Archive for May, 2011

The strange case of Joseph Lelang needs some explanation

May 25, 2011 5 comments

What was it that caused the acrimonious and rather public falling out between National Planning Secretary, Joseph Lelang, and his political masters?

Lelang has admitted paying out millions on behalf of his political masters

As Lelang has himself admitted [1], he has been involved in unlawfully dishing out hundreds of millions of kina from the national development budget on the orders of a small cabal of ministers at the very heart of government, including Arthur Somare, Patrick Pruaitch, Paul Tiensten, Peter O’Neill and, it is alleged, the Prime Minister himself, Michael Somare.

In February this year, Lelang was suspended from office, according to the Post Courier [2], for releasing K112 million for various projects under political directions from O’Neill, Tiensten and Pruaitch.

But surely this cannot have been the real reason for his suspension?

After all, Lelang, as he graphically illustrated himself in a memo to his Minister, Tiensten, dated December 6, 2010, [1] had been doing this for years at the behest of the National Alliance government: dishing out millions of kina to shore up political support for the government and enrich various individuals and their families.

Why would the hand he had been feeding come back and bite him?

O'Neill has already been recommended for prosecution in one inquiry

It also doesn’t make sense that Lelang was allegedly suspended for making illegal payments under political direction, because where was the action against his masters, the Ministers who had acted illegally in directing him to make the payments?

What seems much more likely is that Lelang was paying the price for something else – perhaps serving too many masters?

In this scenario it is rumoured that when Prime Minister Michael Somare directed Lelang to make a series of payments, totally K400 million, the PM was infuriated to be told that the money had already been used for the pet projects of a number of other Ministers.

In a fit of pique, so the story goes, Somare ordered Lelang be sacked. But how to explain this to the media? Caught by surprise, Treasurer Peter O’Neill  made vague statements about illegal payments and an independent audit of the role of the Department on National Planning in distributing the governments K4 billion development budget for 2010. [2]

But of course, the last thing Somare, Somare Jnr, Pruaitch, O’Neill and Tiensten would want is an independent audit that would reveal their sticky fingers all over hundreds of millions of kina in missing funds and illegal payments.

So what in fact happened was a much smaller and more limited inquiry was ordered, into just one very small portion of the whole development budget;  to ascertain in fact what had happened to the K400 million that the PM wanted for his own pet projects but which he found other Ministers had already beaten him too.

Even that relatively small inquiry, has uncovered a series of unlawful payments, illegal directions and questionable motives, leading to a stalemate where the government cannot move forward with Lelang’s sacking because the inquiry has implicated senior ministers and opened a whole series of new questions about other dodgy payments.

Of course Lelang has been able to use this impasse to lever himself back into his job.

Ministers will be wandering what Somare was thinking...

In mid-March, despite having also by then been referred to the Public Prosector by the Ombudsman Commission, for alleged misconduct in office on separate charges relating to his annual returns [3], Lelang obtained court orders allowing him to resume his position as Secretary, if the National Executive Council did not deliberate and make a decision on the original allegations against him within 14 days.

The whole of NEC be given an independent audit report that points fingers at senior government Ministers and raises questions that strike at the heart of the corruption in the National Alliance? Now that is not very likely to happen!

So how is the government going to extract itself from this pretty little mess where the police are now being used to restrain Lelang from getting back into his office in Vulipindi Haus, in defiance of the orders of the National Court. [4]

And what was the PM thinking in striking out against Lelang in the first place? Was his mind confused by his heart problems? Or did the realization of what he had done give him a heart attack?


Yakasa says police impartial in National Planning saga

May 23, 2011 2 comments

Police say their primary objective is to preserve peace and good order and protect state property

Acting Deputy Police Commissioner and Chief of Operations Fred Yakasa said the police service is impartial and that its presence and involvement in the recent saga at the office of the Department of National Planning & Monitoring was to maintain peace and good order and protect state property.

Mr Yakasa was referring to recent allegations made by Mr Joseph Lelang about police involvement and alleged bias following his attempt to move into the Office of the Secretary of National Planning & Monitoring at the Vulupindi Haus in the National Capital District.

Mr Lelang has a court order which he claims amongst others allows him to resume duties forthwith as Secretary for the Department of National Planning & Monitoring.

“We were not a party to the case, nor were we made aware of the court order until Mr Lelang tried to take office. Locks were changed overnight and the move created panic and anxiety. The situation was very tense and we had to intervene to preserve peace and good order and protect state property.

Mr Yakasa has since sought advice sought from police lawyers as well as government lawyers including the Solicitor General and Attorney General on the interpretation of the Court Order. He has been advised that NEC was directed by the Court to deliberate on the allegations made against Mr Lelang within 14 days from May 14 of 2011.

“Should the NEC fail to meet within 14 days and make a decision to the contrary, Mr Lelang is to resume duties forthwith as Secretary for Department of National Planning and Monitoring to serve the balance of the term of his office as per terms of his contract of employment,” Mr Yakasa said.

“Until the NEC meets and decide upon the future of Mr Lelang Police will maintain a daily and visible presence at the Vulupindi Haus.

“I want to appeal to all parties concerned, as responsible leaders and senior bureaucrats to respect the process of the law. Let us do things properly. There is no need for anyone to muscle their way into any office,” Mr Yakasa concluded.

Millions of Kina for agriculture projects abused

May 22, 2011 Leave a comment

By Calvin Caspar

National Planning and Rural development Minister Paul Tiensten has came under-fire from Opposition MPs over the use of the hundred million kina budgeted annually to fund agricultural projects in the rural areas. The government since 2009, appropriated hundred million kina a year under the National Agricultural Development Program to fund agricultural projects in the districts but very little results have been achieved to date. There were concerns of misappropriation of these funds since 2009, yet the government allowed the program to continue.

Finschaffen MP, Theo Zurenuoc in Parliament questioned why his electorate had missed out on these funds. Minister Tienstan in response admitted that were questions raised on the use of the funds but failed to say what actions were taken to deal with those responsible in the misappropriation. The Minister was evasive with his answers passing the buck to the Agriculture department which angered Abau MP, Sir Puka Temu.

Palmer’s $3.6bn launch shows deep relationship with Chinese interests

May 18, 2011 Leave a comment

By Andrew Fraser, The Australian

TWO Chinese government-owned companies will be the cornerstone investors in Clive Palmer’s Resourcehouse float, which formally got under way in Hong Kong yesterday.

Palmer lodged documents with the Hong Kong Stock Exchange to raise $3.6 billion for the public float of Resourcehouse to finance the Galilee Basin coal project in Queensland and the Cape Preston iron ore project in Western Australia.

He started the roadshow in Hong Kong yesterday and over the next two weeks plans to move around the world to other major financial capitals.

But the document shows his deep relationship with Chinese interests.

Metallurgical Corp of China [majority owners of the Ramu nickel mine in Papua New Guinea] and China Railway Group [builders of the Windward apartments in Port Moresby] have each taken up about $200 million worth of shares, and cannot sell any shares for 12 months and six months respectively.

The document also reveals that the Galilee Basin project in central Queensland is the overwhelming priority, as Resourcehouse intends to spend $8bn on the Galilee Basin project and $2.7bn on the iron ore project in Western Australia.

The document says the company has an interest in what it calls the “Cosmo project” — an iron ore exploration operation in South Australia.

While Resourcehouse has an agreement to sell 30 million tonnes of coal a year from the Galilee Basin project to Chinese interests, there are no contracts for the iron ore from WA, which the company says will be sold on the spot market.

Resourcehouse has not completed any financing arrangements for this development.

“Assuming we are able to enter into such arrangements, we may require additional funds,” the documents states.

A term sheet shows that the company will offer 5.72 billion new shares at $HK4.48 (54c) to $HK4.93 a share, with pricing scheduled for May 31 and trading starting from June 9.

BOC International Holdings, HSBC, Royal Bank of Scotland and UBS are managing the sale.

Clive Palmer, Papua New Guinea and the Chinese connection

May 18, 2011 4 comments

Questions have been asked in the media [12] about exactly what Australian billionaire Clive Palmer was doing, along with Chinese state owned mining company MCC, owner of the Ramu nickel mine, at the United Resources Party fundraiser in Port Moresby on Saturday night. Australian Senator, Bob Brown, has suggested Palmer should stay out of PNG politics [13].

But it seems Clive Palmer has some very deep connections with China and MCC in particular, as well as other Chinese state-owned enterprises working in PNG. He also has an interest in at least three petroleum exploration licences in PNG. So its is, perhaps, naive to think he will not be doing even more in the future to further help the fundraising efforts of Environment Minister Benny Allen and Petroleum and Energy Minister, William Duma.

“Queensland coal baron Clive Palmer has built his entire fortune [estimated at $3.5 billion] around the Chinese. They are his chief institutional investors, his main customers, his financiers and his mine builders.” [6]

In 2006/7 Palmer sold iron ore deposits to China’s Citic Pacific for US$415 million [1] but this was just the prelude to some much bigger deals.

In June 2010 Palmer announced that, in a partnership with MCC, he had sold, through his privately held company Resourcehouse, an annual 30 million tonnes of coal to China Power in a 20 year deal that could be worth US$60 billion [1]

In the ‘China First Coal project’, coal will be sourced from underground and strip mines in northern Queensland.  US$5.6 billion of the $8 billion development cost is being covered by the Export-Import Bank of China [1] – the same bank that is financing the Pacific Marine Industrial Zone in Madang.

MCC will be supervising the work for the coal project which includes building the mines, port infrastructure and a 500km rail link [1] and also arranged the debt funding and provided equity [8]

MCC bought a 5% stake in Resourcehouse in February 2010 for US$200m [3]

Sino Coal International Engineering, China Communications Construction and state-owned China Railway Group will be subcontractors [1]

Next month Resourcehouse will be floated on the Hong Kong stock exchange in an attempt to raise Au$3.4 billion to part finance the China First coal project. China Railway Group is expected to buy US$200 million worth of shares [3]

China Raliway Construction has four projects in PNG, the latest, announced in June 2011, is to build the Windward Apartments for Steamships [5]

Resourcehouse also has a ‘China First Iron ore project’ in Western Australia with a planned capacity of 12.2 million tonnes annually of magnetite ora and reserves of 1.13 billion tonnes. The project will cost US$2.7 billion [7]

Palmer’s company Mineralogy has an oil and gas exploration interest in PNG through Chinampa Exploration [8]. Chinampa is listed as the owner of three offshore Petroleum Prospecting Licences (PPL254, 255 and 256) in PNG [11] Palmer owns a 50 per cent stake in Chinampa, but there is little publically available information on this business [9]. The private oil and gas exploration company, Finder Exploration, says on its website that it operates 3 exploration permits in PNG on behalf of Chinampa [10].

Palmer himself says he has been to China more than 50 times and has a long-term personal contact with the nation stretching back to 1962 when, as a boy, he met Pu Yi, the last Emporer of China [2]. Palmer has a home in Beijing [4]

Papua New Guinea has no laws governing the funding of political parties and no register of political donations.

[1] Forbes:
[2] Brisbane Times:
[3] The Australian:
[5] Capital Vue:
[6] Business Spectator:
[7] The Australian:
[8] Mineralogy:
[9] Business Spectator:–pd20100212-2L7YR?OpenDocument
[12] Post Courier, 17 May 2011, The Drum.

Greens query miners’ political role in PNG

May 17, 2011 Leave a comment
Paul Osborne, AAP Senior Political Writer

Australian Greens leader Bob Brown says he’s concerned at the growing influence of Australian mining firms in Papua New Guinea.

A year out from PNG national elections, the United Resources Party (URP) reportedly raised $600,000 at a weekend function in Port Moresby attended by a number of international business leaders including one of Australia’s richest men Clive Palmer.

The URP has six members of parliament including Petroleum and Energy Minister William Duma, Environment and Conservation Minister Benny Allen and Tourism Minister Guma Wau.

Mr Palmer, who owns half the PNG-focused oil and gas company Chinampa Exploration, reportedly told the function PNG was entering “a new era”.

“This is the promised land and with a stable government and support from the community, this country can take off,” the Post-Courier newspaper quoted him as saying.

“You have gas, oil and other resources.

“There is a lot of opportunity here and the government must create the right environment.”

Senator Brown, who visited PNG two weeks ago, told reporters in Canberra on Tuesday the growing influence of Australian mining companies was troubling.

“It is very, very troubling … in a marvellous country like PNG where democracy ought to be based on a fair go for everybody,” Senator Brown said.

“I’m very concerned about that and … will be continuing to raise this issue in parliament.”

Mr Palmer has show a keen interest in PNG in recent years, throwing his weight behind a bid to introduce a PNG team in the National Rugby League competition.

He is the single biggest contributor to the Liberal National Party in Queensland and in 2009/10 donated $500,000 to the federal Liberals, according to the electoral commission website.

A spokesman for Mr Palmer told AAP he was unavailable for comment as he was in Hong Kong launching the float of Resourcehouse.

Palmers visit raises eyebrows at the Post Courier

May 17, 2011 Leave a comment

WHO is Clive Palmer?

Mineralogy Group of Companies boss Clive Palmer’s presence at the United Resource Party fund raising dinner on Saturday had tongues wagging. What many wanted to know was what this Australian, reported to be the 5th richest from down under, was doing in Port Moresby and at a dinner to raise funds for a political party. Is he going to back the URP in the coming general election? That was the big question that was asked by everyone that night.

The Drum