China’s troubling influence in the Solomon Islands

If you were to believe a number of former Prime Ministers, and a handful of so called foreign policy "experts", you would hold the view that China's growing influence in our region is relatively "benign".

I have repeatedly given evidence drawn on my observations of China's growing influence in Papua New Guinea that is not "benign" but in fact of real concern to Australia, and one would hope the silent majority in Papua New Guinea.

However, of all the contributions I have written on China in our region I regard this as the most troubling, if not alarming, of all.

Papua New Guinea is our most strategically important, and largest, neighbour. It is also a former colony of Australia, with enduring business, investment, wartime, sporting, educational, and people-to-people links.

In this contribution I want to highlight China's massive influence in our next most strategically important South Pacific "neighbour", the Solomon Islands.

The Solomon Islands was a British colony until it achieved Independence in 1978. It elected to retain the Queen as head of state and join the Commonwealth of Nations. Independence was achieved smoothly and there is no doubt Papua New Guinea's peaceful transition to Independence was in part a guide to its neighbour.

When PNG achieved Independence it chose to establish diplomatic relations with the Peoples Republic of China and has broadly pursued a "One China" policy ever since. On the other hand, the Solomon Islands established diplomatic relations with Taiwan, and had no formal relationship with the PRC.

Relations between PNG and its neighbour the Solomon Islands were generally sound, though tensions arose when the Bougainville Copper Mine was shut down and a deadly and costly rebellion began. The island of Bougainville is separated from the Solomon Islands by a narrow strait. The proximity of Bougainville to the Solomon Islands ought to be of the highest order strategic importance to Australia.

After years of ethnic tension and a total breakdown of law and order and government services, the SI Parliament unanimously supported a government request for "outside assistance". The response was led by Australia, supported by Pacific Island nations generally.

In July 2002, Australian and Pacific Islands police and troops arrived in the Solomon Islands under the auspices of the Australian-led Regional Assistance Mission to the Solomon Islands (RAMSI). The force totalled 2,200 police and troops led by Australia and New Zealand.

Australia essentially met the cost of the 14 year exercise – around $A2.8 billion.

The RAMSI mission is generally regarded as being initially successful, but as it dragged on ethnic tensions resumed, and one of the nation's political leaders, Manasseh Sogavare, was implacably opposed to the continuing Australian-led presence until it finally ended in 2017.

Sogavare has initially been Prime Minister for a short period in 2000, and returned to office in 2006 at a time when anti-Chinese sentiment was at a peak. Much of the Chinatown business sector in the capital of Honiara was destroyed and hundreds of Chinese were evacuated by China.

Sogavare's term was short lived, but he was returned to office in 2014, and oversaw the ending of the RAMSI mission in 2017. He was removed in a no confidence vote soon after but was successful in the 2019 national elections and remains in office today.

One would have thought that despite Sogavare's hostility to RAMSI, Australia would have retained at least some influence in the Solomon Islands. Apart from providing $2.8 billion to fund RAMSI (which was formed on the unanimous request of the SI Parliament), Australia has been a generous "development assistance" partner with the Solomon Islands. It currently runs at around $150 million a year, and that does not include one-off Covid pandemic assistance.

Two "events" have surely demonstrated that our influence in the SI is just about zero!

Firstly, in September 2019 Sogavare's government, without public consultation, switched recognition from Taiwan to the Peoples' Republic of China. This was undoubtedly driven by Sogavare himself.

Australia had no real capacity to influence that decision of course, but where we failed is that we did not step up, and broaden, our engagement beyond a relatively bland $150 million a year on numerous projects, with some of the funds staying in Australia under consultancy arrangements.

And Australia should have also moved to "protect" the interests in the SI of Australian investors and businesses, especially in the mining sector. If we tried to do so, then we failed miserably.

One of the Australian mining companies operating in the SI at the time of the switch in diplomatic recognition was Axiom Mining, a Brisbane-based company which had invested about $A50 million in the Isabel Mine, even though the attitude of the SI Government was at best "confusing". At times Axiom believed approval for the mine to go ahead was a formality, and it continued to invest while awaiting final approvals.

Around 8,000 Australians were shareholders in Axiom, believing the proposed nickel mine was a sound investment given the world demand for nickel (a demand especially seen in China).

Within months of the SI switching recognition diplomatically to the PRC, the pro-China SI mining minister cancelled Axiom's foreign investment licence, denied it an export licence, and effectively deported its expatriate (mainly Australian) workforce.

The "request" from the Australian Government for Axiom to be treated "fairly in accordance with Solomon Islands law" fell on deaf ears! Within a matter of months the SI mining minister transferred key parts of the Isabel Mining licence area to the Chinese firm, Bintan Mining – a company which cause a major oil spill off the SI earlier that year!

Today Axiom is a delisted Australian Company. Investors have lost the lot – China has acquired a very valuable mine very cheaply.

So when it came to a not insignificant Australian company investing in the SI, Australia had absolutely zero influence. My friend, Rowan Callick, wrote extensively about it in The Australian at the time but the SI Government was totally unmoved!

But that brings me to the even more troubling situation that Australia simply cannot ignore.

It is just over two years since the Solomon Islands switched recognition from Taiwan to the PRC. In that time, China has secured a total dominance over the construction, forestry, fisheries and agricultural export sectors across the SI (with the notable exception of the Malaita Province).

More than 90 per cent of the SI's log exports now go to China – and overall more than half the island nation's total exports go the same way. That has just about all happened in two years!

The Solomon Islands construction sector has effectively collapsed, with every government contract of any value going to Chinese construction companies, principally under the Belt and Road agenda. The Pacific Games will be held in Honiara in 2023 – there are five major construction projects associated with it such as a major stadium, and athletes accommodation.

The contracts for all five have gone to PRC companies with a mixture of PRC grants and loan funding it would seem.

In addition China is developing an international airport and undertaking just about all other infrastructure work for the Sogavare Government. The local construction sector has protested it has been destroyed, but its protests have been ignored.

If there was any doubt about the SI's effective subservience to China just one line in the transcript of a "telephone discussion" between President Xi Jinping and Prime Minister Sogavare on 24 September this year really says it all.

In response to Xi's assurances about more Belt and Road support (expensive tied loans) Sogavare said……"…The SI will continue to firmly support China on issues related to Taiwan, Xinjiang, Hong Hong and human rights!"

That from a strategic regional neighbour of Australia, a Parliamentary democracy, AND a country where over NINETY per cent of the population are committed Christians!

The control China effectively exercises over the Solomon Islands economy, and especially its vital export sector, ought to alarm Canberra on two fronts.

Firstly, a strategic neighbour is now totally influenced by China (something leading SI opposition members and one provincial premier continue to highlight) and secondly as the PNG Province of Bougainville moves inexorably towards Independence, China is well placed to develop strong links with Bougainville especially when it secures Independence!

If what has happened in the Solomon Islands in just over two years is "benign" and "non- threatening" to Australia's strategic national interest (let alone the rights and freedoms of the good people of the Solomon Islands) then I am a very poor judge!