The call comes after Professor Garnaut was forced to resign as Chairman of PNG's biggest mining company because of a ban imposed on him by PNG's Prime Minister Peter O'Neill.
As Jemima Garrett reports, questions are now being asked as to whether Australia's Foreign Minister, Bob Carr, has failed to look after Australian interests in this case.
Presenter: Jemima Garrett
Speakers: Professor Ross Garnaut, former Chairman of Ok Tedi Mining; Professor Stephen Howes, Director of the Development Policy Centre at the Crazwford School of Public Policy at the Australian National University
GARRETT: Professor Garnaut's resignation as Chairman of Ok Tedi Mining Limited brings his official involvement with PNG to an end after an association of almost 50 years.
The ban on his travelling to PNG was imposed in November after he expressed an opinion on a spat between BHP Billiton and the PNG Prime Minister over the control of the PNG Sustainable Development Program. The PNGSDP is a $1.4 billion charitable trust set up by BHP when it handed over its shares in Ok Tedi to the people of Papua New Guinea.
Professor Garnaut is not happy.
GARNAUT: My ban was a low point for Australian diplomacy generally, a low point for PNG development and a low point for Papua New Guinea democracy.
GARRETT: Professor Garnaut says his resignation was necessary because Ok Tedi has some important issues - such as its mine life extension plan - that need immediate attention.
Professor Stephen Howse, a long-time PNG-watcher from the Australian National University, says if Australia had done more Professor Garnaut might not have been forced to resign.
HOWSE: It is very unfortunate that the Australian government didn't issue any sort of public protest when the PNG government put this travel ban in place. In fact the only public comment from the Australian government said it was up to PNG to decide who was or wan't allowed to visit the country. And I think that is a very inapropriate response Australia should be supporting free speech in PNG and Aust should certainly be supporting the rights of its citizens to engage in lawful business activities in other countries.
GARRETT: PNG's Prime Minister, Peter O'Neill, was not available for comment but in a statement he said the central issue was not what he described as ill-informed comments by Professor Garnaut, but BHP billiton's colonial mentality that failed to accept the enormous favor PNG did the company when it allowed it to relinquish its ownership of Ok Tedi without accepting financial or moral responsbility for the enormous environmental and social damage that occurred there on its watch.
Mr O'Neill says BHP Billiton and Professor Garnaut are alleging he wants to get his hands on the funds of the PNG Sustainable Development Program. That, he says, is both wrong and personally offensive.
Professor Garnaut says he now wants to move on but he is concerned the PNG government action against him may have set a precedent.
GARNAUT: The important thing now is that things like this never happen again, that a government never again seeks to exercise leverage over legitimate international corporate interests through the misuse of immigration powers. If it became an accepted precedent, the retention of the precedent would introduce a major new element of sovereign risk, a barrier to PNG development and a recurring volcano in bi-lateral relations.
GARRETT: Now you say you want Australia to negotiate a bi-lateral or a regional agreement that will prevent a repeat of this. What do you envisage exactly?
GARNAUT: Well, I am not going to second guess the officials and ministers that have responsibility for this. I will just put on the agenda the crucial importance of making sure this never happens again. And Australia is the regional power that is in the best position to lead the development of rules that could prevent the arbitrary use of incidental powers that could seriously disrupt international business and development.
GARRETT: A spokesperson for Australia's Foreign Minister, Bob Carr, says claims that Canberra stayed silent" on the travel ban on Professor Garnaut are false.
Our High Commissioner in Port Moresby, it says, specifically raised the issue with senior figures in the PNG Government, on three occasions.
Prime Minister, Peter O'Neill, says 11 years after BHP left Ok Tedi there can be no reasonable case for the company to continue to control the PNG Sustainable Development Program.
Rather than seeking the intervention of the Australian government, he says, BHP Billiton should realise PNG is an independent nation and negotiate in the same mature and reasonable way numerous other Australian resource companies do.