In the Pacific, a rich vein of resources still doesn’t make for rich populations


    Fish, logs and metals buried under the sea floor are all on the shopping list of the resource-hungry powers of China and the West. The Pacific region has the lot, but that doesn’t mean it’s onto a guaranteed winner.

    National Correspondent Lucy Craymer reports in the last of five-part series, Pawns of the Pacific.
    Solomon Islander John thought when the logging company showed up five years ago and offered him money to access his lands and cut down the hardwood forests, he’d be set up for life.

    But he is now disillusioned with the process. While the hardwood has been shipped offshore – the majority of the country’s wood goes to China – the area around the logging camp remains underdeveloped. His family continues to struggle.

    “It’s only five months to the time when the logging operation will finish here,” John said from his home on the mountainous island of Rendova in the Solomon Islands around 300 kilometres from the main island of Guadalcanal. “We now realise there is nothing really tangible for us.”

    Millions of tonnes of wood, fish (mainly tuna) and mineral resources are shipped from the Pacific each year to Chinese ports. The mainly raw goods are processed, canned, cut into furniture or used to power China’s huge industrial sector. China is now the biggest importer of Pacific goods with exports to the global superpower more than doubling in the past decade.

    China has somewhat displaced traditional trading partners – New Zealand and Australia – prompting concerns from commentators that this demand is creating an economic dependence on Beijing. Further, most of the exports are unrefined commodities meaning Pacific countries are losing out on the money and jobs that could come with processing.

    A Stuff investigation, with reporting from nations across the Pacific, has examined a growing power struggle in the region, of which the economic angle is one important element. Over five parts, ‘Pawns of the Pacific’, explains how our island neighbours are caught in a geopolitical standoff between an increasingly aggressive China on one side and an increasingly alarmed United States, and its allies and friends, on the other.

    The search for resources

    “Perhaps the key characteristic of all Chinese economic relations with the Pacific Island countries is ‘asymmetry’,” says Richard Herr, an academic at the University of Tasmania, who writes on Chinese influence in the Pacific. “This imbalance leads to questions as to motives and methods of Chinese trade as well as the political consequences of one-sided economic relations.”

    Much of the export growth is a result of China’s Belt and Road initiative. Launched in 2013, it is a long-term development programme aimed at building China’s overseas reach. Yet the nation’s insatiable demand often comes at the expense of the environment and brings with it risks that resources become depleted.

    John, who asked that his last name not be used, is seeing this first hand. He currently works at the logging camp as do his sons but when the wood is gone all those jobs will dry up, and they’ll just be left with the environmental damage. Landowners in the area complain that rivers now turn to mud when it rains, which it does regularly. John says there has been no government oversight of the project.

    “The worst thing is the workers in the camps are not adequately paid and get ripped off,” he says.

    It’s a tale echoed around the Solomon Islands – the benefits of logging have not flowed through the population, and in some cases the logging has been done illegally. A report commissioned by the Solomon Islands government a decade ago found that at 2011 logging levels, natural forests may be exhausted by 2036.

    Log exports have only increased since then. The Malaysian logging company that leases John’s land did not return a request for comment.

    In Papua New Guinea and the Solomon Islands – the two main sources of hardwood exports in the region – 386,000 hectares of mature natural tropical forest have been felled in the past five years, according to data from Global Forest Watch. That’s the equivalent of roughly two forests each the size of Stewart Island being cut down.

    Environmental groups and academics say Beijing needs to take responsibility for exploitation of limited resources. While the country has moved to clean up its environment at home and has rules in place to improve soil contamination, end deforestation and improve fish stocks, it is argued that it does not have enough rules in place to ensure imports have been legally and sustainably procured.

    Pacific Trade

    Pacific countries trade with China has grown dramatically over the past decade.

    “Bigger players from China use bribes to secure resources and land, dispossessing traditional owners and fragmenting communities. The extraction methods are as quick and cheap as possible, and can leave the locations deeply damaged before they move on to the next opportunity,” says Cleo Paskal, non-resident senior fellow at U.S think-tank The Foundation for Defence of Democracies.

    Environmental groups have documented polluted waterways due to run off from mines; deforestation and huge amounts of illegal and unreported fishing.

    A report published by the Pacific Islands Forum Fisheries Agency estimated that annually around $497m worth of tuna was either captured or transhipped illegally annually between 2017 and 2019. The report does not point fingers at any particular nation but a Geneva-based Global Initiative Against Transnational Crime ranks China as the worst country globally in terms of illegal fishing.

    Near the coast on the island of Manono, in Samoa, a series of weather-damaged plastic and concrete tanks and buildings sit abandoned. They are all that is left of a water plant that was supposedly built by a Chinese business.

    Locals say that fishing operators arrived at the island in 2017, the third largest in Samoa, and offered to build the plant that would convert seawater into drinking water. The project was a failure and aborted, but they remained illegally collecting sea cucumbers, it’s alleged.

    Sea cucumbers are dark coloured slug-like sea creatures that are a delicacy in Asia. A kilogram can cost hundreds of dollars. But Samoa does not allow the export of sea cucumbers.

    The man who rented them the land that the project is built on, Finau Auapaau Tavita, says the company had legally obtained a licence for the harvesting of the cucumber, but they were not licensed to ship these overseas.

    “We pulled out of the project in 2020 because the Chinese company was making more money out of the sea cucumbers, and we were not receiving any,” he says.

    Exploitation of resources in the region is not new and the West certainly does not have an unblemished record of its own. Last century, resources such as phosphate on Nauru were mined and sold significantly below market values to help farmers in New Zealand and Australia. The island still bears significant scars from this and the wealth it once enjoyed has disappeared.

    Yet in the past two decades’ other countries have introduced measures to encourage imports from sustainable sources and provide consumers with more knowledge of where and how products are produced.

    It’s not all bad

    Ongoing illegal fishing aside, tuna fisheries have been one of the success stories of the region. An agreement signed in Nauru in 1982 saw eight countries agree to jointly manage fishing rights in their exclusive economic zones. Tokelau joined later. By doing so, and after some trial and error, they have created a system that manages fish resources while forcing countries to pay fair prices, so their own fishing boats can access the tuna-rich water.

    The nine nations garnered at least US$520m for their fishing licences in 2020 – the minimum price charged is nearly US$12,000 a day, although some days have gone for upwards of US$15,000. This is money that goes into governments’ coffers to pay for education and development.

    For four of the nine states the revenue from this fishery makes up half or more of the government revenue, says Dr Sangaa Clark, chief executive of the organisation that administers the agreement. “It’s not just the revenue, but fisheries are also the major generator of jobs – people work in ports and on the vessels.”

    At the same time the licences – and improved surveillance – have seen tuna stocks in the Pacific improve. According to the most recent data available from the Food and Agriculture Organisation of the United Nations, skipjack tuna was being fished at biologically sustainable levels in 2017.

    Former Kiribati president Anote Tong says that much of the value is shipped overseas, however. Canning of the tuna often doesn’t happen closest to where it’s caught, a change that would increase jobs and wealth in Pacific states.

    The cost of power, labour and shipping, and the availability of water all pose hurdles for setting up processing facilities in countries like Kiribati, as opposed to shipping it to Asia to be canned.

    An ongoing challenge is that as returns improve, countries are less likely to put environmental considerations ahead of economic ones. In November, the Kiribati government announced plans to open up the Phoenix Islands Protected Area for commercial fishing. The 408,250 square kilometre area had been closed to commercial fishing since 2015.

    “Our role as Government and our actions within our territorial waters need to be focused on uplifting the livelihoods of our people, including our conservation efforts,” the Kiribati government said in a statement justifying removing the marine park. It estimates the country has lost out on up to US$217m in revenue because of the closure.

    Tong says he believes that there has been internal pressure put on the government to open up the fishing grounds, though he cannot prove this.

    “One thing we need to be very careful about, in having a fisheries’ relationship with China, is that China is a dangerous fishing partner,” Tong says.

    The Kiribati government did not respond to a request for comment.

    The new resource war that’s heating up

    Demand is rising for metals such as nickel and cobalt – needed for powering batteries used in electric cars and phones – and with it concerns about environmental damage. The newest frontier for this is deep sea mining.

    The Cook Islands last week approved deep-sea exploration licences for three companies – all with American or European connections.

    Concerns have been raised about the development of deep sea mining by scientists around the world. Many are worried because the technology is untested, and therefore the impact is unknown.

    “The accumulated scientific evidence indicates that the impacts of nodule mining in the Pacific Ocean would be extensive, severe, and last for generations, causing essentially irreversible damage,” says Mining Watch Canada, which released a report in 2020.

    But the money could be of huge benefit to both Papua New Guinea and the Cook Islands. A report from The Pacific Community (SPC) and the European Union says net benefits for Papua New Guinea could be US$123m and Cook Islands could earn US$698m.

    Akuila Tawake, deputy director of the geo-resource and energy programme at SPC, says many countries in the region have potential minable minerals in their exclusive economic zone.

    “With increasing in demand for these metals the metal prices are also increasing, hence deep sea mining is becoming more feasible,” he adds.

    And then there are the risks. Tawake says deep sea mining has the potential to impact fishing resources, cause maritime boundary disputes and there is the potential for the misappropriation of mining revenue.

    But perhaps it will bring with it more sustainable processing methods. The nickel mine in New Caledonia has long had problems. Not only was the environmental damage it caused significant but the indigenous Kanak population has largely been cut out of the financial benefits of mining the metal.

    In March 2021 it was announced that a locally-owned company would be taking a majority stake in the mine and that thanks to minority shareholder Transfigura, Tesla had signed a contract that made it a key buyer of nickel. It is also going to provide technical support to the new owners.

    For all the challenges, done right it could provide jobs and development.

    Dorothy Wickman in the Solomon Islands, Lucy Kopana in Papua New Guinea and Talaia Mika in Samoa contributed to this story.

    This series was made with funding from the Asia New Zealand Foundation and the Pacific Cooperation Foundation. The money was used to fund journalists reporting in Samoa, Tonga, Fiji, Cook Islands, Kiribati, Solomon Islands and Papua New Guinea.