corruption in png essay pdf

Governance and Corruption in PNG’s Public Service: Insights From Four Subnational Administrations

Development Policy Centre Discussion Paper No. 81

37 Pages Posted: 22 Apr 2019

Grant Walton

Australian National University - Development Policy Centre

Date Written: April 3, 2019

The Papua New Guinea (PNG) government and international donors have spent millions of kina trying to improve governance in the country’s bureaucracy. Despite these efforts, there are few indicators of success: many consider PNG’s public service to be rife with corruption. However, narratives about these problems have excluded public servants’ perspectives: there is little empirical data about why public servants might support or resist corruption and poor governance. This paper draws on interviews with 136 public servants across four provinces – Eastern Highlands, Milne Bay, Madang and New Ireland – to provide insights into what PNG’s bureaucrats think about these issues. It finds that public servants are often ill-informed about the laws and rules guiding their roles, and are under enormous pressure to provide unofficial favours to businesses, politicians and kith and kin. Yet, some are able to resist these pressures better than others, with senior staff, men, and those in Milne Bay and Madang better placed to push back against and report corruption. Findings suggest that policies that aim to support and inform the less enfranchised (women and junior staff) are particularly important for addressing corruption in PNG. However, this paper argues that efforts to shift the status quo must take into account the contextually-specific relationships between bureaucrats, politicians and citizens, which vary across time and space.

Keywords: governance corruption public service PNG

JEL Classification: H83

Suggested Citation: Suggested Citation

Grant Walton (Contact Author)

Australian national university - development policy centre ( email ).

Canberra, Australian Capital Territory 2601 Australia

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THE TOKAUT BLOG

Forensically analysing grand corruption in png, by professor kristian lasslett 21 aug 2017 10 min read, making the invisible, visible.

The problem with corruption in PNG, at its most grand levels, is that it is everywhere and nowhere. Its morbid symptoms are apparent for all to see, but the particular mechanisms through which the disease of corruption infects governments and markets, and disables the body of the nation, proves difficult to observe, owing to its secretive nature.

Yet in order to fight corruption effectively, we need to answer elementary questions relating to its core characteristics. For example, what type of corrupt transactions are most common and damaging in PNG, who are the participants, what motivates them, how do they make their illicit gains, what do they spend it on, and which institutional structures permit these illegal activities to take place?

Despite the difficulties associated with observing corruption, we can still pull together enough credible data from the civil and criminal courts, commissions of inquiries, national audits, public account committee hearings, Ombudsman Commission reports, and independent research, to formulate hypotheses on these different dimensions of the corruption problem, for testing and refinement.

Sham fronts, illicit ends

And, in this respect, there is one general thread that runs through a vast range of corrupt schemes observable in PNG, whether it be rigged tenders, land fraud or sham litigation – they employ, on the surface, a range of legitimate commercial/legal transactions, to cloak what is in fact crude theft from the public purse.

Often a real service is provided, for example a road is built, or expert advice is provided to a government department. However, the primary commercial motivation of the corrupt parties involved in these transactions is not to profit from providing the contracted good or service, at say a 10% rate of profit. The real motivation is to use the contract as a front, behind which a deal is rigged, that allow costs to be inflated well beyond market value, leading to substantial returns.

In this context the 10% rate of profit is small potatoes, when rigging the deal can allow parties to set a price 4 or 5 times higher than the market rate when providing goods and services, or at a much reduced rate when the contract involves the acquisition of a state asset.

Indeed, contracts with government can be rigged by businesses in many ways, to achieve the same end.

For example, government agencies, such as the National Housing Corporation, the Lands Department or State owned corporations, can part with their assets at an illegally discounted rate. The private beneficiary of the contract gets a block of flats, or a major piece of land, for say 1/10 th of the market price, while kick backs are paid to government officials who approve and organise the transactions (10% of the asset value is often pointed to as the approximate commission paid to corrupt officials). The private beneficiary can then flip the asset on the market for a quick profit, which can be augmented further through improvements to the illegally acquired asset.

A similar logic could be observed during the Commission of Inquiry into the Department of Finance. Here legitimate and illegitimate claims for damages against state agencies, were grossly inflated by lawyers and private consultants, who then secured government settlements, with state officials receiving kick-backs from the litigants.

Here the cloak of a legitimate civil action, was used to do something illegitimate, namely inflate damages, to in effect steal from the public purse.

Arguably, goods and services contracts are the most overt example of this commercial logic. Rigged contracts are awarded to construction firms and consultants, who provide often substandard deliverables – or no deliverables in the case of ghost contracts – at rates far in excess of market price.

No area is off limits. Hospital construction, drugs for patients, handling deceased estates, building schools, these have all proven fair game for corrupt schemes – unlike the Mafia, no “gentleman’s” code of conduct exists, declaring certain social sectors off limits.

The consequence of this is we have economic actors ostensibly engaged in providing goods and services, ranging from construction of infrastructure, through to legal services, whose primary motivation is not offering a great product, at a competitive price. To the contrary, its about providing a substandard product (cheaply!) as a necessary condition for obtaining the main prize, a grossly inflated contract price.

Accordingly, we often find the epicentre for these rigged transactions are Supply and Tender Boards, where tenders and subsequent awards are deliberated on (in the case of state land, it is Land Boards). Boards can fix tenders, to ensure a certain party with inflated prices wins the contract, or they can allow the improper use of certificates of inexpediencies, which permits contracts to be awarded without tender, owing to an emergency situation. Although such situations are strictly circumscribed in the Financial Instructions, certificates of inexpediency are serially abused by government departments to rig large scale public contracts.

Most often, these rigged contracts are pushed from up high, by Ministers and senior officials. This has a debilitating effect on government business.

State officials and policy makers are not motivated by an ambition, for instance, to achieve development strategy outcomes or to oversee the sound administration of public policy – both are mere tools through which to gain kick-backs, or indeed partake in illicit deals through proxies (or even without proxies, so brazen is the execution of corruption in notable instances).

In other words, the provision of health services, or the construction of infrastructure, are not tools for achieving policy outcomes – they are the setting for netting kick-backs and rigging inflated contracts. Accordingly, these services are not based on need or quality, they are inspired by the private commercial and political interests of conspiring parties.

So looked at concretely in PNG, corruption inspires substandard markets activity and failed public policy. Meanwhile, the revenues earnt by the state through taxation – often through exploiting non-renewable resources – and receipts on state assets, are stolen through an edifice of legitimate commercial deals that conceal a rotten core.

Tracing the proceeds of crime

It is less clear what happens to these revenues once stolen.

Certainly some of it we know is spent by beneficiaries on houses, cars, travel, posh meals, jewellery, and the finer things in life.

There is also evidence to suggest some of it is used as seed capital for business ventures.

However, it would be overstating matters to suggest that stolen proceeds play a positive economic role, because they provide a source of capital for business people.

The fact remains, when market activity is serially rigged, seed capital is best spent in propagating further criminal enterprises – acting through legitimate commercial fronts – because the rates of profit is so much higher, than the returns promised through conventional business models.

Indeed, in many sectors, failing to participate in the cultures of corruption, would mean bankruptcy.

We also know from shards of evidence that kick-backs and illicit profits are also being funnelled into the political process.

Fire sales of state assets, kick backs for rigged tenders, and misappropriation of funds through nepotistic awards, create sizable slush-funds.

Indeed, often there is a wave of illicit activity in the year leading up to elections, which is a clear signal on what is to come – namely, bribing electoral officials, voters, and attracting independent MPs into the party structure, through direct and indirect fiscal “incentives”.

Its an expensive business (and likely getting more expensive each electoral cycle), but winning high office is not just about enjoying political power, it in effect means successful MPs become a fixer in the ‘game’ of rigged economics. This position can be exploited in multiple ways to grow political and business empires, making the investment in electoral success the ticket price for much greater fortunes.

It also ought to be noted the risk of being caught in PNG is negligible – successful prosecutions are the exception rather than the rule.

In some countries deeply impacted by grand corruption, we have seen corrupt parties use offshore banking services and corporate bodies, to cloak their illegal activity.

Its not clear if in PNG there is significant demand for this kind of service. That said, we certainly know senior politicians and business people actively use offshore financial, corporate, legal and accountancy services – however, we lack the data to confidently state whether offshore entities are a significant spoke in corrupt schemes.

There are good reasons why PNG politicians and business people may not be conducting their illegal activities through offshore entities on the same scale as other regions. Primarily, there is actually less risk of being prosecuted in PNG for money laundering or bribery, than there would be the case if these transactions were organised in foreign jurisdictions.

After all, PNG’s law enforcement agencies are entirely lacking in resources, specialist skills and leadership, and political control can be exerted over them, where needed.

Equally, why set up a British Virgin Islands company, when beneficial interests in corporate bodies registered with the IPA can be easily cloaked through proxies. Furthermore, there is no evidence to suggest that the Company Registrar is actively policing company regulations – although at the very least the IPA has recently demonstrated a welcomed commitment to enforcing annual reporting requirements contained in the Company Act.

In a similar vein, why become entangled in foreign banks, when banks operating in PNG are enmeshed in the national power structure and thus more easily influenced.

Because the banking sector is so heavily reliant on the PNG state for its survival, there is a culture of dependency which would appear to act as a strong disincentive for banks conducting thorough due diligence when handling the accounts of politically exposed entities – especially when those entities are connected to senior political power brokers with a network of powerful allies.

Certainly there is evidence on the public record indicating some banks in PNG handle transactions that have red flags all over them.

Concerns are also growing over the independence of the judiciary. But this is often more at the level of whispers. There is not a surplus of hard evidence yet on the record to make confident assessments in this respect.

However, there is much more solid evidence on the record demonstrating that members of the nation’s legal and accountancy fraternity, are acting as key spokes in corrupt schemes. They help fix the deals, cloak the criminality, and launder the funds.

Given this is a widespread problem in both professions, it is certainly a concern that their numbers populate the judiciary and senior government offices.

Owing then to the professional expertise at hand, the lax enforcement culture, and the politicisation of criminal justice, PNG appears a considerably safe jurisdiction to engage in high value criminal conduct. So its reasonable to conclude, why go offshore?

The primary reason may be to spread assets. And we certainly know that assets resulting from criminal activity, are being held in jurisdictions such as Australia and Singapore – with little reaction from either nation.

Breaking corrupt networks: The many headed hydra

Besides impunity, another problem facing the anti-corruption movement in PNG, is the way in which rigged transactions are organised.

Evidence suggests criminal networks organising corrupt transactions tend to be small and nimble. Senior politicians and business people surround themselves with a trusted cadre of professionals and proxies, who do their bidding.

Often these cadres have considerable power over the affairs of these senior figures – so the bonds binding them together are tight, built over many years of collaboration, often further solidified through kinship ties, friendships and marriage.

Thus, it is exceedingly hard to break the code of secrecy within these closed, small networks, and even if you break one group, many others exist, operating largely independently from one another.

We have observed this type of structure in relation to terrorism, small cells operate independently, so if one is nabbed by authorities, the whole organisation is not destroyed.

In PNG this is not an intentional design – that is, all these small networks are not part of a much bigger conspiracy. Nevertheless, this illicit structure is a mainstay. So taking down one politician or business person, will not have a domino effect beyond their immediate cadre of helpers and perhaps one or two senior allies, because their affairs are rarely strongly interconnected with a much larger network of business/political figures.

Corruption misnomers

Another challenge facing the anti-corruption movement in PNG, is dispelling problematic assumptions.

For example, it is something of a misnomer to claim that Melanesian cultural norms are to blame for corruption. So the argument goes, Western style market and political transactions have become tainted by Melanesian kinship obligations.

While it is certainly true, kinship bonds can act as an important glue for closed corrupt networks, they are not the cause of corruption, they are simply a means through which revenue theft is better organised, drawing on the secrecy and loyalty kinship bonds afford.

Similarly, it is equally problematic to claim it is an ‘Asian’ disease. While it is certainly evident that Malaysian, Chinese and Filipino business people are actively rigging markets for considerable profit in PNG, there is a lot of evidence to suggest Australians have been equally prolific – although receiving much less share of the blame.

So it would be dangerous to suggest any foreign region is more prolific than others – but it can be safely said, foreign business people and professionals are high frequency actors in grand corruption as practiced in PNG.

Accordingly, steps must be taken to work with those  foreign states willing to place pressure on these transnational networks, through prosecutions and asset seizure.

Conclusions: Steps we can take to combat corruption

All of which may come as cold comfort for PNG citizens who have the unedifying task of working hard for their income, while being extorted through unfair market monopolies. And then as if to add injury to insult, citizens must endure limited, substandard government services and infrastructure, frequently the result of inflated contracts executed with no serious oversight.

However, be that as it may, unless we begin to map this system in intricate detail, formulating strategies to fight it will be educated guess work at best, rather than evidence based anti-corruption policy.

Of course it may be asked, whats the point in building an evidence based strategy, given the national government has not even followed through on an elementary promise to launch the proposed ICAC?

But long journeys take place through small steps. Each forward step in our knowledge, analysis and practice, is one step closer to the goal of making some serious inroads on corruption, however long the journey will be.

In short there is no diamond bullet.

But we can take steps in the right direction, like:

• Consolidating data-sources on corruption, so we can build more accurate empirical models of the networks, processes and mechanisms used to commit grand corruption in PNG.
• Apply novel data-analysis tools to squeeze more juice out of this data, to improve the quality of our theory.
• Expose publicly those involved in corrupt transactions and the techniques they use.
• Support victims seeking justice or restitution.
• Patronise media organisations and social media outlets putting a credible spotlight on corruption.
• Consolidate public pressure around a set of primary objectives, such as the establishment of an ICAC, or to launch an open-data project on public procurement.
• Build better relationships between community groups, NGOs, media organisations and research institutions, involved in the fight against corruption.
• Support those civil servants and politicians demonstrating a genuine commitment to anti-corruption measures.
• Acting as a critical friend of anti-corruption agencies, ensuring they are conducting robust, efficient investigations, and are being supported by government through adequate budgets and infrastructure.
• Promote a culture of transparency and data-openness, ensuring all oversight organisations are making their reporting available to the public in a timely and accessible manner.
• Target known choke points in virulent corrupt schemes, such as Supply and Tender Boards, or prolific banking institutions and law firms.
• Remain vigilant, ensuring revelations and recommendations produced through commissions of inquiry, etc., are not forgotten.

Of course, this list could go for many pages. The point is, if we try to eat the entire meal of anti-corruption in one bite, its impossible. But we can begin to make progress, one bite at a time.

The greatest defence corrupt networks have, is a public who feels disempowered and demoralised – and sometimes just a few victories can suddenly electrify a nation.

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Good Governance, Corruption, and Papua New Guinea’s Public Service

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The Pacific Island region comprises a diverse array of countries that face a variety of challenges. For some, this includes weak governance and public sector corruption. This chapter explores these issues by drawing on research with public servants in the largest (by population and landmass) Pacific Island nation, Papua New Guinea, a country categorized by many as acutely corrupt. In line with scholars who suggest good governance should be tied to the delivery of political goods, it finds that public servants prioritize service delivery over impartiality. This is in part because many believe laws and rules are overly onerous, relevant guidelines and laws are difficult to locate, and public servants are under enormous pressure to provide unofficial favors to businesses, politicians, and kith and kin. Government policies that have strengthened relations between MPs, citizens, and public servants have exacerbated these pressures. In addition, public servants face significant barriers to reporting corruption, a key threat to good governance. The chapter highlights the importance of grounding debates about good governance by reflecting on the contextual challenges facing public servants. It argues that efforts to shift the status quo in PNG and places like it must take into account the contextually specific relationships between bureaucrats, business elites, politicians, and citizens, which vary across the country.

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Walton, G.W. (2020). Good Governance, Corruption, and Papua New Guinea’s Public Service. In: Sullivan, H., Dickinson, H., Henderson, H. (eds) The Palgrave Handbook of the Public Servant. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-03008-7_65-1

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Original document

• Investigation Taskforce Sweep
• Published: September 30, 2013

Paper published in the Griffith Journal of Law and Human Dignity

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Page 2 of 17

GRIFFITH JOURNAL OF LAW & HUMAN DIGNITY

Editor-in-Chief Kelli Lemass

Managing Editors Jessica Armao Daniel Marcantelli

IT Administrator & Editor Troy Maloney

Ryan Anderson Mignote Hannaford Adele Anthony Beau Hanson Mark Brady Jonathan Kwok Tasnova Chowdhury Felicia Lal Brianna Edwards Michelle St.Ange Simone Gray Josephine Vernon Michelle Gunawan Danielle Warren

Consulting & Executive Editor Dr Allan Ardill

Volume 1(2) 2013

Published in September 2013, Gold Coast, Australia by the Griffith Journal of Law & Human Dignity

ISSN: 2203-3114

Page 3 of 17

DR JIM ELMSLIE AND DR A SLOW-MOTION GENOCIDE: INDONESIAN RULE IN WEST PAPUA 142 CAMELLIA WEBB-GANNON

COLLEEN DAVIS MERCIFUL ACTS AND CRUEL OMISSIONS 166

TRACEY SPICER RIGHT TO DIE: THE CORNERSTONE OF A DIGNIFIED SOCIETY 190

DR PAUL WILLIS POPULATION: THE ELEPHANT IN THE ROOM FOR LAWYERS 199

DANIELA GUITART, DR FARMERS’ RIGHTS IN AUSTRALIA: COMMUNITY GARDENS MAY BE 216 CATHERINE PICKERING, DR A WAY IN WHICH A DEVELOPED COUNTRY COMPLIES WITH ITS JASON BYRNE AND DR CHARLES INTERNATIONAL OBLIGATIONS LAWSON

SAM KOIM TURNING THE TIDE: CORRUPTION AND MONEY LAUNDERING IN 240 PNG

DR JILL GUTHRIE, DR MICHAEL INVESTMENT IN PRISONS: AN INVESTMENT IN SOCIAL 254 LEVY & DR CRESSIDA FFORDE EXCLUSION? Linking the Theories of Justice Reinvestment and Social Inclusion to Examine Australia’s Propensity to Incarcerate

Page 4 of 17

TURNING THE TIDE: CORRUPTION AND MONEY LAUNDERING IN PNG

Corruption has a vast impact on Papua New Guinea and its people. Addressing the humanitarian problems that it creates requires a joint proactive effort between Australia and Papua New Guinea. This article provides a renewed insight into the ongoing money laundering in Papua New Guinea and the initiatives of Taskforce Sweep in combating corruption. The article suggests increased efforts by all institutions and persons involved while also placing an emphasis on the fragile, yet growing voices for accountability within Papua New Guinea.

I INTRODUCTION……………………………………………………………………………………………………………… 240

II THE PILLAGING OF PAPUA NEW GUINEA: JOINT FRONTIER………………………………………….. 242

III CORRUPTION IN PAPUA NEW GUINEA: IMAGININGS AND COMPARATIVES……………………… 243

IV WHEN YOU FIGHT CORRUPTION, IT FIGHTS BACK………………………………………………………… 244

V TASKFORCE SWEEP: A PROACTIVE APPROACH TO MONEY LAUNDERING………………………. 245

VI AUSTRALIA’S INTERNATIONAL ANTI-MONEY LAUNDERING OBLIGATIONS……………………. 247

VII CONCLUSION………………………………………………………………………………………………………………….. 249

I INTRODUCTION

Corruption has been affecting Papua New Guinea for many years, the consequences of which have resulted in vast quantities of monies flowing into other nations, particularly Australia. While the opportunities in Papua New Guinea should be plentiful, the risks of corruption becoming out of control have imposed a great strain upon such an ideal. This essay will argue for a renewed approach to corruption, one that includes both Australia and Papua New Guinea. It will do so by focussing on those responsible and their

∗ Sam Koim is the Chairman of Papua New Guinea’s anti-corruption taskforce, ‘Taskforce Sweep’. He has maintained a consistent voice against corruption in Papua New Guinea and the broader region.

Page 5 of 17

TURNING THE TIDE: CORRUPTION AND MONEY LAUNDERING IN PNG VOL 1(2) 2013

dealings, and the financial and humanitarian issues surrounding corruption, before concluding with recommendations and the outlook for “Taskforce Sweep”.

Australia is fast becoming the Cayman Islands in relation to money laundering and housing the proceeds of corruption from Papua New Guinea. 1 What prompts such remarks is the significant portion of funds obtained by the corrupt in Papua New Guinea that find their way into Australian bank accounts and real estate. 2 The Cairns North Registrar of Titles (‘CNRT’) outlines how many properties are owned by Papua New Guineans, including politicians and top bureaucrats.

A recent report in an article from a Cairns newspaper revealed that the residents of Papua New Guinea are the largest investors in far north Queensland, according to the latest figures from the CNRT. 3 It is also understood that six known politicians (named) have invested in multimillion-dollar properties up north and in central Cairns, to a tune of AUD$11.5 million (K$24.5 million). Respectively, the investments are AUD$3.8 million, AUD$1.9 million, AUD$2.3 million, AUD$2 million, and AUD$1.45 million. 4

Furthermore, it was recently reported that Papua New Guinea’s investment in Australia reached US$1.2 billion, according to Asian Development Bank economist Mr Aaron Batten. 5 This does raise the concern that not all of these investments are derived from legitimate funds given the magnitude of investment and the particular assets involved. The question that now begs an answer is whether the banking industry in Australia is doing business with “dirty” money? This is sobering news and, in my opinion, the authorities of Australia should prevent this, or, at the very least seize and return the money if it is not clean. Australia has never repatriated any proceeds of corruption to Papua New Guinea. The corrupt activity has involved the purchase of property and other tangible assets, the shifting of money into bank accounts, and excessive gambling in Australian casinos. To this end, they have never been troubled by having their ill-gotten gains taken off them. Unless the money can be prevented from leaving Papua New

1 Liam Fox, ‘Australia used to launder PNG’s dirty money’, ABC News (online), 10 October 2012 . 2 Ibid. 3 Nick Dalton, ‘PNG investors eye Far North Queensland’, The Cairns Post (online), 11 April 2012

. 4 ‘PNG Politicians invest millions in Cairns’, Pacific Islands News Association (online), 3 May 2012

. 5 Todagia Kelola, ‘Aust ‘hides PNG cash’’, Post-Courier (online), 8 October 2012

Page 6 of 17

VOL 1(2) 2013 GRIFFITH JOURNAL OF LAW & HUMAN DIGNITY

Guinea or prevented from entering Australia, then the corrupt few win and the rest of Papua New Guinea suffers. Let it be known, Papua New Guinea is suffering. 6

II THE PILLAGING OF PAPUA NEW GUINEA: JOINT FRONTIER

Seven million Papua New Guineans live in the nation that is Australia’s closest neighbour, 7 yet 90 per cent do not have access to electricity. 8 Consider also that 57 per cent live on less than two dollars a day, 9 31 per cent have access to a safe water supply, 10 and only 46 per cent complete primary school. 11

Imagine a country richly endowed with natural resources, sometimes called an ‘island of gold, floating on a sea of oil’, 12 so rich, yet its people are so poor. How frustrating it is to watch the richness of one’s homeland vanish into the hands of the few. Papua New Guinea is a recipient of more Official Development Assistance (through the Australian Agency for International Development (‘AusAID’) than any other nation neighbouring Australia. 13 A good portion of this is spent trying to combat corruption. AusAID used to be in the form of cash grants to the Papua New Guinean government to support its budget. Yet some years ago, it was converted to tied grants. 14 It is understood that, as a result, Australia now spends more money in managing its aid in Papua New Guinea. 15

6 Fox, above n 1. 7 United Nations Children’s Fund (‘UNICEF’) (PNG), Papua New Guinea – A diverse people and landscape . 8 New Zealand Aid Programme, New Zealand Ministry of Foreign Affairs and Trade, Improving on 10% –

delivering electricity to PNG’s remote communities (November 2012) . 9 Population Reference Bureau, Population Living Below US$2 per Day

. 10 United Nations Educational, Scientific, and Cultural Organization (‘UNESCO’), Access to electricity and

water for domestic use . 11 UNESCO, National Report On The State-Of-The-Art Of Adult Learning And Education In Papua New Guinea

–A Situational Analysis (30 June 2008) . 12 Byron Chan, ‘Give resource ownership back to the people: Chan’s full speech’ (Speech delivered at the

Office of the Minister for Mining, The Yacht Club, 11 August 2011) . 13 Australian Agency for International Development (‘AusAID’), About Australia’s Aid Programme (30

August 2012) . 14 AusAID, A Review of the Effectiveness of the Development Import Finance Facility (DIFF) (January 1996)

(emphasis added). 15 Ibid.

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However, it is not only Australia. The Asian Development Bank (‘ADB’) has also switched its approach and is now managing its own projects. 16 It is my consideration that one of the main risk factors in that change of operation is corruption. Corruption does not only impact Papua New Guinea, it is a transnational force that affects Australia as well. We believe that Australia understands Papua New Guinea more than any other nation, which is owed to our historical and continued mutual relationships. Based on this premise, both nations can and should collaborate in devising mechanisms that help detect and combat money laundering and cross-border corruption.

III CORRUPTION IN PAPUA NEW GUINEA: IMAGININGS AND COMPARATIVES

Taskforce Sweep was charged with addressing corruption so far as possible with relatively limited resources. The enormity of such a task should not be underestimated. Imagine what would happen in Australia if the Department of Finance refused to answer to the Parliament. Imagine if its members disbursed money without recourse to the national accounts, or if they colluded both internally and externally with the department to circumvent all controls. Imagine if this misappropriation amounted to half of the annual government budget. To this extent, imagine corruption so pervasive that half of the annual funding intended for policing, the judiciary, correctional facilities, the ombudsman, Financial Intelligence Unit, the taxation office, the crime commission and any other anti-corruption body, was misappropriated even before it was disbursed to the authorities. Imagine you have a Fraud and Anti-Corruption Unit that is given just under AUD$94,000 annually to combat corruption. What if that meant that the police cars had no fuel, did not get serviced, the power went out in the police stations (and across the cities) for hours every day, or the water and phones were cut off for weeks or months because the bills were not paid? These are the experiences of Papua New Guinea.

What is more, despite the new government spearheading changes and making some headway, 17 many who have acted corruptly in the past are still in positions of authority

16 Asian Development Bank, Operations-Project Design and Management . 17 AusAID, Joint statement on zero tolerance to fraud in Australia’s aid programme to PNG (4 October 2012)

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in government departments and are still able to misappropriate vast sums of money. 18 This misappropriation is the combined result of thousands of offenders, some of whom are in positions of considerable influence, and they are not about to give up their income streams without a fight.

IV WHEN YOU FIGHT CORRUPTION, IT FIGHTS BACK

The sad reality is that, until recently, Papua New Guinea was estimated to be losing about half of its government budget annually as a direct consequence of fraud and corruption. 19 Numerous inquiries by the government, including those made into the Department of Finance and the Parliamentary Public Accounts Inquiry, described the terrible state of the public service and the leakage of money. In some instances, Papua New Guinea was losing billions of dollars a year in public revenue and, to a lesser extent, is still losing large amounts of money to corruption. 20

Through the investigations carried out by Taskforce Sweep, there have been multiple incidents that have been uncovered involving institutionalised and syndicated corruption. This complex network of corrupt activity occurs where private companies, through collusions with public officials and politicians, have infiltrated the government budgetary processes under the pretext of development projects, and squandered billions of kina. Corruption has distorted open markets for government contracts, as institutions that are established to administer the public procurement process wantonly apply the rules and have instead become havens, orchestrating government contracts under a thick veil of secrecy.

The government relies heavily on the private sector to drive its development agendas, 21 but once the market is distorted, bogus companies of political cronies float to the top of

18 Papua New Guinea (10 March 2013) Shaping Change – Strategies of Development and Transformation . 19 Dylan Welch, ‘Expert Says Australia is housing proceeds of political corruption’, Sydney Morning Herald

(online), October 11 2011 . 20 Cathy Devani, Maurice Sheehan and Don Manoa, ‘The Commission of Inquiry Generally Into the

Department of Finance – Final Report’ (Report, 29 October 2009) . 21 Papua New Guinea Embassy, Beijing, Investment Profile

. See also ABC Radio Australia, ‘World Bank urges PMG to support private sector growth’, 21 December 2012 (Tim Bulman) .

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the list while genuine and reputable companies sink to the bottom. With the support of their connections in government, these front companies squander funds while the people continue to lack basic goods and services. A powerful minority mob establishes potent networks to decide who should get what. They plunder the rich resources of the country at the expense of the vast majority, turning the constitutional democracy of Papua New Guinea into a mobocracy and kleptocracy. In corrupt circles “who you know” is the mantra that builds the channels of wealth creation and wealth transfer.

There exists some irony because the challenge is not identifying offenders; that is all too easy in the scheme of things. Indeed, much of the corruption is carried out using government cheques placed into accounts under the offender’s own name and companies with which they have direct links. The challenge rather is to prevent the continuation of offences, providing a deterrent to those who are still in the process of acting corruptly and those who might do so in the future. This approach is also intended to reduce the ease with which the corrupt are able to shift the proceeds of their activity and remove the opportunity for them to enjoy their ill-gotten gains.

Taskforce Sweep has started to restrain the proceeds of some of the offences, but again there are a significant amount of offenders and so many continuing offences that, unless their “gateways” are squeezed, Taskforce Sweep will never be able to achieve a significant impact. Only 100 miles north of Australia is Papua New Guinea. Papua New Guinea has so many leakages that they have created a pool of illicit monies floating around its territorial banks in search of an opening offshore. It is arguable that Australia has passively allowed those illicit funds to be channelled into this country.

V TASKFORCE SWEEP: A PROACTIVE APPROACH TO MONEY LAUNDERING

The Government of Papua New Guinea has taken a proactive approach to combat corruption and money laundering by appointing Taskforce Sweep, which has arrested politicians, senior public servants and business persons. Moreover, Taskforce Sweep has also recuperated millions of kina through tax and proceeds of crime recovery. The necessity to change is too great and the people of Papua New Guinea demand it. Yet, up until recently, regardless of public outrage, offenders have known that there was little

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that could be done even if everyone knew what they were doing. 22 Allegations have been published in both Australian and Papua New Guinean newspapers, 23 but unless there is something to stop the offender, or to confiscate these illicit funds, they will carry on with impunity. There have been instances where suspects of corruption escape jurisdiction and continue to live and access their ill-gotten gains in Australia. This must be a thing of the past, as recent events between both nations indicate there will be a much greater level of cooperation between both governments.

Taskforce Sweep will provide a list of politically exposed persons to the Australian Transaction Reports and Analysis Centre (‘AUSTRAC’) and the Australian Federal Police (‘AFP’) through the normal information sharing between national agencies. Where Taskforce Sweep observes instances of remittance to Australia by such persons in the future, it will be providing the AFP with the evidence that the funds are proceeds of crime and making a specific request that the institution involved be investigated for potential offences against Division 400 of the Australian Criminal Code. 24

Where that occurs, the Attorney-General of Papua New Guinea has been briefed to ascertain the process of obtaining damages from Australian financial institutions that have been found to have acted negligently with respect to the facilitation of money laundering from Papua New Guinea. There is no doubt that Papua New Guinea is a high- risk nation when it comes to corruption. As a nation, its risks concern Australian institutions when they receive remittances with such a provenance, but particularly from people categorised as ‘politically exposed’. 25

These persons have chosen Australia as their preferred place to launder and house the proceeds of their crimes because it is easy. Cairns is only a short flight from Papua New Guinea and property can be bought off the plan and without permission. The financial system is stable and it has been, up until now, an extremely simple process to get their money into the Australian system. Again, one need only conduct a search at the CNRT to ascertain how many properties are being bought by Papua New Guineans, including 22 Malum Nalu, ‘PNG sharpens up fraud and corruption tackling skills’, Pacific Media Centre (online), 27

February 2011 . 23 Ibid. See also Welch, above n 19. 24 Criminal Code Act 1995 (Cth). 25 ‘ExxonMobil LNG project blighted by corruption and security concerns’ on Crime and Corruption PNG:

The Issues Behind the Headlines (19 January 2010) .

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those by politicians. 26 It is hoped that, in the very near future, Australia will commence conducting enhanced due diligence in its dealings with these persons and, as part of this process, inform AUSTRAC. 27

Taskforce Sweep has become increasingly dissatisfied as it has progressed. This dissatisfaction is perpetuated by the Australian financial system which is being used to systematically launder tens of millions, and possibly hundreds of millions, of kina that should be used for other ends. These include providing healthcare, education, and infrastructure for Papua New Guineans, all of which are the priority areas of the government that the author represents.

VI AUSTRALIA’S INTERNATIONAL ANTI-MONEY LAUNDERING OBLIGATIONS

Australia maintains its obligations under the G20 Anti-Corruption Plan, 28 the United Nations Convention Against Corruption (‘UNCAC’), 29 and the Financial Action Task Force (‘FATF’). 30 However, the most compelling reason to maintain these obligations is Division 400 of the Australian Criminal Code because it reflects the need to sanction such corrupt conduct as a clear means of deterrence. 31 One must also compare the Financial Transaction Reports Act 1988 32 and the Anti-Money Laundering and Counter- Terrorism Financing Act 2006 against the Proceeds of Crime Act 2005. 33 These laws impose _on Australians, as cash dealers, duties to conduct due diligence when dealing with customers. The task force wants these dealers, in conducting enhanced due diligence, to ensure that the transactions being conducted are consistent with their knowledge of the customer and their business. In addition to this, when they are conducting large transactions or frequent smaller transactions, that dealers assure Taskforce Sweep of the source and legitimacy of the funds.

26 Dalton, above n 3. 27 AusAID, above n 16. 28 Group of Twenty Research Group, Annex III: G20 Anti-Corruption Action Plan (12 November 2010)

University of Toronto . 29 United Nations Office on Drugs and Crime, United Nations Convention against Corruption

. 30 The Asia/Pacific Group on Money Laundering and The World Bank, ‘Mutual Evaluation Report: Anti-

Money Laundering and Combating the Financial System’ (Report, 21 July 2011) . 31 Criminal Code Act 1995 (Cth). 32 Financial Transaction Reports Act 1988 (Cth). 33 Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth); Proceeds of Crime Act 2005

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Taskforce Sweep also wants Australia to extend its due diligence checks by conducting a “means test”. This is under the proviso that Australia will not err if one is conducted for every transaction that derives from Papua New Guinea. This extends to Western Union money transfers, chartered accountants, law firms, financial investment companies, and other cash dealers such as heavy equipment dealers and real estate agents that appear to be commonly used to launder funds. These too require some form of scrutiny. There also appears to be some structuring and layering of money amounts. If Australian cash dealers are unable to comply with those requirements, Taskforce Sweep asks that the performance of the transactions be refused and that the termination of the business relationship be pursued. This can be addressed by posing these questions:

• Request their tax returns and their business tax returns and ask for their bank statements. If it is a politician, ask them for the asset and income declaration they are required to provide every year to the Ombudsman Commission. • If they claim that the money is from a business, ask for copies of that business’ bank statements. If they claim the business has a large government contract, ask to see the contract and make sure it is not from the department they work for. • If it is for investment by a company, does the bank statement show that the company was in business and, if so, what sort of business? Has it received any funds from the government and, if so, had the purposes to which the funds were paid fulfilled? • If it is from a personal account, ask them for their salary slips and evidence of loan. • If it is from an Australian-based company transacted within Australia for the benefit of a Papua New Guinean, ascertain whether that company had received some funds from Papua New Guinea and, if so, make enquiries to establish whether that company was used as a front to launder proceeds of corruption. • Ask them for information so that it can be reasonably assured that they are not engaging in a money laundering transaction.

The answers to such questions should be made available to AUSTRAC in further consultation with them on what is required to ensure that Australians are not being negligent or reckless under Division 400 of the Criminal Code. 34 If the AFP come

34 Criminal Code Act 1995 (Cth).

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knocking, it will be necessary to show that conduct was sufficient to satisfy due diligence and to ensure that a reasonable person would not have thought the institution involved was negligent or reckless in its dealings. The responsibilities may seem onerous but the stakes are high.

VII CONCLUSION

The environment has changed. The government of Papua New Guinea has also changed and will actively seek to ensure that Australian authorities stop funds being laundered between both nations. Taskforce Sweep has been instructed to collaborate with Australian authorities to make this happen. This is not so much about the process as it is the result. Until the offenders cease using Australia as a Cayman Islands, Taskforce Sweep will continue to increase the pressure. While bilateral assistance will prove crucial, Taskforce Sweep will also seek to have those who continue to turn a blind eye punished in order to bring them into line. This process starts today.

Corruption is a humanitarian problem and dramatic emphasis on this is necessary. Papua New Guineans are suffering and dying because of corruption. This is no theoretical process. When money that is supposed to build hospitals or buy medical equipment is used to buy real estate in Cairns or Brisbane, people die. Those that turn a blind eye to this are as guilty as the offenders. In Papua New Guinea, Taskforce Sweep is doing all that is possible to stop corruption and to prevent the proceeds of corruption from entering the financial system. However, very limited resources and the extent of corruption means there is a long way to go before corruption is stopped altogether. Corruption must be met with a proactive and joint frontier. It is time Papua New Guinea faces a renewed and shared outlook as a nation and, like a big ship, it is taking a while to turn. As this happens, it is crucial that Australia be prepared to abide by its international anti-money laundering obligations.

Some may ask whether it is unfair that such pressure be applied to bankers and not police. When the time is taken to peruse the examples of money laundering that have been conducted through the Australian financial system as outlined in this article and to understand the ramifications in human cost, the answer will be obvious. 35 The view of

35 Nalu, above n 23.

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Australia as the Cayman Islands is not a personal one, 36 but that of Papua New Guineans. 37 This article has argued for a renewed focus and cooperation between Australia and Papua New Guinea when dealing with corruption. It has explored the repercussions of corruption for both nations while also identifying the ongoing fight with corruption and its institutionalisation. Lastly, the article concluded with recognising current international obligations and recommendations to begin eliminating corruption. The cries of the people of Papua New Guinea must be heard, they must be given a voice.

36 Ibid. 37 Fox, above n 1.

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REFERENCE LIST

A Articles/Books/Reports

Devani, Cathy, Maurice Sheehan and Don Manoa, ‘The Commission of Inquiry Generally Into the Department of Finance – Final Report’ (Report, 29 October 2009)

The Asia/Pacific Group on Money Laundering and The World Bank, ‘Mutual Evaluation Report: Anti-Money Laundering and Combating the Financial System’ (Report, 21 July 2011) http://www.apgml.org/documents/docs/17/PNG%20MER_July%202011.pdf

B Legislation

Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth)

Criminal Code Act 1995 (Cth)

Financial Transaction Reports Act 1988 (Cth)

Proceeds of Crime Act 2005 (Cth)

ABC Radio Australia, ‘World Bank urges PMG to support private sector growth’, 21 December 2012 (Tim Bulman)

Asian Development Bank, Operations-Project Design and Management

Australian Agency for International Development, A Review of the Effectiveness of the Development Import Finance Facility (DIFF) (January 1996)

Australian Agency for International Development, About Australia’s Aid Programme (30 August 2012)

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Australian Agency for International Development, Joint statement on zero tolerance to fraud in Australia’s aid programme to PNG (4 October 2012)

Chan, Byron, ‘Give resource ownership back to the people: Chan’s full speech’ (Speech delivered at the Office of the Minister for Mining, The Yacht Club, 11 August 2011)

Dalton, Nick, ‘PNG investors eye Far North Queensland’, The Cairns Post (online), 11 April 2012

‘ExxonMobil LNG project blighted by corruption and security concerns’ on Crime and Corruption PNG: The Issues Behind the Headlines (19 January 2010)

Fox, Liam, ‘Australia used to launder PNG’s dirty money’, ABC News (online), 10 October 2012

Group of Twenty Research Group, Annex III: G20 Anti-Corruption Action Plan (12 November 2010) University of Toronto

Kelola, Todagia, ‘Aust ‘hides PNG cash’’, Post-Courier (online), 8 October 2012

Nalu, Malum, ‘PNG sharpens up fraud and corruption tackling skills’, Pacific Media Centre (online), 27 February 2011

New Zealand Aid Programme, New Zealand Ministry of Foreign Affairs and Trade, Improving on 10% – delivering electricity to PNG’s remote communities (November 2012)

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Papua New Guinea (10 March 2013) Shaping Change – Strategies of Development and Transformation

Papua New Guinea Embassy, Beijing, Investment Profile

‘PNG Politicians invest millions in Cairns’, Pacific Islands News Association (online), 3 May 2012

Population Reference Bureau, Population Living Below US$2 per Day

United Nations Children’s Fund (PNG), Papua New Guinea – A diverse people and landscape

United Nations Educational, Scientific, and Cultural Organization, Access to electricity and water for domestic use

United Nations Educational, Scientific, and Cultural Organization, National Report On The State-Of-The-Art Of Adult Learning And Education In Papua New Guinea –A Situational Analysis (30 June 2008)

United Nations Office on Drugs and Crime, United Nations Convention against Corruption

Welch, Dylan, ‘Expert Says Australia is housing proceeds of political corruption’, Sydney Morning Herald (online), October 11 2011

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• Australian Aid Tracker
• Aid Profiles
• PNG Databases
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Electoral corruption in PNG: caught between the law and a hard place

Papua New Guinea (PNG) is about to go to the polls. From 24 June 2017, voters will line up to choose MPs for 89 ‘Open’ and 22 Provincial electorates. If past elections are anything to go by, containing corruption will be a significant challenge. In the 2012 election there were widespread reports of bribery and fraud involving candidates, citizens and electoral officials. Electoral observers also found that bribery, fraud and ‘money politics’ were spreading from the highlands to the coastal regions. This is deeply concerning as corruption distorts and undermines democracy.

There has been some progress around electoral corruption since the last national election. In October 2013, PNG’s Supreme Court found that all forms of exchange of goods and money by candidates during the election period amounts to illegal bribery. The ruling suggested such activities should occur prior to the election period. This latest case, titled Aihi v Isoaimo (2013) PGSC 56; SC1276 , is now the law. This stricter approach is beneficial, as it is designed to discourage candidates from participating in expensive customary obligations, and to mitigate voters being influenced by money politics.

This ruling augments existing laws that outlaw electoral corruption. Section 103 of PNG’s Criminal Code Act (CCA) criminalizes attempts to provide benefits to electors, soliciting benefits in return for votes, or receiving benefits to influence the outcome of elections. Although election bribery should be a very serious offence, the law categorizes it as a misdemeanor: it is punished by a fine not exceeding 400 kina (A$164) or imprisonment for no more than one year. Given the millions of kina spent on elections this is not a significant deterrent.

A potentially more potent law is Section 215 of the PNG Organic Law on National and Local Government Elections (OLNLGE). It vests in the National Court of PNG the authority to declare an election void if it finds that the candidate had committed or had attempted to commit bribery or undue influence to get elected. Such a finding by the court does not bar or prejudice a prosecution for bribery under the CCA.

Despite these legal instruments there is little to suggest corruption will be significantly contained in 2017. For a start the Electoral Commission is suffering from a lack of funds , as are the police . The ratio of citizens-to-police has significantly worsened– it is nearly four times worse now than during PNG’s independence in 1975. Sitting MPs have distributed their growing constituency funds over the past five years, which have been used to strengthen patronage among past and potential supporters. In many places, this is likely to increase expectations of largesse distributed during the election campaign.

More importantly, there are few indications of significant shifts in the complex socio-cultural factors that drive corruption during elections. Research has found that citizens, particularly women, feel obliged to vote for local ‘big men’ . A candidate who is insensitive to or out of touch with the people and their custom can be regarded as “whiteman gat blackman skin” , meaning a Papua New Guinean who does not know how to connect to their people and their custom. Citizens also justify selling their vote due to material concerns, such as poverty and lack of state services .

Recently people have been getting around the Supreme Court’s ruling banning ‘money politics’ during campaigns by extending mourning periods ( haus krai ) for deaths, and scheduling compensation payments, bride prices, feasts and other festivities through the election period. Despite the ban, one of us (Sam) has observed political events that have continued through the official electoral campaign period.

Given these factors it is unlikely that, in and of itself, a change of law will significantly reshape electoral practices – even though this is a step in the right direction.

Due to the inability of the PNG state to enforce its laws, many are rightly worried that this year’s election will see a rise in vote-buying, electoral engineering and other forms of corruption. In private, some observers predict anarchy. For the doomsayers it’s worth remembering that PNG is one of the few developing countries that have not succumbed to military rule since independence. Democracy has been severely challenged but the country has not descended into dictatorship (no matter what some social media warriors suggest).

It is also worth remembering that these are long-running issues. For example, the tension between rule of law and socio-cultural factors can be traced back to PNG’s independence (and into the colonial period). PNG’s Constitution recognizes the importance of customary practices as long as they are not inconsistent with a Constitutional Law or a statute, or contravene human rights. This is reflected in past Supreme Court rulings. In the election petition case of Peter Wararu Waranaka v. Gabriel Dusava PGSC 11; SC980 (2009) – a dispute over the outcome of the 2007 national election in Yangoru-Saussia Open – the Supreme Court took a liberal view, noting that:

the political campaigning period is…marked with a lot of festivities and activities. It is a time when a lot of customary obligations are met and often times money and other goods exchange hands. Most of these are to strengthen existing relationships in some cases and in others, creating and entering into new ones. In these settings, leaders are often expected to take the lead, throw up parties and help meet or reimburse expenses incurred by their people or supporters. Care must therefore be exercised to ensure that genuine gifts and meetings of customary obligations with words spoken are considered in their proper context to avoid any misunderstandings and taking matters out of context.

While this ruling has been superseded by the stricter 2013 Supreme Court judgment we discussed earlier, it highlights how important tradition and culture are not only for PNG’s citizens, but also for its lawmakers during elections.

It is hoped that the courts and law enforcement will draw on PNG’s improved laws to go after candidates who engage in electoral corruption. However, without responding to the deeper political, economic and socio-cultural factors driving corruption, it is likely that they will only be addressing the symptoms, not the causes of the problem.

Sam Koim is a Visiting Fellow and Grant Walton is a Research Fellow at the Development Policy Centre.

Related posts:

• What went wrong with the 2022 elections in PNG?
• Women in the 2022 PNG elections
• Why were so many MPs re-elected in Papua New Guinea's 2022 elections?
• Why we need to start worrying about next year's elections in Papua New Guinea
• Papua New Guinea's revolving door

Sam Koim is a Papua New Guinean lawyer whose career has focused on anti-corruption efforts. He was a Principal Legal Officer at the PNG Department of Justice and Attorney General, before becoming Chairman of Investigation Task Force Sweep, PNG’s multi-agency anti-corruption body. He is also a Council Member of the Papua New Guinea University of Technology.

Grant Walton

Grant Walton is an associate professor at the Development Policy Centre and the author of Anti-Corruption and its Discontents: Local, National and International Perspectives on Corruption in Papua New Guinea .

Article discusses electoral laws re: bribery, etc, by candidates.

LPV, the conduct of the Electoral Commission is the biggest fraud since the inception of LPV. Very rarely is the biggest fraudster discussed

To solve this problem, why not the government set a Law to assessed all intending candidates with a criteria…

PNG is no exception of bribery and dishonesty. this is a good article. people won’t change their mindset even in the later year

Blind Freddy could have predicted the mess the results of the recent PNG, General Election has apparently descended into. In fact, many who have some inkling of PNG politics already did.

In the age old PNG fashion of attacking the result and ignoring the person or people responsible, everyone appears to now be casting around for someone, anyone really, to blame.

If someone wanted to blame anything or anyone it’s easy to find the real answer. You don’t even need the eyeglasses and hearing aids being offered by former PM Sir Mekere Morauta.

The current system of PNG of government and a democratic election of a Westminster Parliament is basically foreign to the vast majority of PNG people. The system was thrust upon them by well-meaning but hopelessly out of touch people in the past and was gratefully accepted by those at the time who saw their opportunity for personal gain.

Those like Mr Koim who are educated and experienced have been outmaneuvered by those who are able to manage the PNG politics at the village and clan level. In other words, the educated elite are in reality disconnected from the majority of the rural population. Those who live in the various regional areas are in turn totally disconnected from other regions who are seen at best, as competitors for the benefits promised by would be leaders. In the past, people from other areas were seen as the enemy.

There is no national, holistic PNG spirit. It only begins to start to show its head when someone from the outside points out what’s wrong or in a sporting match when PNG is playing against another nation. It reminds me of a slogan on a ‘T’ shirt seen in NZ where the wearer claimed ‘I support New Zealand and any team playing against Australia’.

Half the PNG nation is under 20 and many don’t have any expectation of getting viable employment except subsistence farming irrespective of what education they receive. PNG election rallies are just a time to enjoy letting off steam. No one really believes what is being said anymore. Kinda reminds you of political statements in the rest of the world doesn’t it?

So what’s the answer? Clearly no one in any vague sort of position of power that might help correct the situation has any real idea. The obvious lessons of history are just too tough to chew on. Both Canberra and Waigani prefer a softer, more electoral nourishing ‘kaikai’.

In the meantime, the corrupt will continue to rule, exactly like those so called ‘Robber Barons’ did hundreds of years ago in Europe.

Spot on, Paul.

Thanks for the discussion on electoral corruption.

The term electoral corruption in PNG context comes in different forms and complexity including abusing formal election campaign process and procedure, abusing the electoral system itself, exploiting the security personnel, polling and counting officials during polling and votes counting period to serve one’s interest for political power or grip onto political power.

It is actually incited by the sitting MPs and intending candidates so the electoral corruption actually started with this cohort of so call leaders and wana be leaders. The voters, security personnel, electoral and polling officials and the electoral systems itself fall victims to these practices. This is the order of business in PNG elections, if you are a politician or a candidate, you cannot deny going through these electoral corruption at one stage or another.

In fact, everyone knew there is laws that governs the conduct of election campaign, polling and votes counting conduct to declare someone as an MP, but no fear, do what you can to get into power is the norms. Later you face the laws and find your way out through.

However, how the winning candidate or MP facing the laws (if implicated) is another long journey and that can only be done if someone (a losing candidate) has the resources-money to meet all the legal bills and other expenses to bring a case to court, which in many cases worth more than how much he/she spends on election campaigns.

Still in PNG, enforcing current electoral laws or introducing new laws will not deter the corruption in electoral politics. We need to understand the political economy of PNG relating to election and the PNG cultural/traditional practice of leadership.

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The 2022 Corruption Perceptions report highlights the urgent need for Government to take immediate and serious action to address corruption.

• January 31, 2023

Today, Transparency International PNG released the results of the 2022 Corruption Perceptions Index (CPI) in line with the uplifting of the global embargo.

The CPI is a survey that scores countries and territories around the world based on perceptions of public sector corruption. The scores reflect the views of experts and surveys from businesspeople, not the public.

The theme for this year’s CPI report is Conflict, Peace and Security. The theme hones in on how corruption fuels conflict, subsequently threatening durable peace, further putting pressure on resources, weakens the independence of watchdog agencies, fuels impunity undermines state legitimacy and weakens public trust in the state’s capacity and willingness to enforce laws.

The 2022 Corruption Perceptions Index scored Papua New Guinea a low 30 out of 100, highlighting a stagnation in the government’s efforts in clamping down on public sector corruption. While there have been positive developments, unfortunately these have largely been isolated and have not yet been fully implemented and as a result minimizing their impact and effectiveness.

In launching the 2022 Corruption Perceptions Index, TIPNG Board Chair Peter Aitsi said, “Political leaders must recognise the dire threat that corruption poses to national and international peace and security, and must make anti-corruption efforts an integral focus of foreign and domestic policy by prioritising transparency which will enable proper oversight and enable meaningful engagement of civil society in scrutinising the use of public funds. ”

Following the country’s 2022 National General Elections and all the irregularities pertaining to the administration and conduct of elections as highlighted in TIPNG’s Election Observation Report , TIPNG has recommended four core areas which, if focused on, have the potential to drastically reduce the impact of corruption in country.

TIPNG’s four recommendations are:

1. Strengthen and secure the independence of watchdog agencies: Anti-corruption agencies and oversight institutions must have sufficient resources and independence to perform their duties. Governments should strengthen institutional controls to manage risk of corruption in defence and security.

2. Improve access to public information: Ensuring the public is able to better access public information in a timely manner will assist achieve greater transparency and accountability for Government.

3. Limit private influence by regulating lobbying and promoting open access to decision-making: Policies and resources should be determined by fair and public processes. Measures such as establishing mandatory public registers of lobbyists,enabling public scrutiny of lobbying interactions and enforcing strong conflict of interest regulations are essential.

4. Combat transnational forms of corruption: Clamp down on corporate secrecy, foreign bribery and complicit professional enablers, such as bankers and lawyers. Take advantage of new ways of working together to ensure that illicit assets can be effectively traced, investigated, confiscated and returned to the victims.

Ends…///

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Papua New Guinea

Independent Commission Against Corruption

 The Independent Commission Against Corruption is an Anti corruption agency established by the Constitution under Section 220 and is governed by the Organic Law on Independent Commission Against Corruption (OLICAC). The purpose of the Commission is to contribute, in cooperation with other agencies, to preventing, reducing, and combating corrupt conduct. The fight against corruption in PNG dates back to Independence when constitutional offices such as Royal Papua New Guinea Constabulary (RPNGC), Ombudsman Commission (OC), Public Prosecutor (PP) and the Auditor General Office (AGO) were established through our Constitution. The efforts in the fight against corruption continued through successive governments and in 2004, the late Grand Chief Sir Michael Somare took this fight further when he signed the United Nations Convention Against Corruption (UNCAC), during the Pacific Islands Forum in Apia, Samoa, making PNG a signatory to the Convention. Despite PNG being the first Pacific Island Country to become a Signatory to the UNCAC, it was only ratified to the Convention by our Parliament in 2007.

In 2009, the National Anti-Corruption Strategy (NACS) 2010-2030 was launched and following that the National Anti-Corruption Plan of Action (NACPA) was developed to bring all relevant agencies/bodies together to implement the NACS.

In 2014, Amendment No. 40/2014 was made to the PNG Constitution enabling the establishment of the Independent Commission Against Corruption (ICAC) Office as well as paving the way for the enactment of the Organic Law on the Independent Commission Against Corruption (OLICAC).

In 2015, the first draft of the ICAC Bill was presented in parliament for deliberation and passage, but was shelved due to the then 2017 National General Election.

The draft ICAC Bill was revisited and presented to Parliament and unanimously passed unopposed on the 12th of November 2020. Apart from the OLICAC, other enabling legislations like the Whistleblowers Act was also passed in 2020. This year, an amendment was done to the Proceeds of Crime Act (POCA) for the Unexplained Wealth Provision whilst the Right to Information Draft Bill which comes under the Department of Information and Communications Technology is being worked on, and will be brought before Parliament to be enacted.

From its initial re-established interim stage in 2018 to date, the office has slowly increased its staffing capacity to meet ICAC’s business needs..

The primary objective was to develop the Executive, Administration and Operational structures of the ICAC.

The purpose of the Commission is to contribute, in cooperation with other agencies, to preventing, reducing, and combating corrupt conduct. In line with the purposes of of ICAC, Section 220(d) of the Consitution the functions of the Commission are : a) to receive and consider complaints and investigate such of those complaints as it deems appropriate; and b) to investigate, on its initiative c) to exchange information and cooperate with other law enforcement, integrity and regulatory agencies, both within Papua New Guinea and internationally; and d) to refer complaints to other agencies for investigation; and e) to accept the referral from other agencies of matters for investigation; and f) where the Commission, after investigating, is of the opinion that a person has committed an offence involving corrupt conduct, to refer the matter to the Public Prosecutor or the Police Force g) to exercise such prosecution powers prescribed by or under an Organic Law; and h) to encourage, cooperate and coordinate with other public and private sector agencies in – i. research regarding corrupt conduct and anti-corruption strategies, policies, practices and procedures; and ii. the development, implementation and review of anti-corruption strategies, policies, practices and procedures; and iii. training, education and awareness regarding corrupt conduct and anti-corruption strategies, policies, practices and procedures.

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