China’s troubling influence in the Solomon Islands

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.