Archive for June, 2013

The baobab tree infested with Corruption

June 28, 2013 2 comments


The whole Independent State of New Guinea Papua, the country, the nation, is a baobab tree infested with Corruption (with a capital “C”). And like a baobab tree the National Government with the national leaders are the base and thick trunk and the Provincial Governments led by Governors and provincial leaders are the rotting angular branches that are infected because the trunk is infected..

WHAT to do? Well, corruption of the kind we see in PNG has developed a life – a growing industry – of its own. So much so that the practices we see are so blatantly blurred that it is probably no longer possible to determine what is right from wrong; or good from bad; or what we knew as grand corruption from a daily, seemingly acceptable transaction.

It is awfully difficult to weed out corruption if the leaders, authorities and the institutions that are supposed to guard against it are in fact the worst perpetrators and promoters. Their lack of will and decisive actions and evasive explanations almost give legitimacy at every level of government and in all aspects of governance.

Don’t let’s allow politicians to fool us by well sounding statements that they are trying to do something to stem corruption. NOT only is corruption here to stay but it has found fertile ground in willing participants and can only grow. It will keep growing because the powers that be and all the mongrels that facilitate and enhance it and who benefit from it know that it pays to be corrupt in PNG.

It seems it pays to be corrupt until the People, the masses, get sick and tired of it. That is what the Arab Spring was all about. May a Melanesian Dawn is in the offing somewhere down the bush track.

ICAC is a red herring.

The Ombudsman Commission can’t possibly see or notice what is going on at ground level because they are perched in the Ivory Tower in the middle of Port Moresby CBD.

Auditor-General is a “dohore” body of 8am to 4.06pm PNGns and Asians that awaken their survival instincts only after the horses have bolted out of the corrals and their reports are essentially compliant reports that only hurt any offenders over the knuckles.

It makes you feel like crying when you see women, mothers in the market stalls from Boram to Buin and Buka; from Malaoro at Gordons to the Goroka Market; from Tari to Telefomin or from the street vendors trying to pawn Chinese made items to the ladies with dishes of scorns, omelettes on their heads at refueling service stations trying to make a quid.

Corruption is a disease. If it is not cured it will eat PNG’s heart and soul away. It’s a disease far worse than HIV-AIDS because it affects even those that do not participate or come into contact with the one’s involved in it. It also leaves the country in a very sad predicament because at least with

Corruption we can take legislative, criminal and policy actions and do something about it. With HIV-AIDS there is no known cure really.

Corruption is right up there with three most “profitable” and noticeable growing industries in this country:

  1. Security Services
  2. Corruption

Success! Parkop suspends contract with China Harbour Engineering Company

June 27, 2013 1 comment

NCD Governor Powes Parkop has suspended a K318 million contract with the China Harbour Engineering Company. The suspension comes after it was revealed two-weeks ago by PNGExposed that the company was blacklisted by the World Bank and implicated in other corruption scandals.

Read the revelations on PNGExposed that led Governor Parkop to order an investigation.

Read the report on EMTV news about the suspension of the contract.

Watch the video:

More on the corruption in Madang and inaction of the Administrator

June 27, 2013 4 comments

Madang Administrator Bernard Lange is refusing to acknowledge the considerable evidence of corruption within his organisation or do anything to deal with the problem.

The Chair of the Provincial Audit Committee has recently resigned over the indifference shown to its findings, as we revealed last week.

unfinished school classroom buildingA further small example of the problems within the Province is shown in the photographs of a school classroom at Gum on the  outskirts of Madang town. Bahubo Building Contractors was awarded the contract to build the classroom and work started in 2009 – but it has never been completed and the half-finished building is unusable. These is despite K100,000 having been paid out to the contractor.

The payments made were as follows: Cheque number 219719 dated 23/03/2009 for K50,000; Cheque number 222915 dated 22/09/2009 for K35,000; and Cheque number 227942 dated 14/12/2010 for K15,000. The last cheque was a final payment and when it was drawn all work on the classroom ceased.

close-up of the unfinished workIt is estimated the remaining work on the classroom will take about K30,000 to complete.

Bahubo Building Contractors have been paid K100,000 out of tax payers money to build a much needed classroom but have never completed the job. The Madang Administration has taken no steps to ensure the work is completed or recover the money paid.

The Madang Administration and Bahubo Building Contractors have defrauded the people of Papua New Guinea and cheated the pupils, staff and parents of Gum school.

interior of the unfinished building

Exclusive: Pro-mine Bougainville leader paid by foreign lobbyists

June 26, 2013 20 comments

The ‘new’ Panguna Landowners Association, led by its Chairman, Lawrence Daveona – a Port Moresby based businessman and civil servant – is holding itself out as the true representative body for landowners on Bougainville. And, to that end, the association has put itself in the box-seat to negotiate the mine’s reopening [1] with Bougainville Copper Limited (BCL).

But there is more to this political coup than meets the eye. PNGexposed can confirm that the group’s Chairman, Mr Daveona, has received thousands of kina in payments from the European Shareholders of Bougainville Copper (ESBC), a body set up by BCL’s European investors to lobby for the mine’s reopening.

These payments have been made by ESBC’s President, Axel G Sturm. According to The Australian, Mr Sturm is “possibly the company’s largest individual shareholder”. He has been agitating for the mine’s reopening from his home in the Principality of Andorra, a notorious tax-haven and secrecy jurisdiction (there is no evidence though that Mr Sturm is involved in any illegal activity).

Receipts and reports viewed by PNGexposed show that Daveona received numerous payments by ESBC between 2009-2011, ranging from K1,000 to K4,650 in value (see Appendix A). Some  payments are simply labelled ‘Project Funding’ and ‘ESBC Activities in Panguna’, while another was evidently made to purchase a laptop for James Tanis, Bougainville’s former President, who has now come out in support of the mine’s reopening. [2]

In 2008 the ESBC’s President, Mr Sturm, claimed to be “deeply impressed by Lawrence Daveona. He is the ideal mediator in this sensitive issue [mine reopening]. He has our [ESBC] confidence and our full support as well”. [3]

Axel G Sturm with Lawrence Daveona, Michael Pariu, Chris Damana and Severinus Ampaoi

Axel G Sturm with Lawrence Daveona, Michael Pariu, Chris Damana and Severinus Ampaoi – Davoena, Pariu and Ampaoi strongly supported, and profited from, Rio Tinto/BCL during the 1980s and once again lead efforts to reopen the mine today.

Axel G Sturm with Sam Akatoi

Axel G Sturm with Sam Akatoi another Bougainvillean ‘leader’ supporting Rio Tinto’s return.

We have also discovered evidence that Daveona, evidently on behalf of landowners, took K5000 from BCL to fund the reconciliation process between different landowner groups – a process viewed as a ‘fundamental condition precedent’ [4] for the mine’s reopening.

These payments – in particular the ESBC money – raise serious concerns over whether Mr Daveona’s leadership role has been compromised by personal pecuniary interests.

But there is more! Daveona was allegedly sacked in December last year as Acting Deputy Clerk of PNG’s Parliament (Daveona has lived in Port Moresby since the early 1990s). According to a Post-Courier report [5], “alcohol, vehicles and other resources have been provided by Parliament for Fraud Squad officers to carry out investigations against certain senior officers of the Parliamentary services”. It is claimed by the Acting Clerk of Parliament, Simon Ila, that his Deputy, Mr Daveona, was responsible for this inappropriate conduct.

It is perhaps not surprising then that Daveona was one of the targets of Francis Ona and Perpetua Serero as they attempted to clear out the rot from the landowning community during the late 1980s. At the time Daveona was a manager at the Bougainville Development Corporation (BDC), and a Secretary/Director of the Roads Mine Tailings Lease Trust Fund (RMTLTF) – a body set up to administer certain mine compensation payments.

The BDC was controlled by a number of rich nationals. When the conflict kicked off, and Francis Ona called for a more equitable distribution of wealth and resources, the BDC it appears were happy to assist the PNGDF slaughter their own brothers and sisters on Bougainville, flying and maintaining the infamous Iroquois helicopters supplied by Australia. By Daveona’s own admission: “Heli Bougainville was a subsidiary company of Bougainville Development Corporation (BDC) the very company I was also a subsidiary company manager of another one of its companies namely, Wear Resistant Material (PNG) Pty. Ltd at the start of the crisis in 1988. We the employees of BDC at that time knew this [that the PNGDF were using Heli Bougainville pilots] and it was business as usual for BDC”. [6]

The helicopter-gunships flown by Heli Bougainville dropped grenades onto villages, and dumped murdered civilians into the ocean – not exactly “business as usual”.

Daveona’s tenure at the RMTLF was also plagued by suspicions. Dr Henry Okole, a Senior Researcher in Governance and Institutional Matters at the National Research Institute, claims:

First, there was a complaint that formal membership of the RMTLTF, including the right to attend meetings and appoint the executive, had been artificially restricted to a small minority of the titleholders in the lease area, while the rest of the landowners had no control over its operation. Secondly, although many ordinary PLA members were aware of the business activities of the RMTLTF, some of our informants claimed that the management had failed to produce a financial report to notify them of the present financial standing of the fund. Thirdly, there was discontent over the recruitment of a Filipino as a general manager of the fund. This man was alleged to be in receipt of an annual salary of K12,000. There were claims that the PLA members were not notified of his recruitment, and there was clearly some resentment at the size of his reported salary. Finally, there were allegations that the whole operation of the RMTLTF, like that of the PLA itself, had come to be geared to the personal gain of the board members. For instance, sponsorship of students to higher education institutions was said to have been monopolised by the board members. There were also rumours that the fund had begun to operate as an integral part of the Bougainville Development Corporation – a move described by the some of our informants as ‘greedy’ and ‘self-benefiting’.

Lawrence Daveona has been, for many years, [7] an advocate of BCL’s return to Bougainville –this support is so overt that on Daveona’s website the following image appears when the heading “Our Future” [8] is clicked:

BCL executives enjoying a private boardroom dinner

BCL Chairman and Secretary enjoying the finer things in life.

To date Daveona’s support for BCL has been couched in largely benevolent terms, for the greater good of ‘his’ people. But in light of these payments, and other serious allegations, it would appear fair to ask whether other material motivations inform Daveona’s call for BCL’s return?

And how many other ‘leaders’, we wonder, are also taking payments from those associated with BCL, or have lucrative ‘business contracts’ lined up for BCL’s return – more than a few we bet!

Appendix A

Details of payments made


Corruption rife in Madang Provincial administration

June 21, 2013 6 comments

The Provincial Audit Committee in Madang has uncovered evidence of corruption by officials on a grand scale but that evidence is being wilfully ignored by the authorities.

The Chairman of the Madang Provincial Audit Committee has resigned because of the lack of support for his committee’s work from the Madang Provincial Administration and the Department of Finance.

Letter of resignationLast year the Chairman of the Audit Committee wrote to both the Governor, Jim Kas, and the Department of Finance in Port Moresby expressing his concern about corruption but both letters went unanswered.

letter to the governorletter to the department of finance

Draft ICAC laws available on ACT NOW! website

June 19, 2013 Leave a comment

PM’s Dept release draft ICAC laws for public consultation

The Anti-Corruption Sectretariat in the Prime Minister’s Department has released for public consultation a number of documents on the proposed Independent Commission Against Corruption.

The documents (which can be downloaded from the ACT NOW! website) are:

  1. The draft Organic Law on ICAC
  2. Draft amendments to the Constitution
  3. Public discussion paper
  4. Background paper on International Best Practice

Members of the public and civil society organisations have until June 30 to make their submissions on the documents to the PM’s Department.

Paraka wiring large sums to his ‘Australian based wives and girlfriends’

June 19, 2013 4 comments

PNG ‘dirty money’ trail leads to Australia

By Nick McKenzie and Richard Baker from Fairfax Media

Millions of dollars allegedly corruptly obtained from the PNG government have been siphoned to Australian banks, confidential banking documents reveal.
Fairfax Media has also confirmed that Australian bank NAB recently increased its due diligence on some money transfers from PNG due to corruption concerns.
The allegedly dirty money stems from a corruption scandal gripping PNG that has led to the suspension of senior government officials and Prime Minister Peter O’Neill last month asking the Australian Federal Police and Interpol to help investigate.
Mr O’Neill also threatened to sack all staff in the country’s Finance Department after allegations in Parliament implicating top officials and prominent lawyers.
Law enforcement sources believe up to $500 million may have been stolen from PNG government legal aid funds over several years.
A NAB spokesman said on Tuesday that the bank late last year ”heightened our due diligence relating to some funds from PNG, as a result of information that became available to us through official channels in PNG”.
”Payments that NAB deems as suspicious will be blocked and reported as required by law,” he said.
Fairfax Media has obtained documents that show the leading lawyer named in the PNG Parliament as one of the architects of the alleged corruption scheme, Paul Paraka, has been regularly transferring large sums of money to several contacts on the Gold Coast and in NSW.
It is understood that one of Mr Paraka’s PNG banks has a business relationship with NAB. The NAB spokesman said the bank could not comment on payments made on behalf of individual customers.
On one day in October last year, a bank account linked to Mr Paraka wired about $80,000 in three transactions to his Australian-based wives and girlfriends, including one who lives in Sydney’s Star City casino complex. Between February 2012 and February this year, almost $3 million was transferred to Australia from bank accounts linked to Mr Paraka. PNG investigators believe most of these funds were corruptly obtained.
The ability of Mr Paraka – who denies any wrongdoing – to transfer suspicious amounts of money raises questions about what Australian banks, the federal police and the anti-money-laundering agency, Austrac, are doing to block or investigate dirty money.
The ease with which allegedly corrupt PNG officials and businessmen can transfer money to Australia is becoming an increasing concern for law enforcement officials in both countries.
Last month, AFP senior liaison officer Superintendent Steve Mullins reportedly told a conference in PNG that tens of millions of corruptly obtained money was being deposited in Australian banks each year. An AFP spokesman said Superintendent Mullins was working with PNG authorities ”on a range of complex issues”.