Lowy Institute

The Lowy Institute has published a major new report on China's behaviour in the South China Sea. 'Shifting Waters: China's New Passive Assertiveness Asian Maritime Security' finds that China has changed its tactics in recent times: there are fewer confrontations at sea with the constabulary and naval forces of other claimants, and more 'passive assertiveness' such as island-building.

Co-author Ashley Townshend says this is partly a good-news story, because it reduces the chances of violent conflict. But in this interview recorded yesterday, Ashley also says that although the tactics have changed, China's strategic goals have not:


After years of moral outrage and stern official rhetoric, the odious scandal of sexual abuse by UN peacekeepers of the vulnerable people they are sent to protect may finally attract tangible penalties for the organisation. US senators this month threatened to withdraw funding from the UN over its leaders' failure to prevent sexual violence by peacekeepers and to hold perpetrators to account when it occurs. Given that the US funds 28% of the US$8.3 billion annual peacekeeping budget, it's a threat with teeth.

This latest legitimacy crisis for UN peacekeeping has been brewing a long time. Since the first widely publicised abuses by peacekeepers in Cambodia in 1992, allegations of sexual abuse and exploitation have followed the UN's deployments to crises around the world: Bosnia, Timor-Leste, Kosovo, Burundi, Liberia, Sierra Leone, Haiti, the DRC, Côte d'Ivoire, Sudan and Mali. 

But it is stories of widespread sexual violence against women and children in the Central African Republic (CAR) that have captured global media attention and which may finally prompt meaningful reform.

Reports of children being sexually assaulted and raped in CAR emerged in May 2014. UN investigators recorded numerous reports from young boys, aged 8–13 years, of their abuse by French troops serving under the (UN-authorised but French-commanded) Operation Sangaris. Gross mishandling by UN and French officials saw nearly a year pass before the reports surfaced publicly, thanks to the scrutiny of the NGO AIDS-Free World; only then did French officials begin criminal investigations. A month later, UN Secretary-General Ban Ki-Moon appointed a panel to investigate the UN's response. Their damning report concluded that the UN's mishandling amounted to 'gross institutional failure' and 'an abdication of responsibility' on the part of senior officials. In the meantime, Mr Ban sacked the head of the UN's peacekeeping mission in the CAR.

But as the UN focused inward on the inadequacies of its own bureaucratic procedures, new reports of abuse continued to emerge. In February 2016, 120 peacekeepers from the Republic of Congo and the Democratic Republic of Congo were sent home over new accusations of sexual abuse brought to light by Human Rights Watch. Other allegations involved troops from Georgia, France, Burundi, Morocco and Tanzania.

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And then in late March 2016 came the revelation that the UN had investigated 108 further cases of abuse by French and Gabonese forces. The vast majority of victims were children and the allegations included grotesque violence and bestiality by a French commander. Just a few weeks later, AIDS-Free World uncovered another 41 cases of sexual violence. 

Why have peacekeeping missions so frequently been guilty of abusing those they were sent to protect? And given that only a tiny fraction of peacekeepers are responsible for the abuses, why has the UN proved so incapable of holding them to account?

Some blame the UN's reliance on unprofessional, inadequately trained troops from countries with poor human rights records. To be sure, the demand for peacekeepers is at an all-time high and they are deployed overwhelmingly from developing countries. But that can't explain the involvement of French troops in the CAR scandal — including in its most depraved incidents — nor the fact that most peacekeepers do not sexually abuse or exploit local people. 

At the same time, while the vast majority of peacekeepers serve honourably and professionally, this is not simply a case of a few bad apples: the peacekeeping system is woefully deficient when it comes to the local accountability of peacekeepers

The primary obstacle is the legal basis on which peacekeepers are deployed, according them immunity from prosecution by the host state. Intended to allow peacekeepers to operate without host state interference, in practice immunity has enabled impunity. The rules of UN deployments protect peacekeepers, not their victims. Countries contributing peacekeepers remain fully, and solely, responsible for investigating, prosecuting and punishing their own personnel. If their home countries turn a blind eye to abuse allegations, there is little the UN — or survivors of abuse — can do about it. Recent recommendations for 'naming-and-shaming' recalcitrant UN member states and withholding payment for their troop contributions reflect welcome progress, but these are weak mechanisms for preventing or remedying these crimes. 

A range of other factors is at play. Field missions answer to UN headquarters in New York, not to communities on the ground. Sexual abuse and exploitation has been treated as misconduct, requiring disciplinary action, rather than as criminal acts requiring a legal response. A lack of transparency, systematic monitoring and public reporting means that local populations rarely have a voice, and it has required ad hoc efforts by civil society organisations to bring abuses to light. Finally, peacekeeping is fundamentally a foreign activity, involving the deployment of international troops within societies they usually know little about. In her book Peaceland, ethnographer and former UN peacebuilder Séverine Autesserre finds that derogatory views of local populations are alarmingly common, recounting 'blatantly racist and shockingly offensive' attitudes and behaviours described variously as degrading, belittling, humiliating, dehumanising and denigrating of local people. 

Together, these features of peacekeeping create a permissive, even enabling environment for sexual violence and exploitation. A slew of organisational reforms over the past decade has not, it seems, made the UN any more effective in curtailing these abuses.

So what should be done?

Withholding funding from the UN, as US senators have threatened, is a powerful form of leverage. The 1964-65 session of the UN General Assembly, for example, essentially ground to a halt after several countries — including the USSR and France — refused to pay their share of the peacekeeping budget in protest over what they saw as the illegitimate authorisation of peacekeeping operations.

Today, the top five financial contributors to UN peacekeeping provide 60% of the entire budget: US (28%), Japan (11%), and France, Germany and the UK (each around 7%). These big contributors can wield substantial influence. While reforming the system of legal immunities is impractical, their leverage could exact reforms from UN peacekeeping bureaucracy to improve the process for dealing with abuse allegations. More importantly, their concerted attention could help to move attention from the politics of New York to the survivors of abuse in host countries, in the form of assistance and compensation. 

They could also lend their political and financial weight to two more ambitious accountability reforms. 

First, UN peacekeeping needs an ombudsperson, with budgetary and reporting independence from peacekeeping operations in the field and from peacekeeping bureaucracy in New York. The experiment with an ombudsperson in Kosovo provides both a precedent and a demonstration of the limits of an accountability mechanism that depends for its authority and funding on the very actors it is trying to hold to account. 

Second, the extent of sexual violence in the CAR — and the UN's mishandling of it — only came to light through the determined but ad hoc reporting of international NGOs, including AIDS-Free World, Amnesty International and Human Rights Watch. Friends of UN peacekeeping, like Australia, should promote and fund systematic civil society monitoring of peacekeeping, ideally through a mix of host country and international NGOs, to monitor operations and give voice to those made most vulnerable by violent conflict.

Photo courtesy of Flickr user United Nations Photo.


Two month ago I wrote a blog outlining the continued deterioration of the situation in Afghanistan.

The situation does not look any better today. Last week a truck bomb was set off in Kabul killing at least 68 people and injuring 347. A friend of mine with whom I checked, and who was at quite a distance from the explosion, told me she thought their office building was going to collapse. It reminded me of August 2004 when a similar bomb shook my office building, catapulting debris into our front yard. At the time it had reminded me of an earthquake.

Sadly these days it takes a major event such as this to get international (especially Australian) press to even bother to write about Afghanistan. It does not, however, seem to change the West's consideration of Afghanistan as a low priority country – at least lower than others. 

For Afghans this presents a situation where their plight has slipped into oblivion. Out of the eye of Western media the sheer hopelessness is growing. My friend put this desperation in one simple sentence: 'I am not sure how long we will survive this.'

This means a protracted and increasingly bloody war in Afghanistan. Since the Taliban announced its annual 'spring offensive' (Operation Omari in honour of its deceased leader Mullah Omar) on 12 April, it has not wasted time in hitting targets which are neatly documented on an increasingly sophisticated website. While Kabul might have been the biggest attack, there is also fighting (again) in Kunduz and at the outskirts of Herat. The focus seems to be increasingly in urban areas, where the majority of Afghan citizens now reside.

At the same time peace talks are stalling, and the insurgency is keeping the upper hand, the civilian toll continues to rise. Afghan civilians are increasingly squeezed between warring fronts that are showing a blatant disregard for civilian lives. The fact that the United Nations Assistance Mission in Afghanistan (UNAMA) has for the first time released a quarterly (instead of biannual) report is indicative of the deterioration of the situation. Even a 2% increase in civilian casualties in the first quarter of this year should be reason for concern, especially as the figures will likely only be the tip of the casualty iceberg.

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A disconcerting note of this new quarterly report is that it shows a 70% increase among casualties that UNAMA was able to attribute to Afghan National Security Forces (including pro-government irregular militias), despite the Afghan Government's repeated reminders to its security forces to curb such incidents. Though there are still far more casualties attributed to the insurgency, the Afghan Government needs to tread carefully at a time where their legitimacy is low. 

The Taliban continues to deny the killing of civilians, calling any such report 'enemy propaganda' with the enemy seeking 'to hide its losses by claiming a high civilian casualty toll'. They go on to argue that the lack of photos of killed civilians 'in itself is proof that there was [sic] no civilian casualties yesterday and if there were, surely they would have published many pictures'. Instead of course, only 'Americans and their lackeys' (which would be the Afghan Government) are killing civilians on a daily basis, the proof being 'a joint US-Afghan raid in Logar province's Kharwar district a few days earlier'. 

The Taliban's denial on the one hand and the Afghan Governments inability to keep their security forces in check on the other shows that neither side seems to consider the protection of civilians as an important part of winning the 'hearts and minds' of the Afghan population.

Insecurity is continuing to impact major service provision (education, health care) and the economic situation shows little improvement in a country where international assistance is in decline. Aid organisations are drawing down with less funding to go around. In more ways than one, there is little that would keep any sane Afghan citizen at home. The problem of course remains: where to go? 

The situation in Afghanistan has forced at least 335,000 Afghans to flee internally in 2015, with another 228,211 arriving in Greece taking advantage of the Syrian refugee crisis. And the flow continued into 2016. The only problem for Afghan asylum seekers is that they are likely to be sent home. This provides us with a conservative estimate that roughly half a million Afghans fled their homes during 2015. Adding this to previous estimates I made in 2014, would suggested that as many as 50% of the Afghan population is currently displaced in some form or fashion, either internally (6.75 million) or abroad (nearly 7 million). 

No small number, but still eclipsed by Syria. But even if the Syrian civil war is currently worse, Afghanistan is by no means a safe country. Europe's absorption capacity has proven to be limited and so far other countries (e.g. the US and Australia) have not really stepped up to the plate of burden sharing. As Afghanistan entered its fourth decade of conflict, Afghan refugees are realising fast that they had their time of international sympathy during the Cold War in the 1980s. Currently it seems the world can only cope with one crisis at a time, and Syria is the lucky winner in this macabre lottery. 

As noted in my last blog, however, the Afghan war is not going away anytime soon. Sending desperate people home or not allowing them to come in the first place will not solve the problem, but simply shift it. As an elder once wisely told me, if you block a stream, it will simply spill into a new path. If you want to ensure a stream stops, you need to go back to the source. Thus, if Europe feels it cannot absorb Afghan asylum seekers and Australia is not willing to throw open its borders, perhaps at minimum international actors need to assess their assistance levels within Afghanistan. The proverbial Afghan camel is very close to having its back broken, and with increasing pressure by the Taliban on urban centres, and little else positive going in the lives of many Afghans, border restrictions may no longer keep the Afghan crisis contained.

Photo courtesy of Flickr user United Nations Photo.


As Australian digital diplomacy strives to catch up to rest of the world, these monthly links highlight the most creative and effective ways countries are leveraging the internet for foreign policy gain.

  • A fantastic blog post by @Lorey explaining how the UK's UN mission used Twitter (and hashtag #NextSG) to bring the public into the room while Secretary-General candidates were questioned. Note the UK came no.1 in this digital diplomacy ranking. (h/t @mattpdmorris)
  • Lieutenant-Colonel Mark Mankowski is the latest contributor to the Australian Army's blog debate about strategic deterrence.
  • Ukraine’s Foreign Minister answered questions on NATO cooperation, countering Russian aggression and EU relations in this reddit session.  
  • Israel has serious digital diplomacy clout but admits to struggling with engaging the Arab world online.
  • Anne-Marie Slaughter argues it is connections and influence over digital flows that make a country powerful today, not armies.
  • Plenty of lessons in this post on the genius of House of Cards' Frank Underwood's (#FU2016) campaign.
  • Canadian Ambassador @BenRowswell outlines his department’s experiments with BuzzFeed, live video app Periscope, online advocacy campaigns and open-source analysis.
  • Online engagement remains the Achilles heel of diplomatic institutions, so here's advice on how ministries can move beyond an obsession with social media and experiment with a broader range of tech and online tools.
  • The US State Department hopes its new SoundCloud podcast Meet the Ambassadors will help it move past perceptions of diplomats portrayed in film and TV.
  • Pope Francis has become a serious foreign policy player; he is now also on Instagram.
  • This important statement by Ambassador to the Philippines Amanda Gorely (context here) might be the most re-tweeted tweet (766) by an Australian public servant.
  • Former Hillary Clinton advisor Alec Ross discusses messy online spaces, Russia’s propaganda arm and the pain of the departmental clearance process in this Khan Academy tutorial:


The hunt continued this week for Indonesia's most-wanted terrorist, as Jakarta prepared for talks with Malaysia and the Philippines over another ISIS-linked threat in Southeast Asia. Meanwhile, President Jokowi weighed in on the drama surrounding the construction of a giant sea wall to prevent Jakarta from sinking.

The hunt for Santoso, leader of the ISIS-affiliated East Indonesia Mujahidin (MIT), is reported to be closing in on a group of around 25 of his followers in the jungles of Central Sulawesi. Last Friday, an alleged member of the group surrendered to police, saying he could no longer stand conditions in the jungle with supply routes cut off by security forces. On Monday, another alleged member, believed to be a Chinese Uighur fighter, was shot dead when he pulled a knife on police. Since the start of the year, four suspected MIT members have been arrested and another 10 have been killed in shootouts.

Efforts to capture Santoso have intensified this year under Operation Tinombala, a joint police-military operation involving more than 3000 personnel. The drive began after Santoso's group claimed responsibility for attacks in downtown Jakarta in January, in which eight people were killed. A push is also underway to make amendments to the Anti-Terrorism Law, affording even greater powers to counter-terrorism authorities. However, human rights groups have criticised the proposed amendments, fearing a loss of hard-won rights and freedoms. In the face of international condemnation of impending executions of drug convicts, and a recent national symposium on the horrors of the 1965 anti-communist purges, it's surprising that more questions aren't being asked about the ongoing shootings without trial for suspected terrorists.

Indonesia is not the only country in Southeast Asia dealing with the threat of terror groups linked to ISIS.

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The killing of a Canadian national this week at the hands of the ISIS-affiliated Abu Sayyaf Group in the Philippines has prompted urgent action across the region. At the initiative of President Jokowi, Malaysia and the Philippines will send their foreign ministers and military leaders to Jakarta for trilateral talks next week on measures for tightening maritime security. As many as 18 Indonesians and Malaysians are reported to have been abducted by Abu Sayyaf in the past month. Next week's talks are hoped to produce a lasting commitment to maritime cooperation between the three countries, beyond the abduction crisis.

In local politics, Jakarta's current maritime focus is ensuring that the capital does not sink into the Java Sea. President Jokowi this week weighed in on drama surrounding the construction of the National Capital Integrated Coastal Development project, a giant sea wall intended to stop land subsidence that is causing Jakarta to sink faster than any other city in the world. Jokowi, in a cabinet meeting on Wednesday, urged progress on the $40-billion project, which has recently been suspended for six months over bribery allegations involving a private developer and the Jakarta city council. 

The public-private project aims to protect Jakarta's coastline with a barrier of around 4000 hectares of reclaimed land, made up of 17 islands arranged in the shape of the Garuda, the bird of Hindu mythology represented in Indonesia's coat of arms. The so-called 'Great Garuda' will feature along its wingspan multiple residential, shopping and entertainment complexes, similar to Singapore's Sentosa Island resort. The local government has also requested 15% of the area for low-cost housing — which hasn't been well received by developers.

Battles between the public and private interests of the development are now underway. The Corruption Eradication Commission (KPK) is  handling a case of suspected bribery over reclamation and zoning regulations involving developer PT Agung Podomoro and a city council member from the Gerindra party. Governor Ahok is moving ahead ruthlessly on eviction of urban poor communities inhabiting areas along the waterways and coastline. The North Jakarta mayor this week resigned over accusations from Ahok that he hadn't done enough to prevent flooding. Ministers, legislators, activists and even Vice President Jusuf Kalla have reportedly spoken out against the project. 

Amid these concerns, Jokowi's statement this week shows a strong commitment to following through on what could be one of the biggest development projects of his presidency. What remains to be seen is his commitment to representing public interests the project as and when it moves ahead.


By Catherine Hirst, an intern in the Lowy Institute's West Asia Program.

This month marks the three year anniversary of the death of Mullah Mohammed Omar, the infamous, one-eyed cleric who led the Taliban for more than sixteen years. 

Captured Taliban Militants, January 2016 (Photo courtesy of Getty Images/Anadolu Agency)

Omar was a fascinating figure on many fronts. Famously reclusive and enigmatic, no Western journalist ever met him and he wasn’t seen in public after 2001. Under his rule, a stringent formulation of Shariah Law was implemented in Afghanistan, including amputation for theft and stoning for adultery. A veteran of the Soviet-Afghan war, Omar and Osama bin Laden were close colleagues and this was an important factor in the 2001 US invasion of Afghanistan. After the fall of the Taliban, Omar managed to evade capture for twelve years, despite an intensive US-led manhunt and a $US10 million bounty. He died of natural causes in 2013.

Beyond his notorious exploits, influence, and the mysteries that surround him, Omar’s life and death provide fascinating insights into the role of individual leaders in the Jihadi system.

Omar commanded almost mythic status as the spiritual and political leader of the Taliban. He was referred to by his followers as Amir al-Mu’minin (Leader of the faithful), the prestigious title used by Islamic Caliphs throughout history. His authority extended beyond the Taliban; Al-Qaeda and other regional Islamist groups were also loyal.

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The legitimacy vested in Omar as leader of the Taliban was such that his death was (rather successfully) concealed for more than two years by a small group of high-ranking Taliban members. When the news of Omar’s death broke in July 2015, some commentators asserted that the Taliban was facing a ‘legitimacy crisis’, that the Taliban and other Afghan and Pakistani Jihadi factions could fracture, and that his death had broken the back of the Taliban. 

This has not been the case. Contesting or in control of at least one-fifth of Afghanistan, the Taliban currently holds more territory than at any point since the 2001 invasion. It has even made significant inroads into the opium-rich Helmand province, now controlling seven of the thirteen districts, and threatening the provincial capital Lashkar Gah. Last week heralded the deadliest suicide attack since 2011, with the Taliban killing 30 and wounding more than 300 people in the Afghan capital Kabul.

There are many reasons for the recent resurgence of the Taliban, and Omar is not one of them. Although a significant amount of prestige, legitimacy and power were indeed concentrated in the former Taliban leader, the degree of this concentration and its long-term impact on the organisation has been overstated. Recent gains made by the Taliban show that experienced deputies (such as Mullah Mansour), a breadth of strategic expertise (as represented in the 21-man Rabari Shura or leadership council), multiple revenue streams, the support of foreign fighters (largely Uzbeks and Pakistanis), and a local support base are all important reasons why Jihadist groups can remain resilient despite leadership change.

The experience of the Taliban resonates with other Jihadi organisations and their leadership. Al-Qaeda has been making gains in Afghanistan in spite of Osama bin Laden’s death in 2011, defying predictions this would be a crippling blow.

Similarly, al-Shabab is faring surprisingly well despite the assassination of its charismatic leader, Ahmed Abdi Godane, in September 2014. Predictions that his death would mark the beginning of the end for the group have not been borne out. Al-Shabab has ramped up its attacks over the last 12 months, and has shown remarkable resilience and adaptability in the face of the African Union Mission to Somalia (AMISOM), Somali Government and US assaults. 

Despite the mythic status of many Jihadi leaders, heads are rarely indispensable to their organisations. Leaders are important, but they can be replaced. Ironically, the fact the Taliban has prospered after Omar’s death is a testament to how formidable a leader he was.


Earlier this month, nine candidates for UN secretary-general (SG) sat in the hot seat for a first round of unprecedented 'informal dialogues' before the UN General Assembly. Over the course of three days, the candidates rotated in two-hour slots, fielding some 800 questions from member states, civil society groups, and the public.

While the public hearings revealed some insights into the candidates' personas and their general priorities as well as those of UN member states, they unfortunately didn't tell us much about the actual prospects of the contenders. There are several reasons for this:

Firstly, and most importantly, as I noted in February, the candidates' chances are still largely determined by the UN Security Council's permanent five (P5) members. The UN has taken steps over the last six months to make the SG selection process more open and inclusive of the General Assembly, but the P5 remains the ultimate decision-maker, and geopolitical realities and their previous interactions with the candidates are more likely to shape their views than a candidate's performance at the hearings. If a performance does happen to influence a P5 position, it's likely to only factor in discussions behind closed doors rather than in any public deliberations. While the President of the General Assembly has touted the hearings as a 'potential game-changer,' even he admits that 'if there are many, many candidates and no clear favorite, it could very well be that the absolute final word will [still] be from the Security Council.'

Secondly, the push to make the SG's selection more transparent, combined with the reality of the Council's role in the process, means the candidates have to play a tricky balancing act in public appearances. On the one hand, the candidates are striving to demonstrate that they possess the characteristics flagged in the UN's historic kick-off letter late last year: proven leadership and managerial abilities; extensive experience in international relations; and strong diplomatic, communication, and multilingual skills. Vuk Jeremic (Serbia), for example, was quick to cite his own accomplishments as President of the General Assembly. But at the same time, the candidates must remain acceptable to each of the veto-wielding P5 members, which often means avoiding substantive positions on controversial issues, such as Ukraine and Syria, or appearing too independently minded. When asked about how to address the Israeli-Palestinian conflict, for example, candidates spoke in general terms about building trust, and Vesna Pusic (Croatia) even acknowledged that she didn't have anything revolutionary to say. An aide to one candidate told a reporter that the SG selection isn't like national elections, '...where the aim is just be popular. In this election, if you are too popular, you might scare off the P5. So it's a delicate balance.' 

Then there is the format of the hearings themselves which, as is unfortunately often the case with UN meetings, seemed to discourage substantive and comprehensive responses. Read More

The candidates received questions from multiple member states one after another, and each member asked upwards of five questions. The sheer number of questions meant that the candidates often only had time to give surface-level responses, and the time restrictions allowed candidates to dodge thorny questions by running out the clock. Irina Bokova (Bulgaria) seemed to do this particularly well with Ukraine's question on what she would do to support the General Assembly resolution on the territorial integrity of Ukraine, specifically Crimea.

Finally, the hearings aren't necessarily a great indicator of how the race will play out because the field is still fluid. There is no deadline for entering the race, and speculation continues to swirl about additional nominations, including former Australian prime minister Kevin Rudd. As UN expert Richard Gowan has suggested:

Rudd may have hoped that he could sit out this round of UN blathering, and then enter the race at a later stage as a bigger-name candidate after the Balkan minnows had gone home. A number of other serious potential nominees, such as Argentinian Foreign Minister Susana Malcorra, are also said to be sitting back to watch events.

While this first round of informal dialogues doesn't appear to have given us a sense of who are the early frontrunners and laggards in the race, there were still some benefits to having held them. It was another step toward a more transparent SG process, and some commentators, including several of the candidates themselves, credit the hearings with increasing interest in the UN. The hearings also gave us a glimpse of the candidates and their ability to navigate competing interests at the UN, introducing them to member states and the public. This means once the appointment is eventually made, the world is likely to know quite a bit more about the new SG than it did about Ban Ki-moon when he assumed the role in 2007. Lastly, the hearings forced the candidates to sink hours into defining their positions and considering their visions for the organisation, efforts that almost certainly will help the next SG get off to a running start.

Photo courtesy of Flickr user United Nations



It took a series of whistleblowers and the resulting toughness from US authorities to force Switzerland to lift its vaunted banking secrecy. It took 'Luxleaks' for a spotlight to be turned on the officially sanctioned but clearly scandalous tax-saving practices of multinational companies. And now we have the political fallout from the Panama Papers, which will force corporate and individual transparency with regard to offshore accounts and letterbox companies.

Many are still in denial and much is being done to deny evil intent. Yes, it is true that both letterbox companies (in use pretty much all over the world) and offshore accounts are not illegal. But it is equally true that Panama, the British Virgin Islands and other exotic offshore centres are making it pretty easy to keep the secrets of the people and corporations who are the beneficiaries of assets held in such companies and accounts. That explains why a number of former clients of Swiss banks, once automatic exchange of information between national authorities was threatened, transferred their assets to a Panamanian account held by a letterbox company.

The intent of tax evasion is clear. The diligent work on the Panama Papers by the International Consortium of Investigative Journalists (ICIJ) shows, for instance, that 'friends' of Russian president Vladimir Putin transferred billions from the Swiss-based branch of a Russian bank to a letterbox company in Panama. Records also show blatant criminal money laundering in Panama by Mexican drug lords, terrorist groups and sanctioned entities such as North Korea, Iran and the Assads of Syria.

If not to hide something, why would the Panamanian law firm Mossack Fonseca, where the Panama Papers leak originated, offer its clients use of a dummy foundation called the 'International Red Cross' (sic)? The muckrackers from the ICIJ checked with the Red Cross in Geneva, which had neither heard of nor benefited from any money from any Panamanian 'foundation'.

The effort to clean up this Augean stable will be arduous, first and foremost because it will not, at least initially, be helmed by the unparalleled legal, institutional and financial might of the US. Letterbox companies were always perfectly legal in the state of Delaware. Wyoming and Nevada now allow the same, and other US states intend to follow. It will take a mighty push from the US federal government in Congress to reverse this trend. A by-now no longer impossible Democratic landslide in November would help, Vice-President Joe Biden (ex-Senator from Delaware) notwithstanding.

Second, the intermediaries to letterbox companies and off-shore accounts are not only banks, now pretty tightly controlled by national regulators and through international treaties and bodies. More crucial are the lawyers, who set up the legal documents and deal directly with those involved. The maze of national laws and rules regulating the legal profession is considerable, and reliance on non-mandatory self-supervising bodies frequent. Moreover, the deeper a lawyer is involved in a client's potentially unsavoury financial business, the easier it is to plead attorney-client privilege in court.

Nevertheless, there can be no doubt that the international machinery to counter tax evasion, fraud and worse through letterbox companies and offshore accounts will soon crank up and produce national legislation. Read More

The process started when G20 finance ministers and central bank governors met on the margins of the Bretton Woods Spring Reunion in Washington on 15 April. Egged on by a group of European countries — the so called G5 consisting of Germany, France, the UK, Italy and Spain — they asked all countries to adopt immediately the existing standards of the G20-created Financial Action Task Force (FATF) regarding transparency and economic beneficiaries of financial transactions.

The EU wants to go further and quicker, including by establishing company registers with relevant data, and automatic information exchange by all countries. The emerging markets, but also the US, are not there yet. However, it is a pretty fair bet that we will get much more light in the not too distant future on global offshore funds (which Boston Consulting Group estimates at being worth US$10 trillion), their real beneficiaries and their legal status.

Photo courtesy of Flickr user The Weekly Bull


Economic good news is rare these days for the current French Government. So earlier this week, when the announcement that Canberra had chosen the French option for what was termed in Paris the 'contract of the century', it made headlines throughout the day in French media.

President Hollande himself made an impromptu visit to the headquarters of DCNS, the French submarine company. It was reported that DCNS would have a share of about €8 billion of the contract and that it would create some 4000 jobs in France (3000 for DCNS and 1000 for its subcontractors).

Coming on the heels of an unprecedented string of major contracts for the French aerospace industry, notably with Indian and several Arab countries, this victory for Paris validated the Hollande team's approach of a better organised and more patient approach to major arms deals.  

This success will undoubtedly comfort the French naval industry, perhaps also increasing the chances for other export successes (Norway is said to be interested in French subs). Incidentally, the improvement of DCNS's financial health may also ensure that the timeline for producing the next generation of French submarines — after the Barracuda will come a new class of SSBNs — will not be hindered by industrial and employment considerations.

Both Canberra and Paris understandably focused their initial comments on the economic dimension of the decision and the concrete domestic consequences in Australia and in France, and there is every reason to believe that these considerations — rather than international politics — were paramount in Australia's decision.

I would argue, however, that the broader political and strategic context of the bilateral relationship mattered, and, perhaps more importantly, that the submarine contract will cement and broaden this relationship.

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'It's a 50-year marriage', said French Defense Minister Jean-Yves Le Drian on French radio. Paris wants such mega-contracts to be based on a strategic partnership and not only on purely commercial interests. But the reality is that Australia and France were already engaged in this way. A leading Australian defense contractor, Thales Australia, is a parent company to Thales, which itself has has a 35% share in DCNS.

As is well-known, Paris is one of Canberra's only military partners in the region (this author remembers a conversation in Nouméa, New Caledonia 10 years ago with a senior Australian officer, who was keen to tell him 'We really like having you in the Pacific region'). While the long-term future of a French presence east of Australia will be partly determined by the 2018 referendum in New Caledonia, there is no doubt that Paris will continue to be a key military partner for Canberra. Currently, French forces in the Pacific region include two frigates, five maritime patrol aircraft, as well as helicopters and land forces, based in Nouméa and in Papeetee. In the Indian Ocean, another two frigates are based in La Réunion, one of several French territories there. France also claims a minor share of the Antarctic continent.  

There's also the fact that Canberra and Paris probably never have had a better and closer political relationship. The removal of the longstanding obstacle of French nuclear tests — the last of which took place exactly 20 years ago — helped improve it. In the past decade, several active Australian ambassadors have played an important role in ensuring that Australia is well-placed on the Parisian 'mental map' (the fact that the terrace of the Australian ambassador's residence is one of the best places to watch the Bastille Day fireworks has not hurt). Attendance of the ANZAC Day celebrations in Villers-Bretonneux has been an eye-opener for many French politicians, officials and experts regarding the depth of Australian feelings towards French soil. It was not only for commercial reasons that Jean-Yves Le Drian had decided to attend the 2016 celebration and deliver a speech there.

The successful 1.5 track annual strategic dialogue, held since 2010 under the auspices of the Lowy Institute and the Fondation pour la Recherche Stratégique, has revealed how close the two countries's strategic worldviews are. They share, inter alia: an alliance with the US, but a strong desire for independence (and occasional doubts about the long-term future of US extended deterrence); defiance vis-à-vis Chinese ambitions in Asia (despite their wishes to maintain good relations with Beijing); and a strong concern for jihadist terrorism and the influence of ISIS in Australian and French youth. 

The French submarine model proposed to Australia is an offshoot of the domestic Barracuda program, which will give birth to the six French Suffren-class SSNs entering service between 2017 and 2028. Although the Australian versions (temporarily named Shortfin Barracuda Block 1A) will enter service later than the French ones, the contract will make the French and Australian navies 'sisters'. There is no doubt that the addition of industrial and operational naval links between the two countries will increase their cooperation and mutual understanding. France sometimes feels lonely in Europe when discussing interests in what Australian rightly calls the Indo-Pacific region. It is glad to have a strong partner for the coming decades.

It may not stop there. Given France's excellent defense relations with India, there may be a future for a 'French component' in the Australian-Japan-India strategic triangle.

Photo courtesy of Flickr user G20 Australia 2014.


Remember Hillary Clinton's internet freedom agenda? In a groundbreaking speech in 2010, Clinton outlined her State Department policy for promoting internet freedom in the context of human rights and democratisation. This meant funding anti-surveillance tools, chiding repressive governments, and funding efforts to support online democratic activism in troubled states.

Although not untroubled, the policy marked Clinton's State Department as progressive and forward looking and championed the US' status as the birthplace of the web and the home of tech innovation. This placed the US in stark contrast to countries which engaged in repressive online censorship — most clearly China and, at the time, Arab states racing to quash the online elements of what would become the Arab Spring. Since that speech, internet freedom faded from US foreign policy prominence. This is unsurprising in the post-Snowden and post-San Bernardino context, where US tech dominance has been shown to be closely linked to US policy goals in a rather less open manner than Clinton may have envisaged and where the Obama Administration has openly campaigned against strong personal encryption. 

However, last week the issue of internet freedom emerged once more, again in the context of China, but this time from the Office of the US Trade Representative (USTR). Two paragraphs in the 2016 Trade Estimate Report for the first time added China's Great Firewall to an annual list of trade impediments. The report argues that over the past decade this firewall has 'posed a significant burden to foreign suppliers, hurting both Internet sites themselves and users who often depend on them for business.' These two paragraphs mark an important turning point in US policy on internet freedom, framing the issue outside the stirring rhetoric of human rights and instead in the dry technicalities of international trade.

So why the shift? The answer highlights the power of the US tech lobby; Google, for example, is the third largest corporate lobbyist in America. Although it championed the US tech industry, Clinton-era internet freedom policy was not an unmitigated gift to the US-based digital giants of the online world. The policy hamstrung internet companies by shaping their entry into the largest emerging internet market in the world in the context of US human rights discourses, putting them in a difficult position given that it is impossible to do business in China's online sphere without interacting with a government with scant regard for such discourses.

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As early as 2007 the First Amendment Coalition, a non-profit advocacy group with significant tech representation on its board, had requested the USTR treat internet freedom as a trade issue. These calls only intensified after Google left China in 2010. Indeed, in 2010, the Executive Director of the First Amendment Coalition published an op-ed arguing for almost exactly the approach taken in the 2016 report.

The issue has gained currency as Chinese tech giants continue to expand outside China, including into the US. As of May 2015, four Chinese companies were ranked in the top 15 global internet companies by market capitalisation. Adding salt to the wound, this expansion uses American finance and expertise.

For example, Alibaba's 2014 initial public offer was the largest in NYSE history, underwritten by four major US banks, including Goldman Sachs and JPMorgan Chase. Now the third most valuable internet company in the world, ahead of Amazon and Yahoo!24, Alibaba has also announced plans to expand into the US and European markets. Other Chinese tech giants such as Baidu and Sina Weibo are also expanding outside Chinese borders, directly challenging US dominance. This takes place in a cloud of accusations of Chinese cyberespionage and IP theft against US companies. Meanwhile, Google cannot operate in China, the Government just this month suddenly and substantially reduced Apple's Chinese operations and in 2015 banned a range of US tech firms from accessing Government procurement contracts.

The appointment of a Robert Holleyman as the US Trade Representative in 2014 underscores the shift in the US approach to internet freedom. Holleyman spent 13 years as the head of the Business Software Alliance, which represents technology heavyweights such as Apple, Intel and Microsoft. In his nomination testimony to the Senate Finance Committee in August 2014, Holleyman stated that alongside mounting a robust response to China's ever-growing presence in global trade, he would ensure that the US would lead the establishment of the rules of digital trade globally, not just in the Chinese context. He told the committee he would fight for rules to guarantee the free flow of data across borders and to stop discrimination against goods and services traded online rather than physically.

The success of this new approach to Chinese censorship is not guaranteed. It will depend firstly of course on favourable rulings at the WTO. Outside of the fact that any such case will be breaking new ground, GATT and GATS were designed in the 1990s, before the internet's force as an economic multiplier was fully understood. This means the definitions of both goods and services are unclear as they apply to internet services and associated technology goods. The arcane workings of the WTO are difficult to fathom and the outcomes of deliberations which hinge on these definitions are not a given, however the US appears to be betting that this will soon change.  

But outside of any positive outcome from WTO deliberations, China will still have to agree to and implement any decisions. Here, the likely outcome is clearer. China has long failed to liberalise many sectors of its economy as fully as its trading partners may wish, and the internet sector is no exception because of both its security implications and its size. Even more so than its predecessors, the current regime sees the internet sector as underwriting its political legitimacy: censorship has increased apace in recent years, and even recent months. But the internet sector is also one of the country's most profitable: the three biggest Chinese internet companies — Baidu, Alibaba, and Tencent — have become the largest private sector companies in China by capitalisation and revenue. This means they are not only powerful in terms of the politics of information but also as private economic actors, meaning the Government is likely to tighten its hold on the the sector. 

In an unusually cruel twist for the likes of Google, then, the tech sector is one of the brightest stars of both the US and Chinese economies and is — thanks in no small part to earlier iterations of US policy — closely associated with national identity and values on the global stage. The latest round of battles has no clear outcome, but America's recent approach opens up a new flank. This time, it heeds the advice of its golden industries and seeks to ferry them through China's Great Firewall instead of demanding they stop at its borders, left to gaze longingly on the riches within.

Photo by Bao Fan/ChinaFotoPress/Getty Images


'Only one of these institutions sounds like a new bank'. That was the conclusion of one attendee at the Think20 Conference in Shanghai in February after a session featuring four international financial institutions: the Asian Infrastructure Investment Bank (AIIB), the New Development Bank BRICS (NDB), the Asian Development Bank, and the OECD.

The  first loans from the BRICS NDB will fund solar projects  (Photo courtesy Flick user minoru karamatsu)

What made the remark noteworthy was that the speaker wasn't referring to the AIIB. He was talking about the NDB.
Given how the creation of the two new institutions came so close together — as SIIS and Lowy Institute nonresident fellow Ye Yu has noted, progress on the NDB helped inspire the AIIB — comparisons are hard to resist. To date, the AIIB that has captured the lion's share of headlines and geopolitical discussion. So no doubt remarks such as that made at the February conference would be music to the ears of NDB management.

Both institutions are entering the next phase of their operations and are expected to announce their first projects by June.

The head of the AIIB, Jin Liqun, talks about being part of the Multilateral Development Bank family, working with other countries, and to international practice, and has drawn heavily on the expertise of recently-retired employees of established Bretton Woods institutions. The AIIB also has hectares of Beijing real estate that may eventually house some 6000 staff (about double the ADB's current staffing); a testament to a vision marked in centuries.

In contrast, the Shanghai-based NDB is eager to promote itself as an independent friend, rather than a member of the family. Philosophically, it wants to be smaller, faster and more agile, with shorter (six months) loan approval processes and lighter procedures. It will leave environmental and social safeguards to projects' host jurisdictions (at this stage, this means BRICS countries).

It has prioritised memorandum of understandings with private banks, and aims to bring in bright young talent from BRICS countries. It is in recruitment mode but does not see itself as a 'knowledge bank'. It eschews a staff-heavy approach and will supplement research teams for its five executive directors through partnerships with advanced economies and academic institutions.

It's instructive to look at the type of projects being discussed at the two institutions.  Solar projects are the subject of the first tranche of loans for the NDB; one each in China, Brazil, India and South Africa, with Russian projects still in the appraisal stage.

This is an interesting contrast with the three rumored road projects that have grabbed the headlines for the 'lean, clean and green' AIIB. That said, this is by no means the end of the story for AIIB projects; for example, the World Bank and the AIIB are discussing nearly a dozen co-financed projects in transport, water and energy sectors in Asia.

The scale of ambition seems to be very different between the two institutions. AIIB financing of US$1billion -$2 billion in 2016 should scale up to US$10 billion in 2018. And the membership base, currently 57 countries, has the potential to increase to 100.

The NDB's capital base appears more constrained, with the initial $10 billion of paid-in capital (the Bank has $50 billion of subscribed capital and $100 billion of authorised capital split evenly among its members) to be contributed over seven installments (and over seven years). And despite occasional calls for additions such as Greece, new NDB members are unlikely, at least in the near term. Making the most of its balance sheet will therefore be a necessity if the NDB is to be relevant.

When I attended the launch of the NDB in Shanghai a year ago, I was struck by the optimism of this policy experiment. Read More

This optimism was still there when it officially 'opened for business' last month. We still don't know how particular governments will want to intervene in bank activities, or how they would react to mistakes. With this in mind, starting small with discrete projects is sensible, as is the rhetoric of being independent from the influence of individual nations.

The AIIB seems destined to become a rock and to retain its long-term vision, one that enshrines a defining leadership role for China in a substantive multilateral institution. But it is the NDB that may end up providing enduring lessons for the multilateral development banking.


  • On Tuesday Papua New Guinea’s supreme court ruled that the detention of asylum seekers on Manus Island is illegal and ordered  the governments of PNG and Australia take immediate action to end the practice. Daniel Webb, a lawyer with the Human Rights Law Centre who helped advance the constitutional challenge, explains the legal context here.
  • On Wednesday PNG Prime Minister Peter O'Neill announced the PNG government would respect the ruling and 'immediately ask the Australian government to make alternative arrangements' for the asylum seekers currently held at the Manus Island centre. At the time of publication, the Australian government had not responded to Mr O'Neill. Earlier, Australia Immigration Minister Peter Dutton had indicated the government’s policies will not change and refugees will not be resettled in Australia. 
  • Fiji’s Prime Minister Bainimarama won’t be attending the upcoming Melanesian Spearhead Group meeting in Port Vila on 8 May.
  • The MSG meeting has already sparked controversy with Vanuatu Prime Minister Salwai expected to challenge the appointment by Solomon Islands Prime Minister Manasseh Sogavare of a new Director General without consulting  other member countries. PNG has also since come out in opposition to the appointment made by Sogavare. 
  • The Fiji Parliament has rejected a bid to discuss the re-implementation of the Great Council of Chiefs which was dissolved in 2006.
  • On Devpolicy, Ashlee Betteridge asks if PNG’s family and sexual violence police units are working. 
  • Australian music producer and filmmaker, Tim Cole, says that there are important cultural links between the Indigenous peoples of Australia and the Pacific. He is working to document the musical traditions of these cultures in his project ‘Small Island – Big Song’.  

The choice of France to build 12 submarines under a $50 billion contract begins a new era in Australia's strategic relationship with that country, its longstanding partner within the western alliance and close collaborator in the South Pacific. 

Signing France on to the submarine construction is far more than a commercial contract. The French State owns 63% outright of the French company DCNS, that has emerged as the successful bidder for the project, and has a 26% stake in another shareholder, Thales, which controls 35% of DCNS.

Certainly the French see the contract as more than a commercial deal. French Defence Minister Drian said as much when he visited Adelaide in late February. In private comments to me yesterday, one senior French official noted with some emotion the timing of advice of the granting of the contract, on Anzac Day in the French capital, underlining the poignant historic foundations of the renewed Australian-French relationship that rests on the shared sacrifice of the past. Another has spoken of the news as a bright spot in a particularly morose period for the French, reeling from the terrorist attacks on its capital last year and so recently on Brussels. A little-reported consequence has been the major disruption to the tourism on which the French economy depends.

I have written previously of the importance of ratcheting upwards our defence engagement with our closest neighbour in the Pacific off the coast of Queensland. I have also separately laid out the increasingly complex geostrategic environment for France (and indeed for us) in the South Pacific, highlighting the critical importance for France’s acceptance in the region of its fully implementing the spirit and letter of agreements over an independence referendum in New Caledonia by 2018.

Apart from the technical merits of Australia’s decision about this major defence contract, it will pave the way for renewed collaboration and sharing of regional responsibilities with a valued partner.

Photo: Mustafa Yalcin/Anadolu Agency/Getty Images


The last decade hasn’t been kind to economists’ egos. Almost no-one saw the 2008 crisis coming. The subsequent recovery has been ‘too slow for too long’. And, at a deeper level, there is widespread discontent with the way the middle class has been left behind while a tiny fraction is enjoying a repeat of the ‘gilded age’.

Thus economics seems to be in need of root-and-branch rethinking. The tried-and-true macro-economic policies that should have ensured a rapid recovery after 2008 are inadequate, with monetary policy resorting to distortionary settings of interest rates and exploring policies (‘helicopter money’) that speak more of desperation than rational analysis. Fiscal policy has been left on the sidelines by a combination of fixation with debt and far-fetched academic theories designed to support doctrine rather than recovery. 

This reappraisal has been underway for some time. On macro-policy, the International Monetary Fund has shifted a long way from its initial support for austerity, although it hasn’t much to offer other than the general mantra of ‘structural reform’. This falls on deaf political ears (‘We all know what to do: we just don’t know how to get re-elected after we have done it’).

Meanwhile there is the rise of structural explanations, each with its recommendations for change. Thomas Piketty’s analysis of the return to Downton Abbey has been overwhelmingly supported, but his solution of higher taxes has not. Larry Summers sees partial salvation in more infrastructure spending, but at the same time worries that entrepreneurial dynamism is dead. Robert Gordon’s view is similarly dismal: the dynamics of the 1870-1970 century were driven by life-altering innovation, which has petered out.

Stephen Cohen and Brad De Long add to this structural-focused analysis with Concrete Economics. They draw their lessons largely from the history of the US, described as ‘the place where economic policy has been, without a doubt, the most successful over the last couple of centuries’.

This book tries to remind us, in simple concrete terms, of how the American economy, again and again, was reshaped and reinvigorated by a loveless interplay of government making broad economic policy and entrepreneurs seeking business opportunities.

In recounting the history of America’s economic success, they show that in each phase of development the government played a central role in giving broad direction, leaving it to private-sector entrepreneurs to innovate and experiment within the environment of incentives and constraints set down by the government. Each new phase had broad public support, with trade-offs, compromises, subsidies and division of the benefits determined by the political process.

Some of the early history will be of more interest to Americans than to others, but the post-WWII period from Eisenhower to Kennedy had such international influence that the narrative is broadly familiar to all. The progressive elements that Cohen and De Long advocate were all present. Administrations were prepared to take a major role in the economy. Defence expenditure, running at 10% of GDP (twice the current level), was a major instrument in guiding private industry into areas that were seen as the most promising. Government-funded infrastructure (such as the national highways in the 1950s) opened up scale opportunities by reducing transport costs. Suburban housing proliferated, epitomising the ‘good life’ and providing strong demand for home-improvement. Education expanded rapidly, and with it high-level university research.

There was very little doctrine driving these decisions. Pragmatism and experimentation prevailed rather than dogma. The whole spectrum of policy tools was used: infrastructure development, tariff protection, direct picking and promoting of winners, exchange rate devaluation, and selective protectionism through import quotas and ‘voluntary’ export restraints by trading partners. The aim was not simply to direct resources according to comparative advantage, but rather to change America’s comparative advantage. This environment produced a flood of high-technology productivity-enhancing inventions.

The authors see the last redesign of the American economy, beginning in the 1980s, as quite different; and inferior. America allowed its manufacturing to be eroded by competition from East Asia, believing that the way ahead lay in a post-industrial world — the higher-value industries of the future. The government had no concrete practical plans for this new era: just a doctrinal faith that deregulation and free markets would deliver the right answer.

The pervasive doctrine of ‘the magic of the market’ was sometimes beneficial (deregulation of airlines), but more often encouraged resources to flow into areas of doubtful benefit for productivity and living standards. Read More

The prime example is the financial sector, which doubled its share of GDP and put the best-and-brightest into innumerable variations of re-packaging finance and trading, with no more benefit to society than a casino. The additional resources in finance didn't improve price discovery and investment allocation. And it all unraveled in the 2008 crisis.

Finance is not the only example. America’s litigious society means its best brains arm-wrestle each other. A market-based health system accounts for 17% of US GDP (compared with 11-12% in most advanced economies), weighed down by top-heavy, paper-shuffling administration. The pre-2008 real estate boom was a bonanza for those who organised the transactions, the real estate agents and lawyers.

Certainly, there are winners: there is no denying the success of Silicon Valley and Hollywood. But these industries are too small and too specialised to provide jobs for the blue-collar and clerical middle class, displaced by imports and technology.

Where do the strongly-dirigist policies of the East Asian successes (Japan, Taiwan, South Korea, Singapore and now China) fit into this narrative? Cohen and De Long seem to see these as having many of the desirable attributes the authors advocate, although a key ingredient of these countries' success — a ready global market for exports — is not an option for all. But aren’t these successes counterbalanced by the failures of similarly-dirigist policies in Latin America, starting with Argentina, once counted among the richest countries in the world? It’s hard to identify generalities which explain the diversity of the successes and failures.

Of course it is easy to find fault in this latest effort to pick apart what has gone wrong with economic policy-making. But each successive contributor to the debate — whether Piketty, Gordon, Summers or Cohen and DeLong — identifies three common themes. The pernicious influence of doctrine (and specifically the free-market ideologues); the insidious undermining of political consensus through income mal-distribution and the rise of politically-powerful vested interests; and the misallocation of our best talent into finance, with so little apparent benefit to society.

Photo courtesy of Flickr user Chris Devers


Once again, the Papua New Guinea Supreme Court has demonstrated its forthright independence by finding against the PNG Government over the legality of the Australian funded Manus asylum seeker detention facility.

In a five to zero ruling, the judges declared that the Manus Island Processing Centre (MIPC) breached the PNG Constitution by depriving people of their personal liberty.

And the judges were highly critical of the way Peter O'Neill's Government handled the case.

Early on in the proceedings, the court ordered the two parties — the Applicant, Belden Namah, who was the PNG opposition leader in 2013 when he filed the case challenging the constitutionality of the Australia-PNG agreement; and the Respondents, Rimbink Pato, the Minister for Foreign Affairs and Immigration, the National Executive Council (PNG's cabinet) and the Independent State of PNG — to agree on a settled Statement of Facts.

However, the Government side never did. This snub obviously annoyed the judges who state that 'the Respondents failed to provide any reasonable explanation for their failure'.

The judges then quote from an earlier case in which one side ignored a similar court order where a judge had said that:

'. . . disobeying a court order is not a simple technical matter, because in not obeying and complying with the order a party is in effect expressing or displaying a contemptuous attitude or behavior to the court. Such a behavior cannot and will not be tolerated . . . The court's orders must mean something and if a party fails to comply with the court's orders then he or she does so on his or her own peril.'

Mr O'Neill's Government did try to amend the PNG Constitution in 2014, after this case originally began. But, the judges say, it then failed to pass any Act of Parliament to give effect to that constitutional amendment.

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PNG's Migration Act is of no help whatsoever to the PNG Government in relation to the detention of the asylum seekers.

Under Section 13, the power to detain and remove persons from the country, the asylum seekers all get exempted because the Minister 'issued permits for each of the asylum seekers to enter PNG.'

'Naturally it follows,' the judges say, 'that the forceful bringing into and detention of the asylum seekers on MIPC is unconstitutional and therefore illegal.'

In examining that 2014 constitutional amendment the judges refer to another section of the constitution that requires any law in PNG to 'be reasonably justifiable in a democratic society having a proper respect for the rights and dignity of mankind'.

They conclude that 'it is clear the 2014 Amendment was inserted without any proper consideration or thought . . . In the absence of any other law restricting or qualifying the rights of a person lawfully in the country, the rights and freedoms guaranteed by the Constitution must be respected.'

The judges refer to the fact that the UN High Commissioner for Refugees has issued guidelines on the 'Applicable Criteria and Standards in relation to the detention of Asylum Seekers and Alternatives to Detention'.

They say the Manus center does not meet these guidelines.

However, they suggest that 'it is open for PNG to make and enforce laws with its own set of guidelines under an appropriate legal framework that has due regard to the international and Constitutional guarantees and protection for human beings' rights and freedoms with capacity to properly treat refugees and assess their claims.'

The judges say that in the absence of such an act there is a lack of clarity about how to deal with the asylum seekers.

'The lack of clarity is worse,' they say, 'given that the asylum seekers were brought into PNG against their will but otherwise have entered and remain lawfully in the country.'

Therefore, the 2014 Constitutional Amendment is 'ineffective' and 'it does not and cannot apply to the asylum seekers at the MIPC.'

The asylum seeker deal between Canberra and Port Moresby has never been a popular one in Papua New Guinea despite the extra aid money involved. Many Papua New Guineans would be happy to see this 'Australian problem' removed from Manus.

Photo courtesy of Flickr user Greens MPs.