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25-05-2012 06:19:00

Australia Won't Intervene In PNG Political Crisis -Foreign Minister

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SYDNEY -(Dow Jones)- Australia won't intervene in a political crisis unfolding in Papua New Guinea, foreign minister Bob Carr said Friday.

Armed police on Thursday arrested Papua New Guinea's chief justice and attempted to charge him with sedition after he ruled that Prime Minister Peter O'Neill's ascent to power was unconstitutional.

The dramatic development brought to a head months of political uncertainty that threaten to damage the gas-rich nation's reputation as an investment destination.

"Our friendly advice is that nothing should happen that damages the country's reputation with the world community, its reputation with the community of democracies that is the Pacific Island community, and its reputation with investors," Mr. Carr said in an interview with The Wall Street Journal.

Mr. Carr urged lawmakers to focus on elections in June and avoid a "sideshow" over the trial of chief justice Salamo Injia.

"The election settles legitimacy and authority as nothing else does," Mr. Carr said.

The long-running political crisis began in August 2011 when Mr. O'Neill took office after veteran leader Michael Somare was forced to step aside as a lawmaker following a long absence from Parliament due to illness. In December the Supreme Court said Mr. Somare should be reinstated, and on Monday it ruled he should act as caretaker prime minister in the lead-up to the election.

Mr. O'Neill and his supporters claim the judiciary is biased. His deputy Belden Namah led armed police into the Supreme Court Thursday, forcing the chief justice to flee to his chambers. He remained holed up for several hours before being charged with sedition late Thursday and released on bail and is due to appear in court Friday.

Papua New Guinea's rich natural gas reserves make it an attractive target for international energy companies like Exxon Mobil Corp. and its Australian partner Oil Search Ltd. seeking to develop projects that can export gas to booming Asian economies such as China, along with traditional LNG users like Japan and South Korea.

Papua New Guinea has an estimated 22.6 trillion cubic feet of natural gas reserves, according to U.K.-based consultancy Wood Mackenzie.

The politically volatile nation has struggled to distribute the proceeds of its resource wealth among its 6.5 million residents, however: around 85% of the population still derive a subsistence living from farming in remote jungle villages.

-By Rachel Pannett, Dow Jones Newswires; 61-2-8272-4684; rachel.pannett@dowjones.com

(END) Dow Jones Newswires

May 25, 2012 00:19 ET (04:19 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

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