Pacific Notes

Guam Sailor Dies, Dozens Injured In Submarine Accident One of three nuclear-powered submarines based in Guam ran aground about 560 kilometers (348 miles) southeast of the island on January 8 in the waters of the Federated States of Micronesia. One sailor aboard the submarine, the USS San Francisco, died from head injuries he received in the incident and dozens of other sailors were injured. Though the hull of the submarine suffered extensive damage, no damage to its nuclear reactor was reported and there was no radiation leak, according the Navy officials. The submarine returned to Guam on the surface under its own power. Though the U.S. Navy initially released few details about the incident, The New York Times on January 12 reported that it had received internal Navy email messages with information about the collision. The messages were written by Rear Admiral Paul Sullivan, commander of the Pacific Submarine Command in Honolulu. Navy officials confirmed that the messages were authentic. The fast-attack submarine USS San Franciso is escorted back to port in Guam after it rammed an underwater sea mountain that was not on its charts. Photo: AP/Wide World Photos According to the Times article, the submarine was on its way to Australia when it collided with an undersea mountain that was not on its charts. The sub was traveling at about 30 knots and was more than 120 meters below the surface at the time of the collision. The sailor who died was thrown forward about six meters (19.6 feet) by the force of the collision and hit his head on metal piping. He was knocked unconscious and died the following day. The Navy had initially said that 23 crew members suffered injuries including broken bones, cuts, bruises and a fractured back. Sullivan's email messages indicate that about 60 sailors were injured, 23 seriously enough to prevent them from performing their duties. The Navy is investigating to determine the exact cause of the accident and to assess the damage to the San Francisco. - ADVERTISEMENT - Federated States of Micronesia officials expressed concern about leaks of radioactivity in their 200-mile exclusive economic zone. "Of course we are concerned about that, but we have been assured that there is no leakage and no environmental damage," FSM External Affairs Department official Jane Chigiyal told Radio New Zealand. The USS San Francisco is a Los Angeles-class, fast-attack submarine with a crew of 137. It is part of Submarine Squadron 15 which was reactivated in Guam in February 2001. In December 2002, it was the second submarine to arrive in Guam. The USS City of Corpus Christi preceded it in October 2002 and the USS Houston completed the squadron with its arrival in December 2004. -Frank Whitman

ANZ To Buy Development Bank Loans
ANZ Amerika Samoa Bank (ANZ-ASB) is to progressively purchase up to $10 million of the Development Bank of American Samoa's (DBAS) mortgage loans.

DBAS chief executive officer, Utu Abe Malae says the proceeds of the sale will be used by DBAS to lend money to the many qualified loan applications currently on its waiting list for homes.

Malae says only a portion of the existing mortgage loan portfolio will be sold to ANZ-ASB and he hopes that the process will be completed in eight months.

"This is a wonderful opportunity for the Development Bank to increase its cash reserves and to again fulfill its role in the American Samoan community as a true development lender," Malae says.

"The Development Bank has been fully lent for years and as it is unable to raise deposits under its charter, it must normally rely on further capital injection or loan reduction to lend new money to deserving borrowers."

Malae says a key consideration in this process will be the fair treatment of all borrowers whose loans will be sold to ANZ-ASB. All customers involved will be informed via letter of the changes.

President of ANZ-ASB Gary A. Ayre says: "We are pleased to welcome the new customers to ANZ-ASB and will not be altering any existing arrangements without the customer's prior consent.

"Our staff will do all they can to minimize any inconvenience during the transition phase.

"More than that, as ANZ-ASB is a commercial bank, it has the capacity to provide additional borrowing should customers require it, something we understand was difficult to obtain from the Development Bank because it was short of cash," he points out.

"This will help clear the waiting list of families needing to build their first homes. That is developing the community and that is our mandate." says DBAS chairman Liufau T. Sonoma.

Since his appointment about three months ago to head DBAS, Malae has initiated a number of new procedures designed to strengthen the bank and enable it to serve in a "development bank capacity."

"This re-capitalization exercise is one of the steps in a long process and I am confident that the territory will benefit as a result," says Malae, former CEO of the government owned American Samoa Power Authority.

-Fili Sagapolutele

Region

Islands Lose Links With Outside World
Thirty years ago, one could only rarely and with great effort get an international phone line into many Pacific Islands, television shows for rebroadcast were delivered on videotapes by snail mail, and Internet wasn't in anyone's wildest imagination.

Suddenly and without warning, in mid-January, international communications that island residents have come to enjoy shut down in eight Pacific nations.

While Telecommunications officials from across the Pacific gathered in Hawaii for the annual Pacific Telecommunications Conference, the Pacific suddenly went offline on January 14, when Intelsat's IS-804 satellite experienced a sudden and unexpected electrical power system failure, crippling Pacific-based communications.

Only Pacific Islands with fiber-optic cable, including Guam, the Northern Marianas, Fiji and Papua New Guinea, were unaffected. The Marshall Islands, Federated States of Micronesia, Palau, the Cook Islands, Tonga, Vanuatu, New Caledonia and French Polynesia were unable to make international telephone calls, access the Internet or send e-mail. Although critical services such as air traffic control and weather information were quickly transferred to neighboring satellites, some countries were without communications for as long as four days.

"The nature of small island countries is that we don't have many options for satellite carriers, and the rates are such that we can't afford to maintain backup satellites," says John Sohl, deputy general manager of FSM Telecommunications Corporation. "So when something like this happens, we're stuck."

While Sohl was able to reach the FSM through an Iridium telephone operating through low-orbit satellites, not all areas had such redundancies in place. In the Marshalls, only people with single sideband radios or Iridium phones, of which there are perhaps two or three in the country, could make contact outside the country. The outage proved especially frustrating for the FSM and Marshall Islands, which have spent much of the past two years trying to launch a fiber-optic submarine cable project, designed to dramatically decrease dependency on satellites.

In a press release, Intelsat CEO Conny Kullman said that "the loss of a satellite is an extremely rare event for us, (and we) remain firmly committed to the region that was covered by IS-804." Intelsat is looking into long-range deployment plans to continue to offer coverage through the Asia-Pacific region. The company has recently been purchased by Zeus Holdings, and the loss of the $73 million satellite will lead to a re-evaluation of that acquisition.

-Jason Aubuchon

Marshall Islands

U.S. Thumbs Down To Marshalls Nuclear Compensation Petition
The Bush Administration in early January told the U.S. Congress that there is no basis for providing more nuclear test compensation to the Marshall Islands. The "thumbs down" was delivered in a 66-page report that took the Bush Administration nearly three years to produce in response to Congress' request for an analysis of a Marshall Islands petition for more compensation first filed in 2000. The Marshalls is seeking more than $3 billion in additional compensation from the Congress to pay for health injuries, hardships and suffering resulting from 67 nuclear tests conducted at Bikini and Enewetak from 1946-1958, as well as nuclear cleanups still required.

But the Bush Administration is blunt that the Congress should reject any consideration of additional funding beyond the $150 million fund provided as part of a "full and final" settlement agreed to in 1983, and resettlement funds set up specifically for Bikini, Enewetak and Rongelap islanders. "The facts regarding radioactive fallout do not support a request under the 'changed circumstances' provision of the Section 177 settlement agreement," the report issued Jan. 3 says.

Although the U.S. report acknowledges that "some islands may never be suitable for communities or food gathering and should remain off-limits," it also says "most historically inhabited islands in the northern atolls could be resettled under specific conditions."

Foreign Minister Gerald Zackios says "his government is deeply disappointed not only with the State Department's erroneous conclusions but also its lengthy delay in issuing the report." He says the Marshall Islands is pleased that the Congress will be holding hearings later this year on the nuclear petition, at which time the Marshalls will "vigorously press our case."

The Marshall Islands petition for more nuclear compensation hinges on a provision of the nuclear compensation package contained in a Compact of Free Association between the two nations that was approved in 1983 and came into effect in 1986. Known as the 'changed circumstances' provision, it allows the Marshall Islands to petition Congress to consider additional compensation if the Marshall Islands can show that damage to property or people was discovered after the effective date of the agreement that renders the compensation provided "manifestly inadequate."

The petition contends that since the compensation agreement was approved more than 20 years ago, U.S. radiation protection standards have become more stringent, while numerous formerly top-secret U.S. government scientific reports about radioactive fallout from the Bikini and Enewetak tests were declassified by the Clinton Administration in the mid-1990s. These reports, the petition argues, demonstrate that fallout exposure was not limited to the four atolls that the U.S. acknowledges were radiation contaminated.

But the Bush Administration report says "there is no 'changed circumstance' on which an additional funding request can legitimately be made."

The Marshall Islands is expected to file a formal response with the Congress later this year.

-Giff Johnson

Papua New Guinea

Review Calls For Reformed Police Force
A government report has recommended that the Royal Papua New Guinea Constabulary (RPNGC) undergo urgent reform or be ruined by undisciplined, unresponsive, apathetic and corrupt police officers.

The review, headed by a committee of eminent people including police union representatives, was triggered by the increase in unrest and violence in PNG.

PNG Internal Security Minister Bire Kimisopa says continuous criticism of the constabulary within and outside the country compelled him to commission the review.

He says the K500,000 (US$151,600) review took about six months and will serve as a "road map" for the 5,250-strong police force to move forward.

The report points out that there is a serious failure in discipline and highlighted a number of grave issues affecting the police force, including corruption and the illegal use of firearms.

"The committee believes that armed violence and the use of illegal firearms in present-day PNG are far worse than they were in Solomon Islands before the intervention of the Regional Assistance Mission (RAMSI). There is much evidence in PNG of armed violence being committed on the streets of many towns," the report said.

"There is some evidence that members of the constabulary use police powers, weapons and equipment to commit criminal offenses, secure in the knowledge that they will not be investigated in any serious manner. Inadequate investigations are characterized by insufficient evidence (often because it was not collected), procedural faults and delays…there exists an influential and negative culture which appears to condone and/or protect corrupt behavior and criminal conduct (including serious assaults) committed by police."

Police constables start on an annual salary of between K7,317 and K8,943 (US$2,218 and US$2,711) and this low wage is cited as the key reason police officers resort to corrupt practices. The report detailed the illegal use of extra judicial police powers such as conducting raids and seizing of property without a search warrant, rape or sexual assault of women detained in police cells, and the bailing of prisoners without issuing a bail receipt.

Political interference in the constabulary was also highlighted, with the committee being critical of politicians using police for personal purposes, interfering in the force's transfer and promotion process, meddling in police investigations and the appointment or removal of police commissioners.

Prime Minister Sir Michael Somare and Kimisopa have given an undertaking to draw the support of the PNG Cabinet and Parliament to implement the committee's 62 recommendations that cover all facets of police work. These include extra funding to improve police working conditions, focus on community police, the reporting of malpractice to relevant authorities, restoring discipline, effective firearm registration practices, strong recruitment procedures, and stability in the police commissioner's position.

-Alex Rheeney

Marshall Islands Patriot Act Penalizes Close U.S. Ally The United States' Patriot Act and its regulations aimed at cutting off funding to terrorists will likely cost the main bank in the Marshall Islands $7 million in deposits and significantly impact the business community in the country. The irony of the new "zero tolerance" stance of the American government in its battle with global terrorists is that while the expressed goal of a newly negotiated Compact of Free Association between these two closely linked nations is economic and private sector development in the Marshall Islands, another U.S. law-the Patriot Act-is being allowed to undermine that development. Despite the country's removal from an international money-laundering blacklist, its close government ties to the U.S. and actions in support of U.S. anti-terrorist initiatives, the Bank of Marshall Islands, one of only two serving the country, will on Feb. 15 lose key U.S. banking links. U.S. Citizens Security Bank of Guam notified Bank of Marshall Islands that it is terminating a long-standing banking agreement in mid-February-the loss of which is expected to hit business and individual banking services in the country. Officials from the U.S. State and Treasury Departments were asked to assist the Bank of Marshall Islands to keep its U.S. banking links. But Washington says it can't get involved in the decision of a private bank. "It will have a big negative impact on the Marshall Islands," says Marshall Islands Banking Commissioner Alfred Alfred, Jr. Bank of Marshall Islands President Patrick Chen, whose bank is being hit by U.S. Patriot Act requirements. Photo: Giff Johnson Citizens Security Bank (CSB) has provided a "payable through" service that has allowed the Bank of Marshall Islands to use this U.S. bank's routing codes on local checks, making them usable outside of the Marshall Islands. In addition, Bank of Marshall Islands through CSB provides the only credit card service in the country that allows for electronically validating and transmitting credit card payments-a service that is also set to end on Feb. 15. Although the other bank servicing Majuro, Bank of Guam, has indicated it is looking to put in place credit card services, it's doubtful that this will happen quickly. If the Bank of Marshall Islands loses the CSB service this month, no merchants in the country will be able to accept credit cards. While the situation is problematic for Majuro merchants, at least they have an option with Bank of Guam. Ebeye businesses, however, have no such luxury. Come Feb. 15, they will not be able to use checks to pay vendors in the U.S. and elsewhere, since there is no other bank in the second major urban center of the Marshall Islands. CSB is responding to requirements of the U.S. Patriot Act, which puts the burden on U.S. banks to ensure that relationships with banks in foreign nations comply with the stringent post-September 11 banking laws. U.S. regulators are enforcing a "zero tolerance" policy, which includes the threat of huge, multi-million dollar fines for even relatively minor violations. Guam CSB president Larry Butterfield wrote to Bank of Marshall Islands president Patrick Chen at the end of November saying that CSB "has no choice. If an existing 'payable through account' relationship does not comply with regulatory requirements, we must terminate that relationship." Ironically, Bank of Marshall Islands hasn't done anything wrong, Chen says. In fact, banking commissioner Alfred says the bank is doing just about everything right. While termination of the links with CSB will not impact Bank of Marshall Islands' core programs of loans, checking and savings accounts, the move is expected to result in as much as a $7 million loss in deposits, as customers move accounts to Bank of Guam or other U.S. banks in order to be able to deal internationally. -Giff Johnson