Landowners on Papua New Guinea's Manus Island are demanding hundreds of thousands of dollars in compensation from the Australian government or they will shut off water to the asylum seeker detention centre.
Local MP and vice minister for trade, Ron Knight, says the landowners are demanding more than US$90,000 in compensation for use of a dump site near Lombrum naval base, where Australia is currently housing about 500 asylum seekers.
The groups also want US$8,400 per month for continued use of the dump as well as another US$24,000 per month to cover anchorage and waste management of Australian Navy ships.
The landowners on the weekend blocked the dump and a gravel pit being used by the Australian government and say they will shut down water if their demands are not met by Tuesday.
Mr Knight says it is not a protest but a very quiet guerilla war.
Australia is planning to build a 600 bed facility with room for 200 staff near a school in the Manus capital, Lorengau, as well as developing other sites inside Lombrum Naval Base.