Turning the Tables on ‘Overnight Millionaires’

Corruption in PNG is a well recognized issue. The country was ranked 136 out of 176 in Transparency International’s 2016 Corruption Perception Index – an index measuring how corrupt public sectors are seen to be.

Reports about corruption are regular pieces in PNG’s media landscape; and commissions of inquiry into maladministration are common. Although specific data on private and public corruption is limited, it would be fair to point to public corruption as being the dominant faction.

In publishing their results Transparency International made the point of highlighting the connection between corruption and inequality – with Chair Jose Ugaz saying:

“In too many countries, people are deprived of their most basic needs and go to bed hungry every night because of corruption, while the powerful and corrupt enjoy lavish lifestyles with impunity”.

These lavish lifestyles, often perceived to have their genesis from an appointed or elected position within public and political spheres, have spawned the creation of a term describing individuals who abuse their positions of trust to such a degree they accumulate significant wealth – i.e: ‘overnight millionaires’.

In 2015 PM Peter O’Neill himself in responding to the opposition during question time admitted that there were former ministers he was aware of who would not be able to adequately account for their new found wealth.

It’s an issue that former Taskforce Sweep Chairman Sam Koim has long voiced concerns about – in particular – proceeds of crime being illegally invested offshore, especially in Australia.

In combating this systemic abuse, it is essential that institutions that play a role in improving the quality of democracy in PNG are well-resourced and empowered to fulfill their functions. Unfortunately, this is quite often not the case.

In 2010 parliament attempted to pass the ‘Maladina Amendments‘ which would reduce the powers of the Ombudsman Commission to hold leaders to account. The Supreme Court later rejected the amendments. In 2014 Taskforce Sweep was disbanded by the government with the promise of the establishment of an Independent Commission Against Corruption. That has yet to eventuate.

So how do we turn the tables on ‘overnight millionaires’ and proceeds of crime?

One proposition that has yet to be put up for discussion in PNG is the idea of reversing the burden of proof for offenses suspected to be associated with proceeds of crime.

The suggestion revolves around putting the onus back on individuals who are suspected on reasonable grounds to have benefited from proceeds of crime. The burden of proof is reversed and the accused must disprove the imposed presumption.

Individuals and organisations suspected of having accrued assets illegally could be forced to prove that those assets were earned lawfully.

Varieties of these reverse in onus clauses are already in use in England, Canada and New Zealand – where such a clause is used specifically to combat suspected proceeds of crime.

A recent article in the NZ Herald describes how since 2009 when the law change was implemented, police managed to:

Seize 110 homes worth $34.5m, cash and bank deposits worth $27m, four farms or orchards worth $7.6m, 234 cars and 97 motorcycles worth $5.6m, eight commercial businesses worth $4.3m and a dozen lifestyle blocks valued at $3.9m.

The confiscated money is re-invested back into law enforcement.

This particular strategy in combating proceeds of crime is especially attractive in a state like PNG where anti-corruption functions of independent institutions have consistently been eroded.

The Royal PNG Constabulary is by no means perfect, but a drastic change of this magnitude will help law-enforcement turn the tide against proceeds of crime.

Changing the Aid Game in PNG

In what has been billed as a shock announcement carried by major news outlets across the Torres Strait, it’s been reported that PNG has formally asked Australia to consider and review how it distributes its annual $AU550 million aid package.

The request was put during the 25th PNG-Australia Ministerial Forum recently held in Madang with senior PNG ministers highlighting the government’s wish to see Australian aid managed directly through the PNG budget by 2020.

Citing internal policy documents including PNG’s Medium Term Development Plan, National Strategy for Responsible Sustainability Development Plan and the 2015 Development Cooperation Policy – which all signal changes in how the government wants to manage foreign development assistance – Minister for National Planning Charles Abel said:

“We want trade not aid. We just want them to come in and support the PNG Government system. They are channeling their aid, which is recognised in our budget, but it’s not really passing through our budget.

“We want you to continue the work, you helping us, but you have to make it more strategic and more visible and thicker, not thinly spread everywhere. All we are saying is we have established our government plans, we have our targets and we want you to come in and work through our plans.”

This message is not new.

It is one that has been consistently presented to previous PNG-Australia Ministerial Forums and PM Peter O’Neil himself highlighted the issue when he addressed the National Press Club in 2012   – that is, PNG wants the way Australian aid is disbursed to be “re-aligned” with government processes and priorities.

The main concern here lies with the creation of a “parallel system” outside the scope of national budgetary, administrative, management and – importantly – maintenance processes whereby duplication of programs targeting similar outcomes exist.

This wastage of resources is compounded when some foreign development programs are discontinued leaving a delivered outcome, whether asset or service, in administrative limbo. It does not help when provincial governments are tasked with ownership of these outcomes on existing stretched budgets.

It is not unrealistic for the government to seek to funnel development cooperation resources toward helping achieve PNG’s development goals as enshrined in the constitution and supported by government policies.

This makes sense, however, presenting such a request can only be taken seriously if adequate and transparent due diligence on the utilization and application of development cooperation resources by the PNG government can be guaranteed.

A level of respect and trust in the bilateral relationship is needed here – and whether it currently exists to the depth required for the request to be granted is questionable.

Ironically, the very substance of PNG’s request that Australia respect PNG’s sovereignty in trying to direct where development assistance should be invested – a premise alluded to time and time again in the 2015 Development Cooperation Policy – flies in the face of a sovereign state’s fundamental responsibility to ensure that its most basic needs are fully met out of its own pocket and not subsidized by the goodwill of others.

And herein lies the challenge for PNG – for no matter how this government frames it, the move to ask Australia to direct fund the national budget by 2020 will be perceived by many as a money grab by a floundering state.

Indeed, news headlines in Australia have already pointed the conversation toward this context; and it follows hot on the heels of other stories reporting PNG’s struggle to meet its financial obligations.

Despite this, with each consecutive budget, total foreign aid decreases as a percentage of PNG’s annual budget. In addition, the OECD Development Cooperative Directorate estimates that Australian development assistance to PNG has undergone a 29 percent real-decline since 2009.

But, as a component of total aid received by PNG, Australian development assistance makes up 68% of all donor contributions. It is because of its proportion that PNG is interested in setting a precedent of how it wants all aid to be “re-aligned”.

With the chances of the current government being re-elected for another five year term in 2017’s National Election remaining high, the push for Australia to fall into line with PNG’s request will not be sidelined – it will only gather momentum.

The Dragon’s in the Detail with ‘Chinese Kina’ – Part 2

This is Part 2 of “The Dragon’s in the Detail with ‘Chinese Kina'” – a two part series looking into China EXIM Bank’s K6 billion loan to PNG. Part 1 can be found here and should be read prior to Part 2.

The revelation that the China EXIM Bank loan to PNG is actually a comprehensive credit package in the vicinity of K10 billion (US$5 billion) falls in line with EXIM’s strategic model of finance associated with developing countries and best demonstrated by the bank’s foraging into a number of African states.

Of relevant interest here is Angola’s 2007 US$4.5 billion credit package, Nigeria’s initially proposed 2009 US$2.5 billion credit package, and Ghana’s 2010 US$10.4 billion credit package – all financed by China EXIM bank and intended for various infrastructure projects – including railway, roads, dams and power plants.

It is debateable whether this model of developmental finance is indeed a genuine model of capital development for developing countries, or simply a credit-package which undermines the ability of these states to cope with debt – a fear some Papua New Guineans hold.

But what is agreed though is that this model is conducive to long-term objectives of developing countries, largely because Chinese policy banks like EXIM, are state owned and offer concessional loans which have long maturities and low-interest rates – fiscal terms and conditions which are globally competitive enough to trump that of both commerical and concessional loans offered by other partners.

Based on EXIM’s experience in Africa, the OECD Development Centre reported that the bank’s concessional loan structure is guided – in general terms – by the following basic conditions:

“Chinese contractors must be awarded the infrastructure contract financed by the loan.

This is similar to concessionary finance of traditional donors and provides these companies with an entry point to set up a presence in host markets where they can bid for commercial contracts, independent of projects under the concessional loan agreements.

In principle, concessional loans are used for procuring equipment, materials, technology and services, with no less than 50 per cent of the contract’s procurement coming from China. The loan is denominated in Chinese Renminbi (RMB) and has a maximum maturity of 20 years.

A grace period of 3-7 years may be granted to the borrower, during which the borrower will only repay interest payments and not the principal. The interest rate [between 3-6 per cent] is subsidised and underwritten by Chinese Government finances.”

It is likely that these terms and conditions will also apply to EXIM’s credit package to PNG too.

And to support the above, a precedent already exists between China EXIM Bank and PNG via the US$300 million Pacific Marine Industrial Zone (PMIZ) where the bank provided a US$71 million concessional loan for its construction in 2010.

Under this agreement, a relatively unknown Chinese contractor called China Shenyang International was awarded the contract as per the conditions of the loan.

These included the requirement that  70 per cent of the project was to go exclusively to a Chinese developer using Chinese technology, labour and equipment – while restricting PNG firms to bid for the remaining 30 per cent.

In addition, China Shenyang International’s profit margin was dictated to be 20 per cent of the total contract value, while the loan structure included a grace period of 5 years and a loan repayment time of 15 years.

As an indication of how sketchy details surrounding EXIM’s conditions can be – former Minister for Commerce and Industry Gabriel Kapris – when naming the the developer to construct PMIZ, could not provide any further detail to the history, expertise or corporate profile of China Shenyang International – apart from the company’s name.

Although the questions of ‘what on’ and ‘how’ EXIM’s K6 billion loan will be expended are important to PNG – and must be answered and made public by Peter O’Neill – it really is secondary to the the issue of what exactly are the terms of repayment.

One of the key issues of the K6 billion loan which has captivated PNG’s domestic discourse is the issue of affordability.

The Opposition in particular has repeatedly highlighted this as a point of concern and have contended that the government has pre-committed the gas revenue from the PNG LNG Project, due to be banked into the State’s coffers in 2022, to pay back the loan.

But this doesn’t  quite make sense under China EXIM Bank’s strategy.

What The Opposition and it seems everybody has missed, and what I strongly suspect to be the case, is that EXIM’s K6 billion loan will not be paid back via the regular financial installments dictated in the standard terms and conditions of a loan and disbursed through the budget process under the Department of Treasury’s watch, but instead, it will be accommodated for through a concessional commodity-for-finance agreement where the State will provide China with a minumum daily supply of oil and/or LNG in exchange for the financing of its expenditure objectives.

It’s an explosive conclusion – but one that I’ve drawn logically given the rather bullish nature of the government’s promotion of the loan in light of unanswered questions and a reluctance to reveal key details.

(It’s either a commodity off-take agreement or the commitment to provide stakes in a number of permits containing undeveloped gas fields and in exploration permits as happened in Nigeria – I suspect the former).

Furthermore, it fits well with EXIM’s strategy.

One of the biggest hints to this possibility is Minister for Works Francis Awesa’s strong indication of the participation of China National Petroleum Company (CNPC) – China’s largest integrated energy company – in the EXIM Bank loan deal.

CNPC and Sinopec, China’s national oil corporation, are both state-owned enterprises that have signed comprehensive supply contracts with ExxonMobil as part of the PNG LNG Project; and both are beneficiaries of project assistance from EXIM too.

There would also be scope for this arrangement to continue and intensify when InterOil’s US$7 billion LNG project begins production in 2015 as another Chinese state-owned enterprise, China National Offshore Oil Corporation (CNOOC), has signed a Heads of Agreement with InterOil and PNG’s Petromin regarding the possibility of underwriting the project – or at the minimum, helping to finance the State’s equity in the project.

In addition – more recently, InterOil-led joint-venture Liquid Niugini Gas Ltd signed a 15yr supply contract with China too.

Any such commodity off-take agreement would be actioned through a joint venture arrangement with Petromin – PNG’s natinal oil, gas and minerals company, and be cushioned by the initial grace period provided by EXIM.

China EXIM Bank’s financing strategy that couples a commodity off-take agreement with the financing of infrastructure is known as the ‘Angola Model’.

Examples abound here with Angola paying its debt to China back with oil exports, Gabon with iron ore, Demoractic Republic of Congo with copper and cobalt, and Guinea with Bauxite. Several of these arrangements are current.

But there are some serious concerns with China EXIM Bank and its ‘Angola Model’.

Perhaps the best example is that of Nigeria which was to draw down US$2.5 billion from EXIM in 2009.

After the country transisitioned through elections, it was revealed by the incoming government that what was initially thought to be a US$2.5 billion concessionary loan credit package turned out to be US$500 million at a concessionary rate, and the remaining US$2 billion at EXIM’s commercial rate.

Furthermore, it has been recently revealed that PNG’s loan structure with EXIM regarding Madang’s PMIZ consists of highly controversial detail.

Perhaps most shocking is the revelation that the entire agreement entered into between the two parties, although signed and actioned in PNG, is to be “governed by and construed in accordance with the laws of China”.

It doesn’t bode well for Peter O’Neill and the EXIM’s K6 billion loan.

As more details of the concessional loan emerge (Works Minister Francis Awesa is due in China later this month to finalize the deal), we may be looking at another of “the well-priced ‘long term trade agreements’ or deferred payment, resource-backed commercial export credits, where the interest rate will be based on LIBOR plus a margin”.

Peter O’Neill must make public the terms and conditions surrounding the China EXIM Bank loan, and the fiscal strategies his government will use to manage and mitigate the risks associated with the loan.

These basic details and conditions of the loan structure need to be made transparent – its importance to PNG requires that this be the case.

At the end of the day, the buck stops with Peter O’Neill and Co to refuse loans that are not concessionary by nature, as the Dragon is indeed in the detail with ‘Chinese Kina’.

The Dragon’s in the Detail with ‘Chinese Kina’ – Part 1

There has been a lot of talk recently in Papua New Guinea about the K6 billion EXIM bank concessional loan which Prime Minister Peter O’Neill has headhunted to address what he repeatedly highlights as being the country’s failing infrastructure needs.

The manner in which these infrastructure needs should be addressed – via a complete yet flexible approach over the current parliamentary term, with the objective of rehabilitating or building from scratch a comprehensive number of infrastructure projects prioritized as being of national significance – has been O’Neill’s catch-phrase to justify the drawing down of such a loan with the underlying goal of boosting the economy.

There is no shirking away from the obvious that PNG’s national infrastructure is indeed in dire straights, and it is imperative that something must be done to address what has been an eternal migraine for consecutive governments – particularly at this juncture of PNG’s economic growth.

Peter O’Neill has opted to strike early, citing the country’s best ever economical, financial and political position in our history to undertake the burden of such a loan and its ramifications.

It must be pointed out that Minister for Works Francis Awesa actually led the first delegation to China to discuss the EXIM loan prior to Election 2012 – so the planning for securing the finance has been in the pipeline for some time.

It’s a very bold decision – and it has drawn its fair share of critics.

PM Peter O'Neill will sign off on the K6 billion EXIM Bank loan deal in #China after APEC. 'Chinese Kina' is trumping Aus $ #PNG #pngpol

— Deni ToKunai (@Tavurvur) September 7, 2012

The Opposition in particular has jumped on the naysayer’s bandwagon and created considerable noise regarding the K6 billion EXIM loan. Its first press release on the issue was titled “K6 billion loan sinister“, and then the alternative government followed this up with two more which were far more focused on relevant details than scaremongering.

The Opposition’s key point of leverage – and one which I agree with wholeheartedly – is that Peter O’Neill must make public the terms and conditions surrounding the EXIM loan, and the fiscal strategies it will use to manage the loan over the coming parliamentary term – and beyond.

These basic details and conditions of the loan structure need to be made transparent. The size of the drawn loan, and its importance to PNG – the same argument the O’Dion Government uses to justify it – demands this.

@masalaifrog I agree. What's concerning though are the details of the concessional loan + fiscal strategy. These need to be made public #PNG

— Deni ToKunai (@Tavurvur) September 27, 2012

But as the rhetoric from both sides has settled down, some interesting bits of information have emerged – and observations made which have gone unnoticed and unquestioned.

Firstly, Peter O’Neill has made it abundantly clear that the K6 billion has primarily been earmarked to fix the country’s economic life line – the deteriorating Highlands Highway.

Treasurer Don Polye has hinted that the total reconstruction of the Highway from Lae to Mt Hagen, and then Mt Hagen to Kopiago, and Mt Hagen to Porgera, will cost somewhere between K2-3 billion.

Polye has also stated that another K2 billion will go toward Phase 2 and 3 of the Yonki Hydro Project to address the country’s energy needs. In addition, Works Minister Francis Awesa has also highlighted that portions of the K6 billion have been marked for the total rehabilitation of Lae City’s roads, including a four-lane highway from Lae to Nadzab Airport.

Secondly, it has been reported that although Peter O’Neill is looking at borrowing up to K6 billion from EXIM, it appears that in fact the total credit package which China is considering making available to PNG is somewhere in the vicinity of $US5 billion (K10 billion).

Thirdly, Minister for Public Enterprises and State Investments Ben Micah, while being questioned on the future of SOE’s Telekom and IPBC yesterday, let slip that a portion of the K6 billion would be assigned to upgrade the condition of SOEs in PNG.

With reports suggesting that the infrastructure needs of NCD have also been factored into the EXIM bank loan – a bill Governor Powes Parkop optimistically estimates to be around K900 million and to be used to solve the capital’s traffic congestion woes; and Peter O’Neill adamant that a financing facility be made available which will not run out of money when contractors are engaged, it seems that the initially quoted K6 billion will be surpassed, and quite easily too.

It is clear from the above that the K6 billion EXIM loan is not simply just for infrastructure. It is a comprehensive credit package which will address infrastructure, energy, and capacity-building and investment needs for the O’Dion Government.

Collectively, it will be the single biggest individual loan the country has ever draw down.

It is likely that we will see the figure K6 billion increase over the course of O’Dion’s parliamentary term – hinged heavily on the immediate to medium-term success of the PNG LNG Project, the long-term success of the establishment of the $US7 billion second LNG project (InterOil) due in 2015 and Harmony Gold’s $US9.8 billion Wafi-Golpu Gold and Copper mine in Morobe Province due in 2019.

Part 2 of ‘The Dragon’s in the Detail with ‘Chinese Kina'” can be read here.

The Undeniable Case for a COI into the Tumbi Landslide & ExxonMobil’s Quarry

The International State Crime Initiative (ISCI) last week released a report it drafted appertaining to January’s Tumbi Landslide in the Southern Highlands.

The Tumbi Landslide is one of PNG’s worst ever landslide disasters and is believed to have claimed up to 60 lives.

The short but succinct report highlights disturbing concerns ISCI considers to be important enough to warrant a Commission of Inquiry into the landslide.

And I agree.

ISCI identifies four key areas needing to be investigated:

1. The cause of the landslide;
2. Government oversight of safety at the LNG project;
3. The response of the National Disaster Centre to the landslide; and,
4. Allegations of impropriety and collusion on the part of ExxonMobil via their subsidiary Esso Highlands Limited.

Commission of Inquiries vary in terms of objectives, but generally speaking, their roles are to collect information – coupled with expert opinion  – and resolve conflict with the underlying theme of restoring public confidence.

When an inquiry is launched to determine facts in retrospect – most often used for accidents or tragedies – it is widely viewed that the purpose or focus of a Commission should not be the determination of individual blame, but rather, the purpose or focus should be on what information is needed to educate the public and provide context to justify the impending recommendations.

And it is precisely this key issue – the wholesome collection and dissemination of information by an independent inquiry – which has clearly not occurred, and it is obvious that this has caused considerable hurt and resentment amongst our citizens in the communities affected.

There is no doubt in my mind that the Tumbi Landslide is a tragedy. The loss of up to 60 lives quantifies that.

However, it is important to make the point that this is not just a tragedy in the middle of New Guinea’s forests devoid of any human interaction.

No – this was a tragedy which happened within the vicinity of ExxonMobil’s operations; and within a stone’s throw from a quarry utilized for a period of two years by the PNG LNG project developer.

If there is a cause-effect relationship here, it has to be proven – but the association between ExxonMobil and the Tumbi Landslide is clear.

The possibility of human influence in causing the Tumbi Landslide and claiming up to 60 lives is the reason why this is a national tragedy warranting a Commission of Inquiry.

Detractors of ISCI’s report may point out that the National Disaster Centre (NDC) did investigate and release a report into the cause of the landslide which concluded that it was initiated by “continuous heavy rainfall”.

However, ISCI highlights the total absence of evidence provided in NDC’s report to substantiate that hypothesis.

It is a point that is impossible to argue against.

Furthermore, the recently concluded Commission of Inquiry into the capsizing and sinking of the MV Rabaul Queen has shown us clearly that state agencies responsible for regulating, managing and responding to operational sectoral issues – let alone extraordinary events – lack the capacity, expertise and courage to adequately fulfill their responsibilities.

The COI into MV Rabaul Queen was equally as scathing on Peter Sharp, the owner and operator of the ship, as it was on the National Maritime Safety Authority. Similar opinions formed by an inquiry into the NDC’s oversight of the Tumbi Landslide are probable.

ExxonMobil’s PNG LNG Project is a venture of national importance and its success will help provide the foundation of the future economic progress of our country.

The fear of possibly disrupting this Goliath, and consequently endangering the State’s own benefits, should not be a reason for Peter O’Neill and his government to shy away from investigating the Tumbi Landslide.

Instead, the importance of ExxonMobil’s project should indeed be the catalyst as to why an independent inquiry is necessary.

ExxonMobil and the PNG Government have entered into a long-term partnership. That partnership is based on trust and respect, and an understanding representing the views of ExxonMobil’s shareholders and strategic direction; alongside an understanding representing the views of the PNG Government in what it believes to be in the best interest of our people.

Government oversight of safety at the LNG Project, as identified by ISCI, is part and parcel of this partnership – and its effectiveness or lack of, needs to be revisited and reviewed. This is a point which has been emphasized by the Tumbi Landslide – despite who or what caused the landslide to happen.

An independent inquiry will help alleviate these concerns by defining matters that need to be addressed in detail to help mitigate any future events such as the landslide.

Additionally, the PNG LNG Project is not limited to the Tumbi area. It’s operational scope is extensive covering several PNG provinces and the communities it affects and interacts with are substantial.

ExxonMobil must appreciate that the influence of the state on landowner concerns is reactive by nature; and vice versa, the demands and expectations of landowners are manifested proactively.

It is because of these dynamics that I think ExxonMobil, through its subsidiary Esso Highlands, have done themselves a great disservice by not publicly supporting an independent inquiry into the Tumbi Landslide.

In any investment the size of ExxonMobil’s, the stakes are high, but the response pursued by the developer in this instance is reflective of the short-term thinking which plagues many of PNG’s foreign direct investment firms.

It goes to show that foreign firms still have a long way to go in understanding the Papua New Guinean psych; and it also demonstrates that the PNG Government still has a long way to go in developing the fortitude required of truly representing the interests of its citizens.

If Peter O’Neill is serious about having PNG’s interest at heart, then he understands that economic prosperity is important, but at no stage does it trump the lives of our people – no matter how large the stakes.

Tragedies like the Tumbi Landslide will happen again, and with the long-term commitment of ExxonMobil in PNG, it is possible that this developer will be associated with another future tragedy. If that occurs, then ExxonMobil and Peter O’Neill will have very little room to maneuver.

It’s a shame that this risk, although self-serving, has not even been identified and exploited to mitigate future damage.

The big losers out of all of this are the people of Tumbi in the Southern Highlands. It will not be lost on them that one of their own is Prime Minister, and that he has done very little to alleviate their pain and address their concerns.

The warning signs are out for Peter O’Neill and ExxonMobil.

PNG’s Election Petitions: The Stats Don’t Lie

As Peter O’Neill’s new coalition government begins the arduous task of establishing itself in the post-election environment of Papua New Guinea, the sorting through of Election Petitions – the concluding phase of the election process – has begun.

According to the Organic Law on National and Local Level Government Elections, petitioners have 40 days after a declaration of a result to lodge an Election Petition. That deadline passed late last week, poignantly right before the country’s 37th Independence celebrations.

An Election Petition refers to the procedure for challenging the result of a Parliamentary or local government election, and is governed by the National Court Election Petition Rules for Presentation and Conduct of Election Petitions 2002 (Amended).

At last count, 136 Election Petitions had been lodged with the first being filed on 14 May regarding the Southern Highlands Regional seat, and the last filed on 17 September concentrating on the NCD Regional seat – a reflection of the drawn out process PNG Election 2012 demanded.

The 136 Election Petitions represent 79 electorates (out of a total of 111) – a contesting rate of 71%. Enga registered the most Election Petitions with 22, followed by Southern Highlands with 14, Eastern Highlands with 10 and NCD with 11.

Bougainville was the only province where no Election Petitions were filed.

In terms of electorates, Enga’s Kompiam-Ambum registered the most Election Petitions with 8, followed by SHP’s Kagua-Erave with 4, then eight others on 3 apiece.

Regionally, the Highlands Region lodged 72 Election Petitions; Southern 29; Momase 24; and New Guinea Islands lodged 11.

We knew lawyers would be #PNG Election 2012 big winners. Election Petitions are the golden eggs. Going rate: K50,000 surety fee + K1500 p/hr

— Deni ToKunai (@Tavurvur) September 18, 2012

A closer look at who exactly is lodging the petitions, and whom the petitions are being lodged against, provides some interesting analysis:

Of the 136 Election Petitions, 18 of them were filed by sitting MPs who lost their seats.

Most notably among these is former PANGU Pati Leader and Nuku MP Andrew Kumbakor; former People’s First Party Leader and Governor of Morobe, Luther Wenge; former PNG Labour Party Leader and Governor of Western, Dr Bob Danaya; former Deputy Prime Minister and Wabag MP Sam Abal; and former PNG Party Deputy Leader and South Waghi-Angalimp MP Jamie Maxtone-Graham.

There are also some notable non-MP losers who have lodged petitions.

Sir John Kaputin has lodged one against Deputy Prime Minister Leo Dion for ENB Regional; Sir Barry Holloway has filed another against EHP Governor Julie Soso (the only petition against any of PNG’s 3 woman MPs); while former Police Commissioner Gari Baki and Commander of the Defense Force Jerry Singirok have filed petitions against Talasea MP Francis Marus and Sumkar MP Ken Fairweather respectively.

Furthermore, 20 of Peter O’Neill’s 33-member Cabinet will face an Election Petition – and the Prime Minister himself would have faced one too had it not been for the last minute decision of his losing adversaries to withdraw their petitions at the eleventh hour, with the pride of having a Southern Highlander as Prime Minister proving the mitigating factor.

Mt Hagen MP and Minister for Petroleum & Energy William Duma; Kandep MP and Minister for Treasury Don Polye; Alotau MP and Minister for National Planning Charles Abel; and Kompiam-Ambum MP and Minister for Environment & Conversation John Pundari, are all facing 2 Election Petitions each.

Also, new Speaker of Parliament Theo Zurenuoc will face an Election Petition – and so too veterans New Ireland Governor Sir Julius Chan and Enga Governor Peter Ipatas.

Of the 135 female candidates who contested PNG Election, only one has lodged an Election Petition – with Philomena Kassman filing one against first-term Central Regional Governor Kila Haoda.

Losing candidates Jimmy Maladina (Alotau Open), Luke Manase (Kandep Open), Sandy Talita (Enga Regional), and losing MP Peter Waranaka (Yangoru-Saussia Open) have filed the most petitions – with 2 apiece.

Based on the sheer number of Election Petitions filed, and the people who these petitions relate to and may affect, their outcomes will be important to the stability of Peter O’Neill’s Coalition.

Election Petitions have have four possible outcomes:

1. The election is declared void: the result is quashed and a writ is issued for a new election
2. The election is held to have been undue: the original return is quashed, and another candidate is declared to have been elected.
3. The election is upheld, and the member returned is found to have been duly elected.
4. The petition is withdrawn. this may occur when the petitioner fails to attend a hearing, or when Parliament is dissolved before the petition process is complete

It is quite likely that over the next months we will see a number of casualties from the Election Petition process – and I think up to three Ministers will most certainly lose their jobs temporarily while writs are issued for new elections in their respective electorates to take place.

This is a tentative period for both the Government and Opposition – but the stakes are much higher for Peter O’Neill than Belden Namah, particularly as there is surfacing evidence that a number of his newly appointed Ministers have been privy to electoral fraud destabilizing the democratic process in their election to parlaiment.

To understand the Election Petition process better, you can download the National Court Election Petitions Process Guidebook 2012.

Peter O’Neill’s Independence Speech

Moale Dina Namona, Ibou mui ai:

My fellow citizens, Residents and Friends of Papua New Guinea.

I extend to you all my sincere greetings and best wishes on this historically special day in our nation’s annual calendar.

It is our National Day today and, as Head of Our Government, I am proud to celebrate our 37th Independence Anniversary with you.

Today, 37 years on, we proudly observe and celebrate the achievement of our nation’s political Independence on 16th September 1975.

In doing so today, I pay the highest tributes to our nation’s Founding Fathers and Mothers who made this dream of building a nation for all of us becoming a reality.

Today I also pay my special tribute and gratitude to our nation’s founding leaders for the gaining of Independence.

I say thank you on your behalf of all citizens young and old – to our nation’s founding Prime Minister Grand Chief Sir Michael Somare for his lengthy active and loyal political leadership service to our country.

I pay tribute also to the other founding fathers, among many, Governor Chief Sir Julius Chan of New Ireland, President Chief John Momis of the Autonomous Region of Bougainville, pioneer woman parliamentarian Dame Josephine Abaijah and Statesman Sir John Kaputin who were among the leading lights of their time.

I pay tribute also to all our former Prime Ministers, Governors-General and Opposition Leaders and many other Leaders for their respective contributions in the evolution of our nation.

These great early leaders of modern Papua New Guinea all did well for our nation, to unite our people and to lay the foundations of a vibrant democracy.

Thank you all.

On this occasion, as Papua New Guineans, we must reflect on where we came from 37 years ago to where we are today and where we are heading as a nation in the years ahead.

We have a growing and evolving nation that is fast asserting itself as an leading developing economy in the Asia Pacific region.

While the industrialized nations face serious economic and financial crises, our nation is respected by many as a growing developing country.

Our national growth has averaged 8 per cent over the past 10 years, and recorded 11 per cent growth in 2011, with forecast for 10 per cent growth this year.

As a nation we have done well but not enough to underpin a sustained quality education, good health and a marked reduction in our key social and poverty indicators.

Everywhere throughout our country we see overwhelming evidence of decline of basic services infrastructures like roads, airports, seaports, hospitals, schools and provincial and district administrative centres.

Law and order management and enforcement has also become ineffective and inefficient in the face of population growth and fast paced development and economic growth.

We have a great deal to do, especially in working together to delivering expected goods and services for our people and for our nation.

I am confident and I believe we can achieve these, if we all work together.

The economic, political and social building blocks, our government has begun putting in place will form the foundations upon which our nation will prosper and grow over the coming years.

Growing and the nation’s future happiness, health and wealth will be achieved through an educated and healthy population, improved modern infrastructures and strengthening the law and order environment.

We can repair, renovate and maintain our existing service infrastructures hand-in-hand with construction of new roads, bridges, hospitals and schools by better prudent management and planning of our resources.

Yes, we can do better and our government is already starting.

We will move swiftly to lifting agriculture development for food security, increase investment and trade opportunities and improve delivery of social services to our people.

Our nation’s success and failures can be measured by many different yardsticks.

I prefer our nation’s success and our government’s leadership performance to be measured and calculated on the basis of our overall failures and our achievements.

We have a good government now in office and we can do better than ever before.

But our critics continue to look at us negatively. They insist on writing our nation off as one without hope and one without a future.

Even though these critics are our own citizens, they continue to look for excuses to talk us down for their own political and selfish gain.

They talk negatively without giving any solutions. This is the kind of politics and leadership that continues let our people and our country down.

Our government does not and will not subscribe to such negative and meaningless views from these doomsayers.

Only leaders without ability, vision and experience will yell and scream. Those who know the job will shut up and get the job done.

As the government, we know our job. We have the most experienced Cabinet since 1975. That is why our government will talk less and deliver more.

There is an old saying in my village which nicely describes loud mouths and non-achievers: “The person who beats his chest and yells the loudest never kills a pig”.

That is what a lot of the critics of our government and our nation are good for.

I see us as a nation of people that has moved along in leaps and bounds in 37 years, sometimes not so smoothly, but slowly moving in the right direction towards prosperity.

We have advanced as a nation with some successes, many failures and some missed opportunities in all aspects of our nation’s development.

I see us as a nation of people that can do better for ourselves in terms of lifting our own and our nation’s economic, political and social development.

Our government is government of inclusiveness, reconciliation and strong leadership that is capable of producing productively for our people and our nation.

We are a government that is committed to making positive changes that will improve the lives of all our people.

We can only look at our nation’s past failures as painful lessons that must not be repeated.

We must pick up the broken pieces left along the way in the last 37 years and reconstruct them.

We must do better by building a brighter future.

We must also embrace the missed opportunities of the past and use that experience to making sure that gainful opportunities must never again slip through our fingers.

An important aspect of our nation’s progress, that we all must accept and celebrate in the 37th year of our National Independence, is the celebration and recognition of our women’s rightful place as equal partners in nation building.

The election of three women leaders to Parliament is an extremely welcome development and a step forward for all our female population.

My own election as Prime Minister further sees the change of leadership guard from our founding fathers to the next generation of leaders.

Yes, our people have a new sense of hope for our country and their family under the new leadership.

Our government also has high hopes for the delivery of best possible results for our national development and for our people’s wellbeing.

Our people and the international community all say we have one of the naturally wealthiest nations on earth.

We have a population that is ethnically and culturally diverse, yet we have remained tolerant and resilient in the face of economic and social adversity over the last 37 years.

That is very true. But the fact still remains that our people remain largely poor in a wealthy nation.

Under the watch of our government, we are starting to make positive changes to bring about outcomes that transform our people’s lives to one that will make them economically and socially better off.

As I have stated many times money, is not our nation’s problem, rather money has always been wasted on the wrong priorities.

We cannot go wrong unless leadership at the political and public service levels is totally incompetent.

As government we have laid out a simple and achievable plan as building blocks for our nation’s development now and in the years ahead. These building blocks are:

• We must educate our people;
• We must provide better healthcare for our people;
• We must provide better security for our people;
• We must provide better infrastructure – roads, bridges, wharves – to build our economy; and;
• We must manage our economy better.

We can do all these together, better than ever before.

Our government will not tolerate slackness, corruption and excuses for not delivering on the commitments our people expect us to deliver.

Within the first three months of this government, any person – both in politics and public service – that is not willing to live up to these commitments will have no place in our people’s government.

Our government is realistic enough to understand and we commit ourselves to providing inclusive, transformational and participatory leadership that is zero-tolerant against corruption at all levels in our country.

We have activated the National Task Force Against Corruption to begin the process of amalgamation of all state agencies involved in anti-corruption operations.

Task Force Sweep will continue playing its role as our government moves forward to also establish the Independence Commission against Corruption.

Also more importantly, our government is serious about growing our nation’s future through prudent and stable economic and political management.

That has begun with the delivery of free education for all our children, free basic healthcare to all people, improved infrastructure which include roads, highways, seaports and airports and better telecommunication and energy supply systems to be delivered efficiently under our Public Private Partnership arrangements.

Our government has no time to waste. We are now working on financial options to deliver our programs within the legal and financial framework of our country.

All the transactions that commit our nation’s future will be done with the highest degree of transparency.

Our government is passionate and committed to involving all capable citizens in the development of our nation.

Together in unity, together in ownership and together in participation, we can transform our nation into one whose population is educated, living improved and happy lives and participating in personal and national wealth creation.

As head of your government, I am confident that we can achieve greater prosperity for our country and for our people.

And all our dream is for every man, woman and child to become educated, to become free from the chains of poverty, to becoming happier and healthier with better opportunities for better life.

I had that dream when I was growing up in my village many years ago. Many had that dream when they were growing up in the villages across the Nation.

We all had that dream 37 years ago.

Let us make the dream a reality together.

I wish all our people and all our friends, a very Happy and Memorable 37th Independence Anniversary.

Tanikiu Bada Herea, Ibou mui ai.

PNG’s Opposition Shadow Ministers

Opposition leader Belden Namah has announced his appointment of the Shadow Ministers for the Opposition of the National Parliament.

Of the 17 MPs who are in opposition, 14 Open MPs have been delegated portfolios, while Namah’s 3 Provincial MPs – Akmat Mai (West Sepik); Jim Kas (Madang); and Sasindran Muthuvel (West New Britain) – will focus on their governorships.

The Opposition Shadow Ministers are:

1. Belden Namah (PNG Party) – 2nd Term; Vanimo-Green River Open
   • Opposition Leader
   • Defense, Internal Security, Correctional Services
2. Sam Basil (PNG Party) – 2nd Term; Bulolo Open
   • Deputy Opposition Leader
   • National Planning, District Development, Health & HIV/AIDS
3. Dr Allan Marat (MLP) – 3rd Term; Rabaul Open
   • Attorney General, Commerce & Trade, Foreign Affairs & Immigration
4. Joseph Lelang (CRP) – 1st Term; Kandrian-Gloucester Open
   • Treasury & Finance
5. Tobias Kulang (PNGCDP) – 2nd Term; Kundiawa Open
   • Opposition Whip
   • Public Enterprises, Public Service
6. Francis Marus (PNG Party) – 2nd Term; Talasea Open
   • Forestry, Climate Change, Environment & Conservation
7. Lucas Dekena (PNG Party) – 2nd Term; Gumine Open
   • Lands, Physical Planning, Housing & Urban Development, Communication & Information Technology
8. Francis Potape (PNG Party) – 2nd Term; Komo-Magarima Open
   • Petroleum & Energy
9. Daniel Mona (PNG Party) – 1st Term; Goilala Open
   • Education, Research Science & Technology
10. Ross Seymour (PNG Party) – 1st Term; Huon Gulf Open
    • Fisheries & Marine Resources, Mining
11. Malakai Tabar (MLP) – 2nd Term; Gazelle Open
    • Agriculture & Livestock
12. Lauta Atoi (PNG Party) – 1st Term; North-Bougainville Open
    • Bougainville Affairs, Intergovernmental Relations
13. Ludwig Schultz (PANGU) – 2nd Term; Angoram Open
    • Works, Transport, Civil Aviation, Culture & Tourism
14. Jeffrey Kuave (PNGCP) – 1st Term; Lufa Open
    • Community Development, Sports & Pacific Games

O’Dion to Repeal Judicial Conduct Act – But is this an Authentic Government?

In a move which supports the rhetoric that this government will be one of “reconciliation, unity and trust”, Governor General Sir Michael Ogio yesterday signaled a comprehensive legislative agenda which the O’Dion Government has set its sight on to tackle.

On top of the list is the repealing of the Judicial Conduct Act 2012, which caused massive protests in Port Moresby in April this year, as well as the Supreme Court Amendment Act, the Parliamentary Powers and Privileges Act, and the amendments made to the Prime Minister and NEC Act – which placed a restriction on the legal age of the occupant of the Office of the Prime Minister and was aimed at legitimizing the removal of Sir Michael Somare.

This domino collection of rushed pieces of legislation were all reactionary in nature, while most were retro-active, and were initiated with the intent of legitimizing an illegitimate government as judged by the Supreme Court.

As I wrote at the time, they were drafted, introduced and passed by the Parliament for all the wrong reasons – and quite frankly, were not only immature and abhorrent, but were an abuse of process and directly contradicted the spirit of the Constitution and the mandate given to our leaders by our people.

In acknowledging this difficult period of political stagnation, Governor General Sir Michael Ogio paid tribute to the people of PNG:

“We must now resolve to never repeat those difficult and challenging experiences. We must not put our people through that pain, fear and uncertainty ever again. Instead we must take action to instil confidence in our people.

They could have taken to the streets to express their anger as we so often see in many countries and egg on each other. But they did not, instead they displayed patience and understanding and they left the political events to take their own course. For this we need to thank our people because the outcome could have been very different.”

Although Peter O’Neill has kicked off the 9th Parliament with a bang – the reality always remained that if he wanted to be taken seriously as a leader of merit for PNG, he needed to repeal these pieces of legislation and make amends with the Chief Justice Sir Injia Salamo – on behalf of the judiciary.

Peter O’Neill has done that, and to his credit, has also rectified the hurt he caused Sir Michael Somare in terms of the Chief’s removal from the post of prime minister and then as a Member of the Parliament.

But questions still need to be answered before O’Dion can be accepted as being authentic.

Although the suggestion by the Governor General that parliament will also consider an Act of Indemnity to protect Peter O’Neill and current and former members of parliament as well external actors, regarding their actions pre-election – is somewhat acceptable – there are some issues which are clearly not.

Most notably, the recent calls by the Member for Henganofi, Hon Robert Atiyafa, to do away with all current leadership tribunals and commissions of inquiry has yet to be dealt with by the O’Dion Government.

In addition, the silent passing of the Maladina Amendments into law, which diminishes the independence, powers and effectiveness of the Ombudsman Commission and which has been vehemently opposed by community and NGO groups around PNG since its proposal in 2008, has covertly been slipped through the back door supported by Peter O’Neill prior to Election 2012.

These are key issues relevant to the accountability of our elected representatives which are integral to the principles of good governance and a parliament which acts in the national interest.

Although O’Neill’s push to establish an Independent Commission Against Corruption (ICAC) must be applauded, for the O’Dion Government to indeed be seen as being authentic, the same rule must apply to parliamentarians – past, present and future.

Where is the PNG Debate on Manus Island?

With the successful passing of legislation by the Australian government to reinstate offshore processing in the Pacific, it is likely that Papua New Guinea and Nauru will be receiving Australia’s asylum-seekers within a month.

The Gillard government was so confident in achieving this outcome – a total back flip from its 2007 stance of abolishing it – that it confirmed that it had approved advance parties consisting of Australian Defense and Government officials who would be visiting Manus and Nauru – before the legislation had even passed.

That advance party touched down in Manus late yesterday afternoon.

The announcement that advance parties were being sent to PNG also indicated that an agreement of some sort had been in place between Julia Gillard and Peter O’Neill for some time – and most certainly well before the 2012 National Elections.

The speed by which developments have taken place to date, and in particular the dispatch and acceptance of Australian officials to PNG has been surprising, and to some degree – frightening.

Surprising and frightening – because our newly elected parliament has yet to even sit for its first official session of parliamentary debate, which has been announced to take place on Tuesday, August 21.

Furthermore, apart from the election of a prime minister and the announcement of a cabinet, PNG is still waiting for the official election of a Leader of the Opposition to take place.

https://twitter.com/IOlewale/status/235972125482156032

It is imperative that sensitive issues like asylum seekers, which have important international ramifications and domestic obligations too, be discussed in full and with the participation of PNG’s entire House of Representatives.

One of the main functions of the the Office of the Opposition is its role in scrutinizing the decisions and operations of the Executive – but how is that possible when that office remains vacant and the Parliament has yet to sit?

Furthermore, it is impetuous of Australia to have us believe that the problem of asylum-seekers is a regional issue, and that therefore, the Manus Detention Centre is a partnership between PNG and Australia helping to address this issue.

This so called partnership consists of nothing more than Australia funding the detention centre and PNG providing the location and a band-aid solution to a problem that is Australian.

In reality, the PNG government and Manus’ new MPs are not particularly worried about Australia’s boat people but support it because they view the detention centre as a boost for Manus’ stagnating economy – and very possibly for Peter O’Neill, as a favor in return to Julia Gillard for her support of him as PNG’s legitimate prime minister over the past 12 months – under the guise of enhancing our bilateral relations, which it will most certainly also achieve.

Would Peter O'Neill & Manus' new MPs be accepting of Australia's asylum-seekers if there was no economic benefit? #PNG #pngpol #auspol

— Deni ToKunai (@Tavurvur) August 16, 2012

And it seems that my view is shared by some senior politicians – albeit former cabinet ministers.

Former Attorney-General Sir Arnold Amet has come out today blasting Australia:

“Australia has debated this over many years as to whether they [asylum-seekers] go to Malaysia or go to Nauru or come to Papua New Guinea.

We cannot overnight be expected to rubber-stamp. It’s like a patronizing attitude towards Papua New Guinea and we cannot simply be expected to do this. And I think that Australia has handled this very poorly.

Struggling Pacific island states cannot be presumptuously treated like Australian territories with the token gestures of development dollar for removing this problem from Australian soil.

This is a moral dilemma. We can’t simply be forced upon to take these people.

They’re Australia’s problem, they want to go to Australia.”

But the reality is that Australia would not be sending its asylum-seekers to PNG had our government not consented to the request in the first instance.

And it is precisely Peter O’Neill’s consent which is concerning – because there has been no consultation outside of NEC chambers; and no opportunity for sincere and transparent debate to occur on the floor of our parliament.

Manus’ new MPs – Governor Charlie Benjamin and Manus Open MP Ronny Knight – need to re-look at the re-hashed economic argument which seems to trump humanitarian concerns time and time again when asylum-seekers are concerned.

Instead of profiting from the misery of others in the short-term, Benjamin and Knight should creatively be thinking of sustainable ways to generate organic economic growth for the people of Manus. It is no wonder that some Manus citizens have come out publicly stating that they are happy to receive Australia’s asylum seekers.

Their people’s statements that it will be good for them economically says it all.