a time that many Pacific island nations are preparing for new frontiers of resource exploitation in the marine environment.

Speaking in Tuvalu this week before the 50th Pacific Islands Forum, Prime Minister Bainimarama called on fellow Forum island states to “support a 10-year moratorium on seabed mining from 2020 to 2030, which would allow for a decade of proper scientific research of our economic zones and territorial waters.”

There is growing pressure from French, Canadian and US corporations to advance the deep-sea mining (DSM) agenda, as well as interest from the China Ocean Mineral Resources Research and Development Association. Just as energy corporations are looking towards deep-sea oil and gas reserves, companies are developing technology to exploit mineral ore deposits found on the ocean floor, including cobalt crusts, seafloor massive sulphides and ferromanganese nodules.

Fiji’s call for a moratorium comes as community groups across the region are campaigning against potential environmental hazards of deep-sea mining, especially to ecologically sensitive hydrothermal vents. A report from the Guam-based Blue Ocean Law argues: “There is a general failure to incorporate sufficient environmental protections, as well as the norm of free, prior, and informed consent for indigenous peoples, who are most likely to be impacted by DSM. In the 21st century, and under well-established norms of international law, these omissions represent serious violations of international legal obligations.”

Bainimarama’s call comes the same week as major restructuring of the Nautilus Minerals corporation, which has been planning to commence mining off the coast of Papua New Guinea, under a world-first licence issued by the PNG government.

Fiji and oceans policy

In recent years, Fiji has taken a leading role in ocean policy at the United Nations, working with other Forum island countries through the Pacific Small Island Developing States (PSIDS) group.

In June 2017, Fiji and Sweden co-hosted the high-level UN Conference on the Oceans and Seas in New York. This conference issued a call for action, highlighting action on ocean acidification, plastics, and overfishing. UN Secretary General Antonio Guterres appointed former Fiji UN Ambassador Peter Thomson as the UN Special Envoy on the Ocean.

This global campaigning is also translating into domestic legislation. Speaking in Tuvalu this week, Prime Minister Bainimarama said: “In addition to playing a leadership role in the global Ocean Pathway, we are also developing a National Oceans Policy, under which Fiji plans to move to a 100 per cent sustainable managed  Exclusive Economic Zone, with 30 per cent of this being earmarked as a marine protected area by no later than 2030.”

Under the Forum’s “Blue Pacific” agenda, island nations are seeking to draw the links between oceans and climate policy. Bainimarama noted that Fiji was working with the Republic of the Marshall Islands in the Pacific Blue Shipping Partnership to develop “a blended and innovative finance structure to support the decarbonisation of domestic marine transportation fleets and facilities in Fiji and across the region. This means replacing inter-island ships with more efficient hybrid ships, thereby reducing fuel costs and emissions.”

Pacific DSM initiatives

Under the provisions of the UN Convention of the Law of the Sea (UNCLOS), many Forum island countries with large EEZs have been in discussions with transnational corporations to partner in deep sea exploration for maritime resources. Under UNCLOS and the authority of the International Seabed Authority (ISA), developing countries can also partner with overseas corporations to licence exploration in “The Area”, international waters that include vast arrays of minerals in Pacific Ocean areas such as the Clarion-Clipperton zone.

Nauru has long been a champion of DSM – at last year’s Forum leaders’ meeting, Nauru President Baron Waqa hosted a side even with ISA Secretary General Michael Lodge and Samantha Smith, the former Head of Environment and Social Responsibility with the deep-sea mining corporation DeepGreen.

This new frontier has drawn in regional organisations, to address legal, technical and regulatory issues around DSM. Boundary limitation is a vital concern as Pacific nations seek to increase potential revenues from fisheries and seabed mining in their Exclusive Economic Zones (EEZs). From 2010-16, the European Union funded the Pacific Community (SPC) to develop model DSM legislation for Forum member states, with many civil society groups concerned this work was promoting rather than regulating DSM.

The SPC Maritime Boundaries Division has also been engaged in technical work to clarify borders between independent island states as well as with colonial powers like France and the United States (for example, Vanuatu and France have been involved in a decades-long dispute over Matthew and Hunter islands).

There are tensions between the administering powers and territorial governments over the control of seabed minerals in the remaining colonies in the region. With an EEZ of nearly 5 million square kilometres, ocean-floor resources could be vitally important for the newest Forum member, French Polynesia. However, as the French government moved to amend French Polynesia’s autonomy statue earlier this year, France’s constitutional court ruled that rare earths can be classified as “strategic metals”, which come under the control of the French State rather than the Government of French Polynesia.   

Independence leaders have long argued against the French State’s control of strategic metals, with former Senator for French Polynesia Richard Ariihau Tuheiava telling the UN Special Committee on Decolonisation in 2017: “We have continually emphasised the critical nature of the resource question as a core issue for our future development. Whether or not these resources are considered in Paris to be ‘strategic’ is irrelevant to the applicability of international legal decisions which place the ownership of natural resources with the people of the non-self-governing territories.”

Collapse of PNG initiative

Early initiatives to begin sea-bed mining in the Pacific have not come to fruition. This week’s set-back to a major project in Papua New Guinea provides a salutary warning about the complexity and potential costs of DSM.

Under a licence issued by the PNG government, Nautilus Minerals has long planned to mine seabed minerals beneath PNG’s Bismarck Sea. However, with widespread community resistance, falling share prices and the loss of a specialised support vessel, Nautilus constantly pushed out the date for commencement of mining.

In February this year, Nautilus filed for court protection from its creditors under the Canadian Companies’ Creditors Arrangement Act (CCAA), and the Canadian-based company was later delisted from the Toronto Stock Exchange. This week, major shareholders MB Holding and Metalloinvest have moved to take control of company assets at the expense of major creditors and smaller shareholders (The PNG Government holds 15 per cent equity in Nautilus’ PNG subsidiary and the Solwara 1 project through the company Eda Kopa).

The looming collapse of the Solwara seabed mining initiative has been welcomed by civil society groups in Papua New Guinea, which have been campaigning against potential adverse impacts on ocean ecology.

Jonathan Mesulam of PNG’s Alliance of Solwara Warriors stated: “We rejoiced when the company filed for protection from creditors in Canada. Our opposition and our court action have helped push it to that point. Communities across Papua New Guinea want to see the nightmare of deep-sea mining removed from PNG waters. We will re-double our efforts to ensure that the new Nautilus will never operate at Solwara 1.”

Fiji’s call for a moratorium on DSM will be debated in the corridors at this week’s Pacific Islands Forum, but there’s a way to go before all Forum member countries are willing to delay action on the supposed ocean El Dorado.

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