In general, the diverse aspects of the intervention developed at the request of the parties to the process. Requests initiating various aspects of the intervention, or giving extended mandates to, say, the PMG or the UNPOB, were generally made by the parties through the negotiation process. Others involved direct requests by one party, as with those for technical support to the Bougainville Administration. At the same time, the ambassadors of Australia and New Zealand and the Director of UNPOB played significant roles in encouraging progress in the peace process. At times they applied considerable pressure to the parties to move in particular directions.
Whilst the best known roles of the Australian and New Zealand governments in support of the peace process include facilitation, monitoring and mediating divisive issues, they have also used funding to not only support the peace process, but to influence the way the process developed and create incentives for Bougainvilleans, in particular, to support the peace process.
Both AusAID and New Zealand Aid (NZAID) have funded a wide range of activities in Bougainville. AusAID's initial focus on humanitarian assistance and small-scale reconstruction gradually shifted to support for larger infrastructure projects, income generation, and building capacity in the Bougainville Administration, especially in the law and justice sector. The UNDP has also had significant roles in funding aspects of facilitation of the peace process, and the European Union has funded some significant development projects.
Some funding in support of the peace process was quite specifically targeted to encourage communities to support the process, or to encourage progress with particular aspects of the process (such as weapons disposal). It did not always achieve the solely positive impacts intended. Well-intentioned funding inputs have contributed to broader problems in Bougainville, notably the payments of allowances to take part in aspects of the process, 'peace dividends' projects, and the funds intended to encourage weapons disposal. These inputs have encouraged perceptions both of availability of an unlimited pot of funds for peace process activities and that involvement in the peace process was about money.
Facilitation interpreted as incentives
While the donors probably always made clear distinctions between, on the one hand, funding intended to facilitate the process (eg for transport to meetings, allowances for participants in meetings, paying costs of accommodation and venue hire) and on the other hand funding intended to provide incentives to participate in the peace process, that distinction was perhaps not always as clear to participants.
Significant funding for facilitation of negotiation sessions and meetings of the PPCC, for providing technical advisers to the parties in the negotiations, and for implementation of the 2001 peace agreement undoubtedly made significant contributions to progress in the process. But some facilitation funds had mixed impacts, in part because recipients interpreted the provision of funding as incentives for participation in the peace process.
Australia, New Zealand and UNPOB (through the UNDP) at various points offered allowances and other financial benefits to Bougainvilleans (and even PNG officials) attending peace process meetings and taking part in awareness activities, and also met some categories of costs associated with reconciliation ceremonies (eg awareness-raising and transport, but not for compensation payments made as part of reconciliation ceremonies). The funds were offered in good faith, largely in response to widespread lack of income. But in doing so, it quickly became the norm for many people to show reluctance to take part in peace process related activities without some form of recompense.
Incentive payments and peace dividends
Early in 2001, with little progress made towards agreement on a weapons disposal process, Australia offered incentives in the form of a AUD$5 million fund to provide small income-generating projects to former combatants groups from communities in which weapons disposal was proceeding. The process of allocation and distribution of the funds proved divisive and disruptive, and there has been very little evidence of any sustainable contribution to income-earning activity.
Australian and other donor funding was also directed to provision of humanitarian assistance and development aid, usually allocated with a view to encouraging support for the peace process. In the late 1990s, donors offered what were termed 'peace dividends' – mainly small-scale projects (eg classrooms, health centre buildings and small commercial projects) to communities supporting the peace process. While most projects made important contributions to improved services, the term 'peace dividends' was an unfortunate one in the circumstances, suggesting that peace was not necessarily something to be supported because of its inherent value, but rather on the basis of receipt of financial incentives. Even as late as 2005-06, the provision of funding for such small projects as classrooms and health facilities in areas where dissidents were well-supported have been perceived to be an enticement for opponents of the peace process to join it.
Development aid for reintegration
There has been some creative use of development aid to encourage economic development, with priority for projects that create economic opportunities for former combatants. Even major infrastructure projects are directed towards such peacebuilding goals. For example a major Australian-funded road project rehabilitating over 600 kilometres of the coastal trunk road has required the international contractor to develop numerous small construction businesses along the road route, each involving former combatants as much as possible, with a view to both their reintegration into communities and the spread of economic benefits more generally, as well as maximising community support for the project.
Attempting to build state capacity
Both AusAID and NZAID have long recognised the importance of building the capacity of the weak Bougainville Administration (the administrative arm of the old provincial government and more recently the ABG). Administrative capacity had been largely destroyed during the 1990s, so by the time the peace agreement was being implemented, a key concern was that the implementation of autonomy arrangements would be limited by administrative capacity, possibly undermining support for the peace process.
There were often complaints by Bougainville leaders about insufficient consultation by AusAID and NZAID on humanitarian assistance and development funding, though this often reflected the weak capacity of the Bougainville Administration. Australia has been proactive in initiatives to build the BA's capacity, but implementation problems have sometimes contributed to tensions between AusAID, in particular, and the Bougainville government and administration.
Capacity-building support has included: providing advisers to the Bougainville Administration – particularly to 'strategically' important parts of it like the police; a project to train and fund part-time community-based police officers; funding a study and strategic plan for restructuring the administration; and AusAID's innovative effort to provide incentives for improving the administration's weak capacity, with funding directed to implementation of the agreed autonomy arrangements and encouragement of good government. Under this Governance and Implementation Fund (GIF), PGK 6 million per year goes to the Bougainville government (with some also to the PNG government) for projects and programmes selected jointly by Bougainville, AusAID and PNG. The GIF envisages increased funding and its transfer to full Bougainville control, but only if ABG financial management, planning and budgeting capacity improves.