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New Caledonia country brief

Introduction

New Caledonia is one of Australia's nearest neighbours, located 1470 kilometres northeast of Brisbane. It comprises the island of Grande Terre (where the capital, Noumea, is situated), the four Loyalty Islands (Ouvea, Lifou, Tiga and Maré), the Belep archipelago, the Isle of Pines and some remote islands. New Caledonia is divided administratively into a Northern and Southern province on Grande Terre and an Islands province covering the rest of its territory. Some 258 000 people live in New Caledonia. Approximately 44 per cent are indigenous (‘Kanak’).

Political overview

The President of the French Republic is New Caledonia’s Head of State. The French State is represented in New Caledonia by a High Commissioner, currently Jean-Jacques Brot. The Noumea Accord (1998) and consequent Organic Law (May 1999) provide the constitutional framework under which New Caledonia is governed and define its institutions. The Accord and Organic Law also define New Caledonia's relations with France and set out a timetable for New Caledonia to assume responsibility for most areas of government. Economic affairs, industrial relations and external trade were among the first powers New Caledonia assumed in January 2000. A second group of powers was transferred in 2004 and a third in 2009-10. From 2014, the Congress will have the opportunity (if agreed to by a 3/5 majority) to hold up to three referenda on whether New Caledonia should assume the final sovereign powers (justice, public order, defence, monetary and foreign affairs) and become fully independent. If a date has not been proposed by Congress by 2018, then the Noumea Accord commits France to conduct the referendum.

Under the Noumea Accord, the Government of New Caledonia is a mandated collegiate government, comprising representatives of all major political groupings. There are three Provincial Assemblies, elected on a five-yearly basis, within New Caledonia – Southern (40 members), Northern (22 members) and Islands provinces (14 members). Fifty-four members of the Provincial Assemblies (32 for the South, 15 for the North and seven for the Islands) are chosen to form the New Caledonian Congress. The congress then elects an executive government of between five and 11 members (which may also come from outside electoral mandates), which is responsible to the Congress. A proportional voting procedure ensures that the main parties together make up the ‘collegiate’ government.

The Noumea Accord provides for an Economic and Social Council to advise the government and a Customary Senate comprising representatives from each of New Caledonia's eight customary areas. Both the government and the French State must consult the Customary Senate on subjects relating to Kanak identity.

The most recent general election was held in New Caledonia on11 May 2014. On 5 June, Cynthia Ligeard was elected President to the Government of New Caledonia. She is the second woman to secure the leadership position in New Caledonia. Supporters of independence won 25 of 54 seats in Congress, two more than in the last elections in 2009. Pro-French parties secured 29 seats and hold the majority. As provided for in the Noumea Accord, New Caledonia and France now share responsibility for New Caledonia's regional relations, allowing New Caledonia to apply to join some international organisations in its own right. Accordingly, New Caledonia became an Observer to the Pacific Islands Forum (PIF) in 1999 and in 2006 was welcomed into the new PIF category of Associate Member. At the 2010 PIF Leaders' Meeting, New Caledonia signalled formally its interest in becoming a full member in the future. New Caledonia is a long-standing member of the Secretariat of the Pacific Community (SPC), which has its headquarters in Noumea. The Noumea Accord also allows New Caledonia to conclude some international agreements.

Economic overview

New Caledonia has a long-established nickel industry (and around one-quarter of the world's known nickel deposits). Output over the next few years will be boosted by the start of production at new nickel plants at Goro and Koniambo, and expanded operations at the Doniambo plant.

Financial transfers from France are also an important source of income in New Caledonia – amounting to some $1.5 billion per annum (14 per cent of GDP). Most of this covers expenditure on education and other public service salaries, social security contributions and pensions. The remainder goes to special development projects, particularly in the Northern and Islands Provinces, given that most of New Caledonia's wealth is concentrated in the Southern Province, which includes Noumea. French funding assists the New Caledonian Government and the assemblies of the three provinces to fund infrastructure, housing, health, training, and environment, sports and cultural programs. French funding also assists municipalities to fulfil their responsibilities and supports ‘microprojects' to encourage economic development at the level of individuals, usually in the Kanak communities.

Thanks in large part to the nickel industry and French transfers, New Caledonians enjoy a GDP per capita that is slightly higher than New Zealand’s. There is a significant disparity in wealth distribution, made more painful for some by the high cost of living owing to heavy market protection (favouring local and European goods). Trade union-led protests and unrest in 2011 focused political attention on the cost of living for New Caledonians. In October 2011, a report prepared by a committee comprising representatives from the Congress, unions and the government identified 21 per cent of New Caledonians as living in poverty. The committee called for an increase in taxes for the territory's highest earners, a reconsideration of tax loopholes, and price transparency. In January 2012 the Congress approved changes to the tax system which took effect in 2013. The changes removed five levies, including import and air freight fees, and replace them with a tax on goods and services (excluding some sectors of the economy, such as health care, education, banking and real estate).

Bilateral relationship

Relations between Australia and New Caledonia have broadened and strengthened in recent years. Australia welcomed the creation of the New Caledonian Government in 1999 and supports New Caledonia's increasing autonomy and involvement in the Pacific region.

Australia provides approximately $1 million annually to fund tertiary degrees in Australia for students from New Caledonia, French Polynesia and Wallis and Futuna. Since 2007, Australia has awarded 30 Australia Awards Scholarships to New Caledonian students. The scholarships are focused on employment needs in tourism, hospitality, engineering, agriculture, environmental studies, management and commerce, international relations and trade, information technology and professional specialised English language training.

Australia has interests in working with the New Caledonian and French authorities in New Caledonia in a range of areas including: promoting greater trade and investment; cooperating on regional natural disaster relief; defence cooperation including visits and joint exercises; combating security threats and transnational crime; and promoting links through sport, tourism and culture. Tourists in both directions have benefited from visa arrangements Australia and France negotiated in 1998 and the new working holiday-maker arrangements between France and Australia.

The former Governor-General, Quentin Bryce AC CVO, visited New Caledonia in April 2012. She was accompanied by Mr Marles, former Parliamentary Secretary for Pacific Island Affairs. Mr Marles also visited New Caledonia in December 2012.

Bilateral economic and trade relationship

Australia is New Caledonia’s second largest trading partner. New Caledonia ranks as one of Australia's top 20 export destinations by number of Australian companies doing business in the location (over 2000). In 2012-13, Australian merchandise exports to New Caledonia totalled $284 million (mostly coal and civil engineering equipment and parts). But New Caledonian import duties on non-EU products and some seasonal quotas restrict Australia's market share to around 10 per cent (behind France, Singapore and China). Australia imported goods worth around $92 million from New Caledonia in 2012-13, mostly nickel ores and concentrates.

An Australia-New Caledonia Business Council (CAANC) was founded in 2003. Its members include Australian and New Caledonian business people and it has links to the Australia-Pacific Islands Business Council (APIBC). The Australian Consul-General in Noumea is its patron.

The Australia Pacific Islands Business Council organises an annual trade mission to New Caledonia to explore business opportunities.

Visitor information

Australians travelling to New Caledonia are advised to consult the Smartraveller travel advice.

Updated June 2014