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.
Papua New Guinea has been advised to tweak its macroeconomic policy and throw more weight behind agriculture, as it has the potential to enable more diversified and inclusive development.
The World Bank makes this recommendation in its latest newsletter Pacific Possible. It warns of rising economic uncertainty and fragile growth in PNG and recommends that authorities focus on structural transformation of the economy, especially in the agriculture sector, to help absorb any shocks.
"Around 87 per cent of Papua New Guineans live in rural areas, and 75 per cent of these are engaged in a variety of subsistence and cash income agriculture activities. Staple products are the main source of subsistence, provide food energy and protein, and are a source of food security for rural villagers when income-earning opportunities are limited," the reports states.
"While most rural villagers combine these traditional subsistence and cash income activities, there is a small but increasing number producing value-added products such as high-value coconut products and spices."
Agriculture is one of the priority sectors in the government’s Medium-Term Development Plan for 2018–22 (MTDP III.
"To utilise the potential of agriculture as a source of income and job creation, the authorities should consider a proposed set of policy options and responses for securing sustainable rural livelihoods in food and agriculture," the World Bank says.
The resource-rich nation of over eight million people is home to a number of multi-billion dollar minerals projects and is vulnerable to substantial commodity price shocks, natural disasters and uncertainty in the performance of new and existing minerals projects.
Its agricultural sector includes fresh food and export products like coffee, cocoa, palm oil, and copra and copra oil.
As the global trade environment pushes further into uncertain territory, Fijian exporters are being urged to take advantage of what Papua New Guinea has to offer.
In a presentation to local businesses this week, ANZ economist for Pacific Island countries Dr Kishti Sen said PNG could become the “China of the Pacific” as the next decade looks promising for the resource rich powerhouse.
And as uncertainty reins in the global markets, PNG looks likely provide a more stable destination for Fijian goods.
“Several mega projects in the oil and gas sector and mining are expected to commence early next decade and the new Prime Minister is unlikely to change project timelines as he has indicated that he will work with the private sector to deliver strong outcomes for PNG,” Sen said.
“Any changes to the country’s resource legislation won’t be implemented until 2025, meaning that current projects will be subject to existing laws which should minimise delays.”
Other sectors of the PNG economy are also forecast to rebound as the new government targets the strengthening of the country’s huge potential in the agriculture sector.
“Three assistant ministers responsible for coffee; cocoa, copra and palm oil; and livestock will be appointed this week to support the Minister for Agriculture. The upshot is that we see [the PNG economy] rebounding this year as gas exports return to capacity following earthquake-induced disruptions in 2018 and maintaining the strong growth momentum into the 2020s,” said Sen.
ANZ is forecasting Fiji’s economy to drop to below three percent over the next two years as government gradually tightens up on expenses.
This will coincide with a slowing global growth that is being affected by major developments such as the on-going trade and technology war between the United States and China, Britain’s proposed exit from the European Union, the United States’ sanctions against Iran as well as what is perceived to be an unpredictable scenario playing out between U.S and North Korea in terms of the latter’s nuclear aspirations.
While this is expected to affect major trading partners and give Fiji some breathing space in which to recover before positioning itself for the next cycle of strong global growth, the country is still faced with balance of payment issues that is directly affecting the status of foreign reserves and liquidity in the banking system.
Foreign reserves fell by F$260 million in 2018 as a result of efforts to finance the current account deficit and the resulting drop in liquidity has pushed up the cost of credit which is expected to put a brake on import demands, said Sen.
BOUGAINVILLEANS are to vote in June this year to decide whether to remain part of Papua New Guinea or to be independent.
The national government has tasked the Bougainville Referendum Commission (BRC) to formulate and finalise the questions that will be on the ballot paper and the tentative dates for the referendum.
On the ground in Bougainville, there has been a lot of preparatory work including public awareness programmes and activities to help people understand the process.
Elected leaders in PNG’s three-tier government system on Bougainville have helped in awareness works in the three electorates of North, Central and South Bougainville. Prime Minister Peter O’Neill has warned Bougainville to be wary of possible outside interference in the lead up to the referendum. He said such interferences could come in the form of misinformation.
The former prime minister of Ireland, Bertie Ahern has been appointed by the Joint Supervisory Body as chair of the BRC. During his term as prime minister, Ahern was involved in negotiations between parties to bring about peace in Northern Ireland.
He has since been involved in facilitating peace in other hot spots around the world including Ukraine, Nigeria, Iran, Turkey and the Basque Country.
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