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Solomon Islands Officials: Chinese Companies Still See Opportunity in Tulagi

Tulagi Island, Solomon Islands. (Leah/VOA)
Tulagi Island, Solomon Islands. (Leah/VOA)

Chinese companies are continuing to look for investment opportunities on Tulagi, one of the Solomon Islands a Chinese company tried, and failed, to lease in its entirety several years ago, authorities say.

Once the capital of the Solomon Islands before that role was moved to Honiara on the island of Guadalcanal, Tulagi is now home to Central Province's capital.

The small island drew attention in 2019 when details became public about a long-term deal made by provincial leaders leasing the entire island to a Chinese company. National officials quashed the deal, which had raised fears that the company intended to develop infrastructure that could be used for military purposes.

Polycarp Galaigu, Central Province's premier who took office in July, told VOA Mandarin last month that Chinese companies remain interested in investing in his province despite the flip-flop.

"We try to contact other businessmen to come and do their investment here in Central Province. But for now, I cannot tell you which company," Galaigu said.

Galaigu said that some of the inquiries are from Chinese companies. Most are seeking opportunities in the fishing and tourism sectors, he said.

Allan Siale, Central's provincial secretary, told VOA on Aug. 12 that several Chinese companies are interested in investing in coconut processing, fishing and tourism in the province's Russell Islands, while others want to build factories on Tulagi. One company is interested in building an oil refinery, he said.

Sam Group, the company that tried to lease Tulagi outright, is still interested in investing, according to government records, he said.

Based in Beijing, Sam Group is a technology, investment and energy conglomerate founded in 1985 that has business relations with Solomon Islands, Brazil, Paraguay, Singapore and other countries, according to its website.

Sam Group did not respond to VOA's request for comment.

Siale said Sam Group's 2019 offer to lease Tulagi failed in part because it was not approved by the Solomon Islands Foreign Investment Division.

Stanley Manetiva, the former Central Province premier who made the initial lease deal with Sam Group, told VOA Mandarin on August 12 that he felt deceived by the Chinese company. He said it failed to follow the protocol that required signatures from a representative from the Chinese government, the Solomon Islands government and the company.

Solomon Islands
Solomon Islands

Company representatives "just drafted a document agreement, and they wanted you to sign it," said Manetiva, who stepped down in July after a no-confidence vote.

Siale said that based on the proposal, the Sam Group didn't intend to install military-related infrastructure on Tulagi. The company wanted to develop the island's economic infrastructure: the roads, the airstrip and the seaport. "For military strategic infrastructure, as far as we recall, the agreement doesn't mention anything to that effect," Siale said.

Michelle Lam, a former employee of state-owned China Harbour Engineering Company (CHEC) in Solomon Islands, told VOA Mandarin that the suspicion that China's Sam Group intended to lease Tulagi with military intent was nothing more than an exaggerated speculation.

"The Solomon Islands will be a port (for China) to supplement supplies and will never be a military base," Lam said.

Citing an unnamed representative of CHEC, Lam said that the Chinese government has banned Chinese state-owned companies from participating in any bidding or development projects on Tulagi and nearby islands after the controversial lease was canceled.

Neither CHEC nor the embassy of China in Solomon Islands responded to a VOA request for comment.

Prime Minister Manasseh Sogavare, who has rejected concerns that a security deal with China will jeopardize regional safety, told The Guardian this July that there will never be a Chinese military base in his country.

Central Province officials signed the "strategic cooperation agreement" with China's Sam Group on Sept. 22, 2019, one day after Sogavare officially cut ties with self-governing Taiwan and established diplomatic relations with China, which considers Taiwan its territory.

Solomon Islands officials terminated the Central Province deal with Sam Group on Oct. 25, 2019, saying provincial authorities lacked the right to enter a 75-year agreement for Tulagi island, which features the kind of deep-water harbor attractive to naval forces.

Polycarp Galaigu, Central Province's premier, was interviewed by VOA Chinese correspondent Liya at his office on Tulagi Island. (Kushima/VOA)
Polycarp Galaigu, Central Province's premier, was interviewed by VOA Chinese correspondent Liya at his office on Tulagi Island. (Kushima/VOA)

"It is settled practice that all agreements involving the Solomon Islands government, which includes the provincial governments, must be vetted by the attorney-general before it is executed," said a statement issued by Sogavare's office pointing out the Central Province deal with Sam Group omitted that step.

At the time, then-U.S. Secretary of Defense Mark Esper applauded the veto, calling it "an important decision to reinforce sovereignty, transparency and the rule of law."