PACIFIC PROJECT TEAM
| The Guardian | Edited extracts
SYDNEY - Millions of tonnes of minerals, fish and timber are extracted from Pacific island nations each year, generating massive profits for foreign multinationals.
Across the region, mining, fishing and logging industries have shored up the budgets and stabilised the economies of Pacific countries, sometimes making and breaking governments.
Done well, these industries bring jobs to the Pacific and bring in much-needed revenue for development.
But there are also cases where companies have started mining, logging and fishing projects without regard for environmental or social harms of the work they do.
The region is covered in the scars of mining projects, deforestation and illegal fishing.
A global audit of Pacific resource extraction undertaken by The Guardian’s Pacific Project has revealed that:
- China dominates resource extraction in the region, taking just over half the total tonnes of the minerals, timber and fish exported.
- In some industries, Pacific communities see less than 12% of the final value of the resources being extracted, with little paid in royalties or reinvested in the countries which own the resources. Despite their collective natural resource wealth, GDP per capita remains low for many Pacific Island states.
- The extraction each year of billions of dollars’ worth of minerals, oil, gas and timber – US$11.8bn in 2019 - is causing environmental devastation, poisoning rivers and forests, and degrading food security.
- The scale of these extractive industries is also having significant social and health impacts on Pacific people.
A few countries take the vast majority of the Pacific’s natural resources
China is the Pacific’s biggest customer whether measured by weight or US dollars. But Australia is close behind when measured in value – $2.8bn to China’s $3.3bn in 2019.
This is due to the fact that while China takes a lot of wood and fish from the region – which are heavy but relatively inexpensive – Australia imports valuable minerals, such as gold.
China’s lack of laws against importing illegal timber, and poor accountability for environmental or social impacts mean the impact of their resource extraction is often worse than for companies from countries like Australia, which are subject to more scrutiny.
“China’s mineral, timber, fossil fuel, food and other imports from Pacific Island nations are staggering in magnitude,” says Prof Bill Laurance from James Cook University. “They’re creating enormous challenges for sustainable development in the region.”
Solomon Islands and Papua New Guinea are among the largest exporters of tropical logs in the world. But the forestry industry is dominated by foreign companies, with some of the logging done illegally and often at unsustainable levels.
By some estimates Solomon Islands exports more than 19 times a sustainable amount of timber every year. On current rates, the archipelago could exhaust all of its natural forests by 2036.
Already there is evidence that logging in Solomon Islands is impacting the country’s coral reefs, a vital part of the food ecosystem.
Logging projects have also been linked to significant internal migration and increasing food insecurity through localised inflation and the destruction of mangroves and food gardens.
Many communities across the Pacific have been left with little to show for decades of logging _– despite the fact that forested land is mostly under customary ownership.
Corruption and poor processes mean that landowners and governments are often shortchanged. In PNG, the reported annual revenues from forestry are between US$200m and $300m, but the industry claims to make only between $8m and $9m in profit.
Mining has dominated Pacific economies for decades but ownership and operations have mostly been a foreign affair.
Every year nearly 11m tonnes of fuel and oil are extracted from the region, 2m tonnes of copper, nickel, manganese and aluminium are mined, and gold worth $2.6bn is quarried.
But despite the minerals and wealth pulled from the Pacific’s mountains, valleys, oceans and rivers, communities often have little to show for it.
Huge gold and copper mines like PNG’s Ok Tedi and Panguna have delivered millions in royalties for fragile economies but they have also wrought devastating impacts upon the lives and livelihoods of the people who live with them.
Oil and mining accounted for approximately 90% of the value of all PNG export in 2018 but just 10% of government revenues.
Promises for infrastructure or royalty payments for local communities are often broken. And concessionary terms or exemptions are often granted to win projects, with the result that many mines – including the Lihir goldmine – have paid almost zero corporate tax for years.
In Solomon Islands, a bauxite mine on Rennell Island has been the cause of catastrophic spills of oil and bauxite into the island’s fishing grounds, endangering a World Heritage site – while enjoying multi-million dollar tax exemptions granted by the country's government.
And the island of Nauru once had one of the highest per-capita incomes in the world because of a booming phosphate mining industry in the 1970s and 80s.
But the mismanagement of hundreds of millions in royalties caused the near-collapse of the country’s economy, fuelling a series of financial crises and ongoing political instability. Nearly 80% of the country’s small landmass is unlivable, having been strip-mined by foreign multinationals.
The Pacific region exported 530,000 tonnes of seafood products in 2019, netting US$1.2bn. The biggest exporters were Papua New Guinea ($470m), Fiji ($182m), the Federated States of Micronesia ($130m), Vanuatu ($108m) and Solomon Islands ($101m).
The biggest consumers of Pacific fish in 2019 were Thailand, with seafood imports from the Pacific worth $300m, the Philippines ($195m), Japan ($130m), China ($100m) and the US ($100m).
In some ways the fishing industry is a success story for the Pacific region.
In a landmark moment of regional cooperation, eight countries signed the parties to the Nauru agreement in 1982, which allowed the tiny countries to negotiate as a bloc, the access to their waters by foreign fishing vessels, a move that has generated an additional $500m a year in revenue.
But the Pacific –– the world’s most fertile fishing ground, which supplies well over half of the world’s tuna –– also falls victim to illegal fishing, with an estimated one in every five wild-caught fish illegally caught.
Negotiations are under way to open nearly half the Earth’s surface to mining. The International Seabed Authority is finalising a mining code that would, for the first time, allow companies and nations to mine minerals from the ocean floor, up to 5km below the waves.
Proponents argue that seabed mining would be a well-regulated industry, one that avoids the mistakes of mining on land. The industry is potentially worth billions of dollars and could assist the transition to a renewable energy economy, supplying raw materials for key technologies including batteries, computers and phones.
But marine scientists who study the deep sea floor – an area of the world humanity knows less about than the surface of the moon – have urged caution. They warn that the world could lose whole species of marine life even before they are known to science.
Pacific nations are caught up in this nascent extractive industry, as many of the exploratory licences that have been granted have been sponsored by them and are in or near Pacific waters.
A coalition of some of the most significant civil society organisations in the region has launched a campaign for a ‘blue line’ to be drawn against deep sea mining.
The coalition says it represents the “most grievous violation of Mother Ocean, already exploited by those nations that have rejected the basic human responsibility to live in harmony with the fragile ecosystem of our planet for the financial benefit of a few”.