Australia could soon have a new nation right on its doorstep, as the people of Bougainville start to cast their votes in a referendum on whether they should seek independence from Papua New Guinea.

Key points: Voting will continue for two weeks with results expected in mid-December

Voting will continue for two weeks with results expected in mid-December It's expected Bougainvilleans will vote in favour of independence

It's expected Bougainvilleans will vote in favour of independence However, Papua New Guinea gets the final say on what happens next

The referendum is an important step in the peace process between groups on Bougainville and Papua New Guinea, following the bloody Bougainville Civil War.

That 10-year conflict, which raged from 1988 until 1998, saw the deaths of up to 20,000 people, or around 10 per cent of Bougainville's population at that time.

People voting in the referendum will be given two options to choose from: greater autonomy from Papua New Guinea or complete independence.

A result in favour of independence is widely expected, but what happens after is far from clear — the vote is non-binding, and Papua New Guinea's Parliament has the final say.

Here's what you need to know.

What (and where) is Bougainville?

Bougainville sits in the same island chain as Solomon Islands, despite being part of Papua New Guinea. ( ABC News: GFX/Jarrod Fankhauser )

Bougainville is a series of islands to the east of Papua New Guinea and the north-east of Australia, and it is technically part of the same island chain that makes up the Pacific nation of Solomon Islands.

Culturally, the people of Bougainville have more in common with the people of Solomon Islands than Papua New Guinea — this was one of multiple factors that have driven calls for independence.

Another factor is the island's rich resources: Bougainville was once home to the world's largest open-cut copper mine at Panguna, which at the time provided up to 45 per cent of Papua New Guinea's export profits.

These resources also played a significant role in the island's civil war.

Many felt mining profits were not being shared fairly between Papua New Guinea and Bougainville, or even between different landowner groups at the mine site.

Pollution caused by the massive Panguna operation was also a major source of tension.

The civil war that subsequently broke out between the Bougainville Revolutionary Army, Papua New Guinean forces and other pro-PNG militias on the island saw the mine shut down in 1989, and it has remained closed despite controversial attempts to reopen it in recent years.

The town of Buka was made Bougainville's capital after the old capital Arawa was destroyed in the war. ( AFP: Ness Kerton )

Politically, Bougainville is currently an autonomous region within Papua New Guinea. Along with the upcoming referendum itself, this autonomy was a key part of the 2001 peace agreement signed after the conflict.

This means Bougainville has its own constitution, government, and public service, and it controls certain areas like policing and health.

However, Port Moresby retains control in key areas associated with national sovereignty, like defence and foreign relations.

What is the referendum about?

The independence vote is the culmination of two decades of peacebuilding efforts. ( ABC News: Nathalie Whiting )

The choice being put to voters in Bougainville is full independence from Papua New Guinea, or a greater degree of autonomy from Papua New Guinea.

But beyond the vote itself, the event also holds huge emotional significance for many Bougainvilleans — it's the culmination of decades of work towards peace and reconciliation.

"We've been planning for months now on what to do come polling day," Francesca Semoso, the deputy speaker of Bougainville's Parliament, told Radio National Breakfast this week.

"We're arranging for the bamboo bands to play, the kids are preparing themselves to dance [at] the polling booths."

Independence could see Bougainville forge its own diplomatic ties, create its own currency and join the United Nations, among a range of other powers.

Due to the displacement caused by the conflict, polling stations have also been set up across PNG, as well as in Solomon Islands and Australia. ( ABC News: Natalie Whiting )

But according to Kylie McKenna, the acting director of the Centre for Social Research at PNG's Divine Word University, the concept of "greater" autonomy remains nebulous.

"It's very complex to understand what the current state of autonomy is, let alone what a 'greater degree of autonomy' might mean," she said.

Under the peace agreement, Papua New Guinea was supposed to gradually pass down more powers to the Autonomous Bougainville Government (ABG) — but Dr McKenna said this process had been slow.

"It's very difficult to find out the status of each of the laws, powers and functions that are being transferred … There's a number of additional powers that haven't been handed down as yet," she said.

Reconciliation ceremonies between opponents in the conflict have been held as recently as early this month. ( AFP: Elizabeth Vuvu )

The Bougainville Referendum Commission has highlighted several "examples of powers that could be available" if voters choose greater autonomy, including power over industrial relations, taxation, and international aid and trade.

The voting period, which begins today, will last for two weeks with results expected about halfway through December.

What happens after the vote?

Regardless of the outcome of the vote, PNG's Parliament will make the final decision. ( AFP: Ben Bohane )

Even if the expected result in favour of independence comes to fruition, don't expect a new country to be created in the immediate future.

Once the results are announced, the governments of Papua New Guinea and Bougainville will enter a period of consultation — the path forward will then need to be ratified by a vote in PNG's Parliament, and that's where things could get tricky.

There are concerns MPs may be reluctant to vote in favour of an independent Bougainville due to the region's vast resources, and out of fear that other parts of the country may seek to follow suit.

While PNG's Prime Minister James Marape has said he is personally in favour of Bougainville remaining part of Papua New Guinea, Dr McKenna said she doubted a landslide vote in favour of independence would receive "an outright no" from Port Moresby.

"I think if there was to be resistance in terms of ratifying the result, it wouldn't just upset various elements in the international community, but also some proportion of the PNG population who would also like to see that vote respected," she said.

"People will often tell you things like 'Bougainville has shed blood, they've been through a lot, and they now deserve to have their choice respected."

Bal Kama, a PhD candidate at the Australian National University, said the voting margin would most likely play a role in how Port Moresby approaches post-vote negotiations.

"Parliament will have to come up with some very good reasons why it would act in a way contrary to an overwhelming vote," he said.

Bougainville has been at peace since a ceasefire agreement was signed in 1998. ( AFP: Torsten Blackwood, file )

Research from the Lowy Institute has suggested there is a risk for another crisis on Bougainville if, in the event of an overwhelming vote in favour of independence, PNG's Parliament failed to ratify the decision.

But Mr Kama said he doubted there would be a resurgence of violence, given the peace that has endured over the past two decades.

"There are strong indications from former fighters, the [PNG] defence force, the BRA and from the leadership that whatever the outcome, there will not be another conflict," he said.

"The media needs to be responsible in conveying that message of peace, and of reconciliation, more than a message of some sort of threat or alarm."

Despite efforts towards reconciliation, some observers have said there is a risk of conflict resuming. ( AFP: Elizabeth Vuvu )

Former Bougainville MP Theresa Jaintong, who is also a local chief and the president of PNG's National Council of Women, made similar comments this week to Radio Australia's Tok Pisin service.

"Whatever the outcome, it won't make us cross or fight. It won't," she said.

"This vote is the outcome of the agreement of the two governments, after consultations and our reconciliation ceremonies with the defence force and the former rebel fighters.

"We don't have anything to fear."

Is Bougainville ready for independence?

Big question marks remain over Bougainville's ability to support itself financially if granted independence — there is a significant amount of post-conflict infrastructure rebuilding that needs to be done, despite hostilities ending more than two decades ago.

This is partly due to Papua New Guinea, over a number of years, failing to pay out the full amount in grants and other monies owed to Bougainville under the peace agreement.

Extensive rebuilding is still needed after the conflict, but there are questions over how an independent Bougainville would pay for it. ( AFP: Torsten Blackwood, file )

The end of mining on the island has also played a role, and it has been suggested a newly independent Bougainville could resurrect resources projects in order to kick-start its economy.

But Dr McKenna said the resumption of mining activities was far from an inevitability, given the role it played in the conflict.

"I think there is a great deal of awareness that mining can create harmful events — nowhere is that more obvious than in Bougainville," she said.

A woman wearing a shirt with the Bougainville flag in the capital Buka, just ahead of the referendum vote opening. ( AFP: Ness Kerton )

Bougainville Parliament's deputy speaker Ms Semoso, who is in favour of independence, said Bougainville was as prepared for independence as any country ever can be — and she said similar concerns were raised about Papua New Guinea prior to its independence from Australia in 1975.

"Has there been a country that had everything, and then got its independence? Independence to me is a process," she said.

"Papua New Guinea … Did they have a lot of money when they gained independence in 1975? Was everything 110 per cent rosy all the way? No.

"Are we ready? We're definitely ready."