Daru Island Projects: China’s Two Big Investments in Torres Strait

Daru Island Projects: China-PNG free trade deal

Daru is the capital of Western Province, a least developed town compared to other provincial towns in Papua New Guinea (PNG). Outside access to the island from Port Moresby is either by air or sea. There is no road connection.

Daru Islanders have strong traditional ties with the Torres Strait Islanders on the Australia border. The Daru Island is one of the 274 Torres Strait islands but on Papua New Guinea side. (Proximity of PNG to Australia).

The sleeping island of Daru is marked for two major Chinese investment projects;

▪︎a busy  fishery base for the Chinese communist government-owned company, Fujian Zhonghong Fishery, and

▪︎a sand dredging investment project along and around the delta of Fly River.

Daru Island Papua New Guinea
Daru Island marked

Chinese-Daru Island projects close to Australia

Papua New Guinea governments, both past and present, have said openly that they ‘want a free trade deal’ with China. The PNG government’s Look North’ investment policy seemed to have complimented China’s Belt and Road Initiative.

In recent years, PNG and China’s bilateral relationship was ‘friendly’, bolstered by the Chinese investments in infrastructure, mining and fisheries. The Chinese govt officials, businessmen, investors and its companies have been visiting PNG to talk business and make donations in kind during the COVID-19 shutdown.

Project 1: fishery base on Daru Island

The PNG government and a Chinese state-controlled company (Fujian Zhonghong Fishery) have agreed to deliver a $200 million fishery project on Daru Island. The island and its nearby waters are known for an abundance of fish and seafood. And controversially, too close to Australia. Understandably, questions have been asked about the location of the Chinese Fishery base near Australia.

An Australian, Jeffrey Wall, who was a former PNG government’s advisor said:

“In a remote and woefully underdeveloped community like Daru, a $200 million project will have a massive impact,”
“But the question that needs to be asked is simple: why Daru?”

Perhaps, it is clear that this deal can not be stopped. As a sovereign country, PNG would hardly be happy about Australia telling it to relocate the Chinese fishery company elsewhere.

Project 2: Chinese mining sand in Western Province

The Chinese have also shown interest in sand dredging – in fact, it’s sand mining – in the Western Province. The company, based in Hong Kong, has a Chinese owner. The company representatives jetted into Port Moresby, during the COVID-19 lockdown in a private plane, and held talks with PNG govt officials.

Interestingly, the investors visited when the other international flights were not allowed into the country. The visit was granted ‘special permission’ and allowed to enter amidst the strict COVID-19 shutdown measures.

The EMTV News reported that the Chinese owned company was granted a contract to dredge sand sediments along the Fly River at a cost of K80 million per month. That is close to spending K1 billion (K960 million) per year.

‘The sand-dredging company intends to invest 80 million Kina monthly in this project with no cost to the government [or Ok Tedi Mining]’. (re#1 EMTV News 29/10/2020)

The PNG government sees project as the clean-up operation of the Fly River system where the Ok Tedi Mining and PNG govt would not spend any money during the cleaning of the river beds. This sounds too good to be true, right?

Here is what a senior PNG government minister said about the Chinese sand dredging venture close to Australia-PNG Border.

‘Well, they (China) have got to get rid of the wastes […] and they can take them (the wastes) away. We don’t want to know where they take them away to.’ (re#2 Wera Mori MP, EMTV News 29/10/2020)

The Chinese company knows the value of the sand wastes. It is now a case of ‘One man’s trash is another man’s treasure’ as far as PNG and China is concerned, it seems.

But, what about Australia in the big picture?

Chinese track record in the Pacific and politics

Politicians and diplomats in Australia, New Zealand and the Pacific neighbours have a preconceived notion that China’s track record in the region is not good. The Australian Federal MP of the Torres Strait Island questions China’s intention:

“You only have to look at what China has done in other places in the Pacific to ask the question of whose best interest it is in,” he said.

“Is it in the best interest of the broader PNG community? I suspect not.” (re#3 MP Warren Entsch, Federal MP)

Daru Island: neglected, remote and underdeveloped

Neglected, remote and Underdeveloped.

These were the words of the commentators who saw the Chinese investments as a means to improve the life of the communities on the island. The Australian Media did not put it, plainly, that way. But it seems that Australia is happy if the underdeveloped Daru Island can remain without China stepping on its front doors.

The news reports from ABC News and Guardian have purported to the Chinese investments in Daru Island (and Western Province) as a threat to national security.

  • As the Australia-China relationship deteriorates, a $200m PNG ‘fishery’ deal raises eyebrows ( re#4 ABC Laura Tingle)

  • Chinese fishing plant in Torres Strait raises alarm for Australian industry and islanders ( re#5 Guardian Lillian Yang)

The inference was that there was nothing good on the Island of Daru, and no fish in a narrow strait like the Torres Strait. Why is China investing $200 million in Fishery and K80 million monthly there?

PNG govt strategic investment dream

The two projects (Chinese Fishery Base on Daru Island & Sand Dredging along the Fly River) are in favour of PNG’s strategic investment policy as far as trade and investment are concerned. China is happy to commit to investments in these two portfolios near the Australian border. It is a matter of time.

Australia is unlikely to stop the two deals. As a sovereign country, PNG would not be happy about Australia telling it what deals it can do, or not do with China.

This article is published under the category of Opinion and News.

___Key pointers__

The opinion presented in this article stems from recent media files from PNG and Australian media reports.

  • (re#1&2) EMTV News 29/10/2020 https://www.youtube.com/watch?v=d4_R00UCpYs
  • (re#3&#4) ABC News https://www.abc.net.au/news/2020-12-12/australia-recognised-threat-png-vulnerability-represents-china/12974846
  • (re#5) Guardian https://www.theguardian.com/world/2020/nov/27/chinese-fishing-plant-in-torres-strait-raises-alarm-for-australian-industry-and-islanders

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This Post Has One Comment

  1. Tim

    Where does all the fish go? To PNG for local consumption? No way, for locals fish stocks go down and price goes up. How much expertise in fisheries has China given to PNG in the last 50 years? Australian aid for PNG development has been very generous for over 50 years. Wake up PNG!

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