' Challenging the State Challenging the State: the Sandline Affair in Papua New Guinea Edited by Sinclair Dinnen, Ron May and Anthony J. Regan Published jointly by National Centre for Development Studies Research School of Pacific and Asian Studies The Australian National University Canberra Pacific Policy Paper 30 and Department of Political and Social Change Research School of Pacific and Asian Studies The Australian National University Regime Change/Regime Maint enance Discussion Paper No. 21 © National Centre for Development Studies 1997 This work is copyright. Apart from those uses which may be permitted under the Copyright Act 1968 as amended, no part may be reproduced by any process without written permission from the publisher. This book is a joint publication of the National Centre for Development Studies, the State, Society and Governance in Melanesia project, and the Department of Political and Social Change, Research School of Pacific and Asian Studies, The Australian National University. The contribution of the Australian Agency for International Development (AusAID) towards the publication of this series is gratefully acknowledged. The opinions contained in this volume are those of the authors, and not necessarily of the National Centre for Development Studies, the State, Society and Governance in Melanesia project, the Department of Political and Social Change, or of AusAID. ISSN 0817-0444 National Library of Australia Cataloguing-in-Publication entry Challenging the state : theSandline Affair in Papua New Guinea. Bibliography. ISBN 0 7315 2366 0. 1. Internalsecurity - Papua New Guinea. 2. Civil-military relations - Papua New Guinea. 3. Papua New Guinea - Military policy. 4. Papua New Guinea - Armed Forces. 5. Papua New Guinea - Defenses. I. Dinnen, Sinclair. II. May, R. J. (Ronald James), 1939- . III. Regan, A. J. (Anthony J.). IV. Australian National University. Dept. of Political and Social Change. (Series : Pacific policy papers ; 30. ). (Series : Regime change and regime maintenance in Asia and the Pacific. Discussion paper series ; 21). 355.0330953 Series editor: Maree Tait Editor: Allison Ley Pagemaker: Tikka Wilson Cover design: LujanSheen Design Cover photograph: News Limited Sydney, reproduced with thanks Printed in Australia by Paragon Printers Contents Contributors vii Acknowledgments viii Acronyms ix 1. Introduction 1 Ron May, Anthony J. Regan and Sinclair Dinnen 2. The Sandline Affair: a chronology of significant events 9 Anthony J. Regan and Sinclair Dinnen 3. Preparation for war and progress towards peace- Bougainville dimensions of the Sandline Affair 49 Anthony J. Regan 4. Paradoxes in Papua New Guinea 73 Bill Standish 5. The Papua New Guinea policy-making environment as a window on the Sandline controversy 82 Anthony J. Regan 6. Crisis or not a crisis: the situation in Papua New Guinea on 26 March 1997 94 Angela Mandie-Filer 7. The military factorin the events of March 1997 99 Ron May 8. The rise of power is the beginning of its downfall: a Bougainvillean perspective on the Sandline Affair 106 RuthSaova na-Spriggs 9. Tr ading in security: private military contractors in Papua New Guinea 112 Sinclair Dinnen 10. Political siege in Papua New Guinea and the role of the military in Melanesia 129 TarcisiusTaraKabutaulaka 11. National election: local decisions 136 Hank Nelson References 144 Appendix: Sandline documents 149 v The contributors Throughout the events covered in this volume several members of the Australian National University's Research School of Pacific and Asian Studies provided regular commentary for the Australian and overseas media. On 17 April Melanesianand Australian scholars in the School led a well-attended seminar todiscuss the events and their implications. Most of the papers presented here derive from that seminar, and from earlier media commentary. They are not intended as a full examination of the events of March-June 1997-several such examinations are forthcoming-but rather as a series of contemporary reflections, partly updated. Standish, Regan, May, Dinnen and Nelson are longtime observers of Papua New Guinea politics who have all spent considerable periods of residence in Papua New Guinea. Mandie-Filer is a Papua New Guinean scholar, currently at the Australian National University, who was in Papua New Guinea in March. Saovana-Spriggs is also a Papua New Guinean, who followed events in March-June from her present home in Canberra. Kabutaulaka is a Solomon Islands scholar who, like Saovana-Spriggs, has taken a particular interest in the political forces unleashed by the Bougainville conflict. The brief reflections presented here are preceded by a detailed chronology of the SandlineAffair and followed by appendices comprising selected documents and texts central to the events covered in this volume. vii Acknowledgments TheEditors wish to express their appreciation to the Departmentof Political and Social Change, theNational Centre for Development Studies and the State, Society and Governancein Melanesia Project of the Australian National University for their financial assistance with the production of this collection. Special thanks are due to Allison Ley, Beverley Fraser, Claire Smith and Bill Standish for their fine editorial work. Sean Dorney and Mary-Louise O'Callaghan have also contributed as visitors to the Department. We are also grateful to Tikka Wilson and Dayaneetha De Silva for their pagemaking efforts and to Maree Tait, editor of thePacific Policy Paper series. The editors would also like to thank Mary-Louise O'Callaghan and The Australian for permission to reproduce her two articles. viii I The Sandline Affair Acronyms ABC AustralianBroadcasting Corporation BBC British Broadcasting Corporation BCL Bougainville Copper Limited BIG Bougainville Interim Government BP British Petroleum BRA Bougainville Revolutionary Army BRF Bougainville Resistance Forces BTG Bougainville Transitional Government CRA Conzinc Riotinto Australia Limited DSL Defence Systems Limited EHP Eastern Highlands Province GDP Gross Domestic Product ICRAF Individual and Community Rights Advocacy Forum MBE Member of the British Empire MELSOL Melanesian Solidarity MP Member of Parliament MRDC Mineral Resources Development Corporation NBC National Broadcasting Corporation NCD National Capital District NEC National Executive Council NGO Non-GovernmentOrganization NIO National Intelligence Organisation PCR Post-Conflict Reconstruction PEA Public Employees' Association PM Prime Minister PNG Papua New Guinea PNGBC Papua New Guinea Banking Corporation PNGDF Papua New Guinea Defence Force PPP People's Progress Party PTF Police Tactical Force RDU Rapid Deployment Unit RFMF Royal Fiji Military Force ix RTZ Rio Tinto Zinc SABC South African Broadcasting Corporation SAS Special Air Sevices SFU Special Forces Unit SHP Southern Highlands Province TUC Trade Union Congress UK United Kingdom UN United Nations UNCHR United Nations Commission for Human Rights UPNG University of Papua New Guinea us United States VIP Ve ry Important Person WHP WesternHighlands Province x I The Sandline Affair Introduction The so-called SandlineAffair in Papua New Guinea occurred against the background of the nine-year old Bougainvilleconflict. As well as its tragic toll in lives and suffering, this conflict has had a significant impact on the national economy, in terms of potential revenue lost from the Panguna copper mine and the high cost of security operations. Since 1988 there have been a number of unsuccessful attempts to resolve the Bougainville situation, using both negotiation and military force (see the contributions by May and Regan in this volume). When Sir Julius Chan, deputy prime minister in the Wingti government(July 1992-August 1994), became foreign minister in January 1994 he made the resolution of the conflict one of his priorities. On becoming Prime Minister in August 1994, this became his main objective. While Chan adopted a number of different strategies to this end (see Regan's first contribution), his efforts ultimately achieved little. Having originally rejected the mercenary option in September 1996, Chan's later change of mind is to be set againstthe frustrations generated by successive breakdowns in negotiations with rebels, a series of humiliating military set-backs, and, not least, the prospect of a looming general election. The details of the Sandline proposal were set out in a report to government of December 1996 entitled Project Contravene and a Introduction I contract between Sandline and the government (both reproduced in the Appendices to this volume). Sandline envisaged a military strike by contracted foreign soldiers, working with the Papua New Guinea Defence Force (PNGDF), against key Bougainville Revolutionary Army (BRA) leaders, destroying their communications, loading and re-supply installations, and re-capturing the Panguna mine (see Regan's first contribution). Sandline International, the principal contractor withthe Papua New Guinea government, acted as brokers for the notorious South African private military organisation, Executive Outcomes. The South African company was, in tum, sub­ contracted by Sandline to supply the mercenaries and military equipment for this operation. Sandline's director, retired Lieutenant­ Colonel Tim Spicer, coordinated the negotiations surrounding Project Contravene. As discussed by Dinnen, Executive Outcomes is the most well­ known of the new breed of mercenary organisations that have evolved in the post-Cold War era and that have intervened militarily