Canberra, 10 March 1966

Top Secret

Papua and New Guinea: ultimate status

Cabinet recently considered what attitude might be adopted by the Commonwealth Government towards short-term or interim constitutional development in Papua and New Guinea.¹ This submission is concerned with what attitude the Government might adopt at the present time towards the long-term constitutional status of the Territory and what lines should be followed on certain matters likely to arise in exploratory discussions in April 1966 with the Papua and New Guinea Select Committee on Constitutional Development.

The Select Committee on Constitutional Development

2. Arrangements are being made, at its request, for the Select Committee on Constitutional Development of the House of Assembly to visit Canberra soon for exploratory discussions.

3. Under its terms of reference the task of the Select Committee is–

'To draft for the consideration of the House of Assembly a set of constitutional proposals to serve as a guide for future constitutional development in the Territory.'

At an informal meeting I had with the Committee in Port Moresby in January this year² the Committee was pre-occupied with seeking some guidance from the Government on which alternatives for the future political status of the Territory they might put to the people for an expression of the people's views. They indicated clearly in these informal talks that from their point of view an important question for the exploratory discussions in Canberra would be the range of special relationships (i.e. relationships in the long-term) between Australia and the Territory that would be acceptable to Australia.

4. In addition to this question the Committee indicated that it wished, in these exploratory discussions, to canvass such points as the difference in status between Papua and New Guinea and the implications of this difference; the conditions on which Australia might grant internal self-government; Australia's role, constitutional and economic, after self-government and in particular the position with respect to Australian aid to the Territory after self-government; and migration between Papua and New Guinea and Australia. The Committee indicated that it would no doubt find other matters before the meeting took place that it would wish to explore.

5. I discouraged the Committee from expecting that the Government would wish to or would be in a position to be specific about the ultimate status of the Territory. I put it to the Committee that the advancement of the Territory to self-government was the first objective which should be looked to at this stage and for this reason the Committee should concentrate its enquiries on the steps that should be taken to reach that objective. The Committee, however, appeared to have got itself into a position, both from its interim report in November to the House of Assembly and in its own thinking, where it considered it necessary to test opinion on the long-term future of the Territory. At the conclusion of our talk the Committee did seem to have moved away from thinking about testing specific possible future constitutional arrangements towards thinking about what broad political paths were open for the Territory to follow in terms of possible future relationships with Australia.

6. With regard to the level of economic aid which the Territory might continue to receive in future years I told the Committee that the Government and Parliament had accepted the World Bank Mission Report as a basis for planning and it would not be realistic to expect the Government to undertake at this stage any commitment beyond the five-year period to which that programme would apply.

Background to Committee's request for discussions

7. A number of factors have influenced the Committee to seek discussions in Canberra. Enquiries commenced by the Chairman of the Select Committee³ to obtain the views of the people on a single name, flag and anthem for the Territory, suggested by the Trusteeship Council as being important issues to be decided now, aroused concern. Part of the opposition took the line that before deciding on these symbols of unity the Papuan and New Guinean people should consciously decide whether they wished to join together in a single future. Since Papuans are 'Australian citizens' and New Guineans are 'Australian protected persons', a proposal to unite Papuans and New Guineans under a common flag, name and anthem implied to some Papuans that they would be abandoning their Australian citizenship. Part of the opposition also came from conservative elements some of which want to see no change in the present arrangements for many years and some of which want Papua and New Guinea to be admitted at some time in the future as a 'state' of the Commonwealth. (There are of course some who look to independence as the long-erm objective, although as yet only few voices have publicly expressed that view.)

8. The Committee now appreciates that it cannot go very far in seeking the people's views on the ultimate status of the Territory without taking into account the difference in status of Papua and of New Guinea; and it considers it cannot adequately canvass the views of the people of Papua and New Guinea regarding their political future without having the Commonwealth Government's views on what special relationships might ultimately prove practicable (or, more exactly, what forms of eventual special relationship would not be acceptable to Australia).

Reasons for considering now the political status of Papua and New Guinea in the long-term

9. The question of the Government's views on the future relationship of Australia with Papua and New Guinea arises apart from developments in the House of Assembly. Cabinet has not hitherto recorded a decision on Australia's position in relation to the ultimate status of Papua and New Guinea. Statements about the political future have emphasised the principle of self-determination; there have been references to self-government or independence as possible outcomes and to a variety of possible associations with Australia that could be discussed between Australia and the Territory when the time should come.

10. There is much to be said for a broad decision now on what the Government would prefer under present circumstances and at this time to envisage as the nature of the eventual relationship of the Territory to Australia. Policy decisions taken now and over the next few years could then to the relevant extent be governed by the Government's broad objective. For example, policies of economic development including trade and investment, the level of financial aid and the nature of education policies could be responsive in varying degrees to any such broad attitude that might be adopted now by the Government. Possibly other Commonwealth policies such as defence expenditure and planning would be affected. The decisions on policy matters of these kinds might vary according to whether the broad attitude is that Australia should, as soon as this is decently manageable, disengage from the Territory or alternatively, whether Australia should actively pursue policies directed towards an ultimate association. Similarly reactions to political or other new developments could be guided by the broad policy posture. To the extent that this may be desirable steps taken from time to time by the Government or by the Administration may be adapted to influence the people to look towards that broad policy objective as the outcome of the Territory's political development.

11. For the purposes of this submission it appears that the various possible broad policy objectives may be considered under three principal headings:–

(1) unqualified independence;

(2) association with Australia–
which might take the form of

(a) independence for Papua and New Guinea with special treaties or agreements with Australia;

(b) self-government for Papua and New Guinea with certain powers (e.g. defence, external affairs) reserved to Australia; or

(c) close association as described in paragraph 17 below;

3. integration with Australia.

Unqualified independence

12. The concept here is one of eventual disengagement and withdrawal by Australia from the Territory. It connotes independence without special treaties or agreements designed to safeguard special Australian interests. A long-term policy objective of independence as here defined would imply that Australia would in the future be following its own path with little regard to events in Papua and New Guinea; i.e. there would be no serious implications for Australia if the government of the Territory crumbled away into instability or even chaos, or if a hostile power were to gain influence in Papua and New Guinea or even to take the country over.

13. {(}While the distinction between Papua as an Australian Territory and New Guinea as a Trust Territory no longer has much practical importance in U.N.eyes, there could be a significant difference between the Territories for Australian constitutional purposes. No formal opinion has been sought from the Attorney-General's Department but the quick reaction of that Department is to feel that, while in the case of the Trust Territory of New Guinea, it is probable that, having regard to the terms on which that Territory was accepted, and is administered, by Australia the granting of independence to it could be justified constitutionally under the external affairs power, in the case of the Territory of Papua the international element is not nearly so strong. The Attorney-General's Department takes the view that the question whether independence (as distinct from substantial self–government) could be granted in the case of Papua raises a substantial constitutional question to which a good deal of consideration would have to be given before a confident answer could be given. In the meantime, it believes that it ought not be assumed unqualifiedly that there could be no impediment under the Australian Constitution as it stands to such a grant of independence.)

Association

14. If there are special Australian policy objectives to be sought in Papua and New Guinea after self–determination, whether of a security, political, economic or other character, these objectives could be sought through some form of association. For present purposes the main possible forms of association are taken to be those listed in paragraph 11 above, and these are considered individually in the following paragraphs.

Association–independence with treaties

15. The aim of policy would be to secure Australia's special interests (e.g. defence, trade) by treaties, and by other means (economic aid, provision of skilled manpower, etc.) compatible with Papua and New Guinea's constitutional independence.

Association–self-government with reserved powers

The Territory would have full internal self-government but there would be legally entrenched provisions reserving certain powers to the Australian Government e.g. defence, internal security, external affairs.

Close association

17. The concept of close association for the purposes of this submission includes but goes beyond self-government with defence and external affairs powers reserved to Australia; it relates to an association based on a much closer relationship deriving from a wide range of possible administrative, economic, legal, constitutional or other links, but falling substantially short of 'integration' with Australia as a State. For example, the Commonwealth at present guarantees public loans in the Territory. Arrangements could be worked out, with adequate safeguards for the Commonwealth, whereby arrangements of this sort could be continued. A continuation and possible extension of common services between Australia and the Territory in, for example, civil aviation, meteorology, specialised engineering works, scientific and industrial research etc., are possibilities. The possibility of special arrangements for the Territory in immigration matters (without breach of the Australian immigration policy) is discussed in paragraphs 39 to 43 below. Presumably common currency arrangements could be maintained. Special trading arrangements such as adaptations of the free trade area concept might be set up. These illustrations suggest that practicable forms of close association could be devised which would go considerably beyond internal self-government with certain powers reserved to Australia. A variety of constitutional links apart from the reservation of specific powers would be conceivable. If at the appropriate time in the future the policy attitude were in favour of some constitutional arrangements to strengthen the close association particular devices could be worked out adapted to the circumstances of Australia and Papua and New Guinea falling short of 'Statehood'. Subject to this last reservation, the arrangements could be drawn so as to result in as loose or as tight an association as might be desirable.

Integration with Australia

18. Apart from 'association' as described above, a possible approach would be to seek to secure Australian interests by integration with Australia. The view that the Territory could become a 'state' of Australia seems to be widely held amongst sections of the Territory population. It is probable that many of those who hold it do not have a clear idea of what they mean. Insofar as the Territory becoming a State of Australia means admission of the Territory on equal terms similar with the existing states the proposal seems impracticable, at least for many years to come. To extend to 2¼ million people of different race, with different standards of living, customs, etc., the option of free movement to any part of Australia seems out of the question in the light of the policy aim of a generally integrated and predominantly homogenous population. The addition of 2¼ million people to the Commonwealth electorate to be represented in the Commonwealth Parliament on the same terms as the present Australian population of 11¼ million similarly seems out of the question. Neither does it seem practicable to include the Territory within the Australian tax and social services systems at any rate at present.

19. (The Attorney-General's Department takes the view that as a matter of constitutional law a Territory can probably become a State of the Commonwealth under the Commonwealth Constitution as it stands, but opinions on the matter have not been unanimous and the matter cannot therefore be regarded as being completely free from doubt.)

20. Whatever relationship may prove practicable and acceptable in the long-term between the Territory and Australia, it is considered that integration as a state on equal terms with the existing states may be eliminated as a realistic possibility under existing circumstances. In that case there might be advantages in this being clearly understood so that advocacy of this course may be discouraged and the raising of false expectations avoided. Care should however be taken to avoid giving the Territory people the feeling that they are being rejected by Australia with the consequent risk of the whole of the Australian operation in the Territory becoming soured.

If integration as a seventh state is discarded as a possible broad long-term policy objective the broad options remaining are independence or some kind of association short of integration. A wide range of considerations affect a choice at this time between a policy attitude directed towards eventual disengagement and a policy attitude directed towards association in one form or another as the broad objective. This submission does not attempt to provide a detailed analysis of these issues. They may have to be weighed in detail at a future stage when decisions are being made about any specific relationship between Papua and New Guinea and Australia. The issues considered below are those which at present seem to have a particular relevance. These are:–

(i) Importance of Papua and New Guinea to Australia's defence and security;

(ii) Commonwealth expenditure;

(iii) Trade and finance;

(iv) Private investment from Australia;

(v) Social services;

(vi) Immigration;

(vii) Australia's position vis a vis U.N.;

(viii) Australia's obligations to the Territory.

Defence aspects

22. The Minister for Defence has approved the statement prepared by the Defence Committee at Annex A. The Department of Defence has provided to the Department of Territories a summary view as set out in the following paragraphs 23 to 27.

23. Defence policy for the security of Australia and its island territories has been based on a forward defence strategy to hold South East Asia. In terms of this policy the retention of facilities in Papua and New Guinea is of great importance in ensuring the passage of our forces between Australia and South East Asia and the maintenance of communications between Australia and United States bases in the Pacific. We also need to retain these facilities for the defence of the Territory itself particularly against Indonesia, and in some circumstances, to reduce the risk to our Eastern seaboard. Should Papua and New Guinea come under the control of an administration unfriendly to Australia and the West in general, this would, in addition to the direct military consequences, facilitate the further penetration of the Pacific by hostile influences.

24. In the interests of Australian defence as well as the defence of the area it is important that access to the Territory of Papua and New Guinea and its base facilities be maintained.

25. The vigorous prosecution of policies which will develop good relations between Australia and the indigenous population will facilitate the achievement in due course of whatever new defence arrangements are appropriate to the future constitutional status of the Territory, and provide a basis thereafter on which Papua and New Guinea may remain well disposed towards Australia. Future defence arrangements in the circumstances envisaged above should include definition of the following:–

a. Retention of present and planned base and transit facilities in the Territory;

b. Right to maintain forces as required in Papua and New Guinea;

c. Dependent on the above a commitment to defend the Territory against overt and covert aggression.

Conceivably a Papua and New Guinea Government in such future defence arrangements might wish to reserve the right to consult us regarding the provision of Australian forces in an internal security emergency.

26. It is difficult to judge the extent, if any, to which a presumed range of future constitutional options for Papua and New Guinea would affect our capacity to undertake the defence of the Territory or to maintain an adequate military presence there. However, as suggested above, it would be judicious to assume that apart from the external threat the ultimate issue, perhaps overriding constitutional forms, will at any time be the political attitude and political requirement of the popular Government of the day in Papua and New Guinea. Without the genuine concurrence of the local government, and to a considerable extent irrespective of our legal defence powers under constitutional or treaty arrangements, Australia's military efforts and presence could be seriously impaired or frustrated by indigenous opposition.

27. The constitutional development of Papua and New Guinea to a stage where it ceased to be a Territory of Australia within the meaning of the ANZUS Treaty would significantly modify the existing United States commitment. The Treaty is applicable to Papua and New Guinea itself only whilst it remains an Australian territory. If Papua and New Guinea ceased to be an Australian territory ANZUS in its present form would no longer apply directly, and there could be great difficulties in obtaining the United States agreement to any modification of the Treaty. ANZUS would however still apply in the event of an overt attack on Australian forces in Papua and New Guinea.

28. The defence assessment in Annex A and in paragraphs 23 to 27 above suggests that the importance of Papua and New Guinea in Australian defence and security is such that total Australian policies towards Papua and New Guinea should be directed to achieving the securest possible tenure for Australian defence positions and interests in the Territory. The defence assessment stresses that the goodwill of the government of the day and of the people of Papua and New Guinea may be the factor that would decide whether Australia could maintain an adequate military presence in the Territory and that this factor may be more important than constitutional forms. For the purposes of this submission, the judgment to be made is which of the courses listed in paragraph 11 is likely to be most effective in achieving these objectives, and as discussed in paragraphs 51 to 56 below, a policy directed towards one or other form of association seems likely to be more effective than a policy directed towards disengagement.

Commonwealth expenditure

29. In terms of direct monetary aid and actual expenditure by the Commonwealth, the Government seems faced with continuing a substantial level of aid to the Territory in the foreseeable future whatever the ultimate political status of the Territory. An objective of continuing association would seem to imply an onus on Australia to maintain a higher level of administrative and financial contribution in the Territory than otherwise. It does not, however, imply an obligation by Australia to raise Territory levels of income and standards of living to Australian levels. (For example if this point arises in connection with social services–see paragraph 38 below.)

Trade and finance

30. In recent years Australia has absorbed something like 50% of the Territory's exports and supplied almost two–thirds of the Territory's imports. The Territory trade accounts with all countries resulted in 1964/65 in a deficit of $30M.

31. As long as Australia provides economic assistance to the Territory on a substantial scale, measures to increase Territory exports, including exports to Australia, will be important in Australia's interests.

32. The Australian market however offers only limited opportunities for the expansion of tropical plantation products and timber which apart from copper–and in the absence of oil–are likely to be the Territory's main exports in the foreseeable future. Copper could become a major Territory export but this, too, will have to find a market outside Australia.

33. With the increasing Australian population and with new products becoming available in quantity from the Territory there will be some scope for the expansion of trade with Australia especially in tea, which the Territory will soon be producing in substantial quantity. With continued development and rising incomes, moreover, the Territory market is likely to become more important to Australian exporters. A policy directed towards a continuing association between the Territory and Australia seems likely to provide on balance some advantage so far as trade aspects are concerned though it does not appear that the trading connections would necessarily be critically affected if a policy directed towards disengagement were followed.

34. The Territory is part of the Australian monetary area and its international monetary transactions at present result in a net liability to Australia. However, the Territory provides Australia with commodities which would otherwise have to be bought on the world market with a resulting debit in Australian international payments. As against that Australia supplies the Territory with certain commodities and services which might otherwise be used directly or indirectly to increase Australia's exports. It is therefore not easy to obtain a precise measure of the total effect which our economic relationship with the Territory has on our international balance of payments.

35. While the net effect is likely to be negative at present the picture could well change and a favourable balance of trade and of payments for the Territory with the rest of the world could result as the programme for expansion of export industries proceeds over the next decade and especially with a successful development of copper resources and–more speculatively–a discovery of mineral oil deposits.

36. There are moreover good prospects of obtaining some capital and other aid from international agencies and if the right investment climate can be created substantial private non-Australian capital might be attracted. It is possible that the Territory could in the longer term contribute to Australia's foreign exchange resources if it remained in the Australian monetary area. Eventual unqualified independence would not necessarily mean that the Territory would cease to be part of the Australian monetary area; but a close association would diminish the prospects of such a separation. As long as the Territory remains within the Australian monetary area, it will need to accept certain monetary disciplines. Subject to this, the question whether the Territory is or is not included in the Australian monetary area would not weigh heavily in arriving at a decision about the attitude that might be adopted now regarding the ultimate status of the Territory.

Private investment

37. As part of the present economic development policy for the Territory external investment is encouraged. The willingness of foreign and Australian investors to commit capital in the Territory is influenced among other things by their expectations regarding political developments there including the eventual political status of the Territory. Commonwealth Government policies which created confidence in the future stability of the Territory would be likely to foster increased investment. A belief on the part of businessmen or investors that Australian authority would be withdrawn from the Territory would be likely to discourage investment. In this connection the present Australian overseas investment insurance scheme does not apply to investments in Papua and New Guinea and although in the event of independence it would presumably apply, it would not then cover investments undertaken prior to independence. So far as the volume of external investment in the Territory is concerned a policy attitude directed towards continuing association after self-determination would be likely to promote the objectives of economic policy in the Territory.

Social services

38. The Australian pattern of social services does not apply in the Territory. In particular, the Territory has no system of age, invalid or unemployment allowances. The care of the aged and of those who cannot earn their own living falls on the village community. A system of pensions on the Australian pattern and at the Australian levels would present intolerable costs in relation to the level of revenue obtainable in the Territory and would be inappropriate to present circumstances there. It may be that the attractions of the Australian system of social services are an element in the thinking of some of those who support integration with Australia. If, however, a relationship of association were viewed as a possible outcome, the social-services system of the Territory could be left for development in harmony with progress in other fields there and in a way adapted to the Territory's own circumstances.

Immigration

39. Immigration considerations might seem prima facie to point to a policy of disengagement since association (in any form) suggests that conditions of entry for Papuans and New Guineans into Australia for permanent residence would be easier than those for non-Europeans generally. It is by no means certain however that Papuans and New Guineans would regard free access to Australia as a necessary part of association arrangements.

40. Not many Territory people have applied for permission to settle in Australia although, in the case of Papuans, a good many of them have for some time been conscious of their legal status as 'Australian citizens'. Such applications can be expected to increase. At the moment the Administration controls exit from the Territory under local ordinance but the future Papua and New Guinea Government will itself have to consider controlling absences for employment elsewhere to avoid denuding the Territory of its people who have skills, qualifications and enterprise.

41. Assuming an 'open door' policy is out of the question–having regard to differences in wage levels, standards of living, customs and social behaviour–there will be cases from time to time where refusal of entry to Australia for permanent residence would threaten damage to relations between Papua and New Guinea and Australia. This is particularly so in relation to Papuans in view of their legal status as 'Australian citizens'. It may be thought desirable that entry for permanent residence should be possible in selected cases (or categories of cases) of this kind, at the discretion of the Minister for Immigration in consultation with the Minister for Territories. Such modest extensions of present practice would seem not only to be consonant with an intended association but to be desirable during any process of disengagement.

42. If association is to be the aim, a further measure which could be adopted without breach of present immigration policy would be to develop the present practice of enabling Papuans and New Guineans to come to Australia for temporary periods for education, training, tourism, business and official purposes. In particular, it should be possible to increase the at present very small number of people coming to Australia for practical training and experience.

43. In addition, changes can be made in documentation and other procedures associated with travel from the Territory to Australia to avoid unnecessary discrimination between the indigenous inhabitants and various other categories of travellers, and to avoid our appearing to treat Papuans and New Guineans as foreigners in such procedural matters.

United Nations

44. Although there is a difference in status between Papua as an Australian territory and New Guinea as a trust territory it appears that this distinction no longer has much practical importance in U.N. eyes. Under the United Nations Charter, Australia has accepted the obligation to develop self-government in the case of Papua and in the case of New Guinea 'self-government or independence as may be appropriate to the particular circumstances of the Territory'. In any case the probability is that Australia is committed to self-determination for both territories.

45. Apart from the obligations under the Charter, the General Assembly has affirmed in Resolution 1514 (Australia and some other countries abstaining) the right of all people to determine their political status, and 'declares that immediate steps shall be taken, in Trust and non-self-governing territories or all other territories which have not yet attained independence, to transfer all powers to the peoples of those territories'. Resolution 1541 (Australia again abstaining with some other countries) states that a non-self-governing territory can be said to have reached a full measure of self-government by–

a) emergence as a sovereign independent state;

b) free association with an independent state; or

c) integration with an independent state.⁴

46. There is an area of disagreement internationally as to whether Resolution 1541 applies to trust territories. There is also an apparent inconsistency between Resolution 1514 which seems to have the purpose of declaring that all territories shall be given independence, and Resolution 1541 which provides for integration and free association as alternatives to independence for non-self-governing territories.

47. A choice now to adopt a path towards association or a path towards disengagement would not necessarily bring immediate difficulties in the United Nations. If a form of association short of constitutional independence (i.e. other than 1 or 2(a) of paragraph 11) were ultimately entered into it is likely on present indications that a majority of U.N. Members would at that time regard this as an unacceptable resolution of the status of a trusteeship or non-self-governing territory and would not agree to release the Territory from the surveillance of the United Nations. There would, of course, be no international difficulties when the time came for action if the ultimate outcome were unqualified independence. Nevertheless, whatever the path to be followed, on the present temper of a majority of the United Nations Australia can expect to be increasingly exposed to criticism or attack on the timetable of political development in the combined Territory.

Australia's obligations to Papua and New Guinea

48. The Territory people have been assured that Australia will provide help to them as long as they need and want it; they have been assured that Australia would not leave in a hurry. If it were concluded that in terms of Australia's interests a path towards disengagement should be followed, this would not mean that Australia's commitments to the Territory could be tapered off rapidly. Even if we had no long term interests in the Territory, considerations of national prestige and the likely reaction in the Australian electorate would dictate against a course of withdrawing at a stage at which political or administrative disorder would be likely to follow.

49. Thus the choice between a path leading towards disengagement and a path leading towards association or close association does not seem to be a choice between freedom from onerous commitments and the acceptance of onerous commitments but rather a choice between accepting less onerous or more onerous commitments. So long as the commitments continue, to follow a path directed towards association is likely to help in the discharge of those commitments through its effect on the confidence of the people in the Territory, whether in Government or private enterprise, expatriate or indigenous.

Summary of considerations

50. The foregoing consideration of the various issues suggests that Australia's defence and security are the most powerful factors influencing a choice at this time between a policy attitude directed towards continuing involvement or association and a policy directed towards disengagement. Some implications of the defence assessment are suggested in paragraphs 51 to 56 below. With regard to the other issues discussed above it appears that a choice of association as the long-term objective might imply a need to maintain a higher level of aid to the Territory than otherwise. It may mean that immigration to Australia from Papua and New Guinea would present more difficulties than would a policy objective of disengagement but it may not be as difficult as it seems at first sight to devise suitable practicable immigration arrangements. Insofar as the United Nations is concerned, criticism may be expected on the timetable of political development in any case and the outcome of unqualified independence seems likely to be the only policy result which would escape charges of neo-colonialism etc. in the absence of some sweeping change in the attitude of the Afro-Asian and Communist Blocs. On the other hand, trade, finance and investment do not seem to have any weighty bearing–if anything there seems to be some advantage in a policy objective of continuing association. The satisfactory discharge of Australia's obligations to the Territory would, it appears, be facilitated by a policy directed to eventual association.

51. With regard to the defence and security of Australia, since the defence assessment concludes that it is important that access to the Territory of Papua and New Guinea and its base facilities be maintained it appears that unqualified independence as a long–term policy objective should be ruled out (though it may turn out in practice that a situation of unqualified independence may have to be accepted) and that the present broad policy attitude should face towards eventual association rather than disengagement.

52. At this juncture it does not seem necessary to choose firmly between the three types of association mentioned or to attempt to define them more closely.

53. Independence with treaties has attractions from an international standpoint and in some circumstances might be psychologically more attractive to the Papua and New Guinea people. On the other hand maintenance of defence bases under treaty or special arrangement seems of itself to be likely to attract hostility (e.g. Singapore, Egypt, Iraq) making bases insecure if not untenable.

54. Self-government with external affairs and defence powers reserved to Australia may also provide a target for political agitation and external criticism.

55. The attitude of the people of the Territory to Australia is at present vastly different from the attitudes of previously colonial peoples elsewhere to their administering powers. This may change but on the present outlook it appears that greater goodwill would be forthcoming throughout the course of political development if Australia showed a willingness now to accept a close association as outlined in paragraph 17 than from Australia's encouragement of movement as soon as practicable to independence plus treaties.

56. In terms of security of defence arrangements it would appear that the closer and more pervasive the association the more likely it would be that the goodwill of the Territory people would be retained and the more durable the defence arrangements would be.

57. The policy attitude should not be regarded as static. Review from time to time will be necessary. For example, better health services and the general lifting of living standards will no doubt lead to a substantial and possibly rapid increase in the present Territory population of 2¼ million. Education and improved communications may lead to pressures for continued expansion of education facilities and community and government services. Industrial expansion will be expected to keep pace with the demands for employment. Pressures of these kinds for aid greater than it appears reasonable to give may lead to changes in the present predominantly favourable attitude of the Papua and New Guinea people towards Australia. On the other hand there is at present a basic awareness on the part of Papuans and New Guineans of the advantages to them of close association with Australia, and this may continue.

58. All in all, under present conditions it is considered that the Government's present posture towards the long-term political future of the Territory should be one of accepting an eventual close association between the Territory and Australia, if this is what the people of the Territory decide they want.

Discussions with Select Committee

59. As noted in paragraph 3 above the Committee in the preliminary discussions in January in Port Moresby emphasised the question of the range of possible special relationships with Australia. Whether or not the Committee pursues this question there appear to be advantages in the Government taking the opportunity to state a view.

60. No difficulty is seen in a general statement that for its part, the Government does not see the difference in status of Papua and of New Guinea as leading to a preferred position for Papuans as against New Guineans in respect of relationships with Australia; the difference in status has some legal consequences, but in terms of treatment by Australia after self-determination the Government's position is that New Guineans would be treated no less favourably than Papuans; the present difference in status should not therefore be regarded as a factor having practical significance for the purpose of the Select Committee's inquiries.

61. If Cabinet agrees with the position arrived at in paragraph 58 above–that the Government's present posture should be one of accepting an eventual close association if this is what the people of the Territory decide they want–then the Government's view could be stated on the following lines:–

• The Government's policy towards the Territory is one of self–determination. The first target is internal self-government. With this achieved it will be for the people of the Territory to decide eventually what they would like to see as the ultimate political status of the Territory; it will be the view of the people at the relevant time that will be important in relation to specific arrangements and not the views of the people at this time.

• If the Select Committee finds that the present outlook of the people is in favour of eventual independence this would be an acceptable situation to the Government; if, on the other hand, it is found that the people of the Territory are looking towards an association or even a close association with Australia this also would be an acceptable path for them to follow from the point of view of the Australian Government. Such an association could take a variety of forms, though it does not appear that integration of the Territory with Australia as a State on equal terms with the existing States would be a practicable outcome, or one that was in the interests of either Australia or the Territory.

• The attitude of the Australian Government is that it will go on helping in the Territory but the co-operation of the people and of their representatives is a necessary part of that help; i.e. in matters like land tenure and the development of mineral or forestry resources, co-operation is necessary and in political affairs it is a prime responsibility of political representatives to co-operate in achieving a smooth transition from political dependence to efficient self-government in the Territory; after internal self-government is achieved if the people of the Territory continue to want help from Australia the Australian Government will not walk out on them.

• A smooth and orderly transition to self-government will require progress in certain essential areas e.g. development of a local public service which can efficiently maintain the basic services of government; progress towards a viable economy; the development of an informed electorate; an education system which will provide people with the skills required in commerce, industry and the public service; and governmental arrangements which place due financial responsibility on the Territory executive government.

• With respect to migration between Papua and New Guinea and Australia an examination will be made of the conditions applicable for the movement of Papuans and New Guineans to Australia and of the procedural requirements; in the longer term in the event of the outcome being association with Australia, precise migration arrangements as liberal as practicable (but short of completely free access) would be worked out at the time as part of the detail of the form of association.

Recommendation

62. It is recommended that:–

(a) the Government's present posture to long-term political development for Papua and New Guinea be one of accepting an eventual close association between the Territory and Australia if this is what the people of the Territory decide they want (such association to exclude integration of the Territory with Australia as a state on equal terms with present States) and

(b) in the forthcoming talks with the Select Committee the Government's views be expressed along the lines of paragraph 61 above.

Attachment

[matter omitted]⁵

Future of Papua/New Guinea–defence considerations⁶

The ultimate aim of our defence policy is to ensure the security of the Australian mainland and its island territories including Papua/New Guinea and to secure our sea and air communications. This policy has been based on a forward defence strategy to hold South East Asia, thus providing Australia with defence in depth. The forward defence strategy also provides Papua/New Guinea, for whose external defence we are presently responsible, with defence in depth against attack from South East Asia. In terms of Australia's national security there is an important inter-relation between these considerations since the retention of facilities in Papua/New Guinea is of great importance in ensuring the passage of our forces between Australia and South East Asia and the maintenance of communications between Australia and United States bases in the Pacific. We also need to retain these facilities for the defence of the Territory itself particularly against Indonesia, and in some circumstances, to reduce the risk to our Eastern seaboard. Should Papua/New Guinea come under the control of an administration unfriendly to Australia and the West in general, this would, in addition to the direct military consequences, facilitate the further penetration of the Pacific by hostile influences.

2. More specifically, Papua/New Guinea is of strategic importance to Australia for the following reasons:–

(a) Lines of communication

So long as Australia maintains her policy of forward defence in South East Asia it will be essential to maintain secure lines of communication for the maintenance of the forces committed in support of that policy. The most direct strategic sea and air routes between Australia and South East Asia lie through or across the island chain which comprises Indonesia. The facilities which are being developed in Papua/ New Guinea are of great importance for Australian air and sea routes to bypass the Indonesian archipelago.

The use of these direct routes would be most advantageous in any Australian involvement in hostilities in South East Asia such as has occurred in Malaysia and South Vietnam. However, present policy for strategic movement is generally to avoid the territory of Indonesia and West Irian, together with territorial waters and air space to which Indonesia lays claim.

In accordance with this policy RAAF Medium Range Transport aircraft staging to South East Asia use Cocos Islands as a refuelling base, but in the future should Cocos become unavailable due to enemy action, there would be a requirement to use airfields in Papua/New Guinea as staging points for these aircraft. In any event the airfields of Papua/New Guinea are essential for staging short range aircraft to South East Asia. Military shipping proceeding to South East Asia is in most cases now routed via Papua/New Guinea waters and Manus Island. There is a continuing requirement for unrestricted passage through this area whilst a forward defence posture is maintained.

An actively hostile Indonesia would make it more difficult, in the event of our operating in South East Asia, to maintain communication with United States forces in the areas of the Philippines and the North Pacific. Papua/New Guinea would be an important link in this communication chain and its denial would make necessary the use of a circuitous east-about sea route.

(b) Value to Australia of base facilities in Papua/New Guinea

In addition to the value of the facilities in the Territory of Papua and New Guinea, including Manus Island, in the maintenance of communications between Australia and South East Asia and between Australia and United States bases in the Pacific as discussed in (a) above, the following factors are relevant:–

a. Base facilities would be required for the conduct of defensive operations in the event of Indonesian covert or overt operations being initiated against Papua/New Guinea.

b. In the event of a limited war situation involving Australia and Indonesia, our possession of base facilities in Papua/New Guinea would have the following further advantages:

(1) They would assist in the neutralisation of enemy base facilities in West Irian and in conducting operations west of the border;

(2) They would be useful to our anti-submarine forces in defending sea communications;

(3) They would be necessary for the control of all forms of infiltration into Papua/New Guinea.

(c) Value to Indonesia of base facilities in Papua/New Guinea

The possession of base facilities in Papua/New Guinea would assist Indonesia in the event of limited war with Australia as follows:–

a. They would increase the threat of the employment of submarine forces against Australia's eastern seaboard;

b. They would considerably⁷ improve their capability for a.ir attack on Australia;

c. They would deny an important link in our communications;

d. They would expose Australia's important trade routes with Asia to interruption;

e. They would assist in further expansion into the Pacific Islands chain to the eastward.

(d) Economic

Apart from the provision of about 13% of current Australian natural rubber requirements, Papua/New Guinea does not produce any strategic materials in significant quantities and from that point of view its loss would not be serious. Surveys are proceeding in the Territory for oil and minerals and their discovery in commercial quantities and exploitation could considerably increase the economic importance of the Territory. The expanded production of tropical commodities such as timber, copra, coffee and cocoa could be of value in time of war.

3. In the light of the foregoing considerations and also the existing Australian responsibility to defend Papua/New Guinea, a programme of defence expenditure on capital works and acquisitions of $A52 million by about 1970 is being implemented. This programme is to provide for the expansion of the defence forces in the Territory, particularly the indigenous forces. The capability of these forces is being improved in terms both of manpower and arms to perform surveillance of the border area and coastal waters, defence of key points, internal security and limited defensive operations. The defence forces must continue for a considerable time to be based on direction, leadership and training by Australian Service personnel, but with increasing participation by indigenes at higher non-commissioned officer and officer level as rapidly as they become fitted to occupy the posts. The programme of Service works projects covers Naval support facilities, barracks, road, training areas, signal installations and extensive airfield construction and improvement. The expenditure involved assumes, for at least some years, Australian control of the facilities being constructed. It is important that there are adequate arrangements for securing timely and accurate intelligence in the area. To this end the intelligence agencies have been strengthened and a Local Intelligence Committee has been establisheq to co-ordinate the collection, assessment, and dissemination of intelligence. These arrangements will be further developed as necessary.

4. The general civil development of the Territory will provide improved facilities for defence, e.g. the development of road communications in the vicinity of ports and airfields and the further development of aviation and port facilities. In this connection an adequate telecommunications system should be developed.

5. In the interests of Australian defence, as well as the defence of the area, it is important that access to the Territories and its base facilities be maintained. This is particularly important while there is uncertainty regarding Australian/Indonesian relations.

6. It is clear that our defence interests could be best served by the development and maintenance in the Territory of a cohesive population and administration which will remain well disposed towards Australia. Action on these lines will provide a solid basis for resistance to unfriendly influences, including communist pressures, which are likely to be directed against the local inhabitants.

7. It is of particular importance to preserve the morale of the armed services and police on whom will eventually be vested responsibility for defending and preserving the law and order of the Territory. It will be necessary to ensure by periodical review that the indigenous forces are in the best possible defence posture to meet their future requirements.

8. The vigorous prosecution of policies which will develop good relations between Australia and the indigenous population will facilitate the negotiation in due course of whatever new defence arrangements are appropriate to the future constitutional status of the Territory, and provide a basis thereafter on which Papua/New Guinea may remain well-disposed towards Australia. Future defence arrangements in the circumstances envisaged above should include definition of the following:–

a. Retention of present and planned base and transit facilities in the Territory;

b. Right to maintain forces as required in Papua/New Guinea;

c. Dependent on the above a commitment to defend the Territory against overt and covert aggression.

Conceivably a Papua/New Guinea Government in such future defence arrangements might wish to reserve the right to consult us regarding the provision of Australian forces in an internal security emergency.

9. It is difficult to judge the extent, if any, to which a presumed range of future constitutional options for Papua/New Guinea would affect our capacity to undertake the defence of the Territory or to maintain an adequate military presence there. However, as suggested above, it would appear judicious to assume that apart from the external threat the ultimate issue, perhaps overriding constitutional forms, will at any time be the political attitude and political requirement of the popular Government of the day in Papua/New Guinea. Without the genuine concurrence of the local government, and to a considerable extent irrespective of our legal defence powers under constitutional or treaty arrangements, Australia's military efforts and presence could be seriously impaired or frustrated by indigenous opposition. This could include internal political actions, appeals for international intervention, such forms of mass action as strikes and passive resistance, or sabotage or insurrection. Such action could be initiated or supported in varying degrees from without.

10. The constitutional development of Papua/New Guinea to a stage where it ceased to be a Territory of Australia within the meaning of the ANZUS Treaty would significantly modify the existing United States commitment. The Treaty is applicable to Papua/New Guinea itself only whilst it remains an Australian territory. If Papua/New Guinea ceased to be an Australian territory ANZUS in its present form would no longer apply directly, and there could be great difficulties in obtaining United States agreement to any modification of the Treaty. ANZUS would however still apply in the event of an overt attack on Australian forces in Papua/New Guinea.

[NAA: A 1946, 1968/838]

1 See Document 5.

2 See Document 3.

3 John Guise.

4 For further explanation of resolutions 1514 and 1541, see attachment 'A', Document 14.

5 Matter omitted indicates that the paper had been endorsed by the Defence Committee on 17 February 1966.

6 Views on the paper from within PMD were expressed by A.T. Griffith (Assistant Secretary, External Relations and Defence): '[the paper] is aimed to affirm an overall policy of the importance to Australia of infra-structure in Papua/New Guinea as much for the defence of Australia as for the defence of the Territory. The importance of these considerations will remain after New Guinea becomes independent. The Defence Committee concludes that therefore the defence of Papua/New Guinea is intrinsic to the defence of Australia. I think that this is a reasonable position. Certainly every country defends its frontiers where they exist and has a plan for the defence of frontiers. This need not be unduly emphasised in our public attitudes but Australia would be gravely amiss if it did not ensure against Indonesia going sour again. The Communist Party of Indonesia is underground but it is a very large one and Chinese influence in Indonesia is bound to be considerably sustained. We should aim to develop constructive relations between Indonesia and Australia particularly at the level of military contact. The value of this experiment has been successful. We should endeavour where politically practicable to have good personal links with Indonesian military leaders such as Nasution. Nevertheless we have a requirement to take cognizance of the fact that we have a common frontier with Indonesia and we cannot assume that friendly elements will be in charge of the country all the time. We must therefore build quietly an effective infra-structure in the area. Any country approaching independence requires also an indigenous military component. There could be nothing offensive in such a process'. Secretary of PMD Sir John Bunting made no comment on this section of Griffith's note (undated note by Griffith on draft of Defence Committee paper, NAA: A1209, 64/6467).

7 In the original, this word reads 'inconsiderably'.