Canberra, 7 August 1969
Secret
As I have mentioned, I have been concerned for some time that the Territory Intelligence Committee, whose membership includes representatives of the Defence and Service Departments and the Department of External Affairs, is permitted by its terms of reference to issue reports and assessments on internal developments in Papua and New Guinea and that this information is being distributed to other authorities and the British Solomon Islands Protectorate through the Joint Intelligence Committee of the Department of Defence.2
To my mind this arrangement is open to the following objections—
• The Commonwealth Departments represented on the Committee have no responsibility for the administration of the Territory.
• Information of purely domestic concern is being disseminated to other Commonwealth Departments, and outside Australia, and this may well lead to inaccurate assessments in various quarters regarding the overall Territory situation.
• The arrangement is constitutionally incorrect.
The concept of an intelligence committee constituted on the present lines seems to have developed from the practice followed in British territories in which the services as well as the civil administration were under the authority of the Governor. While such arrangements may have been appropriate for British territories they seem to me to be quite unsuitable for Papua and New Guinea.
I do not question that the other Departments mentioned above have a legitimate interest in internal developments in the Territory and that, where we may have to seek the assistance of the Services in dealing with an internal security situation, they should be kept informed of developments that might lead to such a request. I do not agree, however, that these Departments have any part to play in assessing and reporting on such situations. The only assessments which the Minister and the Department can accept are those which are submitted by you with the advice of your senior officers, and I think it is a matter for the Department to pass information to other Commonwealth Departments.
Under the present arrangements, External Affairs, Defence and the Service Departments contribute very little, I understand, to the intelligence material which is processed by the Committee. Moreover, so far as developments in the civil sphere are concerned, their representatives could do little more than ‘rubber-stamp’ the draft reports furnished by Administration agencies. Apart from the other considerations raised above, one may well ask, therefore, what practical purpose is served by their representation on the Committee, and I think new arrangements ought to be introduced.
In my view reports of internal developments which affect policy formulation (and should therefore be known to the Minister and the Department) should be prepared on a regular and where necessary on an ad hoc basis by arrangements established in the normal way (e.g., an appropriate committee of senior Administration officers) and submitted under your authority. Where it was considered desirable to do so, the Department could pass information from these reports to other Departments with a need to know. As regards matters of military significance, the Defence and Service representatives in the Territory could prepare their own collective reports for transmission to the Department of Defence and information of mutual interest could be exchanged between them and the Administration under whatever local liaison arrangements you thought it necessary to set up for this purpose.
I would like to make an early submission to the Minister along these lines and, before doing so, would appreciate your comments.
[NAA: A452, 1968/3943]
Bougainville: conflict over coastal land
Following the decision in late February to acquire both European and indigenous land for a mining town and port,1 the Administration had met with continuous opposition. On one hand, the Managing Director and part owner of Arawa Plantation, F.R. ‘Kip’ McKillop, campaigned vigorously against repossession of his property. Meeting with Hay in March, he said he wanted to ‘ascertain … the real purpose of the Government’s decision’; he had heard that CRA had not requested Arawa and had ‘therefore felt bound to conclude that the acquisition had been decided for political reasons’.2 Hay replied that ‘the decision had been made on the basis that the town site now offered to C.R.A . … was the most suitable in all the circumstances’. McKillop made clear that he was seeking legal advice, adding that ‘he felt the Government’s legal case was watertight but that its moral case was very weak’.
A public dispute soon erupted. Speaking on McKillop’s behalf, the New Guinea Planters’ Association described the resumption as ‘odorous, discriminatory and a sop to the United Nations’3 —claims denied by Barnes and Hay.4 The Association simultaneously communicated with the Prime Minister, asking him to establish an inquiry that would investigate Government policies on Bougainville.5 The credentials of public servants advising the Administration were also questioned.6
Analysing the row, Hay commented to Warwick Smith that the
agitation of the Planters’ Association … is an understandable response in defence of one of its members who has made an outstanding contribution to the agricultural development of the Territory. It is, however heavily influenced by sectional interest, and is uninformed as well as being unsympathetic to the proposed copper mining project. This is no doubt partly due to the fact that because of its magnitude the proposed operation will dominate the industrial life of the Territory for many years to come, and it will possibly seriously disturb the industrial relations between the planters and their labour.7
Hay advised that a ‘more detailed’ explanation of the Arawa decision be given to the Association as well as the House of Assembly and the public. Acting Prime Minister John McEwen subsequently provided the Association with a fuller defence, but his reply was uncompromising nevertheless. He noted that the ‘project has been under intensive investigation for some five years’ and argued that McKillop was ‘subject to the provisions of the law as are the owners of native land’.8 Resumption, he remarked, ‘not infrequently occasions disturbance and inconvenience’ and the Bougainville operation, because of its size and complexity, had and would continue to ‘raise … difficulties’, yet he ‘hope[d] that in working towards a solution of these problems, the Administration will be able to look with confidence for the support and co-operation of important Territory organisations such as the New Guinea Planters’ Association’.
The Government was not entirely rigid. In spite of its determination to take Arawa, and its confidence—shared by the company—that any lawsuit by McKillop would ‘amount to nuisance value only’,9 DOET believed there were significant advantages to negotiating a sale. It wanted to ‘encourage the native owners of adjoining lands also to sell their land and avoid any possible hostility’10 and a sale would also give the Administration more secure long-term control of the land.11 Moreover, CRA had expressed concerns that delays caused by legal proceedings would be ‘most expensive’.12
The desire for a settlement was not easily translated to reality; McKillop proved a tough negotiator. Apparently after wrangling with McKillop and his legal advisors—and toward the end of a week’s extension granted the planter by Barnes13 —Hay phoned Canberra on 1 July and said reluctantly that it ‘looked as though there would be no sale and he expected that it would be necessary to decide later today to compulsorily acquire the property’.14 This was, in fact, ‘narrowly avoided’.15 On 2 July, an agreement was reached with McKillop, whereby he would not advance a lawsuit and the Administration would not gazette acquisition; the property would be sold pending resolution of ongoing disagreement over compensation for capitalisation and future yield and price projections.16 And yet final settlement proved elusive. In early August, Barnes forwarded a re-drafted agreement, accompanied by a warning that this would have to be signed within four days.17 McKillop’s solicitors rejected both the deadline18 and, after consultation, the substance of the re-draft.19 The brinkmanship between the two groups continued until later in August,20 when Territories forced the issue. Besley rang Ballard—who was involved in the negotiations—and ‘stiffened him up’; Ballard was told that ‘Entry to the plantation could not be qualified in any way’; that ‘An agreement must be reached by midnight’; and that ‘A breakdown in negotiations might be the best way out if a suitable excuse were available’.21 A phone call from Ballard ‘at about midnight indicate[d] that a settlement was made’.
Running alongside the dispute with McKillop was the ongoing conflict with coastal native landowners.22 In a situation report of early July, Hay warned that the ‘attitude [of] Arawa and Rorovana [villagers is] now much firmer’ and that the ‘likelihood [of] violence [in] Rorovana [is] increasing; due [to] continual visits by politicians, Government officers, etc, people consider their case, presented on each and every occasion, [has been] ignored and tempers are now strained’.23 Hay convinced CRA to delay any sizeable occupation until the end of the month while recommending to Canberra a two phase strategy for dealing with the problem.24 The company could be granted immediately a lease of 600 acres for pressing needs followed, on 1 August, by ‘Operation Rorovana’. The last would involve the injection of police reinforcements with helicopter transport. Both phases would be complemented by an intense public relations exercise in Bougainville. Hay discussed the plan with his Executive Council, a majority of which was supportive, ‘with minority opinion advocating rather firmer action’.25 Barnes approved the idea, subject to various tactical measures designed to avoid violence and distance the Administration from blame should problems occur.26 He reaffirmed his approval on 28 July after the failure of a last attempt by Newman to persuade the people to sell or lease their land.27
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1The letter was signed by Besley over Warwick Smith’s name.
2 Since Barbour’s report of 1968 on the PNG Special Branch (Document 186), and interim changes to the Branch’s staffing structure (footnote 5, loc. cit.), no substantial action had been taken on the reorganisation of the Territory’s intelligence machinery. In a meeting of 8 July, Warwick Smith had re-committed to looking ‘afresh’ at the ‘general question of the Branch’—and notably the status of the TIC was also raised. Whitrod ‘made the point that much of what it does appears unco-ordinated and is passed on without analysis’, while Warwick Smith said that ‘some of its activities did not appear to be those which such a body ought properly to undertake’ (note for file by Besley, NAA: A452, 1968/3943).
1 See Document 260.
2 Telex 2310, Hay to Warwick Smith, 31 March 1969, NAA: A452, 1969/2160.
3 South Pacific Post , 11 April 1969, NAA: A452, 1968/6220.
4 See the Australian , 11 April 1969, and press release by Hay, 10 April 1969, NAA: A452, 1969/2160.
5 See Canberra Times , 23 April 1969, NAA: A452, 1969/2217.
6 As a consequence of public criticism, there developed in DOET a sensitivity to its lack of direct experience of Bougainville. Gregory reported that CRA and the Administration had commented on this inexperience, and he remarked to Mentz that ‘We definitely have a soft spot in regard to the number of senior Departmental officers who have visited Bougainville in recent years. Mr. Gutman is the only one who has visited the area and that was for a few days about 1½ – 2 years ago’. Gregory recommended that the Department’s representatives to the next joint meeting with CRA and the Administration be authorised to ‘visit Bougainville; look over the Company’s operations … and to gain a first-hand picture of the situation on the ground’. His suggestions were approved (minute, Gregory to Mentz, 17 June 1969, and marginal note by Gutman, 30 June 1969, NAA: A452, 1969/3026. See also minute, Mentz to Gutman, NAA: A452, 1969/2217).
7 Memorandum, Administration (Hay) to DOET, 1 May 1969, NAA: A452, 1969/2217. (Hay also mused that ‘It is not expected that any explanation will be acceptable to the native people whose land will be required for the town site or for other associated purposes’.) Two days before, Hay had been optimistic that the Association would be less militant in future, telexing Canberra that ‘the President told me … that he felt the Association had now discharged its obligation to McKillop and did not contemplate further statements’ (telex 2948, Hay to Warwick Smith, 29 April 1969, ibid.).
8 Letter, McEwen to J.H. Adams (President, Planters’ Association of New Guinea), 13 May 1969, NAA: A1209, 1969/7961.
9 Letter, P.H.N. Opas (Group Legal Officer, CRA) to P. McKinnon (Crown Law Department, PNG), 26 June 1969, NAA: A452, 1969/3174.
10 Minute, A.C.H. Campbell to Ballard, 31 July 1969, ibid. Writing of the risks of purchase, Campbell commented: ‘One danger … was that values might be higher than those resulting from compulsory acquisition with a corresponding increase not only in adjoining native lands, but in land purchases throughout the Territory … Another risk which we take in purchasing Arawa and having to [compulsorily] acquire adjoining native land with a possibility of paying less for it is the appearance of discrimination against the natives’.
11 For the legal implications of the mode of acquisition, see loc. cit. and minute, Evatt to A.C.H. Campbell, 11 March 1969, NAA: A452, 1969/2160.
12 Letter, Opas to McKinnon, 26 June 1969, NAA: A452, 1969/3174.
13 Minute, A.C.H. Campbell to Mentz and Gregory, 1 August 1969, ibid.
14 Minute, Basley to Warwick Smith, 1 July 1969, NAA: A452, 1969/2160.
15 Minute, A.C.H. Campbell to Mentz and Gregory, 1 August 1969, ibid.
16 Telex 5086, Hay to DOET, NAA: A452, 1969/3174.
17 Letter, Barnes to solicitors Allen, Allen and Hemsley, 4 August 1969, ibid.
18 Letter, Allen, Allen and Hemsley to Barnes, 6 August 1969, ibid.
19 Letter, Allen, Allen and Hemsley to Barnes, 13 August 1969, ibid.
20 See, for example, note for file by Besley, 18 August 1969, ibid.
21 Minute, Mentz to unidentified recipient, undated, NAA: A452, 1969/4122.
22 For background, see footnote 4, Document 260 and footnote 3, Document 286.
23 Telex 5780, Hay to DOET, 7 July 1969, NAA: A452, 1969/3026.
24 Telex 5292, Hay to Warwick Smith, 9 July 1969, NAA: A452, 1969/3092.
25 Telex 5382, Hay to Warwick Smith, 11 July 1969, ibid. Some in the Administration and Department also advocated a harder line. See, respectively, telex 5292, Hay to Warwick Smith, 9 July 1969, ibid., and minute, Mentz to Warwick Smith, 10 July 1969, NAA: A452, 1969/3848. Mentz wrote that he was ‘inclined to feel that [the] Administrator (rather than [the] Administration) is delaying too long in grasping the nettle—[this] may prove counter-productive’. Warwick Smith responded in the margin ‘No’.
26 Telex 6930, Warwick Smith to Johnson, 16 July 1969, NAA: A452, 1969/3092. Barnes was influenced by the tactical advice of Brigadier Campbell. For Campbell’s assessment, see note for file by Besley, 11 July 1969, ibid.
27 Submission, Mentz to Barnes, 28 July 1969, ibid.