Sale of 21 private islands off Australia’s coast prompts concern over Chinese interest

The owner of 21 private islands right on Australia's doorstep is keen to sell up. But depending on who the buyer is, the incredibly rare opportunity could be a problem for Australia.

It was revealed earlier this week that Australian businessman Ian Gowrie-Smith was selling the 21 islands he owns. The prized real estate known as the Conflict Islands sit in Papua New Guinea's Milne Bay.

Mr Gowrie-Smith purchased the Conflict Islands in the early 2000s. Now, at age 74, it is time to make sure his affairs are in order, which is why he is choosing to sell the atoll.

Speaking to A Current Affair, Mr Gowrie-Smith admitted he was concerned about China's security pact with the Solomon Islands and said he contacted Foreign Affairs Minister Penny Wong's office to inform her that he intends to sell the islands.

He reached out in June this year and had heard nothing when he spoke to ACA. It was on the program he also admitted he would "reluctantly" sell to a Chinese buyer.

The retired entrepreneur, who made his fortunes in oil, gas, mining and pharmaceutical ventures, says he would accept a relatively low offer of just over $36 million for the islands if it was in Australia's national security interests.

The prospect of the islands hitting the open market, which sit less than 1000km from Cairns, has raised concerns in Australia.

Associate Professor Graeme Smith, a Fellow at Australian National University’s Department of Pacific Affairs, told Yahoo News Australia the whole story is shrouded in mystery.

However there is one likely conclusion that should put Aussies on edge.

Should Australia be concerned about the sale of the islands?

If the islands are sold to a company with links to the Chinese government, then Australians would have good reason to be concerned.

"If he [Mr Gowrie-Smith] names a company that has Chinese military connections like China Sam or Holley Group or someone like that, then yeah, we should be concerned," Prof Smith said.

In 2019, China Sam signed a deal that would have meant the whole island of Tulagi would be under lease for 75 years. The deal was eventually cancelled after it was found to be unconstitutional.

Given the difficult terrain, Prof Smith said the prospect of the Conflict Islands being sold to a Chinese company with military links is arguably a more ambitious proposition.

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The Conflict Islands are uninhabited, but that also means a buyer would face fewer barriers than those faced by China Sam with the Tulagi deal.

"They wouldn't have to negotiate if they wanted to build an airstrip or something like that," Prof Smith said.

"It's an attractive proposition, [compared to] the barriers that you normally face in Melanesia in terms of the landowners."

However, the problem is that everything is vague right now and it's not clear if Mr Gowrie-Smith has a prospective buyer.

In response to the ACA story, Michael Shoebridge, the Director of Defence, Strategy & National Security at the Australian Strategic Policy Institute, highlighted that the Conflict Islands have similar features to places where China has set up military bases in the South China Sea.

The implications of the sale Australia may face

Prime Minister Anthony Albanese said this week Australia isn't in a position to purchase every island in the Pacific to ensure regional security but didn't completely rule out Australian interest in the atoll.

"There's over 500 in that area," he told 2GB radio.

"There's a lot of real estate across the Pacific. Australian taxpayers aren't in a position to buy all of it."

The reality is Australia cannot intervene in every private real estate matter in the Pacific but nor would it need to as privately owned land in the region is rare.

"A lot of the countries that border us have traditional landownership," Prof Smith said.

"It's quite unusual for someone to have freehold title over land in [one of our] neighbouring countries."

However there's been an increase in incidents of Chinese-backed companies buying up real estate in the Pacific region, Prof Smith explained. In most cases, buyers are individual actors "responding to a signal".

"It's not that Xi Jinping has picked up the phone and told them what to do," Prof Smith said.

"It's just them realising 'Okay, well, this might be viewed favourably by parts of the Chinese state and it might be a commercial opportunity for a company'."

Earlier this year, when leaked documents revealed a plan between a Chinese aviation company and the Solomon Islands, one expert warned it would be "naive to the extreme" to believe this deal was simply for commercial gain.

Professor of International Security and Intelligence Studies and Strategic and Defence Studies at the ANU, John Blaxland told Yahoo News Australia in April that everything in China for state-owned enterprises "is about the pursuit of political objectives"

"So there'll be a spin to this, [like there was for] the islands in the South China Sea that were built, purportedly for tourism, that are now bristling with military weapons systems," he said.

"So you know, let's not kid ourselves about what's at stake here."

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