Ramu NiCo and PNG Economy: A Security Perspective

By Francis Hualupmomi
The US$1.37 billion Ramu NiCo project is one of the first mega foreign investments by a Chinese metrological company to have invested in PNG to drive the national economy. With the current legal dispute between relevant parties, these questions need begging, is the project a security threat to PNG’s national economy? How should relevant parties resolve this issue? We begin with some general observations and provide some thoughtful strategies at the end.

Some Observations: Security Perceptions
From observation, the Ramu NiCo project issue can be securitized as a non-conventional security issue as far as national security is concerned. The notion of non-conventional security basically refers to non-military aspect and centrally focuses on human security aspect ranging from political to cultural, for instance, human rights abuse, environmental problems, transnational crimes, food security, health issues, etc.
Socio-Environmental Frontier
The current legal dispute between the state and MCC and resource owners revolves around human rights issues and environmental impact. From information gathered, the MCC is being accused of socio-environmental implications posed to constituency of the resource site. The resource owners led by some environmental lobbyists have been on the forefront in discrediting MCC’s operation and its disposal mechanism. The disposal site has been claimed by them as environmentally unfriendly and a health hazard to local populace and bio-diversity.
There also have been numerous complaints raised by the local laborers on human rights abuses perpetrated by the MCC management which led to recent civil violence. This issue, however, has been resolved peacefully through a Melanesian style of soft power diplomacy.
Consequently, although the human rights issue may or may not hold true to some extent, in contrary, the environmental issue appears to have been calculated otherwise as speculated by state’s official position. The government believes that the MCC has been accused by the environmental lobbyist and Media with invalid and misleading information and therefore accounts to misperception by the public.
Economic Frontier
From an economic security observation, the Ramu NiCo is the first biggest investment project by a Chinese company in PNG in an era of economic struggling with boomerang aid and other Multinational Corporations (MNCs). Neither MNCs nor conventional aid donors have invested such a big slice of capital in PNG’s economy since independence. This implies trust and confidence by Chinese investors in PNG’s economy.
It is forecasted that by 2011 the project is expected to produce economies of scale with 31,150 tonnes of nickel and 3300t of cobalt per annum in a high-grade concentrate over a 20-year mine life and is also expected to extend for another 20-30 years. This economic scenario will construct a tripling effect by setting the take-off stage for the full economization of LNG projects in 2014. We expect PNG to become an economic power should these projects compounded with other factors of production are being fully economized without any distortions such as civil disruptions by landowners.
Although, there are some critical political-economic and socio-environmental implications underpinning foreign investment, playing the right card is what PNG needs to attract foreign investors. Diversifying the foreign investment is a strategic move to drive the national economy. The MCC is an important economic player in Asia. With peaceful rise of China as the second key economic player in the global economy, PNG cannot afford to lose MCC. MCC is the catalyst in driving the national economy.
Political Frontier
It has also been observed that the state through the current government has been accused by the environmental lobbyist and Media as being ill-advised in dealing with the issues. The government has been tied down to claims of governance issues with the MCC. More so, the government has been accused of signing significant deals without thoughtful considerations of its implications such as human rights issues and environmental issues. These criticisms are potentially dangerous to foreign investors.
An interesting observation is an emergence of “Cold War” or “Proxy Wars” syndrome. Some political analysts have calculated that competing interests by conventional major players’ quest for natural resources may have politically engineer an environment to contain China’s peaceful rise in the region. In this calculus, major players may possibly strategically maneuver the game by employing non-coercive forces such as lobbyist groups to influence policy outcomes in consistent with their interests.
Cooperation: “Absolute Gain is Necessary”
Confronted with these non-conventional security issues we posit this key question, how can PNG Government-Resource Owner and China-Developer cooperate to gain a win-win situation? Premised on the observation set in precedence, one can argue that PNG and China cannot afford to gain a loss-loss situation. Cooperation through soft diplomacy is absolutely necessary to gain a win-win situation for all parties, i.e. absolute gain matters.
The Chinese government with the developer should reconsider human rights issue with respect to resource owner’s demands in order to maintain its good reputation. A deeper mutual understanding and recognition between the two parties is required to settle the dispute peacefully and isolate future domino-effects.
PNG government on the other hand should pursue a neutral diplomacy between China-developer and resource owners. The government should work closely with Chinese government and the developer to reach a mutually concessional package for the resource owners without jeopardizing the project. It should also consider mediating with resource owners to peacefully resolve the legal battle.
The resource owner as an important beneficiary of the project should reconsider the case seriously with cautiousness. The project has incalculable benefits to transform its livelihood. Most importantly, the resource owners must not be misled by some politically motivated lobby groups. Adequate advisory services should be provided to the resource owner.
Conclusion
The Ramu NiCo is not a potential threat to national economy. In the interest of all parties, a mutually consensual package should be bargained and reached to gain a win-win situation. Legal disputes should be resolved peacefully in a Melanesian style of soft diplomacy.
The Author studies a Master of Arts in International Relations at the Institute of International Studies, Jilin University, China. His specializes in International Security focusing on Geopolitics of Energy Security in Asia-Pacific and Political Economy of East Asia.