Now what for New Caledonia?

The New Caledonian riots which began on May 13 this year, triggered by French President Emmanuel Macron’s attempt to change the New Caledonian provincial electoral roll, have left the French territory in economic despair.

Around 800 businesses have been destroyed with the loss of more than 20,000 jobs. The economic cost has been estimated at around €2.2 billion. New Caledonia’s congress has asked the French government for €4.2 billion to rebuild the economy over several years.

Michel Barnier was appointed Prime Minister of France in September and he immediately abandoned the proposal to broaden the electoral roll. For the past three months, New Caledonian leaders have been negotiating with Barnier about the reconstruction of the economy. The talks resulted in a proposed budget for 2025 and included grants and loans to the territory. In addition, Barnier sent representatives from the French government to resume political dialogue about New Caledonia’s institutional future. Barnier’s ousting in a no confidence vote on December 4, barely three months after taking office, has upended these negotiations.

The appointment of French President Emmanuel Macron ally François Bayrou as the new Prime Minister of France, the fourth nomination this year, is already raising concerns across a divided French parliament. Most leaders are taking a wait and see approach before declaring their support or not for Bayrou. The first job for the new Prime Minister will be to appoint a government that can successfully work with the French parliament. The second job will be to avoid another no-confidence vote. What isn’t clear is when negotiations will begin again with New Caledonian leaders around rebuilding their shattered economy.

Roughly two-fifths of New Caledonia’s 268,000 inhabitants are settlers from France, one fifth are immigrants from Asia and the Pacific, and two fifths are indigenous Kanaks. The Nouméa Accord (signed in 1998) established an electoral roll for New Caledonia’s provincial elections which limited participation to people who were born in New Caledonia or who had lived there since 1998 or earlier, to achieve parity between the loyalists and independentists. Emmanuel Macron’s proposal to change the electoral roll would have potentially swung two or three seats at each election to the pro-French loyalist parties, preventing the pro-independence parties from retaining a majority in Congress as described by Elisabeth Alber, ‘New Caledonia: a Promising Attempt to Constitutionalize a Sovereignty Conflict Going Wrong.’

For my recent doctoral thesis I investigated how the pro-independence and loyalist groups in New Caledonia interacted amongst themselves and with the government of France from 1978 to 2018 on the issues of independence and political autonomy. The negotiation process in New Caledonia proved to be protracted and inconclusive because it was strongly contested by most French immigrants and indirectly by the French government.

The 1998 Nouméa Accord was the last political agreement. It mandated a transfer of significant powers to New Caledonia, and that three referendums on independence should be held: the first no later than 2018. The Kanak independentists boycotted the final independence referendum in 2021, resulting in an overwhelming pro-France result. The Kanaks have refused to accept the validity of this final referendum.

While the May riots were triggered by Macron’s decision to adjust the electoral roll, my thesis explains how the seeds for the unrest had been growing for several decades. After the unsatisfactory (for the independentists) final independence referendum, Kanak leaders urged France to provide a different pathway towards independence. Instead, France proposed to change the electoral roll unilaterally, without addressing the independence leaders’ fundamental concerns. 

New Zealand has been forthright in its criticism of the French government’s approach to the independence movement. Foreign Minister Winston Peters called into question the final referendum’s legitimacy, saying while the vote was technically lawful, it was not reflective of the spirit of the referendum process.

The unrest can also be connected to geopolitical interest in New Caledonia’s nickel, with the French territory having the world’s fourth-largest reserves. The precious metal is sought-after for electric vehicle batteries, and competition for the resource has been growing, including between China and France.

New Caledonia is China’s second-largest supplier of nickel. In 2011, New Caledonia’s trade to China was 6.9 percent of total exports, and according to China relations expert Anne-Marie Brady, by 2022, that had risen to 62.3 percent of all New Caledonia’s exports going to China. Since 2023, nickel prices have dropped 40 percent which has taken a heavy toll on New Caledonia’s economy. The devastating destruction caused by the May riots has further added to this economic downturn.

France, unsurprisingly, also has its eye on New Caledonia’s nickel. Macron has attempted to secure it for France’s clean-energy shift, and to compete against China in manufacturing electric vehicles. However, this initiative was interrupted by the riots and by pro-independence leaders who have called the idea a colonial strategy to regain control of New Caledonia’s resources.

China has courted New Caledonia’s independence leaders for many years and would see an independent New Caledonia as a win for its initiatives in the South Pacific. France’s moves to derail the independence process by changing the electoral roll would have deeply concerned China. Conversely, if France were to lose any of its Pacific territories, its global influence and status in the region would decline significantly.

New Caledonia is on the brink of economic collapse and the fall of the French government will undoubtedly hold up any agreement on financial support from France. This could mean that further businesses will fail and public servants’ salaries may not be paid.

What next? France should consider replacing the Nouméa Accord and devising a clear pathway towards some form of independence for the territory. However, an independent New Caledonia would advance China’s geopolitical interests, and it’s likely China would strengthen its influence by means of strategic investments in New Caledonia, which would reduce the influence of Australia, New Zealand, France and Western partner countries. Any political leaders wanting to help New Caledonia recover from the destruction caused by the riots, and achieve political stability, will need to navigate a complexity of often conflicting interests: their own, those of the Pacific region, those of France, of China, and those of New Caledonians.