The $600 million 'clause' in PNG's new rugby league deal

Australia's investment of 600 million Australian dollars to support Papua New Guinea in forming a new National Rugby League (NRL) team is, in reality, underpinned by a geopolitical game far exceeding the sports arena. While the rugby league is the focal point, the deeper strategic competition is the key.

Australian Prime Minister Anthony Albanese stated at a press conference this morning, "We obviously have an interest in the Pacific region. There is strategic competition in our region, that's well known." Although Albanese did not directly mention China when announcing the NRL agreement, the move is synchronized with the entry into force of the bilateral security agreement between Australia and Papua New Guinea, making its strategic intent self-evident.

In recent years, regional influence in the Pacific has been a focus of Australia's attention, especially after the Solomon Islands signed a security agreement with Beijing in early 2022, which further highlighted this issue. The specific details of the Australia-PNG agreement will remain confidential, but according to The Sydney Morning Herald, it includes a key non-compete clause: if Papua New Guinea signs a defense or policing agreement with China, Australia can immediately withdraw from the agreement.

Henry Campbell of the Australian Strategic Policy Institute believes that creating this team provides a rare opportunity for public and political diplomacy, which helps improve national stability and ensures that Australia is not caught off guard as it was when the Solomon Islands signed a security agreement with China. Essentially, Australia is paying 600 million Australian dollars over 10 years (60 million Australian dollars per year, only 0.008% of the federal annual budget) to exclude China from its closest neighbor for the next decade.

When asked about this withdrawal clause this morning, Albanese neither confirmed nor denied it. He stated, "Australia is Papua New Guinea's security partner of choice, and our bilateral security agreement comes into effect today. This agreement is public, but our relationship is very strong, and we work together, which is no secret. Our agreement covers all aspects of the relationship between the two countries."

Papua New Guinea Prime Minister James Marape has made it clear that the new rugby league team will not prevent Port Moresby from engaging with Beijing. He said, "Australia is our security partner of choice. But that does not stop us from engaging with any nation, particularly our Asian neighbors. For example, we engage with China, which is a great trading partner, a great bilateral partner. But in the closer security space, we have this synergy with Australia."

Campbell believes that Beijing may respond to the new NRL team. He pointed out, "For this policy to succeed, Australia needs to carefully manage security risks. This team is a unique initiative that will face high media scrutiny, and reports about team performance or player misconduct may carry political criticism and geopolitical commentary. Chinese interference is the biggest risk. The team will be an important part of Australia's bilateral engagement with Papua New Guinea and will prevent China from establishing security relations with Papua New Guinea. China cannot directly replicate this sports diplomacy, but capital, industry, and regional banking provide avenues for influence or interference."