After more than five years of negotiations overseen by the Australian government, all factions in the Papua New Guinea (PNG) parliament came together on March 27 to vote unanimously for the Bougainville Peace Agreement , giving limited autonomy to the resource-rich island and the possibility of a ballot on secession in 10 to 15 years time.

The 85-0 vote to amend the PNG Constitution to allow a referendum was the culmination of a process first initiated by Australia, PNG’s former colonial ruler, in 1997 after the PNG military proved incapable of defeating an eight-year insurgency by the self-styled Bougainville Revolutionary Army (BRA). More than 20 separate conferences between the PNG government, its supporters in the Bougainville Resistance Force (BRF) and various factions of the BRA were needed to secure what remains a shaky agreement.

Under the deal, a proposed Bougainville provincial government will gradually become autonomous over the next five years. No changes will occur, however, until a United Nations Observer Mission, a five-person team headed by Guyanan diplomat Noel Sinclair, secures weapons handed in by the warring parties.

Two unelected bodies, the official Bougainville Interim Provincial Government and the Bougainville Peoples Congress will establish a Constitutional Commission to draft a constitution to go before a “representative” Constituent Assembly. There is no provision for any vote by the Bougainville people until after a constitution has been adopted. A Bougainville government will then be elected, but no date has been set for a poll.

The Bougainville administration will eventually establish a police force, judiciary, taxation system, commercial bank and courts. The national government in Port Moresby will retain control over defence and foreign affairs, although its military will largely be excluded from the island.

The actual transfer of functions to Bougainville will largely depend on its capacity to set taxes and raise loans. In addition, it must give the PNG government advance notice of any institutional changes and ensure that its constitution is in line with the national constitution.

Differences and tensions remain between the Bougainville factions. Just four months before the parliamentary vote, the BRF almost withdrew from the weapons disposal agreement after four of its senior commanders were murdered. BRF leaders accused the BRA of the killings. BRF chairman Hilary Masiria only agreed to resume the peace process after a high-level meeting of his commanders with the provincial governor and deputy governor.

As well, the Meekamui Force, led by former BRA commander Francis Ona, who continues to control nearly one-fifth of the island, has remained aloof from the negotiations. But his recent request that the PNG Electoral Commission ensure that his supporters and their families are eligible to vote in June’s PNG elections seems to indicate that he seeks a place in the settlement.

Despite these uncertainties, the agreement is being hailed as a major step toward peace and a new era of freedom for the people of Bougainville. “Today is a great day for Bougainville and Papua New Guinea as a whole,” PNG Prime Minister Mekere Morauta declared. Australian Foreign Minister Alexander Downer was even more effusive. “This is a truly historic opportunity to bring to an end one of the region’s longest running conflicts and to build a peaceful and prosperous future for the people of Bougainville,” he claimed.

Yet for the population of 180,000, the majority of whom live a subsistence life on the small 200 kilometre-long island, living standards will improve little. The limited autonomy will be wielded by a tiny ruling elite, who like PNG itself, will be completely dependent on the main regional powers, Australia and New Zealand, for funding and investment.

Bougainville Provincial Governor John Momis last year admitted that there were no funds for such basic requirements as education, health and road building. Arawa, the depleted capital, is a symbol of the poverty and destruction wrought by the civil war. It has just 1,000 residents, some shops, a medical clinic and a fifth of its buildings intact.

In the financial year 2000, the Interim Provincial Government had a budget of only 23 million kina (US$6.25 million) and suffered a shortfall of K1.2 million in recurrent expenditure. During a parliamentary debate on the autonomy plan last November, former PNG Prime Minister Michael Somare put the costs of establishing infrastructure for self-rule at 300-400 million kina per year.

Even in hailing the agreement, Morauta warned Bougainville’s people not to raise their expectations too high. “Let me emphasise that we all need a sense of realism, not only about needs but also about available resources”.

Earlier this year, PNG’s Minister for Bougainville Moi Avei said the “future prosperity of Bougainvilleans is on the land”, indicating that the island’s major economic activity will be selling copra and coffee. “The prospects for early achievement of fiscal self-reliance—let alone prosperity—are not very bright,” he added.

The coffee industry in mainland PNG is reeling under the impact of some of the lowest prices in a decade, while there has been a general drop in agricultural prices worldwide.

Australian hegemony

The civil war had its origins over a dispute involving royalties from the giant Panguna copper mine, operated by one of the world’s largest mining companies, the Anglo-Australian Rio Tinto group. In 1988, landowners led by Ona began sabotaging its operations, demanding higher payments. After brutal military retaliation by the PNG military, Ona established the secessionist BRA.

For six years, the PNG army, armed and assisted by Australia, attempted to crush the BRA. At least 10,000 people were killed by the fighting and a four-year army blockade of food, medical and fuel supplies. In Canberra and Port Moresby, the military campaign was seen as critical not just for the future of the Rio Tinto project but also the security of mining investment throughout PNG.

Having been largely responsible for the six-year war on Bougainville, the Australian government changed tack in 1997 after it became obvious that PNG military could not crush the BRA. This policy switch was strengthened after the PNG government attempted to fly in Sandline mercenaries to fight the BRA, sparking a revolt by the PNG military.

Canberra’s anxiety to end the destabilising conflict increased following the 1997-98 Asian financial meltdown crisis, which helped trigger political upheavals throughout the Pacific region, including coups in Fiji and the Solomon Islands, as well as military mutinies in PNG. Australian investment is considerable in PNG, particularly in several huge and highly profitable mining projects that provide most of the small country’s revenue.

Foreign Minister Downer underscored how much was at stake for Australian investors. He involved himself personally in the Bougainville talks, visiting PNG several times and convening a week-long meeting of factional leaders at an air force base in Townsville, northern Australia. In order to secure an agreement with the BRA, Downer prevailed upon the Port Moresby regime to accept the possibility of a referendum on secession.

To strengthen its hand during the protracted negotiations, the Howard government provided funding of US$51.6 million and most of the members of the peace-monitoring group. About 2,000 Australian military personnel and 260 civilian officials have served in Bougainville since 1997. At the same time, Canberra has continued to support the PNG armed forces, contributing about $10 million per year as well as training.

To this day, none of the underlying issues surrounding the Panguna mine have been resolved. Rio Tinto has said that notwithstanding the agreement with the BRA, it would not be profitable to re-open the mine, as it would cost nearly $1 billion to restart. An attempt by Ona to sue the company for environmental degradation and the suffering caused by the war has been blocked in the US courts but may proceed in PNG.

All too aware that Australia substantially controls the purse strings, the PNG government has acceded to its demands for a Bougainville settlement. Yet many in PNG’s ruling elite fear that Bougainville’s secession could set a precedent that will be exploited by other provinces, notably those with mineral resources. According to former Deputy Prime Minister Akoka Doi: “Granting autonomy to Bougainville as a one-off case to self-govern after March 23 ... is nothing more than recipe for accelerated disintegration of national unity. There will be chaos.”

Already, the East New Britain and Morobe provincial governments have insisted that their provinces be granted greater financial autonomy from the national government, accusing it of failing to meet its financial obligations. Last week the governors of Madang and New Britain called for their provinces to be granted greater autonomy along the lines of Bougainville.