Australia’s richest man profits from Solomon Islands intervention

By Mike Head
3 March 2004

The Australian government dispatched 2,000 troops and police, as well as senior officials, to the Solomon Islands last July in the name of humanitarianism. The small Pacific country, the argument went, had become a “failed state” where the collapse of “law and order” had left its half million people exposed to corruption, violence and the dangers of terrorism and international crime. As a regional power, Australia was going to intervene to help them out.

In fact, Operation Helpim Fren (Helping Friend) has formed part of a sharp shift in foreign policy, aimed at asserting Australian commercial and strategic hegemony in the southwest Pacific. Just as the Bush administration seeks hegemony over the Middle East and Central Asia, the Howard government wants to become the strongman in this region.

One little-reported feature of the Regional Assistance Mission to Solomon Islands (RAMSI) has been the participation of some of Australia’s major corporate interests in the so-called aid programs administered by the Australian Agency for International Development (AusAID). They supply nearly all the goods and services, including consultants on six-figure salaries, leaving little money for the local people.

These highly-profitable arrangements highlight the predatory character of the operation, which is paving the way for Australian companies to benefit from the program of out-sourcing and privatisation that is being imposed on the Solomons’ government. A revealing case in point is the handing over of the management of the Solomons’ prisons to GRM International, owned by Australia’s richest individual, media magnate Kerry Packer.

GRM advisors are now supervising prison officers at Solomons’ main jail, Rove, which has been enlarged to house 300 inmates, and the reopened Tetere prison farm on the Guadalcanal Plains. The prisons are pivotal to Canberra’s operation. So far more than 700 local people have been arrested.

Operation Helpim Fren has to date cost more than $250 million, including a $90 million Solomon Islands “assistance” package for 2003-04. This has proven a windfall for GRM. The company already held a $15 million AusAID contract under the Solomon Islands Law and Justice Institutional Strengthening Program, a three-and-a-half-year project that began in December 2000. That program consists of training police recruits, prison warders and court personnel, in an attempt to restore the state apparatus that was shattered during the 1999-2000 militia factional fighting.

Now, with RAMSI taking charge of key government functions, GRM is effectively running the prisons under a beefed-up contract. Its high-paid consultants and “advisors”—prison supervisors are receiving about $13,900 a month—administer decrepit cell blocks in which prisoners are denied the most basic rights, including proper medical facilities, meals and access to lawyers. Even the lowly-paid prison warders lack uniforms and elementary equipment, such as telephones.

GRM is a private company, a wholly owned subsidiary of Packer’s Consolidated Press Holdings, which controls a sprawling media, agribusiness and consulting empire. With the growth of the global aid industry into a lucrative multi-billion dollar business over the past three decades, GRM has evolved from a farming and grazing investment company into an international project management firm, boasting a record of having worked in more than 60 countries on some 300 projects.

Prisoners poorly treated

An insight into GRM’s Solomons’ “law and justice” project has been provided by a former security officer who was employed by the company last year. He contacted the WSWS in response to our recent interview with a Brisbane-based lawyer on the denial of basic legal rights to prisoners under the Australian intervention. [See: “Australian lawyer condemns lack of legal rights in the Solomon Islands”]

He described as “very strange” GRM’s appointment to manage the Solomons’ prisons. “If you look at GRM’s web site, you can see that they have no record in providing prisons—none whatsoever. They are into water sanitation in one country and other things in other countries, but not prisons.”

He condemned the poor treatment of prisoners, particularly the lack of medical facilities. “There are cases of malaria and other serious diseases. The so-called prison doctor is a local guy with a first aid certificate. There will be deaths if this is not rectified. His job is to check prisoners’ health, write their scripts and hope that someone will give him the money to get the medication.

“Because the country’s so bankrupt, the jail has no money. There is no prison pharmacy. There is no prison hospital and the local hospital is very poor. I believe that some money is coming from other countries to assist the hospital, but not from Australia.”

Prison meals were “disgraceful,” he said. Inmates “get three hard navy biscuits in the morning with a cup of tea. At lunchtime, it’s rice with a little canned fish. At evening meal, they get rice with a bit of canned meat on it.”

Access to lawyers was only granted if there was sufficient manpower in the jails, which was not always the case under the management plan. Other basic legal norms were being flouted. “Men are being dragged off the streets and shoved into cells in prison uniforms, when they are only on remand waiting for their cases to be heard. It is wrong. They are only on remand and should not be placed in the prison environment until they have been found guilty and sentenced. It is taking all their dignity away—they are still human beings.

“As far as the media is concerned, the country is being run as a closed shop. It is totally wrong. Our contracts of employment with GRM said not to get involved in local politics or speak to the media. Staff, including the local employees, are told that GRM is watching them.”

The former officer denounced the social conditions endured by ordinary Solomon Islanders and the gulf between them and the Australian personnel. “The ex-pats who are on $13,000 a month are living in the King Solomon Hotel with TVs, showers and maids to make their beds, etc. They are living extremely comfortably.

“Then the locals are living in shanties, with cooking and bathing facilities outside. It is just disgusting. In Honiara, just near the main bridge, you can see people living in sheds, 14 foot square, five to a room.

“Solomon Islanders are being paid only about $30 a week. They have been trying to get a pay rise and then Nick Warner [the RAMSI administrator] stuck his nose in to oppose it because it he said it would wreck the economy. That’s wrong—he should have nothing to do with it.”

The aid industry

GRM’s role in the Solomons underscores the neo-colonial character of the RAMSI exercise, which will only intensify the poverty faced by Solomon Islanders, inevitably fuelling discontent and hostility.

More generally, it epitomises the role of official aid programs as tools of corporate, as well as strategic, policy. By AusAID’s own estimates, 80 percent of its aid globally is spent on Australian goods and services, including highly-paid consultants. Its contracts are restricted to firms with headquarters in Australia or New Zealand.

AusAID has become the Australian government’s third-largest buyer of outside services, behind the Defence Department and Centrelink, which administers the privatised welfare and employment programs. At any one time, AusAID has some 1,800 contracts in operation, worth nearly $1 billion.

Most of these projects are in the Asia-Pacific region, nearly all concentrating on police, prisons, courts and so-called “public sector reform”. GRM’s list of 19 current projects, for example, features Nauru Police Advisor Assistance, Papua New Guinea Police General Operations and Community Policing, Samoa Public Service Commission Institutional Strengthening Project and Vanuatu Police Force Capacity Building Project.

Running projects worth $198 million, GRM presently rates third in the receipt of contracts from AusAID. GRM’s managing director Kim Bredhauer even sits on AusAID’s Advisory Council. The two largest AusAID beneficiaries are ACIL Australia and SAGRIC. By contrast, about 100 voluntary organisations such as World Vision and Oxfam/Community Aid Abroad hold less than 7 percent of the aid contracts.

Aidwatch, a non-government organisation that monitors Australian aid spending, estimates that 71 percent of the program is delivered through private companies. Another 20 percent is channelled through international financial institutions, such as the World Bank and the Asian Development Bank (ADB), which hand more work to the large corporations. During 2002 GRM, for instance, had nine ADB contracts and one with the World Bank.

Aidwatch points out that the aid program is shaped more by corporate requirements than humanitarian concerns. “Australians support overseas aid for reasons pertaining to moral responsibility rather than self-interest, but the Australian aid program is increasingly being used to support big business interests under the guise of philanthropic development assistance,” a spokeswoman, Melita Grant, commented in a media interview last year.

GRM’s recent ADB and AusAID projects have included several in key arenas of Australian intervention, notably East Timor (“Strategies for Economic and Social Development”), Papua New Guinea (“Re-establishment of Civilian Policing on Bougainville”) and Vanuatu (“Strengthening State Law Office”), as well as countries of close interest to Washington, such as Indonesia, Tajikistan and Kyrgyzstan. On the back of the Australian government’s unconditional support for the Bush administration’s “war on terror” GRM is also vying for US contracts in occupied Iraq.