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‘Corrupt’ drug deal halts aid to PNG

December 30, 2013 8 comments

Always interesting to see how the neo-liberal press is framing the issue…

Rowan Callick | The Australian

THE Australian government has halted its $38 million aid program to supply drugs to health centres around Papua New Guinea, following Port Moresby’s awarding of the key contract to a company with a record of providing drugs from China that are viewed as substandard.

The company won the contract despite being the highest tenderer.

Nakapi Tefuarani and Glen Mola, the president and treasurer of the PNG Medical Association, who are also leading doctors and professors of medicine, wrote an open letter to Prime Minister Peter O’Neill warning that it appeared that the procurement process for $46 million worth of drugs for next year would be “corrupt again”.

They said the government required tenderers to be International Standards Organisation accredited. However, the Central Supply and Tenders Board first extended the deadline for tenderers and then removed its own ISO requirement.

In 2011, an article in the Journal of Pharmaceutical Sciences by Anita Nair and colleagues from the Goethe University, in Frankfurt, reported that all samples of medicines supplied to PNG from the North China Pharmaceutical Group failed to meet quality standards, and one sample was “clearly counterfeit”.

Many of the medicines supplied in recent years by the winner of the tender for next year, Borneo Pacific, have been imported from NCPG.

The Medical Association leaders warned that the withdrawal of Australia would leave PNG “to local wantok distribution companies sending out low-quality and possibly counterfeit medicines to our hospitals and health centres”, leading to “the deaths of many Papua New Guineans and also much disability”.

Foreign Minister Julie Bishop told The Australian yesterday that she had discussed this issue at the joint ministerial forum on December 11, and had handed a letter to her PNG counterpart Rimbink Pato explaining Australia’s deep concerns.

She said: “We are trying to encourage PNG to support the establishment of an independent health procurement authority” — for which Australia would provide technical assistance, for legislation and its administration. Australia would resume its aid program to support the distribution of medical supplies that met the required standards.

Michael Malabag, the PNG Health Minister, has defended the tender, telling the Post-Courier newspaper there that “AusAID is kicking up a lot of fuss as their preferred supplier is not considered”, while Borneo Pacific is “in the process of acquiring” ISO accreditation.

Australia withdraws funding from Papua New Guinea health programs over corruption, fake drug concerns

December 26, 2013 Leave a comment

By Liam Cochrane for ABC

Australia has withdrawn funding for a $38 million program that supplies medicine to Papua New Guinean health centres, due to concerns about the way PNG has awarded contracts.

Previously, Australia’s aid agency chose the supplier and distributor for the medicines, but this year that process was handled by PNG.

In June, the PNG government removed a crucial quality-control criteria and later awarded the contract to local company linked to a Chinese supplier of sub-quality drugs.

Doctors say the distribution of ineffective medicine in a country rife with TB, malaria, pneumonia and gastro will cost lives.

Three years ago, a corruption scandal within Papua New Guinea’s health system left hospitals running out of drugs and prompted the PNG government to ask for Australia’s help in stocking health centres.

For two years, the International Dispensary Association supplied medical kits to almost 3,000 health facilities across the country.

Dr Glen Mola, treasurer of the Medical Society of PNG, has told Radio Australia’s Pacific Beat the IDA did a good job getting the medicine to health clinics in remote parts of PNG.

“The person who contracted to distribute the medicine didn’t get paid unless they could take a digital photograph of the medicine arriving at the actual health facility at a time and a date that was verified by the health facility OIC,” Dr Mola said.

But the arrangement was always going to be temporary and this year the PNG government took responsibility for procuring the 2014 supply of medical kits.

Australia agreed to keep funding the program, on the condition the tender process was transparent and the companies had certain accreditation, including an internationally-recognised standard ISO 9001.

The accreditation ISO 9001 is an accreditation for Quality Management Systems which, in terms of a pharmaceutical’s, helps ensure the drugs are safe and effective.

Six companies submitted tenders, but only two had the crucial ISO 9001 – International Dispensary Association and MissionPharma/City Pharmacy Limited.

On June 6, an official at the Ministry for Health told a meeting of bidders that the ISO 9001 standard was no longer required.

The company that won the tender – Borneo Pacific – does not have the ISO 9001 accreditation but they do have a history in Papua New Guinea.

“Borneo Pacific are a company that have been in PNG for a couple of decades and they have a reputation. And many of us are very concerned because of past performance,” Dr Mola said.

Borneo Pacific is the largest supplier of drugs from the North China Pharmaceutical Group.

A survey of antibiotics in PNG in 2011, published in the Journal of Pharmaceutical Sciences, found all four samples provided by North China Pharmaceutical Group were sub-standard, with one probably being a counterfeit drug.

Borneo Pacific bid of $31 million (71 million kina) was $9 million more than the bid from International Dispensary Association, which successfully delivered the kits for the past two years.

DFAT pulls funding

Concerns about the tender process have been reported in recent weeks and Australia has reviewed its role in the health centre kits distribution program.

“The Australian Government committed to fund the distribution of medical kits in PNG,” said a spokesperson from Australia’s Department of Foreign Affairs and Trade (DFAT).

“This [funding] was conditional on the Government of PNG purchasing the kits from a pharmaceutical’s firm which met international drug quality standards, through a fair, transparent international tender process.

“Unfortunately, these conditions were not met and the Australian Government will not fund the distribution of the medical kits resulting from this tender process.”

The ABC understands the PNG government has set aside money in next year’s budget to pay Borneo Pacific for the medical kits.

The tender for distributing the medical kits is expected in early 2014 and the drugs are expected to arrive in May-June.

Warnings decision could lead to deaths

Dr Mola from the Medical Society of PNG says the distribution of quality drugs in these medical kits is a matter of life or death.

“If the health workers don’t receive the medicine they need to treat the patients, well then the patients die!” he said.

“It’s not like in Australia or perhaps in other countries where the patient can go just to a different facility or go to see a different doctor or something.

“When you’re in a rural or remote area of Papua New Guinea, your health centre is the only health facility for your community – there’s no alternative.”

Australia’s decision to walk away from the deal is another blow to the credibility of PNG’s claims to be improving governance and public services.

The ABC’s efforts to contact the Health Minister were unsuccessful and there has been no response to a request for comment from the Prime Minister’s office.

However a previous statement responding to concerns from the Medical Association of PNG defended the tender process.

“The National Department of Health has a moral and legal responsibility to ensure that quality medicines are brought into the country for our people,” wrote acting secretary Dr Paison Dakulala.

“As the gatekeeper for these medicines, we cannot and will not compromise this very important responsibility,” he said.

“Papua New Guineans must be assured that the Department will test these medicines … [and] when medicines do not meet our requirements, these medicines will be sent back and will be replaced, or contracts will be terminated.”

More allegations against Don Polye and Peter O’Neill

December 20, 2013 6 comments

C Koa

Here is another one on corruption during the reign of Peter O’Neill as PM. Remember the 2011 supplementary budget of K500 million declared by Finance & Treasury Minister Don Polye? Where did all that money go? How was it appropriated?

That K500 million surplus budget was used to fund the 2012 elections of the PNC and THE parties.

Don Polye’s campaign funding from this K500 million was sourced thru a construction company call Tepman contractors. Funds were remitted to the Kandep district treasury and eventually paid to the contractor. The owner is Luke Minjikuli a first cousin to Polye. His party benefited more thru funding for David Arore, Dellilah Gore, Douglas Tomuriesa, Sali Subam and all the other winning and loosing candidates who contested under the THE party ticket.

Tomuriesa benefited thru his company called Quick Span Building Systems Ltd where K6 million was paid by the South Fly District treasury after these money was remitted from the Finance Dept. Tomuriesa used over half of it to campaign for his seat.

Subam got his share to campaign also in the form of the purchase of K3 million worth of roofing iron for South Fly district – materials which have to date not been delivered.

O’Neill’s party benefited from half of the K500 million surplus. The Finance Dept knows that. Tosali knows that and Steven Gibson was the major facilitator getting payments going as per Polye’s directives.

Belden Namah was working hard to keep O’Neill as PM but never knew what was happening at Finance & Treasury.

Sam Basil who was National Planning & Monitoring Minister was kept out and never knew what was happening to the surplus money because none of the proceeds of the surplus money ever reached his department to fund approved projects.

The K54 million made into the Parliamentary imprest account was beleived to be from this K500 million. This was just to keep Jeffery Nape happy because he actually benefited in the form of a K5 million prior to getting Peter O’Neill sworn in at government house when he first refused in his capacity as acting GG.

Why two deficit national budgets in a row (2012 & 2013)? Its largely due to the misuse of the 2011 surplus K500 million which never funded any budgeted projects.

Be aware; Polye and Co are again orchestrating a similar plan for 2017 national elections. It is highly likely he will deliver deficit budgets for years 2014 & 2015, then declare a surplus budget in 2016 for the purpose of funding their parties’ election campaigns in June/July 2017.

Being the party leader he refused to become the deputy PM because of two issues;

  1. To ensure the lid is kept closed on the use of the 2011 surplus budget and other corrupt practices perpetrated during the last term in office.
  2. 
Plan to steal again to fund his 2017 naional elections.

172 million reasons why the government won’t cancel illegal SABL leases

December 18, 2013 Leave a comment

There are 172 million reasons every year why the government of Peter O’Neill is steadfastly refusing to implement the recommendations of the SABL Commission of Inquiry and revoke unlawful and illegal SABL leases.

172 million reasons why the government is standing by and watching the fraud and corruption and the accumulating losses for customary landowners.

K172 million* is the value of the logs exported from the illegal SABL areas every 12 months, according to SGS, the agency employed by the government to monitor log export volumes. SGS put the total value of logs exported from PNG in 2012 at K306 million and says 29% came from SABL areas where logging is done under Forest Clearance Authorities (FCAs).

The SGS graph showing the percentage of log exports coming from illegal SABL areas

The SGS graph showing the percentage of log exports coming from illegal SABL areas

This logging in SABL areas has been going on since at least 2010 and is still continuing. At the 2012 rate, the accumulated theft now exceeds K700 million.

Every month the O.Neill government refuses to revoke the leases another K14 million is stolen from customary landowners, filling the pockets of the foreign logging companies and the politicians and public servants who have facilitated the fraud.

K14 million a month – that is what it costs to buy our government, our Ministers, the NEC and our CORRUPT Prime Minister.

This is what the Commission of Inquiry said about the SABLs:

“With corrupt government officials from implementing agencies riding shotgun for them, opportunistic loggers masquerading as agro-forestry developers are prowling our countryside, scoping opportunities to take advantage of gullible landowners and desperate for cash clan leaders.” [p242]

“The Commission of Inquiry found widespread abuse, fraud, lack of coordination between agencies of government, failures and incompetence of government officials to ensure compliance, accountability and transparency within the SABL process from application stage to registration, processing, approval and granting of the SABL”

“Legal requirements were deliberately breached and proper processes and procedures were either by-passed or simply ignored… agencies were reckless, careless and negligent” [Report 1 p235 and 236]

The Commission of Inquiry recommended 38 of 42 SABL leases be REVOKED (their emphasis) but the government has refused to do act. Instead the Prime Minister has asked the very same government agencies the CoI said were corrupt and incompetent to come up with their own set of recommendations.

What a cruel joke on the people of PNG!

* K172,261,823 to be precise (or US$88,775,620)

A people impoverished and humiliated by Rio Tinto: Bougainville’s Sir Paul Lapun speaks out

December 17, 2013 Leave a comment

The Bougainville Truth Initiative*

On the 14th of April 1988, Sir Paul Lapun – the legendary MP for Bougainville (1964-77) who passed away in 2003 – sat down with Rio Tinto’s historian to talk about the great fraud forced upon his people, and the long struggle they have waged for justice and dignity.

In this interview, tucked away in the CRA** archives, Sir Paul talks of a once proud people made dependent on a rapacious mine owned by Rio Tinto, which they were told would be nothing more than ‘a big hole in the ground’ (p.23). He talks of rich soils poisoned by toxic tailings that had been pumped onto his people’s sacred lands and waterways. And he talks of a people not born poor, but made poor by the mine and its effects.

As a result of the Panguna mine, Sir Paul claims, there is now, ‘no fish – nothing! The Jaba River is all eroded, and still now the sea shore is becoming silted’ (p.15-6). He continues, ‘we used to get a lot of cocoa seeds … but now they don’t get those seeds’ owing to acid rain (p.17).

Sir Paul recalls having his grave concerns dismissed by national government representatives, get a scientist he was told. In a moment of defiance, Lapun testifies to local knowledge, ‘I’m myself a scientist … I said I know! I was born here!’ (p.19).

And what of the great riches the people were promised? ‘We’re really poor – nothing no toea in our hands’, Sir Paul opines (p,19).

Casting his mind back to the colonial days, Sir Paul recounts the shameful swindle hoisted upon Bougainville. He recalls legislation written in Canberra and then rubber stamped by PNG politicians to give this law of conquest a respectable veneer of local consent (p.3-4); and he recalls a consultation process where the people were told of all the benefits they would enjoy, without a hint of the irreversible damage which would be done to land, environment and custom.

‘Nobody knew anything’ Sir Paul claims (p.22). He continues, we only were told ‘one side of the picture … the bad side … was hidden from us’.

Rorovana women resisit the mine in 1969

Rorovana women resisit the mine in 1969

But matters did not rest there, woven into the bones of his people was a sense of independence and self-determination which they would not relinquish easily. Sir Paul talks of the important struggle launched by the women of Rorovana who heroically threw their bodies in front of CRA bulldozers – in the people’s tradition of direct action – and whose defiance was beamed around the world, much to the chagrin of CRA’s Chairman, whose neat little narrative of a great mine and a welcoming people had been corrupted (pp.8-10).

Echoing the past, Sir Paul warns Rio Tinto the women are organising again (p.28)!

Though this was April 1988, Sir Paul only had an inkling of the enormous sacrifice his people would need to make in order to restore their dignity and win self-determination, and the great imperial coalition that would form in opposition to this simple act, meeting it with grenades, helicopter gunships and white phosphorous mortar rounds.

What would he make of all the rumblings today? Of the Autonomous Bougainville Government (ABG), with its sleek consultation forums, where hand-picked speakers are invited to talk of the riches they will one day enjoy as a result of the Rio run mine. What would he make of the legislation, drafted to secure the interests of Rio Tinto, overseen by Australian advisors? What would he make of ordinary villagers, and their simple demand to live in peace with a quite dignity, being ignored? What would he make of ABG Ministers claiming the people of Panguna must make a great sacrifice to support independence, as if they hadn’t already sacrificed enough?

We can perhaps guess from this transcript; a transcript that is not held in Arawa or Buka, but Melbourne, where the secret history of this island is kept safe from the people.

Knowledge is power, so it must be denied. It must be denied because of the great disparity lying behind the mine; while it lined streets, homes and workplaces abroad in gold, on Bougainville, at the epicentre of this tragedy, the people were left with a land gutted of its richness, and graves full of young bodies taken from the world too soon. This truth must be denied, and the annals of history that testify to this truth forgotten, so that history can be repeated, first time as tragedy second time as farce.

*The Bougainville Truth Initiative: Challenging the Democratic Deficit
**Conzinc Rio Tinto of Australia

SABL Case Study 11: The Kassman family and their fraudulent LNG land deals

December 16, 2013 3 comments

SABL Commission of Inquiry Report 1: Pages 143 – 166

Gerrard Kassman and his sons Charles and John are the beneficiaries of two illegal and fraudulent SABL land deals close to Port Moresby that seek to cash in on the Exxon-Mobil LNG project.

 “There was misrepresentation and fraud involved in the whole process” [p164]

The forging of landowner signatures “borders on fraud and is a criminal act” [p151]

“KHL and CJV are owned by one family to the exclusion of all other legitimate landowners” [p150].

“the sublease made to the developer CJ Ventures [is] fraudulent and improper” [p156]

“it was obvious that officers from DLPP [including] Romily Kila-Pat deliberately decided to ignore and by-pass the existing protocols and practices” [p153}

“The whole process is riddled with defects and flaws” [p157]

“the conduct of Mr Mai [of Kundu lawyers] raises a lot of questions… Mr Mai’s conduct is unbecoming of a professional lawyer” [p155] He “acted improperly and unprofessionally” [p157]

“The manner in which the SABL application was processed… is a blatant disregard of the law and those responsible must be held accountable for their unlawful conduct and actions” [p165]

“We accordingly recommend that the SABL[s]… to be REVOKED” [p157]

This Case Study covers the Special Agriculture and Business Lease over Portions 2465C and 2466C

These adjacent SABLs cover a total area of 980ha in the Motu-Koita villages of Papa and Lealea near the LNG Plant site and approximately 15km from Port Moresby.

Direct Grants of 99 year leases were made to Konekaru Holdings in 2010.

Landowners “were not adequately consulted and were not involved in the process and have not given their consent for the SABL[s]” [p146]

Gerald Kassman is not a landowner as he comes from Korobosea and has no ancestral links to the leased land.

KHL has appointed CJ Ventures as the developer of the project (CJV is owned by Gerard Kassman’s sons Charles and John) and signed a sub-lease.

“KHL and CJV are owned by one family to the exclusion of all other legitimate landowners” [p150].

The purpose of the sub-lease is to make land available to Exxon-Mobil for storage and other purposes.

“There was no land investigations carried out and no public hearings or meetings. Most importantly, majority of the landowners have not given their consent to lease their land for SABL” [p152]

Konekaru Holdings is owned by Gerard Kassman and Henao Tetei [p147]. KHL is not a landowner company as intended for the purposes of holding an SABL – “this defeats the whole intent and purpose of SABL” [p156]

“The LIR [Land Investigation Report] was incomplete and defective, the Certificate of Alienation was signed under duress…” [p157]

The LIR and Lease-lease back agreement is defective as only two people signed on behalf of all the listed landowners and in some instances forged the signatures of other landowners. This “borders on fraud and is a criminal act” [p151]

DLPP failed to consult with Provincial lands officers in carrying out the land investigation process which is normally a Provincial responsibility.

“No officers from the Division of Lands Department of Central Province were involved in the LIP and other processes leading up to the issuing of the SABLs for the three portions” [p152]

“it was obvious that officers from DLPP comprising Lazarus Malesa, Simon Malu, Henry Wasa and Romily Kila-Pat deliberately decided to ignore and by-pass the existing protocols and practices… when they decided to grant three separate SABLs … over Portions 2456C, 2466C and 2485C”. [p153]

“It is clear the land investigation process was ‘high jacked’ by officers from DLPP when this is clearly the function of Lands Division of the Department of Central” [p154]

“The whole process is riddled with defects and flaws” [p157]

The term of the sublease exceeds the term of the head lease “which is improper and unlawful” [p154]

The Register of Titles, Henry Was a, registered the SABL despite an existing land dispute.

“This is careless and reckless discharge of an official function” [p154]

“Romily Kila-Pat in his capacity as Acting Secretary for DLPP and a Ministerial Delegate… went ahead to grant the SABLs for Portions 2456C and 2466C despite the fact the LIR was defective and the Lease-leaseback Agreement fraudulently acquired” [p154]

Emmanuel Mai of Kundu Legal Services was “heavily involved in facilitating the production of the LIR and ‘rushed’ the Lands Officers of Central Provincial Administration to sign the LIR which was incomplete and not properly done” [p154]

“the conduct of Mr Mai raises a lot of questions… he was exerting pressure and to some degree coerced government officials into signing… Mr Mai’s conduct is unbecoming of a professional lawyer” [p155]

He “acted improperly and unprofessionally in facilitating the application and processing of the SABL” [p157]

“The informed consent of ALL landowners was not obtained… Konekaru Holdings Limited is not a landowner company. Furthermore … the sublease made to the developer CJ Ventures [is] fraudulent and improper” [p156]

“The LIR was incomplete and defective and the certificate of Alienation was signed under duress… There seem to have been a lot of controversies at every stage… All these issues and concerns should be reason enough for DLPP not to issue this particular SABL but yet it proceeded to issue the SABL. This raises a lot of questions” [p157]

Their has been no Environmental Inception Report submitted to DEC nor an Environmental Impact Statement. No Environmental Permit has been issued. [p153]

“The intimidation tactics used by the officers from DLPP and the lawyers to hasten the processing and granting of the SABL is both unacceptable and unprofessional” [p164]

“The SABL … was improper and unlawful as proper processes and procedures … have not been complied with… There are a lot of irregularities, defects and breaches in the granting of this SABL… that .. cannot lawfully stand” [p157]

“We accordingly recommend that the SABL[s]… to be REVOKED” [p157]

No more Coca Cola at Vision City?

December 13, 2013 2 comments

image001Coca Cola has declared zero tolerance on land grabbing according to media reports (see below).

PNG’s biggest land grabber, says the recent Commission of Inquiry that uncovered widespread fraud and illegality, is Rimbunan Hijau:

Our investigations reveal that over 50% of the so-called developers’ currently holding subleases on SABLs are connected in one way or another to Rimbunan Hijau (RH) Limited, which by far is the biggest logging operator in PNG. [p242]*

Rimbunan Hijau has been exploiting the SABL leases to illegally grab land from customary landowners, in collusion with corrupt government officers:

“With corrupt government officials from implementing agencies riding shotgun for them, opportunistic loggers masquerading as agro-forestry developers are prowling our countryside, scoping opportunities to take advantage of gullible landowners and desperate for cash clan leaders.” [p242]

Vision City was built by Rimbunan Hijau using the money from its illegal logging operations

Vision City was built by Rimbunan Hijau using the money from its illegal logging operations

Rimbunan Hijau owns and operates the vast Vision City shopping mall in Port Moresby, as well as other retail outlets around the country.

If Coca Cola is being honest about its zero tolerance for land grabbing then Coke will no longer be available in Vision City or any Rimbunan Hijau supermarket, hypermarket or logging camp canteen….

Come on Coke, do the right thing and stand by your commitment to ZERO TOLERANCE FOR LAND GRABBING!

* The full quote from the Commission of Inquiry:

A preponderance of the evidence before us indicate that logging companies are the biggest beneficiaries of the SABL scheme. Most sublease holders are using sublease agreements primarily to extract logs. Most of them do not even make the attempt to clear fell harvested areas to start work on the agriculture component. They take full advantage by exploiting the flawed lease-leaseback process and capitalize on the poorly regulated and badly administered oversight apparatus. Our investigations reveal that over 50% of the so-called developers’ currently holding subleases on SABLs are connected in one way or another to Rimbunan Hijau (RH) Limited, which by far is the biggest logging operator in PNG. [p242]

Coca Cola joins wows to stop land grabs

By Jimmy Kalebe in the Post Courier

THE world’s largest buyer of sugar, Coca Cola, in a landmark announcement last month, has committed itself and its suppliers to a policy of zero tolerance on land grabs.

The commitment came in a reaction to demands from a quarter of a million people mobilised by a hard-hitting Oxfam campaign targeting the world’s top 10 food and beverage companies. The Oxfam campaign states that sugar, along with soy and palm oil, is driving large-scale land acquisitions and causing land conflicts.

In the report released by Oxfam International, Coca Cola worldwide has set the bar high and campaigners are sure to use this to call on governments, investors and the rest of the food beverage industry to step as well.

The report said currently Oxfam International is calling on two other sugar giants, Pepsi and Associated British Foods, to match Coke’s commitment.

In many cases in Papua New Guinea, land acquisition and land conflicts have been linked to human rights violations and loss of livelihoods turning land deals into land grabs.

Oxfam International PNG is urging the government and companies to stand against this practice and respect the law of the land.

Over the past decade there has been scandalous land grabbing in PNG as documented by the inquiry into Special Agriculture Business Lease.

Meanwhile, local landowners of Turubu inland in East Sepik claim they have had their land taken away from them.

An oil palm project was established in their region but the villages of Tring, Ibap, Wandomie and Samap never signed an agreement to be part of the project. However, they were surprised to learn that a logging company, engaged by landowner company Limawo Holdings Ltd, logged parts of their forested land without their consent.

Landowner Augustine Mondu of Nimbuam clan said the locals engaged Centre for Environmental Law and Community Rights lawyers to take up their legal battle.

Locals have been fighting to protect their land for the last five years. With the help sought from the lawyers they will try to make sure logging and other operations happening on their customary land stops.

Since the oil palm project was introduced in 2008, the entire constituency of the Turubu local level government area falls under special agriculture business lease.