Violent protests in Nouméa, the capital of the French overseas territory of New Caledonia in the South Pacific, which have left five people dead, have alarmed the French government.

While Paris declared a state of emergency in the region, blaming “external forces” for the unrest, the island’s indigenous population argues that the new law in the French National Assembly will reduce indigenous representation.

“The proposal to reopen the electoral institution is nothing more than a return to the settler-colonial strategy,” New Caledonian Kanak Senator Robert Xowie, a member of the French Senate, told Interior Minister Gérald Darmanin in March.

A brief history of colonialism

When New Caledonia was recognised as part of the Second Empire in 1853, European settlers flocked to claim indigenous land and set up independent cattle farms.

This low-tech agricultural economy was eventually fuelled by colonial ambitions to turn New Caledonia into a sugar island, similar to the plantations of the Caribbean and Mauritius.

Wealthy planters from Réunion, another French overseas territory in the Indian Ocean, moved in due to crop shortages and invested heavily in sugar cane plantations south of New Caledonia’s capital, Noumea.

These landowners brought with them thousands of ‘indentured labourers’ of Indian, Vietnamese and Chinese origin. Together with the indigenous Pacific Islanders, the Kanaks, these immigrants formed the underclass of New Caledonian colonial society. As landowners and bureaucrats working in France, they would work to enrich wealthy French landowners who were not part of the archipelago society.

The aim of the French white settler landowners was to send their profits to the settler colony in Australia in the hope of ‘economic mobility’ in Europe. New Caledonia as a colony therefore only functioned for the white settlers in the exploitation of natural resources.

How did the self-determination process work?

In the 1980s, when New Caledonia was rocked by violence, including assassinations and kidnappings that left dozens dead, tripartite agreements were finally reached between independence supporters, French supporters and the French government, recognising the Kanaks as the indigenous population of New Caledonia and launching a process of self-determination.

The Nouméa Agreement of 1998 promised that the French Republic would devolve more political power to New Caledonia and its original inhabitants, the Kanaks, over a twenty-year transition period and provided for independence referendums.

The referendums were held in 2018, 2020 and 2021. Although these votes were in favour of ‘staying with France’, the Kanak Socialist National Liberation Front (FLNKS), a coalition of pro-independence parties, had called for the vote to be postponed and for the Kanaks not to participate, arguing that ‘lockdown’ measures and traditional mourning ceremonies during the pandemic had prevented a proper campaign. In 2021, turnout in the referendum was 43.8 per cent.

Protests against the proposed reform of the region’s electoral body, which independents say will weaken the representation of the indigenous Kanak population, are fuelled by deep economic turmoil in the region.

New Caledonia’s wealth is largely derived from its struggling mining sector. With almost 30 per cent of the world’s reserves of nickel, an important material for making stainless steel and batteries for electric vehicles, New Caledonia was expected to play a major role in Europe’s race to catch up with China for critical raw materials.

However, nickel production in the region has fallen sharply and foreign investors have begun to leave the archipelago. The industry suffers from export restrictions imposed by the New Caledonian authorities and high energy costs, making nickel production much more expensive and less profitable than in Indonesia and other Asian competitors.

Huge gap between Kanaks and Europeans

According to the 2019 census, 41.2 per cent of New Caledonia’s population identifies as Kanak and 24.1 per cent as European, with the former group facing significant socio-economic challenges, including lower wages and higher poverty rates.

For example, according to a 2014 study, in 2009 a young non-Kanak was seven times more likely to have a tertiary education than a young Kanak.

A 2012 statistic showed that only 3 per cent of Kanaks had completed tertiary education, compared to 23 per cent of the rest of the population, while the unemployment rate among young native Kanaks was 38 per cent, four times higher than the rest of the population.

In 2010, one in five jobs paid less than two-thirds of the minimum wage in mainland France, and the proportion was much higher in agriculture, domestic work and hotels and restaurants, where part-time work is common.

These low wages must be seen in the context of the very high prices in New Caledonia. With a minimum wage of 78.5 per cent of the French level and prices 34 per cent higher, the purchasing power of minimum wage earners was 59 per cent of the metropolitan level, and even 50 per cent for agricultural workers.

More strikingly, among the regions that make up New Caledonia, the poverty rate reached 52 per cent in the Loyauté Islands, compared to 9 per cent in the Southern Province. In 2014, the employment rate was 65 per cent in the Southern Province, 52 per cent in the Northern Province and 40 per cent in the Loyauté Islands. It should also be noted that the Kanak population in Loyauté is 94.6 per cent.

The collapse of nickel

Despite hundreds of millions of euros in French subsidies, the nickel industry continues to collapse, with production in the first quarter down 32% on the same period last year.

French officials warned in 2023 that New Caledonia’s three main nickel processing plants could soon close, increasing unemployment on the island by 50%.

As protests grow, major investors such as Switzerland’s Glencore and France’s Euramet are either pulling out or refusing to invest further.

Last year, the government came up with a new plan to bail out the industry with subsidies of up to 200 million euros to lower energy prices. But instead of easing tensions, the new ‘Nickel Pact’ was criticised by the New Caledonian independence movement as a ‘colonial pact’ that would give too much power to local authorities.

After months of negotiations, New Caledonia’s representatives blocked ratification of the pact, which is still on ice.

The pact was an attempt by French Finance Minister Bruno Le Maire (who visited New Caledonia on a fact-finding mission in November 2023) to provide around 200 million euros in emergency aid, on condition that New Caledonia’s nickel industry commits to deep reforms to reduce production costs and possibly find new markets in Europe.

The Kanaks argue that the pact in its current form does not ask for enough commitment from the nickel industry companies and also requires New Caledonia to find more than $65 million to finance a cost-cutting electricity scheme, which would require the introduction of new taxes and thus increase the burden on the local population.

No more colonial mining

The mining sector in New Caledonia still bears the mark of colonialism. Considered the cheapest and most aggressive method of extraction, “open-cast” mining was favoured by mining companies for its simplicity, and its immediate environmental damage was ignored. So much so that 330 mines were opened over a period of time on an island 30 times smaller than France, where only 256 mines were open at the height of the coal mining boom.

In the 1930s, the indigenous Kanaks were moved to reservations covering only 10 per cent of their ancestral land in an attempt to increase the availability of mineral rights without harming the cattle industry.

Currently, the mining industry on the island is controlled by three major companies. The largest is SLN, a subsidiary of the French metallurgical company Eramet. The Koniambo nickel plant is operated by Glencore, which is majority-owned (51%) by the Northern Province, where the plant is located. The Brazilian mining consortium Vale operates a large hydrometallurgical plant in the Southern Province.