Day: January 7, 2019

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Case 6.3 – UPNG Police Shooting

On June 8, 2016 members of the Royal PNG Constabulary opened fire at protesting University of Papua New Guinea (UPNG) students in Port Moresby, resulting in injuries to people (Tlozek, 2016). The protesters wanted Prime Minister Peter O’Neill to step down from office and present himself for an interview in relation to alleged corruption.

Mr O’Neill subsequently announced a Commission of Inquiry into the UPNG shooting a week after the incident (Kil, 2016). The Royal PNG Constabulary and the Ombudsman Commission announced separate independent investigations. The police shootings drew widespread local and international condemnation.

But the commission of inquiry promised by the PM did not eventuate nor did the RPNGC management or the Ombudsman Commission publicise details of their findings. The policemen behind the June 8 shooting at the UPNG gate remain free and are yet to be held accountable for their actions, which resulted in scores of students and members of the public receiving gunshot wounds (Editor, 2016).

Sadly another commission of inquiry promised by Mr O’Neill which did not eventuate in the last term of government. It joins the other inquiries that he announced into the National Housing Corporation and the PNG Defence Force Manumanu land deal, which has hardly made traction despite the impact on the lives of ordinary citizens. Papua

Update as of 2018

The 2016 protest was a platform which the budding citizens of PNG in the tertiary institutions expressed their discontent with the Prime Minister – O’Neil in not honouring the rule of law. The protest however was met with much disapproval by the government; the inclusion of the RPNGC led to further aggravation when they opened fire on the students at the UPNG campus.

Despite drawing much national and international attention, little has been done to initiate a Commission of Inquiry into this matter. After promises by the Prime Minister (O’Neil) to conduct a COI, there hasn’t been any report reflecting any concern into the matter by the government nor the RPNGC.

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~ Reference/Bibliography ~

~Photograph~

University of Papua New Guinea students gather to discuss their demand for the prime minister’s resignation, May 2016. Credit: UPNG4PNG

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Case 6.2 – Djoko Tjandra

Riddled with allegations of corruption and scandals, the case of Indonesian businessman Djoko Tjandra was subject to widespread criticism for the role the Papua New Guinean Government played in paving the way for Tjandra to become a PNG citizen. Tjandra fled Jakarta to Malaysia a day prior to his sentencing on grounds of fraud for his part in illegally receiving $57 million of the Bank Bali funds (Callick, The Australian, 2012). Once he was in Malaysia, the Papua New Guinean Government became involved when it transported Tjandra from Malaysia to Port Moresby on the Government’s Falcon jet sparking diplomatic tussle between Papua New Guinea and Indonesia (The National, 2012).

In 2012, Tjandra was granted Papua New Guinean citizenship and later an APEC passport after just three years of residing in Papua New Guinea, a move attracting criticism and allegations of corruption. The decision to grant him citizenship after just three years of residency was contrary to section 67 of the Constitution which states that a person who resides in the country for at least eight years may apply to be a naturalised citizen. Tjandra’s PNG citizenship further went under heavy criticism in April 2016 with the Opposition criticising the O’Neill Government for giving refuge to the Indonesian fugitive in breach of international law (Hakalits, EMTV, 2016).

Despite Tjandra’s status as an Indonesian fugitive and allegations of corruption levelled against the Government and him in the process involved in the granting of his citizenship, Tjandra and the O’Neill Government signed an agreement to repair and refurbish the State-owned Central Government Building in a K145 million deal (Waeda, Loop PNG, 2016). There were instances where senior government ministers supported moves by a Djoko Tjandra-subsidiary Naima Agroindustry to be given a monopoly in rice production in the Central Province (Callick, The Australian, 2013).

In 2016, the Indonesian Government through their Attorney-General renewed calls for the return of Tjandra to face his charges and failure to do so may put Papua New Guineans who may face severe penalties in Indonesia at risk as the Government of Indonesia would not negotiate lenient penalties (Faiparik, The National, 2016). Foreign Affairs Minister Rimbink Pato responded by saying that Tjandra would be deported once all international rules were complied with and both countries had signed eight memorandum of understandings and three treaties so the deportation process would not be easy.

The Tjandra case came under the spotlight in April 2018 when the Ombudsman Commission tabled in Parliament their findings which contained an investigation into the improper and unlawful issuance of entry permits and issuance of a PNG passport to Djoko Tjandra, alias Joe Chan, by PNG Immigration and Citizenship Services Authority (Faiparik, The National, 2018). The investigation naming high level Government officials found that Djoko Tjandra was issued his first passport in 2012 without providing evidence of citizenship and his certificate of citizenship was signed by the Minister for Immigrations and Citizenship Ano Pala two weeks before he was issued a passport. The Chief Migration Officer Mataio Rabura then unlawfully issued the passport. The report also implicated former acting Chief Migration Officer Joseph Nobetau and former immigration visa director Delilah So’osane for issuing Tjandra two Asia Pacific Economic Cooperation business travel cards in 2009 (Post Courier, 2018). In response, Ano Pala denied that he had abused the process in granting Tjandra’s citizenship and claims he had no knowledge of an extradition request by the Indonesian Government (RadioNZ, 2018). Member for Sinasina-Yonggamugl and Opposition MP Kerenga Kua who was the Attorney-General during the time commented saying that the findings have all been known to the Government for a long time and he sought cabinet approval during the time to begin court action to have Tjandra’s citizenship revoked but he was frustrated by bureaucratic red tape (Fox, ABC News, 2018).

In July 2018, Prime Minister Peter O’Neill in Parliament said that he had given instructions for Government officers and people named in the Ombudsman Commission’s report who are allegedly involved in facilitating the entry of Indonesian fugitive Djoko Tjandra to be removed from public service and investigated (Faiparik, The National, 2018). The Minister for Justice and Attorney-General Steven Davis said they were now in the process of implementing the Ombudsman Commission’s recommendation to investigate Tjandra. This was followed by a statement by Police Minister Jelta Wong saying that they are now awaiting advice from the Immigration and Citizenship Authority before investigating Indonesian fugitive Djoko Tjandra and how he obtained PNG citizenship (The National, 2018).

PNG’s continued association with Tjandra raises ethical questions on how our leaders want Papua New Guineans to be seen on the global stage. Are we global citizens promoting world values such as human rights, religious pluralism, gender equality, the rule of law, environmental protection and poverty alleviation? Or do we create our own definitions of world values and apply them at our convenience disregarding what other citizens and nationalities aspire for to create a peaceful, just and inclusive society? These questions remain unanswered until the Government decides to take a strong stand and work in partnership with the Indonesian Government to extradite Tjandra to Indonesia to face his charges. The Government must be commended for taking a tougher approach in dealing with Tjandra and the officers who were involved by following the recommendations of the Ombudsman Commission. However, the outcome of the investigations into Tjandra is yet to be released to the public.

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~ Reference/Bibliography ~

Callick, R. (2012, June 21). PNG takes in Jakarta fugitive Joko Tjandra. The Australian. Retrieved from https://www.theaustralian.com.au/news/world/png-takes-in-jakarta-fugitive-joko-tjandra/news-story/ab4f5d395853d67f770e1a651cb5b15c

Who is Djoko Soegiarto Tjandra? The National. (2012, June 21). Retrieved from https://www.thenational.com.pg/who-is-djoko-soegiarto-tjandra/

Hakalits, F. (2016, April 6). Tjandra’s citizenship questioned. EMTV. Retrieved from https://emtv.com.pg/tjandras-citizenship-questioned/

Waeda, J. (2016, April 1). Contractor funds K145 million for govt building. Loop PNG. Retrieved from http://www.looppng.com/tags/refurbished-central-government-building-cgb

Faiparik, C. (2016, July 16) Indonesia still wants Tjandra. The National. Retrieved from https://www.thenational.com.pg/indonesia-still-wants-tjandra/

Faiparik, C. (2018, April 4) OC: Flaws in passport case. The National. Retrieved from https://www.thenational.com.pg/oc-flaws-passport-case/

Report highlights abuse in granting Tjandra citizenship. Post Courier. (2018, July 19). Retrieved from https://postcourier.com.pg/report-highlights-abuse-granting-tjandra-citizenship/

Former PNG minister denies abuse of process in Tjandra case. Radio New Zealand. (2018, April 9). Retrieved from https://www.radionz.co.nz/international/pacific-news/354503/former-png-minister-denies-abuse-of-process-in-tjandra-case

Fox, L. (2018, April 12) Indonesian fugitive Djoko Tjandra’s PNG citizenship unlawful, Ombudsman Commission finds – ABC News. ABC News. Retrieved from https://www.abc.net.au/news/2018-04-12/png-citizenship-given-to-fugitive-djoko-tjandra-unlawful/9644772

Faiparik, C. (2018, July 18) Tjandra case returns. The National. Retrieved from https://www.thenational.com.pg/tjandra-case-returns/ Wong waits for Immigration on Tjandra probe. The National. (2018, July 30). Retrieved from https://www.thenational.com.pg/wong-waits-for-immigration-on-tjandra-probe/

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Case 6.1 – Department of Finance Commission of Inquiry

Reports of widespread corruption and mismanagement of millions of Kina at the Department of Finance warranted the establishment of a Commission of Inquiry in August 2006. But it began its work in May 2008 and handed over its final report to Prime Minister Grand Chief Sir Michael Somare in October 2009 (Commission of Inquiry, 2013).

However, in March 2010 a court injunction obtained by lawyer Paul Paraka and former solicitor general Zacchary Gelu prevented the publication and implementation of the inquiry’s findings until November 29, 2013 when the injunction was lifted. The inquiry implicated lawyers, senior bureaucrats and businessmen and recommended their criminal prosecution. Despite the lifting of the injunction on November 29, 2013 there were no attempts by the Government to implement the recommendations of the Commission of Inquiry.

But on June 18, 2016 Prime Minister Peter O’Neill assured the public that the recommendations of the inquiry will be fully implemented in the New Year 2017 (EMTV, 2016). At the time of writing, close to 5 months into the New Year and the Government is yet to update the public on the progress it is making to implement the recommendations.

Update as of 2018

Reports of widespread corruption and mismanagement of millions of Kina at the Department of Finance warranted the establishment of a Commission of Inquiry in August 2006. However, the Commission began its work in May 2008 and handed over its final report to Prime Minister Grand Chief Sir Michael Somare in October 2009 (Commission of Inquiry, 2013). The Prime Minister Grand Chief Sir Michael Somare then tabled the Report in the National Parliament in March 2010, a motion was put by the Hon Paul Tiensten MP “That the report and its recommendations be adopted”, and was agreed to by the Parliament (Gelu v Sheehan [2013] PGNC 235; N5498).

However, in that same month in 2010, the National Court granted an interim injunction obtained by lawyer Paul Paraka and former Solicitor General Zacchary Gelu to prevent the publication and implementation of the inquiry’s findings pending the determination of a leave application by Mr Paraka and Mr Gelu for the judicial review of   certain statutory authorities made under the Commission of Inquiry Act (Ch 31) (Court Order-Finance Inquiry). In December 2013, the application for leave was refused by the National Court and as a result, the interim order was discharged (Gelu v Sheehan [2013] PGNC 235; N5498).

The inquiry implicated lawyers, senior bureaucrats and businessmen and recommended their criminal prosecution. Despite the lifting of the injunction on December 1, 2013 there were no attempts by the Government to implement the recommendations of the Commission of Inquiry.

On 10 December 2018, all 27 charges of conspiracy, stealing and money laundering against lawyer Paul Paraka were dropped by the Committal Court. Senior magistrate Mekeo Gauli ruled that the criminal charges laid against Paul Paraka (principal of Paraka Lawyers) by the fraud squad (formerly known as the task force sweep team) was an abuse of the court processes (Post Courier, 2018). He said that the charges were laid by the same taskforce sweep team that was abolished by the police commissioner through the operation of NEC Decision No.191 of 2014, only one month prior (Post Courier, 2018). “This meant that the taskforce sweep team had no jurisdiction to lay the charges at the material time, which rendered the act an abuse of the formal court processes” (Post Courier, 2018). Furthermore, Mr Gauli said that the question of legality of payments was cleared out before the charges were laid (Post Courier, 2018).

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Case 5.3 – Sovereign Wealth Fund

Papua New Guinea’s Sovereign Wealth Fund, developed in anticipation of the country’s expected income from resource projects, especially the PNG LNG project was first introduced in a Parliament sitting in 2010 by the then Prime Minister Sir Michael Somare where he promised a robust framework for effective and transparent governance of future revenues from the PNG LNG project (Kolma, The National, 2010). Estimated to receive around K75 Billion (US$30 Billion) making it the 26th largest SWF in the world, the Sovereign Wealth Fund will be managed in Papua New Guinea but invested offshore (Business Advantage PNG, 2014).

Government departments such as the Department of Treasury and the Bank of Papua New Guinea (BPNG) underwent research and studied models of other foreign SWFs for a possible SWF in Papua New Guinea where they concluded that fiscal discipline, independent management and prudent investment strategies are important in the success of SWFs in meeting their stated objectives and functions. This subsequently led to the Sovereign Wealth Fund Discussion Paper, a discussion paper jointly compiled by the Department of Treasury and Bank of Papua New Guinea which stressed on the importance of the objectives and functions. In 2011 the members of the Technical Working Committee consulted peers from Mongolia and Chile on how to establish an SWF. Regional forums were held in Kokopo, Alotau, Lae and Mt Hagen to alert the public to the SWF Bill.

The Constitution under section 212A provides for the establishment of the Sovereign Wealth Fund and further calls for the establishment of an Organic Law under section 212A (2) to set out the finer details of the SWF. The Organic Law of the Sovereign Wealth Fund 2012was established which outlined the procedures and processes of the Sovereign Wealth Fund but was defective due to a procedural error and had to be altered to correct the irregularities. This led to the enactment of the Organic Law of the Sovereign Wealth Fund of 2015 which repealed and replaced the former Organic Law and contain significant changes to that of the former organic law. For instance, in the former version the SWF consisted of a Development Fund whereas in the newer version, the Development Fund was replaced with the Savings Fund in order to deal with issues of intergenerational equity.

Zanie Theron, the Managing Partner of accounting firm KPMG currently overlooking the appointment of the SWF Board said the organic law relating to the Sovereign Wealth Fund stipulates that a large portion of the revenue is to come from extractive industry sector taxes (James, Business Advantage PNG, 2017). The Papua New Guinea Extractive Industry Transparency Initiative (PNG EITI), an organisation based on promoting transparency and accountability in the mining sector announced in 2017 that the SWF will be featured in the annual PNG EITI report (Post Courier, 2017).

When PNG began exporting LNG in 2014 the SWF had yet to be established, despite the passing of the Organic Law for the establishment of Sovereign Wealth Fund in early 2012 (Osborne, Australian National University Development Policy Blog, 2014). In November 2016, the Government announced that it engaged an independent firm to recruit suitable candidates to sit on the Sovereign Wealth Fund board, which will begin its work in early 2017 (Mou, Loop PNG, 2016). But the recruitment drive to get the new SWF board membership is now delayed due to challenges facing the accounting firm KPMG, says the BPNG governor Loi Bakani (Albaniel, Post-Courier, 2017). In September 2016, the Bank of Papua New Guinea (BPNG) stated in its monetary statement that it is seeking technical assistance to set up the Sovereign Wealth Fund administrative secretariat (Yapumi, PNG Loop, 2016). BPNG announced in 2017 that the World Bank will be assisting in establishing the Papua New Guinea Sovereign Wealth Fund Secretariat (Albaniel, Post Courier, 2017).

Zanie Theron expressed confidence in the 2019 National Government Budget pointing out an improving economic outlook. She further stated that the Government plans to operationalise the Sovereign Wealth Fund after the appointment of the inaugural Board in 2019, while recognising that it will not be fully operational until the required fund balances have been built up. The economic benefits of APEC are expected to be mainly in the areas of beneficial international trade and tax policies, as well as direct infrastructure development support (Theron, Business Advantage PNG, 2018).

The absence of accountability and transparency in the SWF board recruitment process and the failure by the Department of Treasury and the Bank of Papua New Guinea (BPNG) to continue to give the public updates is a cause for concern. In a report by Treasury in December 2017, a Board and Secretariat was to be established in 2018. The SWF bill is one of PNG’s most important legislations after 42 years of independence as it will guarantee the future of the next generation through the collection and savings of windfall revenue from gas and mineral exports. As of December 2018, the SWF Board and Secretariat are yet to be established and the exact date of establishment is yet to be confirmed.

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~ Reference/Bibliography ~

Kolma, F. (2010, July 15). The workings of the sovereign wealth fund. The National. Retrieved from https://www.thenational.com.pg/the-workings-of-sovereign-wealth-funds/

Papua New Guinea Sovereign Wealth Fund coming in the nick of time. Business Advantage PNG. (2013, September 25). Retrieved from https://www.businessadvantagepng.com/papua-new-guinea-sovereign-wealth-fund-coming-in-a-nick-of-time/

James, D. (2018, February 6). Sovereign wealth fund at least a year away. Business Advantage PNG. Retrieved from https://www.businessadvantagepng.com/sovereign-wealth-fund-at-least-a-year-away-says-kpmg-head/

Fund to feature in PNGEITI Report. Post Courier. (2017, July 13). Retrieved from https://postcourier.com.pg/fund-feature-pngeiti-report/

Osborne, D. (2014, October 28). What has happened to Papua New Guinea’s Sovereign Wealth Fund? ANU Development Policy Blog. Retrieved from http://devpolicy.org/what-has-happened-to-papua-new-guineas-sovereign-wealth-fund-20141028/

Mou, F. (2016, November 2). Government to announce SWF board in 2016. PNG Loop. Retrieved from http://www.looppng.com/content/government-announce-swf-board-2017

Albaniel, R. (2017, May 14). World Bank to assist PNG SWF. Post Courier. Retrieved from https://postcourier.com.pg/world-bank-assist-png-swf/

Yapumi, C. (2016, October 5). Government to enact the Sovereign Wealth Fund secretariat. PNG Loop. Retrieved from http://www.looppng.com/tags/png-sovereign-wealth-fund

Theron, Z. (2018, November 21). Analysis: Papua New Guinea National Budget reflects improving outlook in 2019. Business Advantage PNG. Retrieved from https://www.businessadvantagepng.com/analysis-papua-new-guinea-national-budget-reflects-improving-outlook-in-2019/

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Case 5.2 – Whistle-Blower Legislation

The 2009 Commission of Inquiry into the Department of Finance has, among its recommendations, called for the introduction and enactment of whistle-blower legislation to boost the fight against corruption in PNG.

There have been cases in the PNG bureaucracy over the years where whistle-blower civil servants were terminated from their employment (Tokunai, 2011). In February 2017 the Department of Defence sacked 9 staff for revealing details of the controversial Manumanu land deal (Yapumi, PNG Loop, 2017). TIPNG defended the terminated officers and urged bureaucrats who are witness to corrupt activities to speak out (Wiseman, 2017).

The draft of the 2015 Organic Law on the Independent Commission Against Corruption has a section dedicated to protecting whistle blowers. It states that a person is not liable to any civil or criminal action, including disciplinary proceedings, if the person in good faith gives or provides information to assist the commission. It is not known if that section (108) was retained in the bill that is now before the National Parliament for the third reading and final vote. However, it is understood discussions highlighting the need for separate legislation for Whistle-Blowers and Freedom of Information has already been raised at the National Anti-Corruption Technical Committee meeting.

Update as of 2018

The 2009 Commission of Inquiry into the Department of Finance has, among its recommendations, called for the introduction and enactment of whistle-blower legislation to boost the fight against corruption in PNG.

There have been cases in the PNG bureaucracy over the years where whistle-blower civil servants were terminated from their employment (Tokunai, 2011). In February 2017 the Department of Defence sacked 9 staff for revealing details of the controversial Manumanu land deal (Yapumi, PNG Loop, 2017). TIPNG defended the terminated officers and urged bureaucrats who are witness to corrupt activities to speak out (Wiseman, 2017).

In August 2017, Constitutional Law Reform Commission secretary Dr Eric Kwa, in his address at the 2017 PNG update forum held at the University of Papua New Guinea, proposed the creation of whistle-blowers law to allow the leaders of public servants to speak out about corruption without fear of being punished (Sii, Post Courier, 2017). He said that the legislation has been outstanding for 42 years, and they were preparing a draft to be presented to the government (Sii, Post Courier, 2017). Dr Kwa stated that, “public service leaders face the issue of always answering to politicians, and they face the dilemma of either keeping their jobs or telling the truth, adding that some of them cannot find any other job outside of the public service” (Sii, Post Courier, 2017).

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Case 5.1 – Independent Commission Against Corruption

In February 2014 the O’Neill government made the first step to set up the ICAC when it introduced and passed constitutional amendments to put in place the basic framework for the legislation (Allens, 2014). The organic law bill is still in the National Parliament for final reading and was supposed to be tabled before the last parliament rose for the 2017 General Election.

The failure by the last parliament to table the organic law bill for the final reading now leaves that responsibility to the new National Parliament and the incoming government. But all is not lost on the technocrats’ front with a National Anti-Corruption Technical Committee – comprising officials from various departments including the Department of Prime Minister and NEC, Department of Justice and Attorney General and the Ombudsman Commission – meeting and working behind-the-scenes to progress the ICAC agenda.

In April 2017 Sam Koim, the leader of anti-corruption body Taskforce Sweep, withdraw his Supreme Court appeal against a National Court judicial review which upheld the decision of the National Executive Council (NEC) to abolish Taskforce Sweep (Pokiton, 2017). Mr Koim’s decision means Taskforce Sweep no longer exist as an entity.

But the issue of the 2014 arrest warrant against Prime Minister Peter O’Neill, relating to his alleged role in authorising the payment of legal fees to Paul Paraka Lawyers, continues to cast a shadow over the current government’s ICAC agenda and create doubt in the minds of the people. The disbanding of Taskforce Sweep and the attempt by the Police Commissioner Gari Baki to shut down the police’s National Fraud and Anti-Corruption Directorate will compel the public to question the viability of an ICAC in PNG, especially when current leaders are implicated.

Update as of 2018

In February 2014, the O’Neill government made the first step to set up the ICAC when it introduced and passed constitutional amendments to put in place the basic framework for the legislation (Allens, 2014). The organic law bill is still in the National Parliament for final reading and was supposed to be tabled before the last parliament rose for the 2017 General Election.

The failure by the last parliament to table the organic law bill for the final reading now leaves that responsibility to the current National Parliament and the current government. But all is not lost on the technocrats’ front with a National Anti-Corruption Technical Committee – comprising officials from various departments including the Department of Prime Minister and NEC, Department of Justice and Attorney General and the Ombudsman Commission – meeting and working behind-the-scenes to progress the ICAC agenda.

In April 2017 Sam Koim, the leader of anti-corruption body Taskforce Sweep, withdrew his Supreme Court appeal against a National Court judicial review which upheld the decision of the National Executive Council (NEC) to abolish Taskforce Sweep (Pokiton, 2017). Mr Koim’s decision means Taskforce Sweep no longer exist as an entity.

In September 2018, the NEC approved the re-establishment of the Independent Commission Against Corruption interim office to be headed by a senior officer Thomas Eluh as the Chairman (Nicholas, Post Courier, 2018). ). In setting up of the ICAC interim office, the Prime Minister allocated K6 million (The National, 2018). The Prime Minister announced that the ICAC’s first task was to “conduct investigation and prosecute individuals implicated in the misuse of funds in the recently concluded audit into the OK Tedi landowner trust accounts” (Nicholas, Post Courier, 2018). He further stated that he would refer the “complaint raised by Western Province Governor Taboi Yoto about a K15 million withdrawn from a trust account by a legal firm in Port Moresby” (Nicholas, Post Courier, 2018). In addition, the ICAC will investigate any case directed to it by NEC (Wokasup, TIPNG, 2018). All the the files and assets of the Investigative Task Force Sweep were to be transferred to the new interim ICAC office (The National, 2018).

This interim ICAC is however, not an independent investigative body for corruption. In response to the re-establishment of interim ICAC, TIPNG had called on the NEC to clarify the legal basis of this interim ICAC (Wokasup,TIPNG, 2018). TIPNG had also urged the Department of Justice & Attorney General and other agencies responsible for processing the ICAC Bill to enable wider public consultation as Papua New Guinea needs an ICAC that is independent and effective (Wokasup, TIPNG, 2018). It was stated that this process needs to be executed immediately and thoroughly, especially when it was reported that the Government considered modifying the Bill to remove powers of the proposed ICAC (Wokasup, TIPNG, 2018).

In August 2017, the Minister for Justice and Attorney General Davies Steven announced that he is committed to ensure that the ICAC Bill is tabled in the next sitting of Parliament (Loop PNG, 2017). Nevertheless,  the issue of the 2014 arrest warrant against Prime Minister Peter O’Neill relating to his alleged role in authorising the payment of legal fees to Paul Paraka Lawyers continues to cast a shadow over the current government’s ICAC agenda and create doubt in the minds of the people. The disbanding of Taskforce Sweep, the attempt by the Police Commissioner Gari Baki to shut down the police’s National Fraud and Anti-Corruption Directorate, and the re-establishment of the ICAC interim office, will compel the public to question the viability of an ICAC in PNG, especially when current leaders are implicated.   The ICAC was established to investigate and prosecute cases of corruption independently, both the in the public and private sectors.To this day, the ICAC bill has not been passed and has become overdue for tabling in the Parliament.

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Case 4.3 – National Housing Corporation

The eviction of long-term residents of National Housing Corporation (NHC) properties within and outside the National Capital District has been ongoing in the last decade. Some families – without financial support and resources – end up at a news organisation’s front desk, hoping that press coverage will stop the eviction and enable a peaceful resolution. Sometimes it worked but most times it did not.

It was the eviction of residents in NHC-owned properties in Goroka, Eastern Highlands Province last year that compelled the Prime Minister Peter O’Neill to act. Local MP Bire Kimisopa criticised the eviction exercise, which he claimed targeted tenants who lived in the properties for 20 to 30 years – he vowed to lead a class action against the NHC and the State and sue for violation of human rights (Alphonse, 2016).

Mr O’Neill, in response to the Goroka MP, assured the House in August 2016 that the NHC eviction exercise will be investigated and a report tabled in the National Parliament for its consideration. In January 2017 Mr Kimisopa followed up and asked the PM for an update with Mr O’Neill indicating that he had yet to receive a copy of the report from the NHC (Yapumi, PNG Loop, 2016).

It has been 10 months since the PM assured the nation that the NHC will be investigated and the findings tabled for the MPs and the public. The promise comes on the back of announcing separate inquiries into the June 6, 2016 University of PNG shooting and the PNG Defence Force Manumanu land deal. With Papua New Guineans preparing to go to the polls June 2017 it is highly unlikely that there will be resolution to these matters, despite the assurance of the PM. Failure to hold civil servants and leaders accountable for their conduct will lead to the further deterioration of public confidence in and respect for PNG institutions.

Update as of 2018
The National Housing Corporation is a State agency that is mandated by the National Housing Corporation Act 1990 to address Papua New Guinea’s housing situation through building and maintaining of public housing stock. These houses can be leased or sold to eligible persons as deemed so by the Act. The legal premise of the latter is as per section 28 of the National Housing Corporation Act 1990. The NHC is also empowered to conduct housing research and report back to the minister. The corporation’s overarching mission is to promote orderly and economic urban development. Having such powers the actions of the NHC has had (and continues to have) direct influence over the issues of housing concerning most Papua New Guineans around the country.

The power which NHC now exercises is riddled with questionable intent. There have been attempts to deflect responsibility by the Minister of Housing and Urbanisation (Hon. John Kaupa) in press statements (The National, Jan 8 2018) saying that the NHC is not the responsible for the illegal evictions. Despite these statements, the Minister for Housing and Urbanisation seems to be forgetting that the NHC is under his department and within his jurisdiction to review and audit their actions.

There hasn’t been an inquiry launched by the government to assess and diagnose the issues impeding the responsibilities and obligations by the NHC to the people of Papua New Guinea. There has however been two reports released by the Auditor General’s Office in 2016 and the Public Accounts Committee in 2009.

These separate reports reveal gross discrepancies and also highlighted a number of issues within the NHC concerning its staff and management. It is reported that there is a breakdown of proper communication, delegation and implementation of tasks; the constant changes in the head of management has in no way contributed towards alleviating the problems arising out of the NHC. Despite numerous promises by the O’Neil government; there is yet to be a complete overhaul of the NHC in recognition of the recommendations highlighted in these two separate reports.

In around mid-2018, the National Housing Estate Limited – the business arm of the National Housing Commission was liquidated by a shareholder’s resolution. The NHEL was reported to have incurred a substantial debt amounting to K16 million with its audit not done on time. (Pokiton, Loop PNG, 2018) Although dissolution of the NHC may be perceived as progress, the matter regarding the NHC still begs for an independent inquiry to push for reform; without which proper and efficient reform cannot occur if we do not identify and understand what is wrong with the current operations of the NHC.

TIPNG and its partners should petition the government to launch and independent commission of inquiry to assess and diagnose the issues arising from the NHC. Without fully understanding the challenges that the NHC faces, the people of Papua New Guinea will continue to be at risk of being illegally evicted from their homes and may fall prone to the bad business dealings of the corrupt practices of the NHC officials.

The question still remains: how will the landowner companies involved in the deal be redressed for the K22 million loss incurred as a result of the bad business deal that had transpired between the parties involved? And being that the board of CMSS is still active (given their representation in the CMSS case in the national court), how can these landowners companies recoup their loss from MRDC or CMSS? Shouldn’t CMSS be subject to civil proceedings regarding the non-performance on their part of the agreement, and shouldn’t MRDC be an additional party to these proceedings being the trustee for the two landowner companies?

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~ Reference/Bibliography ~

National Housing Corporation Act 1990

Auditor General’s Office Report (2016)

Public Accounts Committee Report (2009)

NHC not involved illegal evictions: Kaupa, January 8, 2018, The National.

S. Pokiton, New Rental Collection Approaches, August 16, 2018, Loop PNG

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Case 4.2 – Boram Hospital

In March 2015 the local media broke the story on the awarding of a K1.2 million contract to an East Sepik Province contractor to fix a toilet at the Wewak General Hospital (National, 2015). The value of the contract and how it escaped scrutiny of the relevant officials – who were charged with the responsibility to monitor the disbursement of public funds – infuriated the public. The case confirmed and pointed to security lapses at commercial banks when clearing cheques valued between K50,000 and over K1 million.

In July 2015 the East Sepik provincial administrator and two other persons appeared before the Wewak District Court for misappropriating K1.1 million belonging to the Wewak General Hospital in a separate case (National, The National, 2016). The ability of the contractor to bypass the procurement requirements when cashing the cheque points to the absence of an effective checks and balance system.

The loss of K1.1 million and K1.2 million in public funds belonging to the hospital does not augur well for a health institution striving to deliver life-saving services in the face of dwindling government and private sector support. The biggest challenge for the hospital’s current management is winning back the trust and confidence of the public after a tumultuous 5 years.

Publicly-funded hospitals – which are likely to get the bulk of a province’s sick population at any one time – should not become training grounds for over-ambitious and inexperienced chief executive officers. After 42 years of independence as a nation, the recruitment of hospital administrators should be a joint exercise between the provincial government and the National Department of Health and is transparent and merit-based.

Update as of 2018

The issues surrounding the theme of maladministration and corruption in public healthcare are vast and alarming, especially so in the case of Wewak General Hospital (synonymously known as Boram Hospital). The previous 20 cases report highlighted certain issues concerning fraud and misappropriation of funds allocated for the efficient delivery of public healthcare services. In two consecutive months – March and July, a total of over K2.1 million was lost due to misappropriation and corruption due to the inadequacies of the check and balances system in the procurement process of public healthcare.[1]

It is known that the case of fraudulence (regarding the parties involved) in the Boram General Hospital misappropriation is an ongoing case with the court. It is inconclusive at this point in time as to the progress of this case. However, in 2016, the case of Wewak General Hospital v Daniel trading as PINS Construction [2016] PGNC 67 [2] shows that the issue of the K1.1 million misappropriation was mentioned. The case revealed that the implicated party (i.e. the contractor – PINS Construction) had applied to dismiss a writ of summons issued by Wewak General Hospital. The writ was to seek the reimbursement of the funds alleged to have been attained by corrupt means and also the transfer of the title of two dump trucks to Wewak General Hospital; the two of which was purchased by PINS Construction using the alleged fraudulent funds. In this case, PINS Construction had attempted to dismiss the summons, but they were unsuccessful as the case was still ongoing and was yet to be decided.

There have been recent media attention surrounding the Wewak General Hospital. The attention has instead been drawn on the provision of funds by the government for the renovation of the hospital’s facilities.[3] The O’Neill & Abel Government has committed funds totalling up to K300 million towards the re-development of the Boram General Hospital. In September 17th 2018, O’Neil launched the redevelopment project and stated that, he will make it his personal business to see the project start and finish on time. (Ove, Prime Minister Launches K300 million Upgrade of Boram Hospital In Wewak, EMTV Online, 2018) [4]

The issue surrounding proper procurement procedures and the inclusion of adequate checks and balances within such a system is concerning and somewhat unsettling. Currently, K300 million is being pledged towards the redevelopment of the hospital; the prevalent issue of misappropriation, if resolved will see that the funds pledged towards such a vocation will end up in the hands of corrupt administrators and their counterparts.

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~ Reference/Bibliography ~

[3] S. Ove, Prime Minister Launches K300 million Upgrade of Boram Hospital In Wewak – EMTV Online, accessed on 11/19/2018 at https://emtv.com.pg/prime-minister-launches-k300-million-upgrade-of-boram-hospital-in-wewak.

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Case 4.1 – Rehabilitation of Education Sector Infrastructure

The Government in 2009 introduced the Rehabilitation of Education Sector Infrastructure (RESI) programme designed to address the overcrowding and infrastructure issues in schools around the country. With an allocation of K230 million in the 2009 National Budget, the RESI funds were divided up with the Highlands region receiving 62%, Momase 23%, New Guinea Islands region 8% and Southern region 7% (The National, 2009). However since its establishment, the RESI funds have been covered with allegations of corruption and misappropriation prompting authorities to launch investigations into the matter.

Increased calls for an investigation into the misappropriation of the RESI funds led to the Ombudsman Commission directing that access to funds in the Rehabilitation of Education Sector Infrastructure (RESI) trust account be stopped to enable the Ombudsman Commission to investigate alleged impropriety relating to the fund’s use (Arek, 2009). The commission’s findings revealed that K37 million which was withdrawn from the same trust account a month earlier was not used for its intended purposes.

Several schools initially received funding for the rehabilitation of infrastructure. In November 2009, a cheque for K3 million from the RESI programme was presented to the Bugandi Secondary School in Morobe Province (The National, 2009). The RESI Funds made headlines when in 2010 a school contractor was arrested and charged for misusing K4 million meant for the rehabilitation of the school’s classrooms (The National, 2010).

Other members of the public in far-flung provinces like Southern Highlands complained at the failure by their provincial governor to give K800, 000 to the North Mendi primary school in July 2010 (The National, 2010). This case follows that of the New Erima primary school incident in March 2010 when the school board chair Simon Eyork sought the assistance of the PNG Chapter of Transparency International (TIPNG, 2009). In April 2017 the NCD education secretary Sam Lora said approximately K300 million allocated under the RESI programme was allegedly misused (The National, 2017).

While the Ombudsman Commission undertook its own investigations in 2009, it is not known if anyone else was prosecuted over the theft of millions of Kina in public money parked under the RESI trust account. In 2012, the Investigation Task Force Sweep (ITFS) was introduced by the O’Neill Government to address specific issues of massive corruption especially in the two main programmes of RESI and National Agriculture Programme (NAP) later disbanded by NEC citing reasons that it was too political and had been targeting politicians when it was not authorised to do so (Faiparik, The National, 2017). There has been no public information on the outcome of the investigations into the RESI programme by the ITFS however the Treasurer and Deputy Prime Minister Charles Abel in his inaugural speech at the 2018 PNG Update at the University of Papua New Guinea and again at the Lowy Institute in Sydney stated that during his time as Planning Minister in 2012, the Sweep taskforce was investigating much of the abuse that had happened at the Department of Planning and his office had to review the method of pooling and distributing funds from the programs such as the NAP and RESI (Lowy Institute, 2018). The impact of the misappropriation on public schools over the long-term period is enormous and the signatories to the trust account should be held to account. The RESI programme would have been a significant project delivering much needed development and repairs to all school infrastructure throughout the country but has ultimately failed because of corruption.

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~ Reference/Bibliography ~

K230m RESI funds used up: Tiensten. The National. (2009, November 13). Retrieved from https://www.thenational.com.pg/k230m-resi-funds-used-up-tiensten/

Bugandi gets RESI funds. The National. (2009, November 5). Retrieved from https://www.thenational.com.pg/bugandi-gets-resi-funds/

One charged with theft of Aiyura RESI funds. The National. (2010, November 8). Retrieved from https://www.thenational.com.pg/one-charged-with-theft-of-aiyura-resi-funds/

Wari, P. (2016, April 14). K49m for schools gone missing. The National. Retrieved from https://www.thenational.com.pg/k49m-for-schools-gone-missing/

Alleged misuse of funds affect school projects. The National. Retrieved from https://www.thenational.com.pg/alleged-misuse-funds-affect-school-projects/

Faiparik, C. (2017). Agency had to go: PM. The National. Retrieved from https://www.thenational.com.pg/agency-go-pm/

Abel, C. (2018). “PNG in the year of APEC.” The Lowy Institute, 18 June 2018, Sydney, Australia. Keynote Address. Retrieved from https://www.lowyinstitute.org/publications/speech-hon-charles-abel-deputy-prime-minister-and-treasurer-papua-new-guinea

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Case 3.3 – Borneo Pharmaceuticals

Borneo Pacific Pharmaceuticals Ltd (BPP) was established in 1996 by naturalised citizen Martin Poh. The company was an agent and distributor of pharmaceutical and health-care products in PNG. According to the company’s website it is a wholesaler supplier to markets in the Solomon Islands, Vanuatu, Fiji, Tonga and Samoa.

In December 2013 the company was thrown into the spotlight when the Australian government withdrew from a $38 million drug supplies program, after the PNG Government’s Central Supply and Tenders Board (CSTB) awarded a contract to supply medical kits to BPP (Cochrane, 2013). The PNG National Doctors Association (NDA) expressed concerns at the CSTB decision in January 2014 after it was revealed that the ISO 9001 accreditation requirements was removed (The National, 2014). In April 2014 the Community Coalition Against Corruption – led by Transparency International PNG and the Media Council of PNG (MCPNG) – condemned the contract and asked that the company’s manufacturing facilities is visited by authorities (National, The National, 2014).

The public outcry compelled the PNG Government to send a delegation to Malaysia in April 2014 to inspect the packaging factory where the medical kits are assembled (EMTV, EMTV, 2014). In May 2014 the Parliamentary Public Accounts Committee (PAC) held an inquiry to ascertain how the contract was awarded (EMTV, EMTV, 2014). In March 2017 the acting CSTB chair and Department of Finance Secretary, Dr Ken Ngangan, revealed that the BPP contract expired in March this year. The Office of the State Solicitors advice against the extension of the firm’s contract after it expired in November last year (Kuku, 2017). The BPP medical supplies controversy raises questions about the procurement system used by the CSTB and whether the process was competitive enough to enable the purchase of quality drugs at the lowest possible cost. There have been calls in the health sector in the past for a commission of inquiry to investigate the CSTB and how it conducted its business.

Update as of 2018

Since the last 20 case report was published by TIPNG; there has yet to be significant actions to reflect and redress the severity of the complications faced by the people of PNG regarding the efficient provision of public healthcare. In February 2018, it was reported that 40% of aid-posts / health centres have been closed due to the shortage of drugs and medical supplies (Tahana, 2018)

To date, nothing has been done to assess, diagnose and reform the efficiency and integrity of the operations of the NDOH in light of the somewhat chronic recession in the efficient provision of public healthcare. Recent media publication has revealed that the NDOH has admitted to the weaknesses within its procurement and distribution chain of medical supplies (“Implementation of New Medical Supply System Would Take Time to Roll Out”, 2019)

The Minister for Health – Puka Temu only commented on the new system to assist with the distribution of drugs, but nothing has been said to address the major issue concerning the infirmity of the procurement systems and processes. The awarding of the tender to Borneo Pharmaceuticals despite it not having complied with the International Standardization Organisation’s (ISO) requirement only highlights the discrepancies in the process of appointing medical suppliers (Cochrane, 2013).

It seems that the media’s reportage of Puka Temu’s numerous statements have only pointed to how the system within the distribution chain is slow in the provision of much needed medical supplies and not in reference to the fragility of the procurement systems used in the acquisition of these medical supplies (Mou, 2018). The lack of proper controls and checks will result (and is evident) in the poor performance of these medical suppliers. This only results in additional and unnecessary costs being billed to the NDOH at the expense of taxpayers.

There have been numerous assessment reports composed by various organisations such as the World Health Organisation (WHO), the World  Bank and the Asian Development Bank (ADB) to name a few that have made an independent assessment of the public healthcare system in PNG. These reports have attested to  certain salient issues that are relatively similar or identical.

Transparency International’s position in this matter should be to either call on the government to conduct a special internal audit – if they haven’t done it already. It should also reach out to its partners to assist where possible to provide an independent audit into the processes involved in awarding contracts to medical suppliers. Other concerned CSO’s and stakeholders should do an independent audit of the processes involved to provide substantial diagnosis which may be used to push for governmental reform.

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~ Reference/Bibliography ~

Cochrane.L, 2013, December 26, “Australia withdraws funding from Papa New Guinea health programs over corruption, fake drug concerns”, ABC News. Retrieved from https://www.abc.net.au/news/2013-12-26/an-australia-cuts-funding-of-png-medical-kits/5174992

“Implementation of New Medical Supply System Would  Take Time to Roll Out” 2019, January 18. Post Courier. Retrieved from https://postcourier.com.pg/implemention-new-medical-supply-system-take-time-roll/

Mou.F, 2018, November 7. “Ineffective command affects supply of medical drugs” Loop PNG. Retrieved from http://www.looppng.com/png-news/ineffective-command-affects-supply-medical-drugs-sir-puka-80634 Tahana. J, 2018, June 5, “PNG Doctors call for overhaul as hospital shelves run bare”,  Radio New Zealand.  Retrieved from https://www.radionz.co.nz/international/pacific-news/358889/png-doctors-call-for-overhaul-as-hospital-shelves-run-bare

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