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PNG: The six billion kina question

December 20, 2012 Leave a comment

Graeme Smith* – The Interpreter (Lowy Institute)

When I penned Are Chinese Soft Loans Always a Bad Thing? for The Interpreter in March there seemed little prospect that my query would have immediate relevance. PNG Treasury officials were adamant that there was a freeze on further loans. Gripped by fiscal rectitude, they were set on paying back an interest-free loan made by the People’s Bank of China in the 1990s, even though no one had asked for it back.

To Treasury’s consternation, during the course of the PNG election campaign Peter O’Neill announced he was negotiating a soft loan with China Exim Bank. It is worth in the region of K6 billion ($2.7 billion), with the potential for up to K10 billion to be drawn upon. It dwarfs the 2006 Soft Loan Facility of $375 million made to the Pacific as a whole.

Pro-opposition blogs have denounced the loan as ‘sinister’ and suggested that Treasury will be bypassed altogether. In the absence of any concrete details of the loan, which is currently being finalised, PNG’s lively blogosphere has filled the vacuum. A thoughtful anonymous post on Keith Jackson’s blog rightly points to the effect the loan will have on the ever appreciating exchange rate, which is set to face enormous upward pressure when Exxon Mobil’s LNG project comes online.

Perhaps the greatest concern is that the loan appears to be fragmenting (even before it is agreed) into a set of smaller projects around diverse actors and local political interests, as noted in The Garamut.

Initially, the loan was specifically for a much-needed upgrade to the Highlands Highway. Projects now mentioned in association with the loan include a hydropower scheme, the infrastructure needs of Port Moresby and Lae, and even the upgrading of PNG’s state-owned enterprises. One minister’s ‘shopping list’ is said to be more than double the value of the loan facility.

To an extent, such balkanisation is a result of the Alotau Accord, an agreement reached between political groupings in the provincial capital of Milne Bay province that led to the formation of the O’Neill-Dion Government. Ironically, Milne Bay appears to be one part of Papua New Guinea that will not benefit from expenditure on ‘high priority infrastructure projects‘.

It will be interesting to see which dance partners appear on the Chinese side of the ballroom. Chinese aid officials privately concede that Chinese construction companies largely drive China Exim’s concessional loans, the majority of which go towards infrastructure development.

In a recent Wall St Journal article, which curiously described PNG as ‘an impoverished southeast Asian nation’, Peter O’Neill maintained that the Chinese partners for the new loan would be ‘Fortune 500 companies’. Success in accessing the 2006 Soft Loan facility came down to the political clout of Chinese contractors within China, and the political savvy of their PNG partners in lobbying the PNG legislature. The outlier was the choice of contractor for the $235 million PMIZ project, which involves the construction of a free trade zone and up to ten tuna canneries in Madang. The project is currently stalled in the courts. The Chinese contractor, Shenyang International Economic and Technical Cooperation Company, is a city-level state-owned enterprise (SOE) with no established presence in PNG. With less than 100 employees in China, it’s unlikely to appear in the Fortune 500 anytime soon.

The choice of an inexperienced company for a complex project seems odd, but is in line with the practice of concessional loans being used to provide selected SOEs with overseas experience. With the majority of the top 20 Chinese companies in PNG listing their business as ‘construction’ (linked article is in Chinese), it’s to be hoped that China Exim Bank calls on companies with experience in PNG, or similar countries. Papua New Guinea is no place for training wheels.

* Graeme Smith is a Postdoctoral Fellow at the China Studies Centre, University of Sydney and a Visiting Fellow with the State, Society and Governance Program in Melanesia Program, AN

Human cost of Paga Hill demolition captured in powerful new music video

December 18, 2012 2 comments

National Housing Estate Limited’s credibility dashed

December 7, 2012 1 comment

Dr Kristian Lasslett – International State Crime Initiative

Although it has been in the pipeline for months, last week the O’Neill government formally announced that the National Housing Estate Limited (NHEL) would be taking over large chunks of the National Housing Corporation’s assets, and presumably its functions too.

Apparently this move was motivated by a desire “to provide affordable housing for Papua New Guineans” Post-Courier (3/12/12). If true, it deserves applause.

However, we must now pause for thought following Sunday’s press statement by NHEL’s Executive Chairman, John Dege (see also ABC Radio, 4/12/12). Among other things, Dege’s statement catalogues a number of housing projects the NHEL is about to embark upon. To this end, he remarks:

“NHEL is…a major proponent in the Paga Hill housing development project undertaken by Paga Hill Development Company (PNG) Limited”.

This is a startling admission for the NHEL to make. After all, the Paga Hill Development Company (PHDC) – which hopes to build a 5-star hotel, luxury marina and residential/commercial complex on the former national park at Paga Hill – and its executives, have between them been censured in no less than six official reports into corruption and public mismanagement in Papua New Guinea.

For example, in 2006 the Public Accounts Committee alleged that PHDC’s lease over Paga Hill was acquired through “corrupt dealings”. The Public Accounts Committee then goes on to describe PHDC as a “private, foreign speculator with no ability to even pay the Land Rental, much less build anything on the site”.

Other inquires by the Auditor General’s Office (AGO) and Public Accounts Committee have probed the past of PHDC executives, including its Chairman, Gudmundur Fridriksson, and its Director, George Hallit. Together these two men ran a consultancy firm CCS Anvil.

The AGO claims when working as an agent for the Public Curator’s Office, CCS Anvil “withheld a significant amount of monies it has received from the proceeds of the realisation of assets of deceased estates, including sale of properties, shares and investment and rent…The AGO can find no evidence that any money realised by Anvil on behalf of estates has been paid into the Estate Trust Account”.

The AGO also allege that CCS Anvil’s Papua New Guinea principal was certifying government payments to his own firm, for as much as K500,000. These findings were followed up, and confirmed, by the Public Accounts Committee in 2006.

CCS Anvil was also censured in two other Public Accounts Committee reports and an AGO investigation.

As if this was not enough, one of PHDC’s Directors recently acknowledged complicity in the attempted forced eviction – they prefer the term “forced relocation” – of Paga Hill’s 3000  residents, some of whom have lived on the hill’s foreshore for four generations. During the forced eviction exercise, RPNGC officers attacked residents with sticks, metal bars, machetes, and automatic rifles; even the then Leader of the Opposition, Dame Carol Kidu, was not exempt from the violence – she was frogmarched from the scene by officers as colleagues opened fire on bystanders.

How could NHEL not know all this? It really defies belief.

Ironically, NHEL came to the fore, owing to alleged corruption and ineptitude within the National Housing Corporation (see Post-Courier 19/9/12). Yet already NHEL is at risk of following the path of its predecessor. NHEL’s relationship with PHDC is one red flag, others have been raised with respect to NHEL’s involvement in the Gerehu Stage 3B-2 Project (see Post-Courier 24/10/12/), and its treatment of residents at the Waigani Hostel,   who allege they were “victims of heavy handed, abuse and oppression perpetrated by the management of NHC in collaboration with National Housing Estates Limited” (Post-Courier 29/11/12).

This is a terrible start to what could have been an exciting new era in affordable housing for Papua New Guineans.

The International State Crime Initiative’s report, ‘The Demolition of Paga Hill’, can be accessed here: http://statecrime.org/online_article/the-demolition-of-paga-hill-a-report-by-the-international-state-crime-initiative/

Priest’s sexual abuse case adjourned to Dec 18

December 2, 2012 4 comments

Abigail Apina – The National

East New Britain Catholic priest Philip Kelera, charged with sexual violations of five young schoolboys in Kokopo, East New Britain, is to appear again in court next month.

Kelera, 47, from Malakur ward in Pomio district, was arrested and charged last month and appeared in the Kokopo District Court two weeks ago.

However, his committal files were not ready and the case had been adjourned until Dec 18, the court confirmed.

Kelera had been charged with five counts – one count of sexual penetration, two counts on sexual touching and two counts of indecent acts.

The priest allegedly violated five boys aged between 11 and 15 on different occasions. But after his most recent offence in July this year, the victim reported it to his parents.

Provincial police commander Sylvester Kalaut reported that all the offences happened when Kelera was a priest at the Guma Catholic parish, White Bay, East Pomio.

All five boys were students of Guma primary school at the time of the offence.

Police said the priest had invited each student to his house. He then forced them into performing sexual acts with him while threatening them at the same time not to report to authorities.

The Catholic church earlier said it was concentrating on helping the boys and their families.

Accused priest preaches in PNG

December 1, 2012 2 comments

Rory Callnan | The Age

Father Roger Mount in Sogeri

Father Roger Mount in Sogeri

PARISHIONERS at the tiny Sogeri Catholic Church in the foothills of Papua New Guinea’s remote Owen Stanley Ranges pay little attention to the fact that their elderly priest has a teenage boy as his live-in helper.

But for some who knew Father Roger Mount when he was a brother working in homes run by the Catholic St John of God Order in Australia several decades ago, the scenario is disturbing.

”Bloody hell, that’s concerning. That’s not good,” says Melbourne pensioner Steve Danas, who grew up in one of the order’s homes after being orphaned at three.

Mr Danas was one of three men who came forward in the the past decade to allege they were sexually abused by the then Brother Mount at the order’s homes in Melbourne and New South Wales in the 1970s and 1980s.

In all, more than 30 former residents of the homes alleged that many brothers had been systematically abusing them from the 1960s to the 1980s. The claims led to a Victorian police investigation and the order paying out more than $4 million in compensation. But the brothers – who have denied the abuse – never faced any charges in Victoria.

A number of the brothers, including Father Mount, have been able to move into other roles where they may have regular contact with children.

This week, Fairfax Media tracked down Father Mount giving Mass to his 60-strong congregation at his small church in Sogeri, a tiny village 40 kilometres east of Port Moresby.

Outside the church, a youth said he was the priest’s live-in helper and had lived with him in a house at the back of the church since he was about 11. ‘

‘My father has given me to him when I was a boy. He is like a father to me. My father did the same job,” said the boy.

He said he had never had any concerns about his treatment by the priest, who was elderly and needed an assistant.

Father Mount vigorously denied being involved in anything inappropriate with any boy in the homes or that he posed any threat to anyone.

He said he had never been contacted by the order about the compensation payments to the alleged victims, something he thought was surprising as ”they know where I am”.

He confirmed he knew Mr Danas and another man who had received a payment from the order but said there had never been any issue between himself and the two claimants.

Asked why they the men had come forward, Father Mount speculated: ”Maybe he (Danas) wanted money”.

Father Mount said he had left the brothers in 1983 to become a priest in PNG and confirmed he had at one point been in the senior role of chancellor of the Catholic Archdiocese of Port Moresby.

He confirmed another of the order’s Brothers, William Lebler, had also worked at the home in PNG. Brother Lebler was later alleged to have abused children at the order’s homes in New Zealand but never faced court over the allegations after a NSW court ruled in the mid-2000s that he had dementia.

Father Mount said he had never seen inappropriate behaviour by any of the brothers.

Yesterday Mr Danas said he was angry that Father Mount was still with the church in PNG. ”I thought that he was dead,” said Mr Danas, who alleged that the then Brother Mount had plied him with alcohol and molested him during his time at the order’s Churinga home at Greensborough in the 1970s.

He said he had given police a statement but was told it would come down to his word against the priest’s and did not hear back from the investigating officer. ”I want to confront him,” he said. ”There should be a proper investigation.”

Fairfax Media has obtained other documents confirming the order also made payments to two other men who had alleged abuse by Father Mount.

One of the men alleged Father Mount had tried to molest him while he was recovering at the order’s Mentone hostel after surgery to remove his appendix.

He also alleged abuse by other brothers and received a payment from the order in the 2000. Father Mount said he did not know this man.

Fairfax Media has also seen a document created during settlement processes by the order involving another alleged victim in NSW who says he was abused by Father Mount while at the order’s special school.

Psychologist Dr Michelle Mulvihill, who was employed by the order to meet alleged victims during compensation negotiations, said she believed the allegations were genuine.

She called on the Catholic Church to stand down Father Mount from his parish priest role and for a proper investigation to be undertaken into the allegations.

Father Mount said this week he was willing to face his accusers. ”Yes I would come back,” he said.

Asked if would he make contact with the order now he knew about the compensation payments, he said: ”I don’t know. They might not want to hear from me.”

Archbishop John Ribat of the Port Moresby Diocese said he was unaware of the allegations. He said any investigation should be conducted in Australia where the alleged offences occurred.

Archbishop Ribat said he was aware a family was living with Father Mount, who was sickly and not fully active as a priest.