China-Funded PNG Fishery Project Brings New Challenges for Australia

The announcement of a $204 million fish processing plant in Papua New Guinea (PNG) located close to Australia’s mainland raises concerns over both resource depletion and security risks.

The project has come to light following the signing of a detail-thin memorandum of understanding (MoU) between China’s Fujian Zhonghong Fishery Company and the PNG government.

Australian Foreign Minister Marise Payne told the Senate in early December that the government had raised its concerns with PNG. She noted that Australian Border Force vessels would be closely monitoring the region and enforcing the agreed fishing standards.

A part of the Belt and Road Initiative, the project would bring major benefits to an infrastructure poor and geographically challenged region, but that masks the strategic underpinnings behind its inception.

Writing for the Australian Strategic Policy Institute, Jeffrey Wall, a former PNG government adviser, highlighted that with the Chinese Ministry of Commerce’s formal announcement of the project, it can be guaranteed that it has the direct support of Beijing.

If the project is fulfilled, it could see Chinese-supported fishing vessels operating close to Australian waters.

The planned fishery facility would operate as a hub for vessels in a region that is covered by a carefully managed treaty between Australia and PNG on waters and fishing rights. Under the treaty, PNG vessels can operate within a shared fishing zone that stops short of Thursday Island, just north of Cape York.

Concerns over large-scale Chinese fishing operations have been widely reported around the world. On many occasions Chinese fishing vessels have tested other countries’ territorial waters.

Crossbench Senator Rex Patrick stated, “Chinese fishing fleets also have a well-known tendency towards over exploitation of marine resources,” which serves as a “potential threat to the delicate marine eco-systems of the Torres Strait.”

While this depletion of natural resources should be of major concern to Australia and PNG, the facility would also raise security concerns. The MoU is one of many developments of strategic interest for Australia and its allies in the region, particularly involving PNG.

Australia is PNG’s largest development partner and PNG is the largest recipient of Australian aid. Significant resources are dedicated across a swathe of aid programs. However, the Morrison government’s recent shift to prioritize the Indo-Pacific via its aid money, and importantly the move toward infrastructure initiatives, underscores its acute awareness of the challenges it faces.

Outside the Australian Infrastructure Financing Facility for the Pacific, the Coral Sea Cable project is one of the most emblematic infrastructure-focused initiatives driven by Australia. Greenlighted by former Prime Minister Malcolm Turnbull, the 4,700 km undersea cable was completed last year and aims to significantly improve internet connectivity in PNG and the Solomon Islands. Australia’s engagement was widely perceived to be underpinned by security considerations, deemed a response to the Chinese telecom firm Huawei’s initial tender for the project.

Turnbull later acknowledged that Australia’s motivation was in fact to ensure that “critical communications infrastructure did not fall under the control of China or any other country whose interest may not always be aligned with our own, let alone the values of Pacific island nations.”

When speaking on the Fujian Zhonghong Fishery Company’s MoU, Xue Bing, China’s ambassador in PNG, emphasized that the project will enhance PNG’s ability to comprehensively develop and utilize its own fishery resources.

However, the reality is that it continues to seat PNG at the center of a tug-of-war, where the presence of China’s authoritarianism is increasingly imprinting itself on the fledgling democracies of the Pacific – rarely driven by altruism or regional responsibility, it places both the resources and security of the region at risk.

Senator Patrick flagged that such a facility would bring “significant security issues for Australia.” He added that the Australian government “should discuss the proposed Chinese project with PNG and advance alternative development proposals that would be in the interest of both PNG and Australia.”

The Fujian Zhonghong Fishery Company’s MoU shows the need for constant vigilance in a region that is in a geostrategic contest. If the project progresses beyond an MoU, the Australian government will need to answer: At what cost does it allow China an increased presence in the Torres Strait?

For the moment, the project is a long way off, but it adds yet another development for Canberra to monitor.