SYDNEY (REUTERS) - The Solomon Islands government says a contract signed by one of its provinces to lease the entire island of Tulagi to a Chinese company is unlawful and should be terminated.
Details of the controversial long-term lease between Solomons' Central Province and China Sam Enterprise Group were made public shortly after the Pacific nation switched diplomatic ties from Taiwan to Beijing in September, which sparked a strong rebuke from the United States.
Headquartered in Beijing, Sam Group is a technology, investment and energy conglomerate founded in 1985 as a state-owned enterprise.
Solomons Attorney General John Muria said the province and Chinese company were not legally able to strike such an agreement without government involvement.
"The agreement was not vetted by the Attorney General's chambers before signing," Mr Muria said in a statement issued on Thursday (Oct 24).
The agreement was "unlawful, unenforceable and must be terminated with immediate effect", he added.
China has in recent years expanded its financial and political influence in the Pacific, which had until then been a diplomatic stronghold for the US and its regional allies since World War II.
In a setback for self-ruled and democratic Taiwan, which China claims as a province with no right to state-to-state ties, Beijing won over two previous Taiwanese allies in the Pacific - the Solomon Islands and Kiribati - in September.
The Sam Group agreement, dated Sept 22, purportedly offers wide-ranging powers to the Chinese conglomerate to develop infrastructure on Tulagi and surrounding islands.
Tulagi is a significant island that hosted American bases in WWII and is where Solomons' former capital city was located before being moved to the island of Guadalcanal.
A signatory to the agreement, Central Province Premier Stanley Manetiva, did not immediately respond to questions on Friday.
In a statement on its website, Sam Group said its representatives had met Solomons Prime Minister Manasseh Sogavare in early October during a state visit to China by a delegation from the Pacific island nation.