Canberra, 7 June 1966
Secret
Visit to the Territory of Papua and New Guinea 2nd—5th June 1966
The following is a brief report on my visit to Port Moresby last week for the monthly meeting of the Local Intelligence Committee. It has been prepared in haste in view of the current interest. It summarizes the main points which emerged from my discussions with a wide variety of people, including some indigenous leaders. My talks with them are covered in a separate memorandum.2
2. Since my previous visit in November 1965, industrial relations have deteriorated in Port Moresby, and from reports, also in other urban areas in the Territory …
3. Because we are not in a position to establish with any accuracy either the ceiling of expectancy of the indigenes in respect of wages and terms and conditions of service, or the effect that the present complex cash conversion policy, in lieu of rations etc., which is still not finally settled, will have on the indigenes when it becomes fully known, it is not possible to make an accurate assessment of the probable extent and intensity of dissatisfaction after the first pay period in July (the Army is paid on 7th, Police on 15th).
4. Any assessment is further complicated by the influence of a number of factors.
5. First, the wages of the Police and Army have been traditionally and still are geared to the Administrative wage scales, which also indirectly affect the rates of pay of most of the other sectors of the community—in which there has been industrial unrest over many months, often taking the form of wild-cat strikes. We do not know the degree of collusion which exists between the various groups although we do know that some contacts at least have been made between elements of the Army and Police, and between various sections within the tertiary student organizations, notably medical and Administration students, teachers and Police Cadets. The present discontent thus affects all groups represented in the tiny minority of educated indigenes in the total population (about 3.4%), which is thinly spread across the Territory.
6. A further complication will arise as the present situation in Bougainville becomes more widely known. Considerable resentment has been aroused over the Commonwealth Government’s mining policy. An estimated £30-40 million is expected to come from the mining royalties from the Rio Tinto Mine in exchange for which, under existing Commonwealth mining legislation, local land-owners will receive no compensation.
7. Finally, the situation is likely to be complicated by the degree of distrust and lack of contact which exists between the native and European communities. Racial discrimination is practised by a large segment of the European community within which there are indications of increasing concern about personal safety. There is a dangerous vacuum existing between many Departments of the Administration and indigenous leaders, which Police Special Branch, ASTO and Service representatives are unable, because of their occupation, to bridge. Th {us} there is a very real danger of the misunderstanding of major issues, especially when they are so complex. In particular respect to the Police, the marked increase in general Police and Special Branch efficiency has not been accompanied by any significant delegations of political and economic responsibility to indigenes in Government. The result has been only to increase distrust of Europeans, which misleading reporting by the press and radio has only served to exacerbate.
8. Although it is not possible at this stage to estimate with any degree of accuracy the extent and the intensity of the dissatisfaction that must be expected, unless emergency action is taken by Cabinet to make radical changes in its present wage policy in the Territory we do know that, on present indications, considerable unrest will be generated amongst important sections of the Army, Police, if the policy as it now stands is implemented. The effects of the new wages policy will be acutely felt in Port Moresby where the cost of living is about 100% higher than in other areas of the Territory. As the L.I.C. Port Moresby assessment dated 3rd June 1966, states:—
‘Should unassigned cash in hand, as a result of the new wage rate, not measure up to expectations, the situation could deteriorate rapidly. Should this deterioration occur, the loyalty of the indigenous Army and Police in Port Moresby could not be relied upon’.
If such a deterioration could not be arrested an emergency situation ‘could arise in Port Moresby, and possibly in other centres of the Territory and any physical disorder would develop along racial lines’.
9. Two serious effects of the irresponsible and misleading reporting by the press and radio, apart from its effect on race relations, has been to ‘raise the expectancy of the Police and Army for substantially higher wages and to emphasise the effectiveness of the threat of strike action’.
10. If the serious deterioration referred to in the L.I.C. report is to be averted, emergency steps will need to be taken by Cabinet to make radical changes in its present policies.
11. I envisage that the present situation could develop through three stages, following the first payment under the new Army and Police wage scales.
12. The Army pay day will be on 7th July, followed by the Police on 15th July.
13. In the first stage, spontaneous and probably unco-ordinated minor local disorders are likely to occur, similar to others which have occurred in recent months. A state of emergency would be reached in stage two, when these disorders grow in size and spread, action by the indigenous members of the Security Forces becoming linked with that of Public Servants, students and industrial workers. Then strike action, marches etc., could be expected at this stage.
14. The third stage would be reached with the formation of a militant united front, having an anti-Administration platform. At this stage some form of leadership could be expected to emerge. In Port Moresby, at least, this could possibly come from the biggest detribalized group in the town, the Keremas (roughly 14{,000} of 30,000).
15. Because of the number of factors still unassessed, it is not possible to predict with any certainty a firm timetable for the above stages. As matters stand at present the first stage would appear almost certain to follow the Army payday on 7th July. Whether or not it is followed by the critical second stage, and at what interval, will depend on whether radical changes in government policy have been implemented in the meantime, and on the ability of the Administration and Army authorities to control the stage one disorders, {and} prevent them spreading. O{ur} present assessment on the available information is that a state of emergency is probable. If it is reached, however, it would almost inevitably be followed by stage three.
16. Also relevant in this report is the question of emergency legislation and powers. I understand draft emergency regulations, including plans for the establishment of an Auxiliary Police Force, {are} at present up before the Administrator, but that assent has been withheld to {them} going before the House of Assembly, for fear of heightening alarm amongst the European community and investors. Such a problem has not arisen in most former British colonies because Emergency Powers have normally been vested in the Governor as a matter of course.
17. As matters stand, therefore, there are no plans in existence for the protection of the European community, key {points} etc., in time of emergency. The European community in Port Moresby numbers some 7-8,000. Were soldiers to riot using weapons—and there is some chance they might and have Police support, it is doubtful if one company of ARA3 troops from Australia would be sufficient to maintain law and order. A battalion would probably be needed to be flown in. The Commissioner of Police4 {and} the Commander, IPIR5 consider they could control the situation for no more than twenty-four hours were the Army and Police to strike together.6
[NAA: A1838, 689/1 part 2]
Changes to PNG mining legislation
In mid-June, the House of Assembly passed amendments to the mining ordinances of Papua and New Guinea.1 Among the changes were new prospecting authorities which increased the maximum area available for exploration projects from 1,000 to 10,000 square miles; compensation for occupation of land during prospecting was fixed at $1 per acre per annum; and recompense for damage to land was also legislated. Special mining leases of up to 25 square miles and for 42 years (renewable thereafter at periods of up to 21 years) were established to provide title to areas where large ore-bodies were involved and, again for large-scale undertakings, provision was made for agreements between the Government and mining companies, which in turn would require legislative ratification.
During debate, the MHAfor Bougainville, Paul Lapun, urged that
copper royalties … be paid pack to the people of Bougainville. It must go straight back to them … it will not be wise if the people in Kieta are dissatisfied and say that they are being exploiled. Troubles could arise.2
Later in the day, Lapun proposed an amendment to the bill giving the ‘owner of the land’ 5% of the mine’s royalties.3 The Administration attacked the amendment. Henderson said that
_At first the owners will want five per cent of the royalties and then they will demand all of them. Either the state owns the minerals, or the private individual. There can be no compromise … We make provision in this bill to ensure justice is done to the individual—that he is paid rent or an occupation fee if he is deprived of the use of the surface of the land. We have done everything possible to protect his rights, but the minerals in this country belong to all the people. They do not belong, nor should they belong, to the owner of the land—to a person who has the good fortune to be sitting on top of a mineral4 _
The suggested amendment was defeated by 30 votes to 22.
Reflecting on the incident, the Local Intelligence Committee noted:
in view of the anlipathy in the [Bougainville] area towards the operations of the Company, we believe that LAPUN will endeavour to re-introduce the ‘royalties’ amendment at later sittings of the House and may stand a good chance of gaining a majority vote. Should this eventuate, the Australian Government would be faced with the alternatives of either disallowing the amendment and thus alienating indigenous M’s.H.A., or agreeing to the payment of royalties, a decision which would constitute a reversal of policy.5
1 A. F. Dingle, Intelligence Co-ordination, DEA.
2 Not printed.
3 Australian Regular Army.
4 R.R. Cole.
5 That is, the commander of the first battalion of the PIR, Lt Col B.B. Hearn.
6 On 15 June, the Joint Intelligence Committee, using the MIS for May (see MIS no. 5/66, 3 June 1966, NAA: A452, 1966/842), judged that ‘Although the announcements of new pay scales for the police and army has led to an immediate reduction in tension, the situation is still considered serious and could deteriorate rapidly should net pay, as a result of the new wage, not measure up to expectations’. ‘Should this deterioration occur’, the assessment continued, ’the loyalty of the indigenous army and police in Port Moresby could not be relied upon’ (supplement to JIC current intelligence weekly report, 15 June 1966, ibid.).
1 Information in this paragraph is from an anonymous and undated paper entitled ‘Mining Ordinances: Territory of Papua and New Guinea’, NAA: A452, 1966/5311, and memorandum, Administration (Cleland) to DOT, 6 March 1965, NAA: A452, 1963/2763.
2 House of Assembly debates , 14 June 1966, NLA: Nq 328.952 PAP, p. 1487.
3 See ibid., pp. 1502-4.
4 loc. cit.
5 MIS no.6/66, 8 July 1966, NAA: A452, 1966/842.