By Matt Siegel
SYDNEY, Feb 19 (Reuters) - It was mid-morning when the knock came at Rod Henshaw's door. He had 30 minutes to pack, police told him, then straight to the plane that would deport him from the home he'd made on the tiny Pacific island nation of Nauru.
The knock ended weeks of uncertainty that had started when the justice minister issued an order for his deportation, something the Australian says was never explained.
This seemingly insignificant incident set in motion events leading to the sacking of Nauru's judiciary, the kind of political crisis that history shows would usually draw a swift response from Australia. Canberra has long been the heavyweight in the South Pacific, imposing sanctions on Fiji after a 2006 coup, for example, even intervening militarily, as in East Timor in 1999.
But the collapse of the judiciary, as well as other recent moves by the government that Australian opposition politicians, Nauruan business figures, sacked members of the judiciary and analysts have said signals a creeping authoritarianism in the island state, has drawn only a muted response from Canberra.
They attribute this near silence to Nauru offering something Canberra values more than promoting regional democracy: a place to outsource its asylum seeker headache, far from prying eyes.
Australia has flooded Nauru with money since 2012, when the island became a key plank in its controversial policy of dealing with asylum seekers. Nauru hosts a detention centre able to hold 1,500 men, women and children from the Middle East, Africa and Asia who have been sent there after trying to get to Australia in rickety boats, usually from Indonesia.
Canberra has set aside some A$2 billion ($1.81 billion) over four years to run the centre and a similar one in Papua New Guinea, money that is separate from Australian direct aid worth about 40 percent of Nauru's annual GDP of A$72 million.
"I think it really comes down to the fact that there is this deal that the Australian government has with Nauru: You'll manage it all, we'll keep filling the coffers with money and let's not rock the boat," said Senator Sarah Hanson-Young of the opposition Greens Party.
Immigration Minister Scott Morrison declined to be interviewed for this article. Foreign Affairs Minister Julie Bishop, who has called the crisis a "domestic issue" for Nauru, said in a statement to Reuters that Australia had privately conveyed its concerns to the island's leadership.
She did not respond directly to a question about whether Canberra was holding back criticism to avoid jeopardising the detention centre deal.
A DOT IN THE PACIFIC
By August 2012, with thousands of refugees arriving every month and with record low poll numbers, then Prime Minister Julia Gillard needed to tackle the asylum seeker issue.
The deaths of hundreds of people at sea after boats capsized and a push by popular radio talk back hosts to label boat arrivals immigration "queue jumpers" had combined to create a powerful anti-asylum seeker mood among some voters.
One solution came in the form of detention centres in Papua New Guinea as well as Nauru, a speck in the Pacific about 4,500 km (2,800 miles) northeast of Australia with 10,000 citizens and little economy since the depletion of its rich phosphate mines in the 1980s.
Under a Memorandum of Understanding, Nauru agreed to reopen a centre to process claims that had been the backbone of a previous government's asylum seeker policy. For its part, Australia agreed to bear all the costs.
The camps are meant to deter asylum seekers from undertaking the dangerous boat journey. Those sent to them can never be resettled in Australia, regardless of whether or not they are granted refugee status.
Gillard's agreements have been honoured by the new conservative government of Prime Minister Tony Abbott, who was elected in September after promising to "stop the boats".
The centres have drawn criticism from the United Nations and human rights groups. The U.N. High Commissioner for Refugees in a November report said neither centre had a "fair and efficient system for assessing refugee claims" nor provided "safe and humane conditions of treatment in detention".
On Monday night, a riot at the detention centre on Manus Island in Papua New Guinea left at least one asylum seeker dead and 77 more injured.
As the plane carrying Henshaw lifted off on Jan. 29 and the island disappeared from view, he realised it could be a long time before he returned to Nauru and the bar that he had opened there with his late wife.
"It broke my heart because I felt so helpless," he told Reuters. "It was a sad journey."
Australian Peter Law, who arrived on Nauru in 2010 to become its chief magistrate, had tried to keep Henshaw on the island, approving his application for an injunction to halt the deportation. Law said he then received an SMS from Justice Minister David Adeang, who demanded an explanation for his decision. Adeang declined to be interviewed.
"It was totally inappropriate," Law told Reuters at his home in Sydney.
Less than a fortnight later, Law said he was bundled onto a plane and deported without explanation, causing a scuffle at the airport when supportive employees flooded the terminal building in an attempt to stop the deportation.
The government says Law was dismissed because of a history of public drunkenness and mistreating a subordinate, among other complaints. After Law was deported, the government opened an investigation into those allegations.
The name of the subordinate has not been made public and the investigation is ongoing. Law dismisses any allegations of misconduct as being politically motivated.
Australians have long helped staff administrative positions in Nauru, which gained independence from Britain, Australia and New Zealand in 1968.
Geoffrey Eames, Nauru's chief justice and also an Australian, told Reuters he issued injunctions to stop Law's deportation, and quickly found his own visa to return to the country from Australia cancelled.
Under the Nauruan constitution, the chief justice can only be removed from office by a vote of two-thirds of parliament on the proven grounds of misbehaviour.
The country's solicitor general, also an Australian and the last remaining member of the judiciary, resigned in protest over the sackings. Andrew Jacobson, a Melbourne-based lawyer, has been acting as resident magistrate in Law's stead, but no other position in the judiciary has been filled.
As news of the crisis in Nauru broke last month, New Zealand threatened to cut off the US$600,000 in annual funding it provides to run Nauru's justice system.
It backed off after Adeang went to New Zealand to meet Foreign Minister Murray McCully, saying that to do so would unfairly burden Australia with more funding for the country. McCully later denied he had come under pressure from Canberra.
President Baron Waqa has called criticism of the deportations an attack on Nauru's sovereignty.
Eames called that argument a red herring.
"I certainly don't deny the right of Nauru to conduct its own affairs. But part of sovereignty is a commitment to the rule of law," he said.
The government provided Reuters with a statement in response to written questions intended for Adeang, in which it declined to answer specific questions about Henshaw's case.
"The Government of Nauru was elected with a mandate to clean up the cronyism and corruption of the past, and our recent decisions have been made with this objective," it said.
The deportations, however, are not the only thing that has drawn criticism.
Last month, Nauru raised the cost of a journalist visa by 40 times from A$200 to A$8,000, prompting accusations from Hanson-Young and others that its government was trying to block oversight of the detention centre.
Nauru had said the measure was needed to raise revenue, but in its statement to Reuters said it was to penalise reporters, Australians in particular, who it said had reported unfairly on the country.
In her statement to Reuters, Foreign Affairs Minister Bishop said: "Although Australia accepts that decisions about visas and judicial appointments are matters for the Nauru Government, the visa cancellations have implications for both the rule of law in Nauru and for Nauru's reputation internationally."
Although Nauru has not explained why it deported Henshaw, locals and visitors told Reuters his Reef Bar was the most popular establishment on the island for the foreign and local workers earning as much as A$40 per hour at the detention centre.
Henshaw says he believes Adeang, who oversees a government holding company that took control of his bar, engineered his deportation for financial benefit.
"I've got no bloody doubt in my mind that that's the case but I can't substantiate it," he said.
The Nauru statement dismissed such allegations as absurd.
"We reject implicitly the defamatory implications of these reprehensible questions," it said. ($1 = 1.1072 Australian dollars) (Editing by Dean Yates)