Papua New Guinea´s Foreign Policy: A Bridge to Indonesian Shores

Abstract

On 4 February 1982, after protracted negotiations, Papua New Guinea (PNG) and Indonesia signed agreements regulating the navigation of the Fly River which at its bulge west of 141? East Longitude is the border between PNG and Indonesia's Irian Jaya province (West New Guinea). The importance of this agreement to PNG cannot be overestimated for it is an integral requirement in the planned development of the Ok Tedi mine and other potential mineral resources in PNG's wild and remote Western Province. The Ok Tedi project is located at Mt. Fubilan in the Star mountain range some 18 kilometres east of the PNG-Indonesian border. The final agreement to develop the Ok Tedi mine was reached in February 1981, by a consortium consisting of Australia's BHP (Broken Hill Proprietary Co. Ltd., 30 per cent) and Amoco (30 per cent), the West German combine Kupferrexploration (20 per cent), and the PNG Government (20 per cent). It is hoped that the open-cut mine will be in production by 1985. Its low-grade gold cap is expected to pay for the infrastructure. The medium grade porphyry copper ore will be concentrated, filtered, and dried on site and then transported by barge 1,300 kilometres down the Fly River to Port Moresby for export. Hence, the necessity for an agreement with Indonesia for navigation on that part of the river where the thalweg forms the boundary.1 The promise of Ok Tedi comes at a critical time for PNG. The economy is heavily dependent on the 4Cs ? copper, cocoa, copra, and coffee. As the Bougainville mine goes deeper, its ore grade is declining. At the same time the North Solomon Province continues to insist on a larger share of the mine's income. Declining world prices for the 4Cs has already led to a significant drop in export earnings, forcing severe cutbacks in government expenditures across the full range of functions: from education and health to defence. More extensive exploitation of PNG's mineral resources, therefore, has