FOREIGN POLICY IMPLICATIONS OF SAREI VS. RIO TINTO

C O N F I D E N T I A L SECTION 01 OF 02 PORT MORESBY 000401

SIPDIS

SIPDIS

FOR EAP?ANP AND L/EAP

E.O. 12958: DECL: 9/25/2016
TAGS: PREL PP
SUBJECT: FOREIGN POLICY IMPLICATIONS OF SAREI VS. RIO TINTO

REF: SEPT 21 E-MAIL FROM EAP/ANP

CLASSIFIED BY: Robert Fitts, Ambassador, U.S. Embassy Port
Moresby, Department of State.
REASON: 1.4 (b)


1. (SBU) Summary: The PNG government of the day has taken and
communicated a decision to the Embassy that it does not want to
be seen as standing in the way of the hearing of the subject
case in California courts. Accordingly, we must assess that
there are no compelling foreign policy objections vis-a-vis PNG
(and Bougainville.) In particular, we do not concur with the
representations that an adverse decision on the case would creat
a backlash against the GPNG. This of course, does not speak to
the broader foreign policy implications of the Alien Tort
Statute. We do note, however, that as long as the case goes on,
the Autonomous Bougainville government will be tempted to avoid
the difficult decisions and hard work of development in favor of
waiting for pie in the sky via ATS. End Summary


2. (U) Australia, whose mining companies are active around the
world, understandably would like the Alien Torts Statute to be
as limited in scope as possible. In particular, the non-paper
(ref) refers to the requirement that local remedies be exhausted
prior to application of the ATS. That certainly has not been the
case with Sarei.

3.(U) In fact, PNG's statutes require as well that all
litigation on natural resource projects be brought in PNG
courts. In an earlier iteration of the case (2001 or so) PNG
agreed that it would not charge the plaintiffs for violating
that provision in order to pave the way for having the case
transferred back here.

4.(SBU) But the worm has turned. I was officially informed by
both the Minister for Bougainville Affairs and by the Prime
Minister's Chief Secretary (the country's top civil servant
although it is a political appointment) that the government did
not want to be seen as standing in the way of Bougainville's
claim. They wanted the case to proceed. [This had the air of,
we hope the US courts will quickly dispose of this troublesome
issue. Alas, I had to remind them that the US courts were
neither quick nor subject to this Embassy's influence.] In fact,
they said that they were opposed to having the case in PNG
courts as any setbacks to Bougainville's side would be seen
there as a sign the PNG government was trying to keep them under
PNG's thumb.

5.(SBU) The Bougainville peace negotiations are largely over,
though sensitivities are still very near the surface. We are
now in the lengthy run up to the proffered 2015-2020 plebisite
on possible independence. The Bougainville Affairs Minister
noted that his main job is making sure the Bougainville
leadership sees the PNG government as helpful and supportive of
its efforts to set the stage for that plebisite.

6.(SBU) There is lots that is troubling about this case.
Bougainvillians actually believe that, if the case proceeds,
they will pocket $10 billion and become a rich province again.
[Actually, if Bougainville and PNG history is any guide, most of
that chimeral $10 billion would instead wind up in the Brisbane
housing market in the name of individual Bougainville leaders.]
While the case is ongoing, there is every incentive for the
leadership to wait for its ship to come in and not make the
responsible and hard decisions that are required. Also, there is
no guarantee that a future PNG government - which could take
office after the May 2007 elections, might not reverse course.
This would be particularly true if lurid testimony was made
public of the conduct of PNG forces during that troubled
conflict.

7.(U) But, the government of the day has taken the firm position
that it does not want to stand in the way of the litigation.
Therefore, this Embassy cannot argue that there are compelling
foreign policy reasons for the case not to go forward. [This is
vis-a-vis PNG. The Department and DOJ will have to weigh the
world wide implications of ATS cases.]

8.(C) In particular, the assertion made by the Australian
Embassy rep that a loss by the plaintiffs would result in a
backlash against the PNG government is unfounded. Such a
backlash would come only if the PNG government had been opposing
the case. I checked with the Australian High Commission here
and they share my assessment on this specific point. [The GOA
may be trying to limit ATS application and so marshalling every
argument it can think of. This one, though, does not hold
water.]

9.(C)Comment: The GPNG position is a bit strange if viewed from
its own financial perspective. As a 25% of BCL, it would

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presumably have to front up its share of any award that was
made. However, given the way things are done here, the general
suspicion is that PM Somare has been given a financial incentive
to reverse the previous government's position on the case.
Certainly, it would be very typical of Melanesia if what the
government saw as in its nation's interest also redownded to the
individual benefit of its leadership. It is worthy of note that
Paul Nero, a plaintiff and the current PNG CG in Brisbane, is
very much a Somare man.
FITTS