date:2006-06-13T00:04:00
source:Embassy Wellington
origin:06WELLINGTON451
destination:VZCZCXRO6290 RR RUEHPB DE RUEHWL #0451/01 1640004 ZNY
CCCCC ZZH R 130004Z JUN 06 FM AMEMBASSY WELLINGTON TO RUEHC/SECSTATE
WASHDC 2886 INFO RUEHBY/AMEMBASSY CANBERRA 4437 RUEHPB/AMEMBASSY PORT
MORESBY 0572 RUEHSV/AMEMBASSY SUVA 0474 RUEHC/DEPT OF INTERIOR WASHDC
RHHMUNA/CDR USPACOM HONOLULU HI RHHJJAA/JICPAC HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 04 WELLINGTON 000451

SIPDIS

SIPDIS

STATE FOR EAP/FO, EAP/ANP
PACOM FOR J2/J233/J5/SJFHQ
INTERIOR FOR DAS COHEN

E.O. 12958: DECL: 06/08/2016
TAGS: PREL, NZ
SUBJECT: INITIATING A DIALOGUE: NEW ZEALAND ACTIONS IN THE
PACIFIC AND OPPORTUNITIES FOR COOPERATION

(U) Classified By: Deputy Chief of Mission David R. Burnett,
for reasons 1.4(b) and (d).

-------
Summary
-------

1. (C) Ministry of Foreign Affairs and Trade (MFAT) officials
say New Zealand's main areas of concern in the Pacific are
governance, economic stability and security. New Zealand is
revising its approach to and strengthening engagement with
Pacific Island countries (PICs), and is coordinating more
with other countries with interests in the region (notably
the European Union, France, China and Japan). MFAT suggests
increased information sharing about what the United States
and New Zealand are doing in the Pacific, improved
coordination in regional fora (especially the Pacific Island
Forum Post-Forum Dialogue), and greater dialogue in the
management of Pacific fisheries as three potential areas for
U.S.-New Zealand cooperation. End summary.

--------------------------------------------- ----
Initiating a Dialogue on Shared Pacific Interests
--------------------------------------------- ----

2. (SBU) On June 1, DCM and Emboffs met with representatives
of MFAT for a high-level discussion about New Zealand's
activities and interests in the Pacific. Deputy Secretary
Alan Williams led the New Zealand side, accompanied by Dell
Higgie, Director of the Security Division; Heather Riddell
Director of the Pacific Division; Marion Crawshaw, Deputy
Director of the Pacific Division (Bilateral Relationships);
and Niels Holm, Deputy Director of the Pacific Division
(Regional Relationships).

3. (C) Williams said he was struck by EAP Assistant Secretary
Hill's "unrequited appetite about what New Zealand is doing
in the Pacific." New Zealand and the U.S. once held regular,
documented conversations on respective activities in the
Pacific, but Williams said New Zealand turned off that
dialogue when budget cuts constrained resources. Williams is
eager to resume contact and invited Emboffs to meet with him
and the Pacific Division every five to six weeks. DCM
Burnett agreed this would be helpful, noting that often our
exchanges have been crisis (e.g. Solomons and Papua New
Guinea) or event driven (Samoan elections) rather than
proactive.

--------------------------------------------- -------
Areas of Concern: Governance, Economic Stability and
Security
--------------------------------------------- -------

4. (C) Williams said MFAT's Statement of Intent, which
outlines GNZ's overarching foreign policy goals, highlights
the agency's goal of redefining engagement in the Pacific to
promote regional stability and development and reduce risks
to New Zealand's security and trade. He also noted that the
Pacific Islands rated second only to sub-Saharan Africa for
poor performance on the Millennium Development Corporation's
indicators of development.

5. (C) On governance, Williams is concerned about
undemocratic trends in the so-called "Arc of Instability"
encompassing Melanesia, and referred to the region as "close
as we come to failed states in our region." He recognized
that while New Zealand's provision of targeted development
and good governance assistance to the region was expanding,
weak institutions and political instability continue to pose
risks. New, more active approaches by Australia and New
Zealand are needed, including in the Regional Assistance
Mission in the Solomon Islands (RAMSI).

6. (C) Crawshaw reported that New Zealand is (in the last
eight or nine months) moving past the post coup environment
in Fiji. New Zealand is watching with interest as the Prime
Minster puts together Fiji's first multi-party cabinet.
While not expecting the arrangement to last, MFAT views the
process as a positive step toward building cross-party
relationships that will later contribute to stable governance.

7. (C) While New Zealand's concerns in Melanesia are

WELLINGTON 00000451 002 OF 004


principally about governance and security issues, in
Polynesia, the worry is about the lack of economic
development, demographic challenges, the threat of HIV/AIDS,
and land ownership issues. MFAT said the quality and nature
of the interventions made by external partners are critically
important to prosperity and stability in the region: a bit
more cultural sensitivity, including the need for buy-in by
host governments, is definitely needed.

8. (C) "We're even facing the winds of change with
long-standing Polynesian partners," Williams said, among whom
"even the most successful and best governed countries are
having problems with law and order such as in Tonga, which is
the last of the feudal monarchies." "The king is ailing in a
New Zealand hospital," Williams continued, "and we're
expecting rapid and intensive change." Williams explained
that with a large population of Pacific Islanders in New
Zealand (especially Polynesians), "Pacific issues quickly
become domestic issues." Thus New Zealand is necessarily
deeply involved in Tonga reform discussions, while flirting
delicately with the bounds of interference. New Zealand
concerns in Micronesia are similar to those of Polynesia.
While GNZ acknowledges that its engagement with Micronesia is
less robust, it also realizes that Micronesia is a critical
partner for regional economic stability, particularly for
sustainable fisheries.

9. (C) As GNZ revises its engagement with the Pacific, it is
adopting a listening approach in which New Zealand "has some
humility that we don't have all the answers." Riddell
highlighted the difficulty of promoting good governance where
institutions of democracy might be incompatible with cultural
structures (e.g. Solomons and Papua New Guinea) where there
is not a strong sense of statehood, and where loyalties are
at the sub-state level (such as provincial governments) or to
particular institutions (such as the police). (NB: Andrew
Ladley, Director of the Institute of Policy Studies, School
of Government, Victoria University of Wellington -- a legal
scholar focusing on democracy in Pacific -- has similar
views. Ladley asserts, for example, that election processes
in many Pacific countries are based on deeply ingrained
patron-client relationships and institutionalized bribery.
Legislators do not seek reelection to office but rather treat
their terms in office as one-time opportunities to loot
government coffers and reward friends, Ladley said, resulting
in high legislator turnover -- more than 80 percent in Papua
New Guinea and between 60 and 70 percent throughout the
Western Pacific.)

10. (C) Riddell said in these fragile democracies, there are
obstacles to good governance on both the demand and supply
side. People do not demand democratic governing structures
because they've never had them. On the supply-side, these
countries are "coming toward the end of their post-colonial
generation and we're not seeing the next generation." The
DCM said because cultural institutions are breaking down,
traditional processes are not in place to supply the next
generation of leaders. Williams said GNZ is using its
Pacific Partnership visitor program to address the leadership
gap by, for example, bringing provincial governors from the
Solomon Islands to New Zealand to experience New Zealand's
system of governance first hand.

-------------------
Economic Stagnation
-------------------

11. (C) The MFAT participants lamented limited economic
progress in the region. Beyond fisheries and Papua New
Guinea's mineral resources, Niels Holm, Deputy Director of
the Pacific Division said, the region has few natural
resources on which it can rely. MFAT recognizes that trade
and economic growth is not proceeding quickly enough to
respond to population growth in the Solomons and other
Melanesian countries. The MFAT officials were not all doom
and gloom, noting that a number of countries (even Papua New
Guinea) are showing better growth than at any time over last
20 years and that regulatory reform in countries such as the
Cook Islands and Samoa appear to be yielding real economic
returns.

12. (C) Holm said the PICs share a number of disadvantages,

WELLINGTON 00000451 003 OF 004


such as low skills, limited natural resources, poor
communications links, and rapidly declining or expanding
populations. Despite the PICs' inclination to respond to
these challenges individually, they would benefit from
collective action, particularly for problems such as bird flu
and security. The Pacific Island Forum should pull back from
a bias towards policy implementation by individual
governments and instead focus on defining regional policy and
achieving buy-in, Holm said.

13. (C) Pacific nations are plagued by low levels of capital
where governments, often the only modern institutions, are
hampered by problems of culture (such as land tenure issues)
and tend to excessively regulate so that "even panhandlers
need a license," Holm said. Despite the fact that fisheries
are the only significant natural resources in the region,
Pacific nations still operate on the "Olympic principle of
the first one out gets the fish" and not the principle that
sustainable fisheries is "not about managing fish but
managing the fisherman," said Holm. While he noted that it
was important to harmonize donor effort and minimize conflict
between New Zealand, Australia, United States, China, Japan
and the European Union, regional cooperation is mostly about
recognizing "interdependence and promoting self-reliance and
a business friendly environment."

14. (C) Expressing frustration with the Pacific Agreement on
Closer Economic Relations (PACER) and the Pacific Islands
Countries Trade Agreement (PICTA), Holm said, "until we have
a regional trade framework that works, we're going to have a
problem with economic stability in the region." (NB: Vince
McBride, Executive Director of the Pacific Cooperation
Foundation and a retired New Zealand diplomat with extensive
development experience in the Pacific, separately told Poloff
that a gross Pacific Island trade imbalance in favor of
Australia and New Zealand needs correction for the longer
term viability of the economies of Pacific Island Countries
(PICs).)

---------------------------------------
Security Concerns and Capacity Building
---------------------------------------

15. (C) On security, Higgie highlighted the PICs' acute
capacity issues with meeting international counter-terrorism
obligations, and said the PICs believe the international
community has imposed obligations without adequate
consultation. Higgie said in fact there had been
coordination with the PICs' UN missions, but that they suffer
from the same type of capacity issues that afflict PICs in
general (e.g. dearth of skilled personnel, insufficient
financial resources, weak communications infrastructure, and
-- in some cases -- lack of political will). The
international community needs to consider whether it will
"modulate" CT requirements to address these very real
capacity issues, she added.

16. (C) The Pacific Islands Forum (PIF) Working Group on
Counter-Terrorism (WGCT) held a regional CT tabletop exercise
(Exercise Ready Pasifika) in Suva in November 2005. During
the debriefing portion of the exercise, PICs representatives
identified as a weakness the general lack of national
frameworks for counter-terrorism. Recognizing the capacity
issues faced by the PICs, Australia offered to draft a
template; New Zealand further suggested drafting an "all
hazards" plan, believing that it would achieve better buy-in.
Interestingly, some PICs wanted to develop stand-alone CT
plans, believing that global best CT practice requires a
separate plan. They did see the plans as a de facto audit
tool for other action plans, such as hurricane response,
however. Other PICs responded that if they faced a real
problem, they would just call on New Zealand or Australia.
Higgie said she responded "fine, but have you investigated
the law to see if the legal authorities are there? Can we
attach Status of Forces agreements? Are there opt in/opt out
clauses?" Williams added that PIF meetings had migrated to
a perspective of asking how to meet national needs within a
regional framework. "After all, we are ourselves a Pacific
Island country," he said.

-----------------------------
Opportunities for Cooperation

WELLINGTON 00000451 004 OF 004


-----------------------------

17. (C) Williams said he shared USG interest in bilateral
cooperation in the Pacific, and said GNZ has also been
revising its programming language to note the importance of
working with the EU, Japan, and China. For example, he said,
over the last six months, GNZ has increased its level of
diplomatic interaction with the European Union, asking that
it not ignore the Pacific in favor of Africa. GNZ has also
told Japan its interests in the region should be broader than
just the International Whaling Commission (IWC). On June 21,
New Zealand will host a high-level Chinese diplomat to
discuss Pacific regional cooperation.

18. (C) "France has been sending signals about where it wants
to be involved -- in police training and intelligence," said
Williams. In May, the heads of mission from France's Pacific
posts met in New Zealand. During that visit, they also met
with GNZ officials to discuss mutual interests.

19. (C) "Can the region be all that it can be without U.S.
involvement?" asked Williams rhetorically. "There's a lot we
could and should be doing" Williams continued. For example,
a Pacific Island Forum review team is investigating how to
improve the quality of the dialogue from the regional
architecture: the PIF, the Post Forum Dialogue and the
multiplicity of other regional fora. "We need better
choreography so that Chris Hill has time to talk to leaders."
When the review team visits Micronesia, U.S. assistance
suggesting contacts would be helpful, Williams added.

20. (C) Williams offered to provide a revised Pacific
strategy paper (an "environmental scan" as he called it)
submitted to Cabinet earlier this year, which summarizes
GNZ's activities in the PICs. DCM Burnett said that the
Embassy would see if Washington could provide a similar
document from our sub-PCC process. Williams said his Pacific
Division should share relevant reporting with the Embassy,
and recommended scheduling a regular meeting every five to
six weeks with Emboffs and the Pacific Division to discuss
recent events and explore possible areas of cooperation.
Williams also welcomed the opportunity for a high-level
policy discussion, noting that he intended travel to
Washington later in the year, and that he would be happy to
swing through Hawaii.

21. (C) Pol-Econ Couns recalled A/S Hill's interest in New
Zealand's use of trust funds for delivering official
development assistance (ODA). Williams said that New Zealand
is increasing its use of trust funds in Tuvalu, Niue,
Tokelau, and would share more information on their use.

22. (C) Williams also asked to what extent the U.S. Coast
Guard remains engaged in fisheries management in the Pacific,
noting that New Zealand and France are discussing possible
exchange of data within the FRANZ cooperative arrangement.
Williams asked how the U.S. and New Zealand exchange
fisheries-related satellite data. He noted that as New
Zealand rolls out its new multipurpose vessels, it could be
useful to discuss New Zealand's role in patrols of Pacific
fishing areas.

23. (C) Comment: Sydney Morning Herald columnist Peter
Hartcher, in an article picked up by the June 12 Dominion
Post, warned that if Australia and New Zealand do not want to
see places like East Timor "lapse routinely into chaos" and
"become a permanent dependency," they need to revise their
engagement with the Pacific and avoid a "moral hazard" where
Pacific governments find their incentives toward good
governance and economic development reduced by offshore
arbiters of law and order and providers of financial
assistance. As we move forward cooperating with Australia
and New Zealand on Pacific Island issues, we will need to
explicitly address this issue.
McCormick