Strategic Weekly Analysis

20 April 2011 FDI Team

Vol. 2, № 14.

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From the Editor’s Desk

Dear FDI supporters,

Last week, FDI’s Indian Ocean research programme held the first of its interstate small group research workshops. Taking place in Sydney and Canberra, participants discussed “Interpreting China’s Role in the Indian Ocean”. This is part of a major study that FDI is undertaking and which aims to determine the strategic objectives of three major powers – the United States, China and India – in the Indian Ocean region between now and 2020. The Indian Ocean research programme gratefully extends its thanks to all participants for their time, knowledge and valuable insights.

Workshops form a vital part of the research that is carried out by FDI and contribute to our unique research edge. FDI is very thankful for the ongoing support received from our Associates in Australia and overseas in making the workshops possible.

In this week’s edition of the Strategic Weekly Analysis, the Indian Ocean research programme considers Indonesia’s possible use of military force to release the crew of an Indonesian-flagged vessel held by Somali pirates and the growing pro-democracy movement in the southern African kingdom of Swaziland.

Still in Africa, the Global Food and Water Crises research programme looks at the imminent crisis confronting Uganda as a result of the La Niña weather phenomenon.

Meanwhile, the Northern Australia research programme investigates the Native Title negotiations which are underway between Fortescue Metals Group Ltd and the Yindjibarndi people of Western Australia’s Pilbara region.

Upcoming Strategic Analysis Papers include Pilbara Prospects, an examination from the Northern Australia research programme of some of the challenges to be faced in developing the Pilbara region and, from the Global Food and Water Crises research programme, The Rundown on Rainmaking, a study of artificially-induced rainfall.

Nextweek, the Strategic Weekly Analysis will take a short break as a result of the Easter/Anzac Day period and will return to your in-box the following week, on Wednesday, 4 May.

I trust that you will enjoy this edition of the Strategic Weekly Analysis.

Major General John Hartley AO (Retd)

Institute Director and CEO

Future Directions International


Military Force Considered by Indonesia against Somali Pirates, Company to pay Ransom


After the Indonesian Government considered the use of military force to secure the release of the Indonesian-flagged cargo vessel MV Sinar Kudus, captured by Somali pirates on 16 March 2011, the ship’s owners have settled on a ransom payment. Although Jakarta is continuing to facilitate discussions between the company and the pirates in order work out the logistics of the payment, the figure has not been disclosed and intervention by the Indonesian National Armed Forces (Tentara Nasional Indonesia, or TNI) now appears unlikely.


The bulk cargo carrier MV Sinar Kudus was captured by Somali pirates as it passed approximately 320 nautical miles north-east of the Yemeni island of Socotra, at the entrance to the Gulf of Aden. The vessel was carrying a cargo of nickel ore from South Sulawesi to the Dutch port of Rotterdam. The majority of the thirty-strong crew – some 20 individuals – are Indonesians.

Within 24 hours of its capture, the Sinar Kudus was used by the pirates as a mothership in an unsuccessful attack on the Liberian-flagged bulk carrier MV Emperor

Negotiations between the pirates, who were originally demanding a ransom of US$3.5 million that was subsequently reduced to US$3 million, and the ship’s owners, had been underway since the vessel’s capture. On 20 April, Co-ordinating Political, Legal and Security Affairs Minister Djoko Suyanto confirmed that ship owner PT Samudera Indonesia had reached agreement with the pirates on an unspecified ransom figure.[1]

After a month without progress, calls for decisive action from commentators in the Indonesian media had become more strident, with one writer describing it as ‘… a perfect moment to project our power … [and] show them the fury of Indonesia!’[2] Such calls invariably cited the recent successes of South Korea and Malaysia in liberating their vessels from the clutches of Somali pirates. Just how the commentariat reacts to news of the ransom agreement is yet to be seen.

Perhaps in response to the calls for action, TNI Commander-in-Chief Admiral Agus Suhartono announced on 14 April that, while the government was prioritising negotiations, if they failed, ‘the TNI is set to deploy.’ The Army Special Forces group (Kopassus), the Navy’s Jala Mangkara detachment and two frigates had reportedly been deployed to Somalia waters.

Any rescue mission would have been severely hampered by the location of the Sinar Kudus, which is in close proximity to the Somali shoreline. Rescue attempts are invariably easier at sea where the pirates are isolated and without access to land-based resources such as extra “troops” and additional firepower. A rescue operation on the other side of the Indian Ocean would not have been without challenges and Jakarta may very well have found itself with no better option than to ride out a growing storm of public opinion and to continue managing the negotiations.

Leighton G. Luke


Indian OceanResearch Programme

[email protected]


Swaziland Democracy Protests Continue


Pro-democracy protests in Swaziland are gaining momentum with increased participation from trade unions and banned political organisations. Protesters have begun to openly criticise the government of King Maswati III, despite a crackdown by the kingdom’s security forces. The stance of regional powerhouse South Africa remains ambiguous.


Swaziland is the last remaining absolute monarchy in sub-Saharan Africa. A tinkundla(constituencies)system of government is employed, whereby the cabinet is largely composed of royal family members appointed by the King. Swazi citizens have been banned from any form of political participation since 1973. 

The latest round of pro-democracy protests began on 12 April 2011, the thirty-fourth anniversary of the banning of all political parties. Inan attempt to immobilise dissent, King Maswati’s security forces have been deployed to systematically arrest the leaders, organisers and key members of major unions taking part in the protests. The protests were led by a grouping of civil and trade unions calling themselves the Labour Co-ordinating Council. The ensuing violence has temporarily halted protests in the commercial capital of Manzini.

As democratic elections do not exist, Swazi leaders are free from accountability, resulting in ongoing government corruption and financial instability. According to the recent Budget, 80 million rand ($11.1 million) is lost annually through corruption. The current budget deficit is estimated by the International Monetary Fund to be 13 per cent of Gross Domestic Product. 

South Africa’s African National Congress (ANC) government has voiced concern over the situation in Swaziland, calling for an environment conducive to dialogue and negotiations between the ruling elite and protesters. Members of the ANC have also hinted at the inevitability of Swaziland’s eventual democratisation. 

The current situation places pressure on relations between Swaziland and South Africa. As the leader of the regional powerhouse and Swaziland’s key trading partner, South African President Jacob Zuma is uniquely positioned to employ economic leverage as a means of encouraging democratisation. Rather than urging democratisation as a solution – or at least calling for dialogue – the South African Department of International Relations and Co-operation has called for ‘calm’, urging all parties involved to ‘exercise restraint’. The vague rhetoric suggests that South Africa is hesitant to sever its ties with the Swazi ruling elite. 

Without an undertaking from King Maswati to cease the violence towards protesters and commence dialogue, trade sanctions may be implemented by other countries, including the United States. Membership of the African Growth and Opportunity Act is also likely to cease due to Swaziland’s poor labour relations record; an event which would further deepen the country’s already critical financial crisis.

While King Maswati ranks among the world’s wealthiest monarchs, 81per cent of his subjects live on less than US$2 per day, unemployment stands at 40 per cent and, at 26.1 per cent, the country has the world’s highest HIV/AIDS prevalence rate.

Annika Aitken

Research Intern

FDI Indian Ocean Research Programme


La Niña Drought Worsens Uganda Food Security


Thousands of people living in 36 of Uganda’s 112 districts are facing severe food and water shortages as a result of prolonged La Niña weather patterns. Meteorologists last year predicted the dry season to be longer and drier than normal, with reduced rainfall during the March to May 2011 rainy season. Wells have already begun to run dry, bringing warnings of famine and calls for government intervention.


The Ministry for Disaster Preparedness has issued official warnings for impending water shortages and famine in several areas of Uganda. The persistent La Niñadry spell has resulted in some districts receiving insufficient rainfall to support agriculture. In some instances, people must now walk long distances to retrieve water from rivers and streams.

The La Niña weather phenomenon causes cooler than normal sea surface temperatures in the Eastern Central Equatorial Pacific Ocean area. In East Africa, La Niña brings drier than usual conditions, typically sparking food security concerns.

El Niño, the counterpart of La Niña, brought torrential rains to several parts of Uganda in 2010, which caused water-logging and rotting of crops, affecting food reserves. Mr Moses Muwanga, the chief executive officer of the National Organic Agriculture Movement of Uganda believes that food stocks will be exploited by around May-June 2011. The shortage of food stores has resulted in an escalation of produce prices. For instance, one kilogram of maize flour that used to cost 800 shillings (32 cents) has increased to 2,000 shillings (80 cents) – a large increase in the Ugandan context. On 14 April, protest marches against rising food prices were met with brutality by the police.

Many Ugandans depend on agriculture for their livelihood and are now facing a shortage of pasture and water for livestock. Agriculture accounts for 29.4per cent of Uganda’s Gross Domestic Product.

Professor Patrick Rubaihayo, an agriculture expert, believes that the Ugandan Government ought to invest more in the agriculture sector, given that the economy relies so heavily upon it. As stated in the Daily Monitor, investments in irrigation schemes and food storage facilities would be money well spent as they would help to mitigate the effects of drought.

The Food Security and Nutrition Working Group for Central and Eastern Africa last year labelled Uganda as an area of concern, confirming the La Niña event and calling for pre-emptive action. Unfortunately, it appears these early predictions of drought have not been incorporated into agricultural and food security plans. The Ugandan Government must now respond hastily and effectively to avoid a humanitarian catastrophe that could potentially develop within months.

The current Ugandan food and water crisis is not an isolated occurrence, as the country is often harshly affected by the El Niño and La Niña weather events. While the government may be able to provide some immediate emergency assistance, it needs to be better prepared for such conditions in the future. Uganda and other East African countries are highly vulnerable to climate variability, thus climate change adaptation measures should be prioritised. Otherwise, the cycle of hunger and poverty will only be exacerbated.

Brooke Jones

FDI Global Food and Water Crises Research Programme


The Need for Dialogue in the Land Rights Debate


The legal negotiations between Fortescue Metals Group (FMG) and theYindjibarndi people highlight the continuing complexities of Native Title negotiations. Both mining companies and Indigenous parties must actively strengthen and foster dialogue in order to develop a mutually beneficial relationship. 


Historically, Indigenous Australians have been politically and economically marginalised in resource development of their traditional lands. A “paradox of plenty” has been created by the substantial cultural, social and economic costs to communities while simultaneously failing to profit from the economic benefits of mineral development. The Mabo Case, complemented by subsequent legislative and judicial decisions, has substantially increased Indigenous involvement, establishing a “right to negotiation”.

Such negotiations allow Indigenous communities the freedom to seek economic benefit from operations and develop policies to reduce the cultural, environmental and social impacts associated with resource development.

Current negotiations between the Yindjibarndi people and Fortescue highlight the complex nature of Native Title negotiation. FMG is currently in the process of expanding its iron ore portfolio with the development of the Solomon project near Tom Price in the Pilbara region of Western Australia. Negotiations between the community and FMG have been complicated by a split in the Yindjibarndi Aboriginal Corporation responsible for negotiations. Despite featuring only three out of the seven elders, the breakaway Wirlu-Murra group has entered into a compensation agreement with FMG.

Mining companies must develop a more nuanced strategy than simple “divide and conquer” tactics. Companies must acknowledge and incorporate an awareness of Indigenous group dynamics if they are to avoid long and costly litigation battles.

As highlighted by Rio Tinto’s four year discussion with the Negarluma people on access to sites for the Dampier and Cape Lambert development, Native Title negotiations take years to develop. Positive engagement is built upon extended culturally sensitive dialogue, liaising with all Indigenous stakeholders. Companies must identify and recognise which parties are entitled to speak on behalf of the community and work with overlapping claims. The FMG case illustrates how parochial negotiation has antagonistic short- and long-term effects, reinforcing Indigenous distrust of the resource industry.

Mining companies should be aware it is not possible, nor is it in their interest, to attempt to circumvent Indigenous people and organisations. Legislation, procedural rights under Native Title, media exposure and impact approval procedures provide multiple avenues for Indigenous people to counter companies that try to marginalise their claims. Attempts to “fast track” project planning can potentially hinder the development process and timelines. Increasingly litigious land rights debates, compounded with the high Australian dollar and ever-increasing sources of iron ore could decrease the profitability of Australian commodities.

Emerging junior exploration and mining companies must develop strong relationships with Indigenous communities or face significant barriers to entry into the market. In Ontario, Canada, protests between junior companies and the Indigenous communities of Webequie and Marten Falls led to the flow of funding for projects being stifled and significant budget blowouts.

Traditional landowners should not be seen as an impediment to resource projects, but rather as a unique asset in project management and can help to facilitate timely project development. By sharing knowledge and experience, the adverse environmental effects of resource development have the potential to be mitigated.

Commonwealth and State Governments must increase their role in Native Title negotiations. The current laissez-faire approach is not conducive to enterprise attraction or realising outcomes consistent with the Government’s “Close the Gap” campaign. Mining companies, Indigenous communities and government must develop a dialogue to ensure all parties benefit from the prosperity that resource development can provide.

Liam McHugh

Strategic Analyst

FDI Northern Australia and Energy Security Research Programmes

[email protected]



What’s Next?

  • Prime Minister Julia Gillard begins her Asian tour today. Her itinerary takes her to Japan on 20-23 April, South Korea from 24-25 April, and Beijing from 25-27 April. Discussion topics are expected to include trade relations, energy, resources, security and international co-operation.
  • Sri Lankan President Mahinda Rajapakse today concludes an official visit to Bangladesh.
  • French Foreign Minister Alain Juppé will meet with Kenyan Prime Minister Raila Amolo Odinga in Paris on 21 April.
  • The Defence Secretaries of India and Pakistan will meet on 22 April to discuss the disputed areas of Sir Creek and Siachen.  
  • The Western Australian Branch of the Australian Institute of International Affairs will host a talk by Professor Richard Higgott titled “Europe and a Multi-polar World” at St Catherine’s College, 2 Park Road, Nedlands, on Wednesday, 27 April from 6.00pm-8.00pm. For more information, visit      


Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.


Published by Future Directions International Pty Ltd.

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[1] Simamora, A.P., ‘Money ready to pay ransom for 20 RI hostages, Govt says’, Jakarta Post, 20 April 2011.

[2] Atriandi, R., ‘Free MV Sinar Kudus, show Indonesia’s fury’, Jakarta Post, 13 April 2011.



Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

Published by Future Directions International Pty Ltd.
Suite 5, 202 Hampden Road, Nedlands WA 6009, Australia.