By Colin Packham and Matt Siegel
SYDNEY (Reuters) - Dozens of people were wounded and four reported killed in Papua New Guinea on Wednesday after police opened fire on a student demonstration in the capital and riots erupted across the country, officials and residents said.
A groundswell of political unrest has surged in the island nation, just to Australia's north, in recent weeks amid calls for Prime Minister Peter O'Neill to resign over corruption allegations.
People in Port Moresby reported police firing on the public and using tear gas to disperse crowds during a protest at the University of PNG's Waigani campus. Protests were later reported in the PNG Highland cities of Goroka and Mt Hagen, and in Lae on the north coast.
PNG media and one international aid agency, which declined to be identified because it only had preliminary information, said a clinic at the university had reported up to four students had been killed, although there was no confirmation.
"Now there is a very big clash with the public and with the police just outside the Port Moresby General Hospital," a hospital official told Reuters by telephone after a group of wounded students were taken there for treatment.
"There is also shooting going on, open gunfire."
Papua New Guinea, formerly administered by Australia, struggles with endemic violence and poverty despite a wealth of mineral resources. It is ranked 139 out of 168 in Transparency International's corruption index.
Wednesday's events echoed a similar confrontation when police opened fire on anti-government student protesters in 2001. A full account of that incident has never been given.
An official at the Port Moresby General Hospital said 38 casualties had been treated there.
O'Neill said no students had been killed that five wounded protesters were in stable condition.
"The facts relayed to me are that a small group of students were violent, threw rocks at police and provoked a response that came in the form of tear gas and warning shots," O'Neill said in a statement, dismissing calls by students for him to stand down.
The Australian government, which routinely warns of high levels of serious crime and lawlessness, said there had been an "unconfirmed number of deaths and serious injuries".
The U.S. embassy in Port Moresby told its citizens to avoid areas hit by violence. "The situation is still volatile and could escalate at any time," it said in a statement.
Later on Wednesday, Virgin Australia said in a statement it had turned around a flight from Brisbane to Port Moresby "due to safety concerns regarding civil unrest in Port Moresby”.
No other flight disruptions were reported.
PEOPLE FLEEING
Hubert Namani, a lawyer and business leader, said public transport had been halted and businesses shut.
"People are looting and rioting and sort of revolting, so the police are now caught trying to manage all of that," Namani told Reuters by phone from Port Moresby.
Noel Anjo, one of the leaders of the student protest, said the violence began when students started a planned march from the campus towards the parliament building in the capital, where police had set up a road block.
"Police did not like that idea and started assaulting the students, punching them, hitting them with the gun butts, before firing shots at them," Anjo said.
"The students were running for cover in all directions, but I saw some people badly wounded," he said.
There was no immediate comment from police in Port Moresby.
TEAR GAS, GUNFIRE
Video on social media showed students fleeing amid clouds of tear gas and the sound of gunfire. Pictures showed several men with what appeared to be serious stomach, chest and leg wounds.
Thousands of students across PNG have been protesting and boycotting classes for weeks amid growing political unrest.
O'Neill, who came to power in 2011 promising to reign in corruption, has faced allegations he authorised millions of dollars in fraudulent payments to a leading law firm.
In 2014 an anti-corruption watchdog issued an order for his arrest over the incident, which O'Neill denies. He refused to submit to the warrant and ordered the watchdog stripped of its funding.
Most of Papua New Guinea's seven million people live subsistence lives in isolated mountain villages and scattered tropical islands.
Despite that, an energy production boom, which includes Exxon Mobil's (N:XOM) $20 billion LNG plant, has fuelled annual economic growth of almost 10 percent a year for the past three years.
Newcrest Mining (AX:NCM), which operates two remote gold mines in PNG and Oil Search Ltd (AX:OSH) said their operations had not been affected. There was no comment available immediately from Exxon Mobil in PNG.
"This is going to get worse before it gets better,” said Greg Anderson, executive director of the Papua New Guinea Chamber of Mines and Petroleum in Port Moresby.
"Incidents like this trigger paybacks, which could easily spiral out of control," he said.
Western tourists and workers in Port Moresby said the city was in gridlock.
Oliver Fowler, director of Australia-based Adventure Bound Tours, said he was reconsidering his next scheduled trip in August. “We might have to put it off. It’s really going to affect the industry,” he said.