EIGHTEEN years after independence, Papua New Guinea was starting to cut ties with Australia and the Keating government was struggling with ways to maintain the relationship.
Just released Australian cabinet papers for 1992-93 reveal Australia’s view of PNG prime minister Paias Wingti as trying to diversify foreign and commercial relations away from Australia, under the banner of "Look North".
Since his 1992 election he had postponed his first official visit to Australia, but a Department of Foreign Affairs and Trade report to the cabinet in November 1993 noted he had visited Indonesia, Malaysia, Singapore, Vanuatu, Solomon Islands and Nauru and devoted a lot of energy to developing relations with Malaysia, including encouraging a Malaysian logging company to set up a newspaper, and seeking to secure Malaysian investment in the Lihir gold project.
"The Wingti government is more aggressively nationalistic and reformist than its predecessors," DFAT said.
"Wingti is a populist, impatient for change. His actions suggest he takes the relationship with Australia somewhat for granted ...
“He and some of his ministers see Australian models as of declining relevance for PNG, and believe that in some areas we are holding PNG back economically. Some of his actions suggest he would be happy to see Australian influence diluted, especially in the economy."
The National Archives of Australia partially exempted parts of the DFAT report from public access because it could have an impact on the Commonwealth's relations with PNG.
DFAT clearly thought little of some PNG government members: "Foreign minister [John] Kaputin, who is something of a special case, believes bilateral relations are still characterised by colonialist modes."
The Department of Prime Minister and Cabinet's input to the DFAT report was also less than enthusiastic.
"The Wingti government's policy directions on internal security, Bougainville and trade policy – and its lack of attention to Torres Strait issues (where two Africans had entered Australia illegally the previous February) – are a cause for concern," the department said.
"We consider it is important to maintain the pressure for better management by the PNG government of security and law and order by holding to our policy of not agreeing to requests for new assistance to the security sector unless they are part of a clear PNG government strategy and are in accord with our objectives."
The cabinet was told the biggest impact had been on Australian business.
"The Wingti government's nationalist stance has created a more difficult environment for Australian companies. Australian food exporting, air charter and construction firms have been adversely affected by protectionist measures," DFAT said.
"The greatest impact has occurred in the mining sector. In March 1993, PNG secured an additional 15% equity in the Porgera gold mine from the three joint venturers (Placer Pacific, MIM and Renison). In the process, the value of PNG-exposed stocks on the Australian stock market fell by $1.43 billion.
"The PNG government was highly critical of CRA's role in Mt Kare (a factor in CRA's decision to abandon the mine) and appears intent on loosening CRA's grip on the (closed) Bougainville copper mine.
"At both ministerial and officials level, we have repeatedly stressed to PNG over the past year the importance of maintaining a stable and consistent investment climate, and our expectation that Australian companies will receive non-discriminatory treatment."
The Office of National Assessments' prediction was even bleaker.
"Wingti is mistaken in assuming that the Panguna mine (Bougainville) can be made operable in the forseeable future. This has encouraged him to believe that a military victory is imminent. As a result he risks losing a propitious opportunity to forge a compromise settlement."