27 April 2016
by Fleur Anderson

Election 2016: Refugee headache after PNG court decision

Australia has been dealt an election-eve headache over its asylum-seeker policy after the PNG's Supreme Court declared the 15-year-old Manus Island detention centre illegal, also casting doubt over the government's $1.2 billion contract to centre operator Broadspectrum, formerly Transfield Services.

The Manus Island detention centre has been used by Coalition and Labor governments as an offshore processing system since the Howard government established it in partnership with the PNG government in 2001.

However, Prime Minister Malcolm Turnbull, who cites his predecessor Tony Abbott's success in "stopping the boats", and Labor Leader Bill Shorten – whose party resurrected offshore processing at Manus and Nauru in 2013 – may have to rethink their parties' refugee polices following the PNG court decision.

The five-man bench of the court found the Manus Island centre – housing 850 men, half of them refugees – breached the PNG constitution's "right to personal liberty".

Immigration Minister Peter Dutton said the detainees would not return to Australia and the Coalition's border protection policy had not changed.

The PNG Supreme Court's decision comes at a difficult time for Broadspectrum, the company that manages the detention centres on Manus Island and Nauru under a 20-month contract announced in February last year.

Hostile takeover bid
Broadspectrum has been fighting off a hostile takeover bid from Spanish infrastructure group Ferrovial, and has told investors that it is better off alone than accepting Ferrovial's $1.50-per-share offer, which closes on Monday.

Most Broadspectrum investors have stuck by the board's recommendation to reject the takeover bid, with only 16 per cent of shares tendered into the offer to date.

But investors may be more inclined to accept the offer over the next few days if they believe Broadspectrum's earnings from the detention centres are now more uncertain. There's speculation the government and Broadspectrum will have to work on a new model for the detention centre, including the "open centre" model used on Nauru where detainees are able to move freely in and out, but unable to leave the island.

A spokesperson for the Broadspectrum said: "We note the ruling of the PNG Supreme Court and we're waiting on further instruction from our client, the Department of Immigration and Border Protection. We will update the market on any impact on our company."

Labor immigration spokesman Richard Marles said the PNG decision was a "significant concern" to Labor and Mr Dutton should fly immediately to Port Moresby to hold talks with the PNG government to consider alternatives.

PNG Prime Minister Peter O'Neill has previously said the Australian-run centres had harmed his country's reputation.

"Labor is seeking an assurance from the government that it has a contingency plan to deal with this today's ruling," Mr Marles said.

"This decision, and our government's response will be monitored by people-smuggling networks."

Mr Marles blamed the Coalition for the current constitutional problem because the facility was never meant to be a "punitive place of indefinite detention".