Confidential government documents show that, just like his predecessor Michael Somare, O’Neill is not only being bullied by the Chinese to give them preferential access to PNG resources – he is using PNG tax payers money to subsidize the Chinese.
The O’Neill government says the controversial Pacific Marine Industrial Zone in Madang province is one of its priorities to boost the national economy but has not revealed:
- The USD79 million dollars it is borrowing from the Chinese to fund the project will be plowed straight back into the Chinese company building the PMIZ rather than being invested in PNG companies and people
- China Shenyang International Corp has been contracted by the PNG government to design, build and supply equipment and materials for the PMIZ rather than the PNG government using local businesses
- The total PNG government contract with China Shenyang International is for USD 95 million, which means PNG taxpayers will be directly subsidizing this Chinese company to the tune of USD16 million.
- All the goods, technologies and services purchased for PMIZ will come from China – not PNG suppliers
- China Shenyang International will operate completely tax free in PNG, exempt from any “rate, charge, duty or imposition of any kind under PNG laws” – a concession the PNG government NEVER gives to PNG businesses
The PNG government has also granted Chinese officials full and unlimited rights to examine and supervise the project funding including granting a long-term multiple entry visa to the Chinese loan officer.
The government has also “irrevocably waived” any sovereign immunity for PNG in any dispute over the loan, AND agreed while PNG may not assign or transfer any of its rights or obligations China has full rights to assign or transfer any of its rights and obligations!
Finally the PNG government has agreed the loan contract, although signed in PNG and to be effected in PNG will be “governed by and construed in accordance with the laws of China” – bet you don’t even know what those laws are do you Mr O’Neill!
A Gulfstream private jet N8989N is currently parked at Port Moresby International Airport. It is alleged this aircraft has brought international fugitive Tjandra Joko Soegiarto back to PNG.
It is alleged Joko is closely associated with a number of PNG politicians and arrived in PNG with large quants of cash. It is further alleged he is trying to negotiate the purchase of 4 million hectares of land.
Is Joku in PNG and if so why is he here?
International Indonesian fugutive Joko Chaundra Soegerto wired some Indonesian Government funds offshore from the Reserve Bank of Indonesia for Investment offshore. When the regime changes in Indonesian politics Joko Chaundra Soegerto ran away overseas and hide in Malayasia and then to other countries because the Indonesian Government wanted him to return that Investment funds back to Indonesian people.
In PNG 90 percent of logging companies are owned by the Malayasians in partnerships with PNG politicans who are corrupt and are directors of most of the logging companies, retailing and oil palm industry. Joko Chaundra Soegerto has family members in connection to some of these operations in PNG and in retailing business. Joko Chaundra Soegerto is related through blood family lines and investment in PNG through PAPINDO group of companies and Super Value Stores (SVS) group of company’s diversfying to Real Estate companies and now into rice production through the Minister for Foreign Affairs in Central province. They are now applying for oil and gas industry with mining exploration in Papua New Guinea.
Joko Chaundra Soegerto is the friend of many PNG national government ministers both in the current Oniell/Namah government as well as the faction with the Chief Somare and his son Arthur Somare in the opposition. Meaning most of the parlimentarians go to bed with the Malayasian and some Indonesian Businessman like Joko Chaundra Soegerto with his family members and associates.
All this has happened that has leaded the PNG Government Falcon Jet issue with the Indonesians military jets escorting the governmernt jet to PNG/Indonesian boarder last year. The basic truth is that when the PNG government Jet takes off the International fugutive Joko Chaundra Soegerto’s jet took off at the same time in one of the airport in Indonesia.
Some funds transferred from Malayasian Banks have been off loaded from the International fugutive Joko Chaundra private jet to PNG Government jet in Indonesia where both jets landed for the delivery of cash in suitcases.When the Kumul jets landed at the Jackson air port in PNG most of those suit cases have not been checked by the PNG Customs and Immagration officers.Therefore there are some facts associated in the movement of hard cash by Deputy Prime Minister Belden Namah with his delegation last year to Malayasia.
On Friday April 27, 2012 at 7.45am International Indonesian fugutive Joko Chaundra Soegerto’s Jet all white with green stripes with registeration number N8989N landed in Port Moresby,Jackson International Airport with 3 suitcases may be full of cash and other items.He was met by Prime Minister of Papua New Guinea Hon.Peter Oniell and his Deputy Prime Minister Belden Namah.There was no Immagration and Customs checks and clearance because the officers were told by the Immagration Director General not to do any thing.
As of today Tuesday May 2, 2012 the International Indonesian fugutive Joko Chaundra Soegerto’s jet is still parked near the Air Niugini cargo Terminal manned by a Blue 10 Seater Vehicle LBD 337 all tinted.From the very relaible sources International Indonesian fugutive Joko Chaundra Soegerto has been given a PNG Citizenship passport and Joko Chaundra Soegerto has transmitted US$52 Billion from Dubai to Singapore awaiting to be transmitted from Singapore to Papua New Guinea.
This matter has been reported to Australian High Commission office in Port Moresby on April 28, 2012 and nothing has been done to date.Please we need assistance to crub money laundering and corruption in PNG politics and economy.
By Todagia Kelola
THE new Board of the Motor Vehicle Insurance Limited (MVIL) has been able to recoup only K9 million out of the K100 million that was [fraudulently] invested in Australia.
Chairman of the Board Bonny Igime in a statement said out of the fraudulent K100 million investment that the MVIL made with Woodlawn Capital Ltd of Lismore, NSW Australia was executed on July 22, 2009, my Board has manage to recoup only K9,187, 260 back into PNG. The money is now with the Gadens Lawyers Trust Account in Port Moresby waiting to be remitted back into MVIL.
“When the Government of Prime Minister Peter O’Neill appointed me as Chairman of MVIL I assured the nation that I will vigorously pursue the K100 million being siphoned off into Australia and bring it back into PNG. The money rightly belongs to the 7 million people of this country, who own MVIL through the government, and the people have the right to know what has happened to their money.”
In late February this year Mr Igime took the Board and management to Australia and met with the executives of Woodlawn Capital Ltd in Brisbane.
“We asked Woodlawn executives where they kept the money and what is the current net asset value (NAV) of the investment. Woodlawn kept evading our questions and came up with an excuse that a substantial amount of MVIL investment was lost during the global financial crisis a few years ago. We didn’t buy into their argument. We suspected that something was seriously wrong with the investment and that we must independently investigate and find out soon. Coincidently, at about the same time the former CEO of MVIL John Mua called me on numerous occasions and begged me not to bring the money back to PNG. He said the money was safe in Australia and that MVIL has a lot of liquid cash sitting in the banks in Port Moresby and does not need the K100 million. That’s when my sensitive nature tells me that something is seriously wrong with the investment and we must investigate.”
The Board engaged Gadens Lawyers in Sydney and Price Waterhouse Coopers (PWC) accounting firm to conduct a thorough investigation into all the accounts of Woodlawn Capital in Australia and ascertain the net asset value of the investment. With our instructions Gadens Lawyers successfully obtained an interlocutory order in the New South Wales Supreme Court thus freezing all the accounts of Woodlawn. The Supreme Court order effectively froze all the accounts of Woodlawn being kept by various financial institutions in Australia.
He said their forensic accountants conducted an audit into the frozen accounts and uncovered AUS$24 million being kept in those accounts, which is equivalent to K50 million. The K50 million plus the K9 million already brought into the country amounted to K59 million. The question is, what happen to the balance of K41 million?
The investigations have uncovered a shocking truth that Woodlawn Capital at the time it received the money from MVIL was not licenced to conduct business as a financial investment company. Woodlawn did not hold a valid Financial Services License (FSL) under the Australian Securities and Investment Commission (ASIC). This is indeed a serious crime under the Australian laws. ASIC is the Australian government watchdog that regulates, monitors and oversees all financial and investment activities in Australia. The K100 million investment was a fraudulent transaction between the executives of MVIL and Woodlawn with the intent to defraud MVIL because Woodlawn was not licensed to receive the money at the time.
The investigations have uncovered another shocking truth that some people were using the K100 million like a petty cash. Numerous unexplained withdrawals were made on the K100 million over the entire period of the investment from July 2009 to as recent as January 2012.
For instance, the following withdrawals were made on MVIL accounts in Australia in 2011 and early 2012.
BANK ACCOUNT NO. DATE CURRENCY WITHDRAWAL AMOUNT
Westpac 467559 5/5/2011 AU$ 1,500,000
Westpac 467559 30/6/2011 AU$ 2,000,000
Westpac 467567 8/7/2011 AU$ 300,000
Westpac 467559 14/7/2011 AU$ 300,000
Westpac 467567 14/7/2011 AU$ 300,000
Westpac 467559 16/8/2011 AU$ 3,000,000
Suncorp 4157414 15/9/2011 PGK 24,872,335
Westpac 467559 21/9/2011 AU$ 1,000,000
Westpac 467559 27/9/2011 AU$ 1,197,540
Westpac 467559 14/11/2011 AU$ 227,000
Westpac 467559 13/1/2012 AU$ 440,142
According to correspondences between the executives of MVIL and Woodlawn we have uncovered that the former CEO of MVIL John Mua was the only authorized representative of MVIL who can authorize or instruct Woodlawn for any transactions to be conducted on the accounts in Australia. And therefore, I am calling on John Mua to come out and tell the Government and the people of PNG about the irregular and unexplained withdrawals made on the K100 million being kept by Woodlawn. Our lawyers and forensic accountants are following the money trail and we will get to the bottom of the missing K41 million and the nation will know about it.
Read more about the Woodlawn scam and the Somare family:
Eoin Blackwell, AAP
The government has failed in a bid to have last year’s constitutional case about who is the country’s legitimate leader reheard, after a judge said allowing it would sanction “legislation by surprise and ambush”.
However, the court has yet to decide on whether the nation’s chief justice, Sir Salamo Injia, and justice Nicholas Kerriwom should step aside amid allegations of bias against the government.
In what was supposed to be the first day of hearings into the legality of parliamentary decisions since the government of Peter O’Neill took office, lawyers instead revisited old ground on Monday.
Government lawyers argued to have the 2011 case be reheard because parliament passed laws disqualifying former prime minister Sir Michael Somare from parliament.
The laws passed three days before the court handed down its December 12 judgment that Sir Michael was unconstitutionally deposed from office and was still PNG’s legitimate prime minister.
The same five-man bench who ruled against the O’Neill government in 2011 also opposed the latest move.
“We are of the unanimous view that there is no need for a separate application at this late juncture,” Justice Bernard Sakora said in reading out the judgment.
“To do so would sanction legislation by surprise and ambush.”
Following a brief adjournment, lawyers for Mr O’Neill applied to have Justice Nicholas Kerriwom removed from hearing the current case due to a perceived apprehension of bias.
On March 13 a document bearing Justice Kerriwom’s signature and calling on judges to defend themselves against attacks from the O’Neill government was leaked online.
The memo, leaked to the blog PNGExposed, calls on the court registrar to take out a full-page advertisement in local newspapers to defend Sir Salamo, whom the government and police have accused of mishandling the funds of a dead judge’s estate.
Attorney General Allan Marat’s lawyer, Tiffany Twivey, argued that the authenticity of the document was not an issue, only that it bore Justice Kerriwom’s signature and had been seen by the public both online and in newspapers.
“The memo is up there and has been commented on by the public,” Ms Twivey said.
“There are statements in the memo that if they are true (show an apprehension of bias).
The court will deliver its judgment on Justice Kerriwom at 9.30am AEST on Tuesday, after which government lawyers are expected to attempt to have Sir Salamo step down.
The latest legal waltz is the most recent in repeated moves to have Sir Salamo removed from the court altogether.
The O’Neill government tried three times to have him removed from hearing the 2011 case.
It then tried and failed to have him removed from the bench.
Police arrested him last month on allegations of perverting the course of their investigation into his handling of funds, but the court issued a permanent stay on that case.
The government last month passed the controversial Judicial Conduct Bill 2012, which effectively gives parliament the power to suspend judges.
After public opposition to the bill – which is seen by many as a way of removing Sir Salamo – Mr O’Neill indicated last week his government would consult more widely before implementing it.
Parliament will resume at 2pm (AEST) on Tuesday.
By Ash Pemberton
The Papua New Guinean government has backed down in the face of a society-wide revolt over its new power to suspend judges. Prime Minister Peter O’Neill said the law would not be implemented until public consultations were carried out.
Thousands of students from the University of PNG rallied in Port Moresby on March 23. Students said in a statement that the law undermines the constitution by removing the separation between the government and courts.
Seven big trade unions joined the call to repeal the law on March 28, the Post-Courier said that day. The Community Coalition Against Corruption and the PNG Chamber of Commerce also opposed the law.
Students from the University of Technology in Lae began an indefinite boycott of classes on March 29, Radio Australia said that day. Prisoners also threatened a mass breakout from jails if the law was not repealed, PNGPerspective.com said the day before.
The law was enacted on March 22 in response to a long-running dispute between a section of PNG’s elite and O’Neill’s supporters over the government’s legitimacy.
Judges became targets of the government after the Supreme Court ruled in December that O’Neill had unconstitutionally deposed former PM Sir Michael Somare, who had been absent from the country for months due to illness.
Parliament later passed a law legalising O’Neill’s government. A week-long stand-off developed during which Somare and O’Neill both claimed to lead the legitimate government.
Since Governor-General Sir Michael Ogio ended the stand-off and declared O’Neill prime minister, Somare and his supporters have waged a campaign to regain power.
Somare admitted ordering the failed military coup against O’Neill on January 26, AFP said on January 28.
Somare has been a dominant figure in PNG politics since the country’s independence in 1975, serving three terms as prime minister. His last term was marked by higher-than-usual corruption and nepotism, leading to rising unpopularity among the public and alienating many parliamentarians.
O’Neill has tried to present himself as a reformer, but he is a veteran politician who has been accused of corruption in the past. His government includes ministers who served under Somare.
Chief Justice Sir Salamo Injia, Justice Nicholas Kirriwom and Justice George Manuhu were asked to resign by deputy PM Belden Namah on March 20, AAP said that day.
Injia, who headed the Supreme Court that ruled O’Neill’s government illegal, was recently charged with trying to pervert the course of justice over his handling of the estate of a dead judge. Manuhu was accused of colluding to protect Injia.
Kirriwom was targeted by Namah over the contents of a leaked memo in which Kirriwom called for his colleagues to fight back against the O’Neill “regime”, PNG Exposed said on March 13.
O’Neill’s government has been under fire from sections of the PNG elite since it took power in August last year. Some elites were upset by O’Neill’s talk of giving landowners more rights to wealth from mining and his promise to curb the corruption that flourished under Somare.
O’Neill has since backed away from these promises and resorted to undemocratic methods to fend off attacks by Somare supporters.
The dispute is expected to come to a head in national elections scheduled for June. However, Namah expressed his desire to postpone elections for a year, the Canberra Times said on March 5. He later said he had no power to stop the elections.
Australian foreign minister Bob Carr threatened sanctions against PNG if elections did not go ahead in June. Carr was forced to back away from the threat, but his comments reflect Australia’s colonial attitude towards PNG, which was under Australian rule until 1975.
Since independence, the PNG state has operated as a conduit for the enrichment of foreign companies, especially Australian companies. PNG’s corrupt elites feed off the crumbs of these foreign operations while ordinary people live in poverty.
The latest example came on March 29 when the government announced it would send soldiers to Southern Highlands province to end landowners’ protests that stopped Exxon Mobil’s $15.7 billion gas project.
On January 24, 60 people were killed and 42 homes were destroyed in the area by a landslide, believed to have been caused by work on the gas project, IPSNews.net said on March 9.
Ilya Gridneff, Sean Nicholls
Former prime minister of Papua New Guinea [The Grand Thief] Michael Somare has demanded an investigation into the behaviour of the country’s Deputy Prime Minister, Belden Namah, at the Star casino last year.
It was revealed yesterday that incident reports written by casino staff alleged Mr Namah sexually harassed a blackjack dealer before being thrown out for threatening staff while drunk on the morning of April 16.
But hours later, the casino readmitted Mr Namah, along with two colleagues. It is understood he had deposited $800,000 in a casino account, along with two colleagues.
Sir Michael, toppled by the Prime Minister, Peter O’Neill, in a political crisis last December, said Mr Namah should be banned from overseas trips and described his behaviour as ”disgraceful” [and Somare and his family would know all about that!]
”I know many in PNG are embarrassed that an elected representative, therefore a leader of government, can behave in such a shameful and disorderly manner,” Sir Michael said.
”Mr O’Neill cannot remain silent about the conduct of his deputy any more. Too many allegations are already stacking up against Mr Namah.
”The alleged amount of money held by the casino of $800,000 for Mr Namah is also alarming,” Sir Michael said.
Lawrence Stephens, the PNG chairman of the corruption regulator Transparency International, said it was always disappointing to hear of public officials misbehaving overseas.
”It looks bad. Splashing large sums of cash around at a casino is extremely frightening, especially when we are constantly told there is not enough money for schools, hospitals and roads,” he said.
”Over the years we’ve heard numerous names of PNG people behaving in a similar way with large sums of money at various Australian casinos,” Mr Stephens said.
”And it is a huge public embarrassment when senior representatives behave in such an obnoxious manner,” he said.
”I am sure the PNG people will be hugely disappointed with these reports.”
The federal Deputy Opposition Leader and spokeswoman on foreign affairs, Julie Bishop, described the allegations about events at the casino as ”serious” and urged Mr Namah to co-operate fully with any investigation into the matter.
”The allegations about Mr Namah’s behaviour … are serious, particularly the claim that large sums of money were involved,” she said.
A Department of Foreign Affairs and Trade spokeswoman said the allegations were matters for the inquiry under way into the Star by the NSW Independent Liquor and Gaming Authority.
Mr Namah, a former forestry minister in Mr Somare’s government, has denied he is the person mentioned in the five incident reports dated April 16, 2011.
His lawyer, Greg Sheppard, said Mr Namah ”did not misconduct himself”.
Sean Nicholls and Matthew Moore
Deputy Prime Minister of Papua New Guinea, Belden Namah, allegedly sexually harassed a blackjack dealer at Sydney’s Star casino last year before being thrown out for threatening staff while drunk.
Despite this, the casino readmitted Mr Namah, an opposition MP at the time, after realising he and colleagues planned to gamble hundreds of thousands of dollars, according to The Age.
But Mr Namah denies he is the person described in five separate Incident Reports, including one in which he is named by casino staff. His lawyer, Greg Sheppard, said Mr Namah ”did not misconduct himself” at the casino.
”Until we are provided with the incident reports in question, Mr Namah is unable to comment further on how his name appears on these reports, except to say that if it does, they are mistaken,” Mr Sheppard said.
Mr Namah was in the government of Michael Somare before joining the opposition, which deposed Sir Michael last year.
Incident reports by staff show Mr Namah and two colleagues were gambling in the Sovereign Room for high rollers when approached about 7am on April 16 last year and asked to stop drinking ”as they were deemed to be approaching intoxication”.
A blackjack dealer’s statement said that after being asked to stop drinking, Mr Namah began ”teasing me by asking my mobile number”. Mr Namah is then alleged to have asked him:
”Can I f— you tonight?”
When he was being removed from the casino, Mr Namah allegedly told either a manager or security guard:
”You may be big but I will knock you on your f—ing arse.”
A former duty manager, Elizabeth Ward, has previously revealed a ”minister from a neighbouring government” was ejected from the casino last year. This is now understood to be Mr Namah.
She had been advised the minister was allowed back in several hours later after executives realised he and two friends had deposited in a casino account $800,000 to gamble.
Read the Incident Reports from the Casino.
A memo, purportedly signed by Justice Kirriwom and published on this blog yesterday, if genuine, shows extreme bias exists in certain parts of the judiciary against the government of Peter O’Neill.
All judges are supposed to be political impartial but the memo shows it may be hard for the current government to get a fair hearing in the various cases now before the courts over its removal of the previous Somare regime.
There are also a number of worrying factual errors in the memo. For example, the memo says that Prime Minister O’Neill has put his own people on the mercy committee so that if he or Namah get charged with contempt they will be pardoned. This would seem to be untrue as the Chairman of the mercy committee is Moses Maladina and he has been the chairman since 2005 when Michael Somare put him there.
The memo also suggests that judges should be above the law and due process. The memo says the Chief Justice should not stand trial on allegations of corruption and should not have to tell his story as part of his defence to the charges as ordinary people do. Instead the memo suggests the judges should just issue a statement and that will be the end of it - where is due process there? Especially as the memo accepts that the CJ made an administrative decision to withhold the money at the centre of the allegations in breach of a court order.
By Philip Dorling*
Leaked emails detail the depth of sleaze in the government in Port Moresby
When Papua New Guinea’s Prime Minister, Sir Michael Somare, was unceremoniously removed from office last August, the private US intelligence company Stratfor was desperate for inside information to pass to its clients, especially international companies with interests in PNG’s burgeoning resources sector.
Stratfor had one well connected operative who could provide insight on PNG politics, a Brisbane based consultant closely engaged in business in Port Moresby. “Source CN65” was quickly tasked and his subsequent reports, released by WikiLeaks, provide a direct insight into the chaotic and often corrupt PNG political scene.
CN65 didn’t mince words about PNG’s new Prime Minister, Peter O’Neill. In an email to his Stratfor “source handler,” CN65 suggested the new prime minister had a keen sense of personal financial interest.
“Quite corrupt. I know him. … O’Neill is not any more pro-Western than anyone else up there. As long as he makes money for himself (he has significant business investments in mobile phones, among other things), he couldn’t really care less.”
Asked what the new Prime Minister would want from Australia, CN65 gave a succinct reply: “He’ll be interested in just one thing – money. He will be wanting increased aid from Australia, and untied aid, i.e. direct budgetary support as opposed to aid tied to particular projects and administered by Australia.”
PNG is Australia’s largest recipient of foreign aid and with more than A$480 million allocated in 2011-12.
Stratfor’s Source CN65 was revealed by WikiLeaks last week to be the former Australian Senator, Bill O’Chee. A Queensland National Party Senator from 1990 to 1999, O’Chee was the first ethnic-Chinese Australian to serve in the Australian Parliament and was also the youngest person to serve as a senator. He remains active in the Liberal National Party in Queensland.
Last week WikiLeaks began the release of more than 5 million leaked Stratfor emails, which it said show ”how a private intelligence agency works, and how they target individuals for their corporate and government clients.”
According to its website, Stratfor, ”uses a unique, intelligence-based approach to gathering information via rigorous open-source monitoring and a global network of human sources”.
Now a partner in the Brisbane based Himalaya Consulting, O’Chee has a Stratfor “A” rating for “source reliability.” Drawing on a wide range of personal political and business contacts in Port Moresby, his reporting was regarded as “unique insight” into the labyrinth of PNG politics.
After spending a day and a half with “my PNG chums, who were down for the Oxford [University] dinner at the Sydney Opera House,” O’Chee was able to provide Stratfor with an inside account of the collapse of the Somare administration, specifically the personal falling out between acting prime minister Sam Abal and foreign minister Don Poyle, both Enga, a region in the PNG Highlands, that “ripped apart the government” while Sir Michael was slowly recovering from heart surgery in a Singapore hospital.
“Everyone in the government got fed up with this, and it led to huge dissatisfaction. On top of that, Abal moved to shift Peter O’Neil from the Treasury portfolio. That was the [catalyst] for action.”
Significantly O’Chee also referred to “a group of about four or five from the political class, led by one of our business associates (won’t say who) helped put the numbers together for a change of government.” However in subsequent reports, O’Chee directly identified Prime Minister O’Neil’s most important backer as former Defense Minister and PNG National Rugby League chief, Highlands businessman Ben Sabumei.
“Uncle Ben is advising O’Neill. … It is wrong though that business put O’Neill in place: it was Uncle Ben and his Highlands circle,” O’Chee wrote. Referring to the maneuvering that preceded Somare’s downfall, O’Chee simply observed “corruption will win the day.” O’Chee also had contacts with the Somare camp, leading him to comment that a return to power by Sir Michael would take PNG back to “a cesspit of corruption, incompetence and mediocrity. Need I regale you with the details of my meeting last year with Somare’s housing minister who was stoned on betel nut?”
Reporting on PNG’s international relationships, O’Chee expressed the view that domestic political turmoil was unlikely to have much effect. Asked about PNG’s growing ties with China, he observed that “the links between PNG and China won’t be changed by who is in power, as China already has a substantial foot in the resources sector – Ramu NiCo and Marengo Mining, for example, as well as sniffing around PNG LNG.”
“The main factor limiting China’s ability to reach into the country is the inability of the PNG politicians to be efficient in receiving aid offers. For example, most of a US$200m loan facility remains undrawn because they can’t work out how to utilize it. The thing about Melanesia is that politicians are not pro-active, and certainly not policy active. They are instead led by people from outside. The factors that determine future direction are: first and foremost, how Australia throws aid around; and what other countries put on offer.”
More broadly O’Chee concluded: “The real challenge for PNG is that it is too corrupt to develop efficiently. … The standard of the political class is clearly lower than it was 15 years ago. The old guys got corrupt and lazy, and outdated. The newer guys have been obsessed with personal wealth, and lack the respect for the offices they hold, which the previous generation had. This, at least, was the view presented to me privately … by one of most senior diplomats.”
Leaked US diplomatic cables released by WikiLeaks last year described PNG is being trapped in ”Ponzi politics” and quoted Australian diplomats as referring to the PNG government as a “dysfunctional blob.”
In a November 2008 briefing, the US embassy in Port Moresby noted that resource revenues and Australian aid have served ”more to enrich the political elite than to provide social services or infrastructure. There are no large-scale local businessmen, but numerous politicians are relatively well off.”
O’Chee’s confidential reporting most recently informed Stratfor’s analysis of the unsuccessful pro-Somare PNG military mutiny in January, with the intelligence company describing prime minister O’Neill as “staunchly pro-business” and highlighting strategic investments by ExxonMobil, Santos and Oil Search in PNG’s growing LNG production and export sector.
Contacted about his work with Stratfor, O’Chee declined to comment on what he described as “private business.” He said he had no ties to any government and his business activities ”didn’t require advertising.” He said he had no contractual relationship with Stratfor and was not on the company’s payroll, but declined to respond when asked about whether he received any payment for his reporting or analysis.
*Philip Dorling is a contributing writer for the Sydney Morning Herald and The Age (Melbourne). He is a former Australian diplomat.
By John F.M. Kocsis, Harvard Political Review
In one of the coming decades’ most important developments, tensions between the United States and China have begun to escalate on a whole host of new fronts. Prospects for the presidency have soared to new heights of monetary nationalism, the Obama administration has announced plans to station 2,500 marines in the Pacific, and Chinese diplomats have turned up the heat on American allies in the South China Sea.
As in all great rivalries, China and America both have proxies whom they support, provided the junior partners act in their interest. One such proxy nation is Papua New Guinea, the resource-rich Pacific nation whose domestic political instability has made it a surprising focus of American and Chinese geopolitical maneuvering.
Of potential flashpoints for conflict in the Pacific arena, Papua New Guinea is generally less studied than its regional counterparts, such as the Philippines and Vietnam. New Guinean history is primarily viewed through the lens of Jared Diamond’s Guns, Germs, and Steel. This ignores the island’s long history on the world stage. A battleground between Allied and Japanese forces in World War II, the country was restored to Australian ownership at the campaign’s end. Sir Michael Somare, a perennial leader of Papua New Guinea, finally won his people independence in 1975 – but ever since, the Melanesian state has been fraught with conflict.
Despite recent military developments, Papua New Guinea is ostensibly in the throes of a petty constitutional crisis. Sir Michael Somare, in his fourth nonconsecutive role as prime minister until this past August, has returned from his convalescence in Singapore claiming to be the country’s rightful legislative chief. The person serving in that position now, Peter O’Neill, toppled the placeholder Somare who appointed in August and was voted by the parliament as the rightful prime minister. The small nation’s supreme court ruled that because Somare left for heart surgery with full intention to reclaim his seat, he is legally entitled to the role of prime minister. By and large, parliament disagrees – and Papua New Guinean ministers strongly support the new prime minister, Peter O’Neill. This vehement disagreement at the highest levels of government led to a mutiny attempt to remove O’Neill and restore Somare.
The rebellion was successful at first. Hired by Michael Somare, the Indonesian colonel Yaura Sasa and his troops seized control of the military barracks in Port Moresby, the capital, and captured Brigadier-General Francis Agwi, the Commander of the PNG Defense Force. After days of escalation, soldiers surrendered their weapons on January 30. They promised to stand down instead of facing prison time. The colonel was jailed but later released on the grounds that he was merely operating under government commands. The government of Sir Michael Somare, which the Supreme Court deemed legitimate, had, after all, executed the order.
A surface-level reading of this scenario focuses on an internal struggle within government leadership over political control and resources, a common occurrence in developing nations. However, a broader and perhaps more accurate view of the situation requires putting it in terms of American and Chinese interests. Papua New Guinea is an attractive destination for investors due to its untapped 22.6 trillion cubic feet in natural gas, not to mention its copper and gold wealth. Exxon Mobil is working on a $15.7 billion liquefied natural gas project that should due to be completed in 2014. The China Metallurgical Group Corporation (MCC) is developing China’s largest overseas mining investment, a $1.6 billion attempt to exploit 140 million tons of nickel.
As is typical of situations in which foreign investment is involved, outside nations require government compliance in forging ahead with their designs. China had an easy time injecting itself in the nation when Somare was in charge. The once and perhaps future prime minister supported Chinese interests in his Environment Act, which amended the law so that landowners could no longer contest damaging activities on their land – a move that authorized the MCC’s plan to dump toxic mine waste into the Bismarck Sea. This provision was repealed by the O’Neill government, which claimed to look out for both the environment and the rights of its constituents.
The acts of Peter O’Neill are not necessarily so principled. While Somare instituted a “look north” policy during his tenure, O’Neill has increasingly conducted his primary business with Julia Gillard and her Labor government in Australia. Sir Michael Somare saw China as the country to emulate. He invited members of the People’s Liberation Army to train the Papua New Guinea Defense Force. He also established a program for PNG officers to undertake military training in the People’s Republic of China for up to three years. Historically, since Papua New Guinean independence, training aid had been under the aegis of Australia, New Zealand, and the United States. In the past couple of months, O’Neill has attempted to revert to those days, inviting Australian troops back to the island.
Last spring, Secretary of State Hillary Clinton admonished Somare for getting too close to his neighbor to the north. She warned of a “resource curse,” insinuating that he would fail as leader if he lacked commitment to good governance, transparency, and accountability. Clinton has taken a Kissinger-esque stand when it comes to the nation, urging the U.S. Congressional Foreign Relations Committee, “Let’s put aside the moral, humanitarian, do-good side of what we believe in and let’s just talk straight, realpolitik.” She bluntly claimed that China is trying to “come in under us” regarding “Papua New Guinea’s huge energy find.” As if there was any doubt, she strongly asserted, “We are in a competition with China.”
U.S. diplomats aren’t the only ones to recognize the recent skirmish’s implications on the Chinese-American divide. Resentful PNG citizens have circulated text messages claiming, “The Somare regime existed through Asian mafia’s funding.” Papua New Guinea has experienced the rapid rise in Chinese immigrants to which the entire Pacific region has become accustomed. Nativist anti-Chinese riots ulcerated in 2009; accordingly, most citizens strongly prefer America to China. However, as America’s unipolar moment fades into a period of increased Chinese assertiveness, it is not hard to imagine a future of Chinese dominance in Papua New Guinea.
Pacific Islanders might not like their new neighbors, but many established politicians have a tendency to get along with Beijing just fine. As China’s aggression continues, its influence is unlikely to go anywhere but up.