Fighting The White Collar Criminals and Fraudsters in Papua New Guinea, No Room For Complacency

Transparency International’s most recent survey of global corruption (2014) revealed that PNG was 145th of 175 nations in the World, with the 175th being the most corrupt. In the Asia Pacific region, PNG was placed 21^st with North Korea ranked 25^th - placing PNG just 4 places away from a nation described as most authoritarian (dictatorial) regime in the 21^st century.

This number captured informed views of analysts, business people and experts who have worked and lived in PNG. No one can dispute intelligence and experience of these experts unless significant improvements are evident within public service and law and justice sector.

What is important here is the reality that decision makers (politicians) and public service machinery (public servants) are putting PNG amongst the worst of corrupt nations on Earth. 

In order to improve the country’s ranking, first political leaders have to take the lead. That means that the Cabinet has to either set up anticorruption bodies, empower existing fraud investigation squad or both. Task Force Sweep – the anticorruption body set up by Peter O’Neill in August 2011 - was established in good faith. 

Any political initiatives for fighting corruption have to be formally sanctioned through the Constitution and given legal powers to both investigate and prosecute alleged white collar criminals. It must not be subjective to Cabinet ministers who are likely to withdraw support when they are investigated.

Independence of such graft fighting body is important. This will stop what happened to Task Force Sweep where the prime minister disbanded it when he was the subject of their investigation. Recent report revealed that this anticorruption body is stuffed off funds and on the verge of closing all its investigations. This is a direct blow as far as fighting corruption is concerned. 

The government has to remain true to the effort to reduce white collar crimes and fraudulent activities in the public sector by releasing K7 million funding for this year (2014). On the same token, the government of Peter O'Neill has to increase the funding for this effective but underfunded anticorruption watchdog. 

Second, public service departmental heads and secretaries will have to be appointed on merit instead of appointed by political affiliation. Questions have to be asked now to ascertain appointees to every government ministerial position. Wantoks and political allies must not sit at those positions if they do not have the experiences and credentials.

This is where corruption takes hold of government systems . To reduce fraudulent activities in public sector offices, a recruitment system has to be set up in future to recruit eligible candidates from within and overseas who can deliver on policy provisions and delivery of goods and services to cities, towns and villages in the country.

Meanwhile, a proper review of ‘who’ is doing ‘what’ is long overdue, starting with the prime minister’s office including every position within the 32 ministries in the government.

So has PNG seen an improvement in the fight against corruption? Regardless of public and international perception on corruption, there is some signs of improvement. Task Force Sweep had arrested over 50 people and recouped K60 million. 15 MPs are currently under investigation for white collar crimes and corruption: 3 are found guilty;

- PM for Pomio Paul Tiensten is convicted of ‘making a footnote on a project proposal that compelled the officers of National Planning to bypass the lawful processes and procedures in making payment’ of K10 million to Travel Air  and is serving 9 years in Bomana Prison

- Gulf Governor Havila Kavo is given 3 years prison sentence for has been found guilty of misusing K130 000 from a trust account belonging to the people of Kikori district for infrastructure.

- MP for Komo-Magarima Francis Potape found guilty by the National Court of misusing K330,000 of public funds.

Many Papua New Guineans thought maximum sentence of 10 years for misappropriation of public funds did not match the amount of money these white collar criminals and fraudsters siphoned. But the fact is that justice was served. That is what matters the most.

Task Force Sweep has to keep the momentum. The government has to release funds for it to operate. Not doing so means that Peter O'Neill and Leo Dion's government are starving a vital investigative body to death, thus nursing corruption. 

#PNG governor jailed, MPs facing corruption charges. Via @Post_Courier pic.twitter.com/3PNKtNQlGK

— Stefan Armbruster (@StefArmbruster) December 10, 2014

K8.6 Billion Debt Vs K16 Billion Budget - Why PNG Treasury Runs Dry and Impact On 2015 Budget

Two letters were released on two important political developments on the same day, Friday the 14th of November. The first was the 'unexpected' referral of the Prime Minister, Peter O'Neill, to Leadership Tribunal. Second is a letter from the Chief Secretary of Government seeking cooperation from department heads to minimise pressure on 2014 Budget. 

The PM and Minister for Treasury indicated that 2015 Budget was on course. Their intentions were to showcase to every citizen and overseas friend that all is under control. As long as there are no confirmed data to support the Budget presentation, no one will believe them.

Government circular No. 05/2014 indicated that all is not too well. Chief Secretary to the Government circular implied that treasury could run dry before the end of the financial year. Every financial year ends in March. Does it mean that department heads have not followed tight monetary policy over the last 8 months? Why this letter is 'urgent'? 

The reasons why the heads should take cost-cutting measures detailed in Circular Instruction No. 05/2014 are indicative. This means that those reasons are used as smokescreen to divert attention from nonconformity to 'strict fiscal conditions set in 2014 Budget'.

The reality is obvious. Take a look at the facts associated with commodity prices, overspending and Government Debt.

1. Decline in tax revenues due to falls in some key commodity prices

Gold and silver prices have fallen after the financial crises, but oil and gas prices are at record high due to high demand from South East Asian Countries like Japan and Taiwan. Coffee price is at its peak, including other agricultural commodities.

The problem is that government has neglected Agricultural commodities, instead it places value on Gold, Silver and Oil and Gas. 

2. Increased costs associated with the completion of facilities for the 2015 South Pacific Games

Preparation of the SPG has put a lot of strain on 2014 Budget. The games committee has overspent  and requested more. The Government initially allocated AU$9 million, about PNG K1.2 billion when Don Polye was the treasurer. The estimated budget for the games is AU$342 million (over PGK760 million)

One only wonders if such an amount would not eat into Government Budget.  

3.  Increased costs on Government debt

Current government treasurer, in his 2015 Budget speech, said budget deficit is at K77 million and not K2.35 billion as expected from 2014 Budget. This is an oversight or deliberate attempt to divert from real debt. The amount does not include PNGK6 billion (about AU$2.7 billion) China's Exim Bank loan. The treasurer did not include the loan from Swiss bank UBS worth almost PNGK2.6 billion (AU$1.2 billion). 

It was reported that public debt service to cover interest payments stands at  K3.7 billion. Does this include both loans? What is the actual deficit brought forward from 2014? All these have to be factored into 2015 Budget and printed for all to see. 

In fact, PNG government has accrued a total debt of more than PNGK8.6 billion (K6b + K2.6b) since the Exim Bank loan. (That does not include other borrowings or repayments. or public debt of K3.7 billion or deficit from 2014 Budget of K2.35 billion). 

The conservative amount of K8.6 billion is factual based on both loans The nation's 2015 budget is around K16 billion. From the outset, one can see that debt level is at half the PNG's Annual Budget. 

Papua New Guineans and commentators have to see this figures clearly, and as it should be seen. The government has to tell us how much it has paid back. 2015 budget has to reflect all these figures in entirety. 

Apparently, Government of Papua New Guinea is placing all its hope on revenue from PNG LNG project. This is what the Prime Minister said in response to series of questions from the ABC news:

"GARRETT: You've just announced a 6 billion kina loan from China's Exim bank - that's worth almost 2.7 billion dollars. Critics say that is too big for PNG's budget. How do you respond?

O'NEILL: I think they underestimate Papua New Guinea's growth that is happening in the country. We are growing at an average of 8% over the last 10 years. We expect that growth to continue. We expect our economy to double by 2014. Our infrastructure in the country is declining to a state where some infrastructures are not able to cope with the demands of our people and our ecomomy. So when you look at this what solutions do you have? We need to program a massive overhauling and redevelopment of many of these infrastructures, particularly the transport systems in the country, and we are doing that by borrowing large sums of money. It sounds large but the draw down will not be in one single year. We are managing it prudently through our fiscal strategies that we have put in place and the projects are not going to be completed in one single cycle of a budget. So I don't think the stress levels will be that noticeable as the economy continues to grow. So I think our critics that are out there now stating that we are not able to manage such a large loan that has been sought through the Exim Bank of China we say this 'Do you want us to allow our infrastructures to continue declining? Do you want us to allow the economy to slow down and that there is no economic growth in the country? Do you want us to allow the unemployment figures to continue to rise?' Because when the economy does not grow the unemployment increases, all the other social sectors will decline. That is not a responsibility this government is prepared to accept. That is why the onus is on myself and the government to make sure that we rebuild the infrastructure in the country"

The stress level is clearly reflected in Chief Secretary's circular. The good news is that PNG LNG gas revenue will into government coffers starting 2015. 

Above all we must consider that PNG government will make just over K1 billion from its 16.8% stakes in the LNG project next year. Government's 10% stakes (149.4 million shares) in Oil Search contributes just over K70 million in first year of full production which is 2015. So, the anticipated revenue from the LNG project would contribute under K2 billion to Budget 2015.

It is certainly true that the Governments of Sir Michael Somare and Peter O'Neill have erred in using the PNG project as platform for more borrowing. PNG's budget has not doubled this year, not even next year when one takes a closer look at the rate of growth and debt level.

The country is likely to plunge deeper into debt.

O'Neill Referred | 3 Allegations Of Misconduct By Prime Minister of Papua New Guinea

Peter O'Neill [Google Pics]

Referral of the Prime Minister to a Leadership Tribunal was confirmed. The news was a ‘Breaking News’ on Sharp Talk. It was interesting to note that people close to the prime minister didn’t know.

Yet, this particular referral process has taken three months. Ombudsman Commission (OC) referred Peter O’Neill on Tuesday 12^th of August, 2014. 

According to the Public Prosecutor the initial referral did not contain sufficient evidence, credible to request the Chief Justice to appoint a Leadership Tribunal. OC has now provided cogent evidence, convincing to see this judicial process through.

Peter O’Neill referral is based  on 3 allegations reported in the Post Courier on 13^th August 2014:

The Prime Minister failed to comply with administrative and financial processes including the normal overseas borrowing process in the approval of the K3 billion loan from the Union Bank of Switzerland AF (Australia Branch);

The leader having made a media release on the sacking of Mr Don Polye as the Minister for Treasury by saying that Mr Don Polye caused instability in the Government, when the actual reason was to do with Mr Polye’s refusal to sign the UBS Loan deal which the Prime Minister had unilaterally approved on March 6, 2014; and

The leader made a misleading statement on EMTV that he had obtained advice from the state agencies including Bank of Papua New Guinea on the UBS loan to purchase Oil Search shares, which was contrary to the evidence received.

Until Friday 14^th 2014, no one has thought the Public Prosecutor would have made this bold move. To request Chief Justice to call for a Leadership Tribunal is a step in the right direction. The tribunal will deliberate on the process and transparency surrounding the K3 billion loan from Union Bank of Switzerland, the UBS.

Has the Prime Minister, Peter O'Neill, complied with due process? Has he sacked Don Polye for the right reason? Has he obtained advise from appropriate institutions before signing off the loan? Those questions will be tested against the OCs evidence. 

Facing the evidence is what Peter O'Neill has dreaded. That's his great phobia. He must subject himself to this referral.  He can only proclaim his innocence by proving to the contrary any evidence provided to a Leadership Tribunal by the OC. 

Sir Peter Barter Passed On His Legacy Lives On

Sir Peter Barter dies in Cairns: The family of former Papua New Guinea cabinet minister Sir Peter Barter has announced his death on Wednesday at Cairns Hospital, Queensland.

Sir Peter spent 55 years in PNG, after going there to work as a pilot for the Divine Word missionaries.

He later became a prominent businessman involved in tourism, running a resort and ships, and later served three terms in parliament, becoming minister of Provincial Affairs and Health.

Sir Peter Barter          Courtesy SMH

SOCIETY, MEDIA AND SOCIAL MEDIA 

Democratic good governance depends on public debate – a debate which is based on fact, honestly and openly held views, and willingness to engage with participants who hold quite different positions. 

The Internet provides fresh – and exciting – opportunities for just such debates on important public issues. Unfortunately, however, it often falls short as some participants make ill-founded claims, or simply resort to labelling those with whom they happen to disagree. 

In complex and contested environments, such as those experienced at times in some parts of Papua New Guinea, such conduct has the potential to publicize mere assertions, even untruths, or, particularly when labelling is involved, personal abuse. 

In doing so, it may add or give rise to tensions on the ground.

Sir Peter Barter work as Minister for Bougainville Affairs

As Minister for Bougainville Affairs, the challenges I faced included working to build trust not only in government but between ex-combatants on different sides of the previous conflict, and within and between communities around Bougainville. 

Similar challenges arose when the 2002 elections in Southern Highlands failed. 

My responsibilities included rebuilding the trust which is basic to peace, democracy and good governance on the ground. 

Media must contribute to informed debate 

Anyone who values the free exchanges which are vital to democracy must, surely, appreciate the opportunities that blogs and other sites on the Internet provide. 

However, the ways in which some participants make unfounded assertions or simply ‘slag off’ at those with whom they disagree must, surely, be cause for concern. In doing so, they do not contribute to the informed debate or help build the trust and mutual confidence in government and the wider community which are basic to public order and development. 

What Sir Peter Barter said about PNG Social Media

In this regard, contributors to social media would be well advised to bear in the wider – social – context in which they are expressing themselves, and that the role of media is to transmit what they say to a much wider audience which may not be aware of the immediate issues or context in which they are expressing themselves, or have ready access to other sources of information and opinion. 

In short, freedom of expression should be accompanied by an appropriate sense of responsibility.

Autonomous Region of Bougainville

Having been privileged to serve as the Minister with primary responsibility for the Bougainville Affairs for eight years, I continue to maintain a keen interest in the progress that is being made in the Autonomous Region of Bougainville. 

In doing so, I remain in personal contact with the President of the Autonomous Bougainville Government, Hon. Dr John Momis and other Bougainvillean leaders, as well as students at the Divine Word University (where I have the honour of being a Council Member).

Without wishing to dwell on the past, I would like to make it clear that the negotiations which produced and then gave legal effect to the Bougainville Peace Agreement by amending the National Constitution and enacting the Organic Law on Peace-Building in Bougainville involved Bougainvillean leaders on all sides of the previous conflict, support by the United Nations, Australia, New Zealand, and other countries, and, most importantly, the active participation of the churches, individuals like the late Theodore Miriung, as well as women and men around Bougainville. 

These efforts led to the making of the Bougainville Constitution, the formation of the Autonomous Bougainville Government (ABG), and, now, the work underway to bring about restoration and development on the ground, the transfer of functions and powers to the ABG, and preparations for the guaranteed referendum on Bougainville’s political future (due to be held, when good governance and weapons disposal have been achieved, between 2015 and 2020).

Sir Peter Barter and his work on the Autonomous Region of Bougainville

As Minister for Bougainville Affairs, I saw my immediate task to help make and build peace on the ground, and secure the resources required to provide essential services to the people. Australia, New Zealand, Japan, the European Union, and other aid donors provided generous support.

Aware of the sensitivities among local communities, in particular, I did not encourage discussion about the future of mining at Panguna. 

However, I did make public my view that, in order to be truly autonomous, or become independent following the referendum, Bougainville would need to have an economy and become less reliant on donor aid. 

This is clearly a prime concern of the ABG and the people of Bougainville. They want Bougainville to be autonomous, and, in the event the people vote for independence and the National Parliament agrees, they do not want to be beggars.

Throughout my time as Minister, I had to deal with the sensitivities of the various factions, and endeavour to establish an environment in which the peace process could keep moving ahead - as it has, in fact, done. Though there may be people who disagree, I am confident that significant progress has been made, and that this will continue if we can harness the resources we have available now and in the future.

2002 Southern Highlands failed elections

In addition to my responsibilities as Minister for Bougainville Affairs, I had to deal with the failed elections in the Southern Highlands and, ultimately, the establishment of the Hela and Jiwaka Provinces. 

I used many of the same processes learnt in Bougainville to help bring back some semblance of law and order and ensure an environment in which elections could take place. 

An important lesson I learnt is that you cannot wave a magic wand to bring about peace; peace can only occur if everyone wants peace; peace begins in the hearts of those who want peace!

Freedom and diversity of the views expressed in social media

Many of us appreciate the freedom and diversity of the views expressed in social media concerning Bougainville and other important issues and parts of Papua New Guinea. 

However, in doing so, we cannot help but be concerned at the ways in which some participants behave and express themselves as if they have the licence to say whatever they choose, however sarcastically and disrespectfully they seek to express themselves and even impose their views. 

Errors of fact, exaggerations, deliberate untruths and the application of unwarranted and unwelcome labels to other individuals, groups or organizations may cause offence, even hurt, to those who are targeted, including people who are innocent or, perhaps, unaware of the allegations being made or slurs being cast. 

True democratic debate in PNG

Truly democratic debate is a matter of honesty, openness and trust in the integrity of other participants and the process as a whole. 

It is accordingly important that participants in blogs and other social media recognize the importance of these values, the role they are playing, and the need to behave in ways which are consistent with – and so help to reinforce – the very democratic values on which they rely.

Like every other country, Papua New Guinea cannot claim to be perfect. Amid our diversity, we have impressive – including some quite unique - national strengths. 

We also have important national challenges to address and overcome. While criticism can be vital to inform national debate in a democracy, ridicule and abuse are not; they frequently represent an abuse of free speech that would be condemned elsewhere, including the countries from which some of it originates.

Papua New Guinea development  dilemma

Papua New Guinea needs improvements in health, education, employment and other opportunities for youth, which would help to reduce temptations to crime and reduce our reliance on foreign aid. 

A more self-reliant society and economy are important keys to a sustainable future. 

While it is not the only way forward, these are precisely the issues being addressed and the reasons why mining is receiving increasing attention in Bougainville. 

It is vital both to democratic good governance and to Bougainville’s future that participants in the discussions in Bougainville are not labelled in derogatory ways, or subjected to abuse or ill-founded accusations. 

Like participants in other democratic debates, they are entitled to be treated with honesty and respect. While they have the right to freedom of speech, contributors to social media should recognize the responsibilities that participation in the social and media aspects of their activities entails.

Papua New Guinea is an independent country. We have come a long way. Anyone who knows or cares for Papua New Guinea can only be impressed with the development that has taken place while recognizing that much still needs to be done. 

Sir Peter Barter balanced comments

My comments concerning social media are not directed against any specific person(s) or organization(s). 

My aim is simply to ensure that Papua New Guinea keeps moving ahead – towards what I believe are shared national objectives of more equitable distribution of wealth, more employment, and sustainable self-reliance based on agriculture, manufacturing, tourism and a responsible approach towards mining and resource development that will bring about improved services to the people of Papua New Guinea.

I, therefore, call on users of social media, both in-country and overseas, to adopt – and on their audiences to encourage - and promote a positive, respectful and optimistic approach when discussing issues in and affecting Papua New Guinea. 

The word ‘optimism’ comes from the Latin word ‘optimus’, meaning "best". An optimistic approach is one which leads one to look for the best in any situation, whether or not it is really welcome. While self-awareness and self-criticism are important, slagging off at our country or particular national actors is unlikely to lead to positive outcomes. The key to a successful future is mutual and self-respect, and an optimistic approach towards the opportunities and challenges we face.

Peter Barter, GCL. OBE. Kt

Oct 10, 2014

EXXON MOBIL PNG LNG PROCEEDS : How Much Has Been Made Within 5 months?

The article discusses the proceeds generated from the PNG LNG sales within the first five months of operation. It addresses contradictions in the Prime Minister's statements and raises concerns about possible misinformation and irregularities in handling the country's revenue.

*Calculations are based on responses from the Prime Minister, Peter O’Neill, when questioned Don Polye and Sam Basil. 

ExxonMobil PNG LNG project

The PNG LNG project, launched on 26th May 2014, has witnessed 12 shipments of liquefied natural gas reaching Japan within a span of just five months. 

With a significant investment of USD$19 billion, the project is estimated to continue production for the next 30 years. However, recent statements by then Prime Minister Peter O'Neill have sparked debates over the actual revenue generated from these initial shipments.

According to Prime Minister O'Neill's response to questions posed by Don Polye and Sam Basil, the proceeds from the sales of these 12 LNG shipments amount to more than US$600 million. This indicates a promising start to the project's revenue generation. However, further scrutiny reveals some irregularities in the Prime Minister's response that warrant attention.

The first contradiction lies in the projected duration of the LNG project. While media outlets and Exxon Mobile claim a 30-year lifespan, the Prime Minister mentioned a 20-year duration during his response. This discrepancy of 10 years could potentially result in a loss of one-third of the projected revenue. Such inconsistencies raise concerns about the accuracy of the information provided to the public and stakeholders.

EXXON MOBIL PNG LNG PROCEEDS

The second concern arises from the PNG government Hansard, which highlights the Treasurer's previous statement about an undisclosed amount of the government's cut being kept in Trust Accounts during a parliamentary debate. However, the Prime Minister's response contradicts this, creating confusion among the international community and stakeholders. Transparency and consistency in communicating financial matters are essential for fostering trust and confidence in the project.

Furthermore, the Prime Minister's assertion that the revenue will start flowing into the government's coffers from 2015 onwards raises eyebrows. The decision regarding revenue allocation typically rests with the company's board of directors, rather than the Prime Minister or the government. This statement prompts further inquiry into the management and oversight of the project's financial affairs.

Summary:

In summary, the PNG LNG project has seen initial success, generating over US$600 million from 12 shipments within five months. However, discrepancies in the Prime Minister's statements regarding the project's duration and the handling of revenue distribution raise concerns about misinformation and irregularities. Clear and transparent communication is crucial when dealing with substantial amounts of the country's currency, and it is essential to address these issues promptly to avoid any potential long-term consequences. The government must prioritize accuracy and accountability to ensure a successful and sustainable future for the PNG LNG project.

By the start of production, the Project had spent nearly 11 billion Kina (US$4.53 billion) on combined Lanco and non-Lanco services #PNGLNG
— ExxonMobil PNG (@ExxonMobil_PNG) October 17, 2014

Vaki, Pala, Paraka and O'Neill: Why Have Their Lawyers Not Tested The Evidence In Sam Koim's Affidavit?

This is what should have happened - PM, Vaki and Ano should test the validity of evidence contained in Sam Koim and the Police Lawyer's affidavits that led to the WoA on Peter O'Neill. They NEVER did!

Instead, they fought (and are fighting) the justice system. It would be good to see those evidence tested at the National Court. Vaki's lawyer must argue the evidence contained in Sam Koim's affidavit is wrong.

For the sake of those who have forgotten here is what the lawyer would have to argue for and against:

1. O'Neill knew the letter containing his official signature existed since 24th of January 2012.

2. O'Neill signed the letter when he was F & T Minister under Somare.

3. O'Neill denied signing the letter when he is Prime Minister.

4. O'Neill LIED whilst in the PM's seat5. O'Neill confirmed he lied.

6. O'Neill gave directive to release K80 million to Paraka forthwith.

7. O'Neill and Paraka consciously collaborated in illegal and fraudulent payments.

8.  Payments were made without consent from Department of Justice.

9. O'Neill did his mate a favour - he had a bank overdraft of over K8 million at the time of the letter

10. Forensic investigators CONFIRMED the signature on the letter was Peter O'Neill's. 

Prove to courts that those were baseless allegation and the work of TFS is a sham. PM, Vaki & Pala and those laywers representing them have to prove to the contrary the evidence contained therein Sam Koim's Affidavit! Why isn't that happening?!

~~~~~~~

Take a look at what Sam Koim has to say after disbanding of Investigative Task Force Sweep

*Here is the latest on Supreme Court's ruling on the Warrant of Arrest on Peter O'Neill as discussed in Facebook group Sharp Talk.