Grand larceny robs PNG of millions

By Rowan Callick / The Australian
Good governance has fallen hostage to elements of the elite who siphon off vast sums of public money
PAPUA New Guinea's assistant Auditor-General Gordon Kega has discovered $2 million was paid to 87 people "for unknown services" out of relief funds given to Oro province following cyclone Guba in November 2007.
His investigation urges criminal charges against those who "fraudulently and illegally paid themselves", often simply by shifting money from the relief funds into their personal bank accounts.
A further $800,000 was paid to businesses and other organisations for goods and services that were unverifiable.
Those involved included "disaster officials, senior government officers, bank officers".
A few days ago, Oro's provincial administrator Owen Awaita urged AusAID to build a permanent bridge in the province after its predecessor was washed away by cyclone Guba, since temporary alternatives have also collapsed."The sooner AusAID steps in, the better it will be for the bulk of the population who depend heavily on the bridge," Awaita said.
The connection is palpable. PNG has been undergoing a transition through which an extraordinary proportion of public funds have been purloined by members of the elite, while 40 per cent of Papua New Guineans live on less than $US1 ($1.19) a day.
This gap is being accelerated by the prospect of instant wealth around the corner from ExxonMobil's $16.5 billion liquefied natural gas project, still four years from operation.
The stress on the LNG deal has helped build a climate in which corruption appears to be viewed by some beneficiaries merely as booking private spending against future national earnings that are expected to be bottomless.
At the same time, government services have been declining, putting increased pressure on aid, especially from Australia, which the Rudd government is increasing in the next financial year, to $457m.
The Rudd government meanwhile has cancelled the annual ministerial forum with PNG, due to limitations on ministerial travel in election year.
PNG Prime Minister Michael Somare, lionised globally as a Third World champion against climate change, a fortnight ago attended a conference on that issue in Norway. Last month while visiting New Zealand, he told the University of Auckland that LNG projects would "increase our revenue to an unprecedented level and transform PNG", and that as a "big brother" to other Pacific island nations, PNG would be "in a position to provide development assistance within our region".
But the country has been suffering widespread outbreaks of cholera during the past nine months, with more than 2600 cases so far, including 56 deaths, indicating poor sanitation and inadequate access to safe drinking water. Sales of fresh seafood have plummeted as people grow nervous of the disease, which has hit 573 people in Port Moresby.
Recently, the Papua New Guinea Post-Courier newspaper reported the pathology section of the main Angau Memorial Hospital in Lae, the country's second city, is on the verge of collapse. Francis Bannick, the doctor in charge, describes the situation as desperate.
Lae has been unable to buy equipment needed urgently to enable pathology work to be carried out there -- costing about $500,000 -- replacing obsolete or broken machines.
And medical specimens and biopsies instead sent to Port Moresby General Hospital for analysis have not received any response since September last year.
Recently, life expectancy has begun to decline and infant mortality to rise. Yet Health Minister Sasa Zibe has committed $9m towards a new high-end public-private Pacific Medical Centre in Port Moresby.
A recent survey of nine local government districts in PNG has found that apart from in the immediate vicinity of the local MP's core support base, most services and new projects are provided by churches, non-government organisations and aid donors, but not by the government.
The country's chief road artery -- the Highlands Highway that links the most populous region to the coast at Lae -- is in dire straits. Bafinue Roika, managing director of 14-vehicle trucking firm KK & Sons, says: "If nothing is done to fix the highway, we may head for disaster because the only thing to do is to shut down operations."
Opposition Leader and former central bank governor and prime minister Mekere Morauta told parliament last month: "People are tired. People have lost faith. People are sick of secret deals. People are craving for services."
At the same time, he said: "The government, and many people, have been intoxicated by the anticipated wealth and opportunities of LNG. The nation is now feeling the effect of the early stages of the project.
"The domestic cost structure has increased markedly. Many bad side effects will flow from the LNG-driven price inflation. Poverty will intensify, leading to other social problems."
Many people have flown to Port Moresby from Southern Highlands, where the main gas field is located, seeking cash from various grants available from the government. Self-styled consultants are eagerly signing up such clients and representing them to government agencies, for commissions.
"There are enormous expectations," says PNG Chamber of Mines and Petroleum executive director Greg Anderson, who stresses the need to manage them carefully. "There are dangers this could emerge as a huge cargo cult in the minds of many."
Government funds are already confirmed as a successful cargo cult that keeps on giving, with little downside for the beneficiaries.
Mowana Ugwalabu, general secretary of the PNG Teachers Association, said recently the teachers' payroll list contains thousands of ghost names whose pay is going to outsiders while teachers struggle to get paid at all.
In March, Somare tabled in parliament the 818-page report of a separate commission of inquiry into corruption at the top levels of the bureaucracy, which was chaired by retired PNG judge Maurice Sheehan, a New Zealander, with fellow commissioners Cathy Davani and senior PNG businessman Don Manoa.
But an injunction was granted banning the report's publication and implementation as soon as it was tabled. And extraordinarily, the government has not sought so far to have the injunction lifted.
The government, however, has moved rapidly to pass legislation sheltering resource projects from all litigation over the destruction of the environment, labour abuse or landowner exploitation.
This follows the growing anxiety of China's Metallurgical Construction Corp, the developer of the $1.5bn Ramu nickel mine, about the effect of injunctions especially, recently, those granted to halt its construction of a pipeline to slurry tailings into the sea.
Deputy Opposition Leader Bart Philemon, a former treasurer, says the new legislation protects the interests of investors at the expense of the resource owners and the environment.
Port Moresby Governor Powes Parkop says it delivers "almost absolute power to the government" on such matters.
Philemon says Somare is "dangling five carrots before the eyes" of backbench MPs to secure their support. Parliament last week approved the establishment of five new ministerial portfolios, thus bringing to 32 the cabinet positions, out of 109 MPs.
Somare this week justified the new legislation, however, saying: "We cannot get mining going while this is in court. The Prime Minister's Department has been held to ransom by [the judiciary]. The government will lose a lot [of money]." This is even though he has granted the Ramu project a 10-year tax holiday.
A clamour had arisen demanding the suspension of National Planning Minister Paul Tiensten over claims of corruption. Tiensten returned to his constituency. But Somare then sent the government's Falcon jet to bring Tiensten back in triumph to Port Moresby.
The Supreme Court chalked up a win over the government recently, however, in insisting on the suspension of Treasurer Patrick Pruaitch following his indictment by the Ombudsman Commission for corruption.
Justice Nicholas Kirriwom said in awarding the decision against Pruaitch -- overturning an earlier stay order -- that "for a leader to remain in office when he has been referred [to a leadership tribunal] is a mockery of the constitution".
Legislation to water down the powers of the Ombudsman Commission, which polices corruption, has been backed by the government. But it was postponed to later in the year following mass demonstrations.
Morauta warns: "If the Ombudsman Commission goes, there is no country." Somare says there is no intention to remove the commission, describing the demonstrators as "ol long long" (they're mad).
Paul Barker, executive director of the Institute of National Affairs, PNG's independent think tank, says: "The few reformers within the government seem to have inadequate political and bureaucratic backing to push through the massive changes needed for government to contribute rather than be a dead weight to a productive and inclusive economy and society.



Whilst I commend the Somare-Temu government for the securing investors worth multi billion dollar projects to name a few, LNG and Ramu Nickel, I have a few points that need raising eyebrows.

I believe there are lots of things to be cleared inside Somare-Temu government, and the one's that manage to surface are just the tip of an iceberg. The Chief's idea of solidarity in cabinet is also breaching it's borders: it also has a tendency to protect it's cohorts/ministers even if they are implicated of an offense. The question sweeping across the minds of the people seem to rest on these "calculated moves" or so it seems.

Interaction between the majority of the population and decision makers has marginalized. The people anxious regarding specific agenda that the Chief himself in the light of a few recent dramas, had cheaply brushed aside with his "lash outs". Somebody just has to stoop down from that super government and explain as a leader why this and that please, instead of branding us "longlongs"! The people have brains, they can understand. All that needs is proper communication (unless there is something to hide).

It also seems that government's solidarity in cabinet has it's own agenda, the people have their own! And when things don't work out, The OC, the Judiciary, the Media, etc, somewhere along the line partake their share of nightmare in that lash. Please don't do that!

The PM and his ministers are now tasked to retain trust from the people. And through that trust, suspicions cannot get in the way to hinder progress. We are all thinking creatures created by God, with intuition, instincts and logic. Respect and dignity is earned through trust; not by might nor by POWER!!!

To the leaders: remember that people's concern is that we are a great nation, but it only takes just one, but silly decision even from a "hero" to capsize a boat. If they have a right to voice their concern, so be it. Hope you don't forget piece of mind.