Date: Fri, 14 Mar 1997 14:04:29 -0500 Subject: Bougainville Update - 14/3/97 >Delivered-To: malecki-AT-algonet.se >Date: Fri, 14 Mar 1997 18:28:43 +1000 >To: (Recipient list suppressed) >From: Sasha Baer <sashab-AT-magna.com.au> >Subject: Bougainville Update - 14/3/97 > >Papua New Guinea contract with mercenary troops going ahead >==========================================================> >Radio Australia, Thursday 13 March, 1997 (5:04pm AEDT) >------------------------------------------------------ > >Papua New Guinea's Prime Minister, Sir Julius Chan, says his government's >contract with the private military advisers, Sandline International, is >going ahead. > >Sean Dorney reports that Sir Julius has sent an official reply to the >Australian Prime Minister, John Howard, following their meeting in Sydney >last Sunday at which Mr Howard canvassed what he called reasonable >alternatives to the Sandline's Contract. > >Speaking publicly for the first time since his meeting with Mr Howard, Sir >Julius said they had basically agreed to disagree on the wisdom of bringing >a company like Sandline into the South Pacific region. "As it stands at the >moment, we have a contract, not only we have a contract, we have paid for >the contract, and not only that they are on the ground and they're >performing according to the conditions of our contract." Sir Julius >confirmed to me that that contract included the Sandline advisers going into >Bougainville with the Papua New Guinea troops they are training. Sean >Dorney, Port Moresby. > >---------------------------------------------------------------------------- > >More criticism on PNG Government's relationship with mercenaries >===============================================================> >Radio Australia, Friday 14 March, 1997 (7:28am AEDT) >---------------------------------------------------- > >The Head of Political Studies at the University of Papua New Guinea, Doctor >Ray Anere, says the PNG Government should reveal its source of funding for >the engagement of Sandline International. > >Doctor Anere said the government's actions to date in the engagement of >Sandline as a 36-million dollar military consultant, show it is moving away >from being an open government. > >He warned that the government could be exposed to pressure from any external >source of funding, with contractual obligations taking precedence over the >views of the people of PNG. > >Doctor Anere said the funding details should be public, to rule out any >suspicion of foreign manipulation. > >He said he believed any hardline approach to the Bougainville crisis would >be counter-productive and further prolong the war. > >---------------------------------------------------------------------------- > >World Bank denial on reviewing loans to Papua New Guinea >=======================================================> >Radio Australia, Friday 14 March, 1997 (3:29pm AEDT) >---------------------------------------------------- > >The World Bank has denied reports that it's reviewing its loans to Papua New >Guinea, over the government's use of mercenaries on Bougainville. > >The Bank says its 358-million dollar economic recovery package agreed to >last year has been fully disbursed, and the Bank is precluded from >interfering in the internal political affairs of any country. > >It says where the Bank would comment on military matters is when military >spending is seen to impinge on sound economic planning and management - >especially where such expenditure distorts a country's development priorities. > >The Bank says its primary concern with P-N-G is to ensure these development >priorities are maintained. > >---------------------------------------------------------------------------- > >Australian Opposition calls for tough line against P.N.G. >========================================================> >Radio Australia, Friday 14 March, 1997 (4:09pm AEDT) >---------------------------------------------------- > >The Australian opposition has called on the government to get tough with >Papua New Guinea over its decision to use mercenaries against rebels on >Bougainville. > >The Opposition Foreign Affairs spokesman, Laurie Brereton, says as a minimum >Australia must cut aid to P-N-G and suspend immediately the bilateral >defence cooperation program. > >Mr Brereton says the use of mercenaries in the region is a dangerous step >and must be stopped. > >"And given that we are subsidizing PNG to the tune of 320-million dollars >per annum, given that this is Australian taxpayers money, and given that >some 36-million of this money is going to help pay indirectly for the >mercenaries, Australia should get tough and say for every dollar spent, >there will be a dollar reduction in the allocation from Australia." > >---------------------------------------------------------------------------- > >Chan vows to use mercenaries >===========================> >The Australian, Page 1, March 14, 1997 >-------------------------------------- > >By South Pacific correspondent MARY-LOUISE O'CALLAGHAN > >MARCH 14: Australia's relationship with Papua New Guinea was plunged into a >fresh crisis yesterday when the Prime Minister of Papua New Guinea, Sir >Julius Chan, rejected Australia's pleas and said he would send mercenaries >to Bougainville. > >Sir Julius's comments, the first since his weekend meeting with the Prime >Minister, John Howard, effectively rule out Australia's compromise offer to >provide a "reasonable" alternative in aid and defence training to the use of >the Sandline mercenaries. > >Mr Howard and the Foreign Minister, Alexander Downer, both restated >Australia's "firm opposition" yesterday to the use of mercenaries. > >Speaking at a press conference in Port Moresby, Sir Julius said his country >would not be treated like "a little child". > >"It is time for people offshore to realise that we are an independently >elected government of an independent country . . . I have to decide at >crucial times what is best for Papua New Guinea," he said. > >"We have a contract. Not only do we have a contract, we've paid for the >contract. And not only that, they are on the ground (on mainland PNG) and >they are performing to the conditions of our contract." > >Mr Downer said last night the PNG Government was entitled to make its own >decisions, whatever the consequences might be. > >Last month federal Cabinet refined a series of options in response to the >issue which are believed to include cutbacks in Australia's $320 million >($US253 million) annual aid program with PNG. > >"At the end of the day, whatever the consequences may be, the Papua New >Guinea Government is entitled to make its own decisions," Mr Downer said in >an interview on ABC Radio. Dialogue with PNG on the issue would continue but >Australia's position was "crystal clear". > >"Our national interest is to ensure that mercenaries don't become the norm >in our region and mercenaries aren't used in Bougainville to try and resolve >a very difficult political issue." > >A spokesman for Mr Howard said the Prime Minister would write to his PNG >counterpart, after receiving a letter from Sir Julius following their >meeting last Sunday. > >"Mr Howard is ready to continue discussing with the Papua New Government how >the problem of the mercenaries might be resolved," he said. > >However, Sir Julius told journalists that while he understood where Mr >Howard "stands on this position", he still intended to use the "paid >military advisers" from the British-based Sandline International on >Bougainville. > >"Yes . . . definitely; I have made it very clear on several occasions," he >said when asked if the Sandline employees would accompany the PNG Defence >Force personnel they are training to Bougainville. > >On the offer of reasonable options, he said Mr Howard "gave me some ideas to >chew over, and I also responded in the same vein to him". > >In a separate development, World Bank officials yesterday denied they were >in PNG to review loans recently granted to the Government in the light of >the $36 million spent on the he mercenary contract. > >A spokeswoman for the bank said the delegation was in Port Moresby at the >Government's invitation and it was not the bank's policy to interfere with a >country's internal affairs. > >---------------------------------------------------------------------------- > >Bank threat to PNG over mercenaries >==================================> >Sydney Morning Herald, Wednesday, March 12, 1997 >------------------------------------------------ > >By GREG ROBERTS > >In a move which may have serious implications for the beleaguered Papua New >Guinean economy, the World Bank and other international agencies are >reviewing loans worth $210 million because of PNG's use of mercenaries on >Bougainville. > >A World Bank delegation led by an Iranian economist, Mr Pirouz Hamidian-Rad, >has arrived in Port Moresby and is questioning the PNG Government about the >$35 million it is spending to hire the London-based company Sandline >International for operations gainst rebels on the disputed island. > >Mr Hamidian-Rad has asked Port Moresby to explain why the bank should not >consider PNG has breached conditions Port Moresby agreed to in exchange for >loans because there was no provision in the PNG Budget for the money, say >finance sources. > >Mr Hamidian-Rad, who is the bank's PNG loans officer, has also asked the >Government to explain how it proposed to fund its planned purchase of >RTZ-CRA's majority share in the abandoned Panguna copper mine on Bougainville. > >The bank may not proceed with loans worth $65 million if it finds >"performance criteria" agreed to by PNG have not been met. > >The bank's investigation is being followed closely by the International >Monetary Fund, which has prepared a draft agreement offering another $65 >million in loans to PNG this year. > >The agreement is being reviewed by IMF economists because of the >controversy, and there is no guarantee it will be ratified by the fund's >executive at a meeting next month. > >Diplomatic sources said the Asian Development Bank (ADB), which was expected >to offer PNG loans worth $80 million this year, is also reviewing its position. > >The IMF loans may not necessarily have been taken up, but the World Bank and >ADB loans are essential to the PNG Government's development plans. > >The loans are part of a $465 million "structural readjustment" package >agreed to in 1995 by the World Bank, the IMF, the ADB, Japan and Australia. > >It is subject to PNG meeting strict performance criteria ranging from >adhering to an agreed national budget to implementing environmentally sound >logging practices. > >Australia has lent PNG $70 million under the package, in addition to the >$320 million a year in aid it provides. > >The PNG Finance Minister, Mr Chris Haiveta, originally sought to pay >Sandline from PNG's share of proceeds >from the float of Oregon Minerals Ltd, partly because of "conditions >relating to the IMF/World Bank loans", >according to a confidential letter he wrote to the North Fly Highway >Development Company. > >However, the proceeds could not be spent this year under agreements with the >IMF and the World Bank. The >letter was leaked to PNG's Post-Courier newspaper two weeks ago, forcing Mr >Haiveta to give an assurance >the payment would come from the "normal budgetary process". > >Mr Haiveta has said the mine takeover could cost between $50 million and >$200 million, but he has not explained how the Government intends to fund >the purchase, or pay estimated costs of between $400 million and $600 >million to restart the mine, which was abandoned in 1989 following rebel >attacks. > >---------------------------------------------------------------------------- > >PNG rebuffs Australia: mercenaries go ahead >==========================================> >Sydney Morning Herald, Friday, March 14, 1997 >--------------------------------------------- > >By CRAIG SKEHAN, Foreign Affairs Correspondent > >The diplomatic crisis over Papua New Guinea's hiring of foreign mercenaries >for a military campaign against secessionist rebels on Bougainville deepened >yesterday with the PNG Prime Minister, Sir Julius Chan, rejecting new >Australian pleas to scrap the plan. > >The Prime Minister, Mr Howard, on Sunday personally offered Sir Julius an >increase in military assistance on condition that mercenaries provided by >the British-based firm Sandline International are not used. > >However, a defiant Sir Julius told a Port Moresby media conference yesterday >that a $US36 million contract for the supply of mercenaries and military >equipment would be implemented. > >The PNG Government has waged a nine-year military campaign against guerillas >of the Bougainville Revolutionary Army (BRA) fighting for independence for >the copper-rich island. > >The conflict has claimed the lives of hundreds of PNG soldiers and thousands >of civilians, and Australia has argued that there should be a negotiated >settlement as no military solution is possible. > >"Not only do we have a contract, we've paid for the contract," Sir Julius >said yesterday. "And not only that, they are on the ground and they are >performing to the conditions of our contract." > >While some PNG officials have indicated that up to 80 mainly southern >African mercenaries would be used only for training PNG special forces in >counter- insurgency techniques, Sir Julius said they would have an >on-the-ground role on Bougainville. > >"Some of those backroom operators will need to be there to operate some of >this equipment," he said. > >Sandline has been contracted to give direct back-up to PNG Defence Force >company commanders in a planned campaign to wipe out the "hardline" BRA >leadership. > >Sir Julius referred sarcastically to four Australian-supplied Iroquois >helicopters which have been the subject of protects by Canberra over their >use as a weapons' platforms. > >"We might give them back and ask Australia to sell them to help finance this >project," he said. > >PNG bitterly resented Australia's refusal to provide increased military >assistance, including high technology infra-red equipment to pinpoint BRA >positions. > >But a series of human rights violations, including civilian massacres, has >increased Australia's reluctance to be associated with the military campaign. > >---------------------------------------------------------------------------- > >PNG lawyer fights mercenary plan >===============================> >The Age, 13 March 1997 >---------------------- > >By GREG ROBERTS > >A contract between Sandline International and the Papua New Guinea >Government made specific provision for foreign mercenaries to be employed in >front-line fighting on Bougainville, says a Port Moresby lawyer who is >mounting a legal challenge against the operation. > >The PNG Government responded to the challenge by Mr Rimbink Pato in the >National Court yesterday by serving notice that it will try to throw the >case out on security grounds. > >The National Security Intelligence Organisation and the North Fly Highway >Development Company applied to become parties in the case, which was >adjourned to next week pending consideration of their application tomorrow. > >The PNG Finance Minister, Mr Chris Haiveta, wrote to the company in January >saying he had directed the Bank of PNG to transfer $35million from the >Government's share of a mineral company float to another account to >implement its Bougainville plans. > >The letter is being examined as part of a review by the World Bank and other >international agencies of loans to PNG worth $210 million. Agreements >between PNG and the agencies prevent such transfer of funds. > >The security intelligence organisation will argue that the case could >threaten national security. > >Mr Pato seeks an application restraining Mr Haiveta and the Prime Minister, >Sir Julius Chan, from paying further public money to Sandline International. >He argues that the contract with the company breaches the Constitution and >violates bureaucratic procedures. > >Mr Pato, who hopes the case will reveal contract details, said a lawyer had >told him it provided for Sandline employees to be involved in fighting. >``The contract makes it clear mercenaries will be actively engaged in the >front-line on Bougainville,'' he said. > >---------------------------------------------------------------------------- > >PNG to go ahead with mercenaries >===============================> >The Age, 14 March 1997 >---------------------- > >By LINDSAY MURDOCH, >international affairs >correspondent, Canberra > >Australian efforts to force Papua New Guinea to abandon plans to launch a >mercenary-led offensive on Bougainville appear to have failed. > >The country's Prime Minister, Sir Julius Chan, yesterday declared >mercenaries would still go to Bougainville and his Government would not back >away from a $35 million contract with the London-based company Sandline >International. > >Sir Julius's comments in Port Moresby dashed hopes that talks he had in >Sydney last weekend with the Prime Minister, Mr John Howard, would lead to >PNG backing away from using the mercenaries in an offensive designed to wipe >out leaders of the secessionist Bougainville Revolutionary Army. > >Mr Howard is likely to approve some form of retaliatory against PNG if the >mercenaries fight on Bougainville, where an estimated 12,000 people have >died in the island's nine-year war. > >He issued a statement last night saying he would respond to Sir Julius's >comments after seeing a transcript. > >Sir Julius refused to reveal the contents of his talks with Mr Howard, but >made clear the Sandline contract would stand. > >``Not only do we have a contract, we've paid for the contract,'' he said. >``And not only that, they are on the ground and they are performing to the >conditions of our contract.'' > >Sir Julius said that Mr Howard had given him ``some ideas to chew over''. >But he said PNG would not respond immediately. > >About 40 African-based mercenaries have been training PNG soldiers in >preparation for a renewed offensive on Bougainville. > >Rebels on the island have vowed they will ``shoot on sight'' any >mercenaries, and claim advance parties have already landed in six places. > >Sir Julius yesterday admitted that some Sandline employees would go to >Bougainville in an ``advisory role'' to oversee PNG's use of new equipment, >including helicopters. > >The Foreign Minister, Mr Alexander Downer, said from Perth late yesterday >that further talks would be held with PNG in the next few days. > >Sir Julius's comments contradict an assurance that PNG's Foreign Minister, >Mr Kilroy Genia, gave Mr Downer last week that no mercenaries would go to >Bougainville. > >The ABC reported from Port Moresby that PNG wanted a deal whereby Australia >would provide the same services as Sandline, including counter-insurgency >training, equipment including helicopters and sophisticated intelligence and >listening equipment. > >But the conditions would be unacceptable to the Government, which is >demanding that PNG pursue non-military ways to end the war. > >The ABC quoted Sir Julius as saying he was acting in PNG's national >interests, and it annoyed him that every time he made a decision he felt >Australia tried to slap him on the wrists or on the knuckles. > >- with AAP > > >---------------------------------------------------------------------------- > >NIO role sought in Sandline case >===============================> >The National, March 13, 1997 >---------------------------- > >By GARONA VERE > >PORT MORESBY: The National Court was yesterday asked to make the National >Intelligence Organisation (NIO) a party to the legal challenge against the >engagement of Sandline International by the State. > >Warner Shand lawyers filed a motion seeking orders that the NIO be joined as >a party to the proceedings to prevent information being divulged to the >parties opposing the Government's decision to engage the foreign military >advisors. > >Mike Wilson sought the order on behalf of Deputy Prime Minister and Finance >Minister Chris Haiveta who was named as the second defendant in the legal >challenge by lawyer Rimbink Pato. > >Mr Pato who is an intending candidate, had named the Prime Minister Sir >Julius Chan, as first defendant, and the State as third defendant. > >He is seeking seven declarations by the court to nullify the engagement of >Sandline International, stopping the use of the K33 million earmarked for >the exercise and prohibiting any deals with the contracted company. > >Mr Wilson submitted that the documents were privileged under section 46 of >the NIO Act, Chapter 405, and it was necessary to protect the State's >interest in protecting security over the right to freedom of information. > >Mr Wilson also applied for the North Fly Development Company Pty Ltd (NFDC) >to be a party in the proceedings. > >NFDC is alleged to be the company used to channel the K33 million Orogen >sale proceeds to fund Sandline International. > >Mr Pato objected to Mr Wilson's applications but Justice Gibb Salika >adjourned the matter for hearing to tomorrow. > >Mr Pato's substantial motion seeking the declaratory orders has been >adjourned to the Registry for a date to be set. > >A search of documents filed at the court registry revealed that NIO Director >General Ovia Rauka had written a letter on Monday (March 11) to Acting >Finance Secretary James Loko directing all officers attached to the >department involved in the State's decision to sign declarations of secrecy. > >Part of the letter stated: "Please note that all information that has come >to your knowledge and to those persons involved in the project is now >governed by the National Intelligence Organisation Act and is confidential >and shall not be divulged to any person or authority without my express >approval." > >Mr Loko in reply to Mr Rauka's direction said: "Please note that there may >be other Government Authorities that have had access to documentation >
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