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France retains control of Australia’s near neighbour following New Caledonia’s recent referendum

04 December 2018

#Corporate & Commercial Law

France retains control of Australia’s near neighbour following New Caledonia’s recent referendum

On 4 November 2018, voters in New Caledonia were given the choice of remaining part of France or becoming an independent country. The result was 56.4 per cent for maintaining the status quo and 43.6 per cent in favour of independence. But this does not mean that New Caledonian independence is off the table. 

In this article, we briefly describe the implications of the referendum for New Caledonia and the South Pacific region. 

Background

The New Caledonian archipelago is located less than 1,500 kilometres off Australia’s east coast. Annexed by France in 1853, this French territory was initially a penal colony before becoming one of the only French settlements. It has been 30 years since New Caledonia began the process of decolonisation. The 1998 Noumea Accord and consequent 1999 Organic Law provide the constitutional framework under which New Caledonia is governed. This has resulted in New Caledonia being a largely self-governing territory using a mix of international law, French law, New Caledonian law and the laws of each Province of New Caledonia.

For the first time on 4 November 2018, New Caledonian voters answered the question: “Do you want New Caledonia to accede to full sovereignty and become independent?”

A resourceful territory

New Caledonia is a resourceful territory with strong economic potential. 

The territory benefits from important mineral reserves located on the seabed of its Exclusive Economic Zone (EEZ), including phosphate, cobalt, nodule and polymetallic sulphide. 

New Caledonia holds about 25 per cent of the world’s nickel reserves; nickel ore is mainly used to make stainless steel. 

Given its history, resources and strategic location, New Caledonia receives substantial support from France. Consequently, New Caledonia enjoys one of the highest GDP per capita rates in the Pacific region. 

Referendum process and outcome

On 4 November 2018, under the scrutiny of 13 UN observers, New Caledonia voters rejected independence from France. However, that is not the end of the decolonisation story.

Under the Noumea Accord, two more referendums could be organised at the written request of one-third of the members of the New Caledonian Congress, in 2020 and 2022. And, the Organic Law allows for the deadlines for these two additional referendums to be extended even further into the future. This lengthy process has been deliberately structured by the French government to defuse tension between pro- and anti-independence groups.

So, the November poll does not definitively answer questions regarding the political, legal, economic and social future of Australia’s close neighbour.

Consequences of the referendum for the Pacific region

France, Australia and other players of the Pacific region have strategic interests in France retaining New Caledonia.

Thanks to New Caledonia, France enjoys the second largest EEZ in the world behind the United States, and ahead of Australia. Beyond the abundant halieutic resources and maritime zone preserved from pollution, the vast EEZ is a strong element of French diplomacy. 

The independence of New Caledonia could lead to unpredictable results in the Pacific region. France is a close ally of Australia and brings stability to the Pacific region and therefore to Australia. 

With its proximity to both Australia and New Zealand, New Caledonia also acts as a channel facilitating the relations between Paris, Canberra and Wellington.

Additionally, according to the Australian Department of Foreign Affairs and Trade, Australia is New Caledonia’s 11th most important export destination and 4th most important source of imports. On the New Caledonian side, the fall in nickel ore exports in the recent years has resulted in the New Caledonian Government encouraging diversification of potential exports. Consequently, we may expect an increase in trade and economic exchanges between Australia, New Zealand and New Caledonia in the coming years. 

Holding Redlich’s cross-border legal services team has assisted several clients with their activities in New Caledonia. Team member, Jeanne Vallade, is a native-speaker of French and is qualified as a lawyer in both France and Queensland. Holding Redlich also provides legal services to New Caledonian clients investing and conducting business in Australia.

Author: Jeanne Vallade

Contacts

Brisbane
Kylie Wilson, Partner
T: +61 7 3135 0514
E: kylie.wilson@holdingredlich.com

Carl Hinze, Partner
T: +61 7 3135 0630
E: carl.hinze@holdingredlich.com

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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