Rebel soldiers besiege Papua's parliament

Adrian Hadland and Agencies

Armed soldiers and demonstrators prevented 100 MPs from leaving Papua New Guinea's parliament yesterday after the Prime Minister, Sir Julius Chan, survived a motion to oust him.

The no-confidence motion, defeated by 58 votes to 39, called on Sir Julius, together with other high-ranking ministers, to resign ahead of a judicial inquiry, due to begin on April 1, into a controversial $36m (pounds 22m) contract with foreign mercenaries. Last night about 250 soldiers, armed with M- 16s and pistols, had set up roadblocks and were searching for MPs outside the parliamentary compound.

Sir Julius's whereabouts were unknown last night, though there were reports that he had left parliament shortly after the vote.

The deal between Sir Julius's government and the British mercenary firm, Sandline International, sparked civil riots last week as well as a mutiny by military leaders, who alleged corruption and argued that the money would be better spent on local soldiers.

The mercenaries had been taken on to assist in crushing a secessionist rebellion on Bougainville, a copper-rich island 800 miles north-east of the country's capital, Port Moresby.

Soldiers of the Papuan army have been defying the government for the past week and all but one of the 60 mercenaries have been deported.

Major Walter Enuma, a high- ranking soldier allied to the recently fired army leader Brigadier General Jerry Singirok, arrived at the compound late last night and tried to defuse the situation.

"The parliament has made its decision ... and the military will respect it," Major Enuma said. "There will be no confrontation." He then entered parliament to assure the politicians inside of their safety.

The former head of the army, Brig-Gen Singirok, was sacked by Sir Julius as a result of the mutiny but remains in effective control of the army. He was not present at parliament yesterday.

During the debate, Sir Julius told parliament that the country's ill- trained and ill-equipped soldiers had been captured on Bougainville and slain "like sitting ducks" by the rebels.

"There comes a time when you have to act in the interest of the nation's security," he told parliament. "I had to put the lives of our soldiers on Bougainville first."

Mathias Ijape, the Defence Minister, said the decision to hire the mercenaries had been taken after Australia and New Zealand had refused to provide the military equipment and training needed to crush the rebellion.

"What do you expect a legitimate government of Papua New Guinea to do? Sit here and see this suffering?" Mr Ijape asked.

Although Sir Julius won a tactical victory, it immediately prompted outrage among protesters outside parliament. The crowd threw stones at cars and police responded with volleys of tear gas.

Chief Emeka Anyaoku, the Commonwealth secretary-general, interrupted an official visit to Australia this week and travelled to Papua New Guinea in an attempt to mediate the crisis. He arrived late on Monday, visited rebel army leaders at their barracks and spoke to a broad range of political leaders before returning to Canberra. Both Chief Anyaoku and the Foreign Office urged a peaceful, constitutional settlement to the current crisis.

Economic analysts, meanwhile, say Papua New Guinea may yet pay dearly for the loss of stability in the region through capital flight and falling foreign reserves.

"The uncertainty itself will have an impact. The international banking system is very sensitive to political uncertainties in the country. I'm pretty sure Papua New Guinea would have lost a fair bit of foreign reserves by now," said Satish Chand, a specialist at the Australian National University's National Centre for Development Studies.

There were also fears that the World Bank and IMF would withdraw support if stability did not return, he said.