Home > Corruption, Human rights, Land, Logging, mining, Papua New Guinea > Australia lectures PNG on corruption and underdevelopment… Where is that mirror?

Australia lectures PNG on corruption and underdevelopment… Where is that mirror?

February 17, 2014 Leave a comment Go to comments

Goodie. The Australian government has returned to the lectern to chastise PNG over corruption and lack of development. Australia’s Foreign Minister, Julie Bishop, has slammed the PNG government claiming corruption is rife, and laments PNG’s backward slide on the Millennium Development Goals.

julie-bishop2Which would be fine, were it not an act of complete policy schizophrenia. Because while the Australian Foreign Minister tut-tuts at PNG, her government – and those before it – pursue an economic agenda in PNG that fosters corruption and undermines community-led, sustainable ‘development’.

What’s more ‘aid’ is a key weapon employed by Australia to engineer economic arrangements in PNG it says will alleviate ‘poverty’, but which in reality have fostered corruption, a growing criminal economy, epic land grabs, a bloated extractive industry, lunar landscapes, and a decade long war.

For instance, no one has been more proactive in pushing the sale of PNG’s mineral, oil and gas resources to foreign multinationals than the Australia government, with AusAID – now part of DFAT – at the forefront of these efforts through its ‘mining for development’ programme. According to DFAT, ‘the mining sector has considerable potential to help reduce poverty, accelerate human development and economic growth, and support progress towards the Millennium Development Goals’.

In reality it creates a bonanza for Australian/Canadian/Chinese/US miners and construction firms, who conveniently turn a blind eye to the big black hole they dump their tax revenues into – and claim, contrary to all the evidence, that they are helping to ‘develop’ PNG.

The fact is these revenues are pumped into government coffers, and then national ‘entrepreneurs’, with a supporting cast of foreign criminals, devise a whole series of scams to privatise it, ensuring minimal amounts make it into aid posts, schools, roads, communications, universities and infrastructure (when it does, it is often decimated by bribery and inflated prices submitted by client contractors).

The scams vary in complexity. Sometimes they involve blatant misappropriation of money and assets, in more complex examples they consist of inflated contracts, bogus consultancies, jobs for mates, sham law suits, privatisation of public assets … the list goes on and on.

All of which is sustained because PNG lacks a real economy, one built around the everyday sweat shed by rural and urban workers. Instead there has emerged a fictitious economy built on misappropriation and swindle, which is propped up by the tribute (tax) paid by miners to political intermediaries (corrupted government agencies).  And lets not be naive – the miners are aware of the graft, and are content to see it continue. National leaders working for money are obedient, those working for the people don’t dance as readily to the multinational’s tunes.

And what is the other big Australian agenda that has been pushed by AusAID, and its academic satellites, over the years? Why the privatisation of customary land, through land registration schemes. If customary landowners were able to convert vast tracts of land into economic assets, so the argument goes, PNG could experience a grass roots economic boom.

Yet we know in those instances where land in PNG has been ‘converted’ into economic assets it has sparked a frenzy of white collar criminality. First the land is acquired through a series of illegal transactions, be it through defrauding customary owners or paying off friends in the Lands Department. The alienated asset then becomes part of a black economy, a reality that is covered up by the ‘legal’ leases proudly displayed by the villains. With their crooked schemes hidden under a cloak of legality these mainly foreign land-grabbers can then take advantage of sky-rocketing urban housing prices, or prey upon the country’s rich forestry resources. The national elite cashes in as fixers for these crooked deals, drawing on their political and customary connections.

All of this is laid out in the SABL inquiry reports, and Public Account Committee inquiries, currently collecting dust.

And some of the biggest names in PNG politics and business, have been involved in these nefarious trades and schemes. The likes of Peter Yama, Paul Paraka, Peter O’Neill, Michael Nali, Andrew Mald, Rex Paki, Gabriel Kapris, Tom Amaiu, Beldan Namah, Paul Tiensten, Eramus Wortoto, Puka Temu, William Duma, to name just a few, have been condemned in anti-corruption reporting, judicial inquiries, and in the pages of PNG Exposed.

So, in effect here is how it works. The Australian government wants to see a business and political elite mobilised so PNG can be converted into a giant market, on which its natural resources are the main traded item. Evidently the trickle down effect will lift villages out of what the aid boffins call ‘poverty’.

In reality it has 1) built a fictitious economy resting on the rents generated by a bloated extractive industry; 2) facilitated a black trade in land and forestry resources; 3) allowed a national elite, embedded in illegal enterprises, to consolidate their power and wealth-base, creating a stranglehold on the top jobs in government.

And then what happens when our honourable leaders park their ill-gotten gains in the Queensland economy, to the cheers of real estate agents? It falls on deaf ears in Australia. And what happens when Aussie fraudsters steal from our public purse, or concoct schemes to take our resources? It falls on deaf ears in Australia. And what happens when rural communities attempt to work collectively in order to harness their own resources in small-scale industries constructed in the spirit of sustainable, self-reliance? Nothing, they are not encouraged or assisted, indeed a self-reliant nation of autonomous producers is to be feared, and dependency is instead actively encouraged by Australia – dependency on mining revenues, dependency of foreign ‘investors’, dependency on resource rents, dependency on foreign ‘advice’, never autonomy, never self-reliance, never self-determination, never self-belief.

Julie Bishop, if PNG is a monster Australia is Dr Frankenstein!


  1. February 18, 2014 at 9:49 am

    Get ur team of expats to investigate… Public funds, donor grants etc…in all state departments.
    Pls post this world wide..
    Really png is a corrupt nation with greeeeeeeeedy bastards reaping and raping the nation..

  2. Jade
    February 20, 2014 at 2:16 pm

    I grew up in a small station setting in the Milne Bay Province during the 1970’s because my father was a community school teacher then.
    That particular station always had the grass mowed , Diesel power station giving about 12 hours of power daily, All public servants were professional with their socks up and were always in their offices on time. The small hospital had an old refrigerator that always stored away certain medicine. The medical orderlies as they were known in those days could attend to about any medical issues that came their way. Obviously they would refer the more serious cases to the Provincial General hospital.
    During those times there was only one toyota landcruiser utility vehicle for admin and one tractor DPI (department of primary industry) for the whole station and District. The ADC (assistant district commissioner) would take that vehicle home to be garaged every evening after all departments done their official runs to the outer villages during the day or cartaging of their office supplies from the airstrip, wharf etc. The 6 men policemen were very smart and respectable also. They would do the parades on independence day celebrations with their .303 rifles and were normally the highlight of the shows followed by traditional dances from the local area. There was no news about corruption, mis- use of funds, nepotism, politics etc during those times. We knew then that first Prime Minister was Michael Somare,GG was John Guise etc and we were proud of our new flag. All public servants llived happily as a great big community in those days. All government services seemed to be getting to the rural people and you could feel it. Public servants from other provinces always had their travel warrants sent on time for their recreation or holidays every 2 years.
    My big question now is why was these station plus many others throughout PNG allowed to run down today? What went wrong and what sort of people are we, what do we really want?

  3. defender
    February 24, 2014 at 9:15 am

    the current government is the most corrupt government of all the previous government we have in the past.however its corruption is camouflaged in its policies that was initiated by it therefore its actions can be justified.
    the establishment of the task force sweep team is one example. however it is similar to the Secret Police established by Adolf Hitler in WWII. this team purpose was to destroy any potential individual/organizations that Adolf Hitler believes that would be a threat to his reign in Germany.
    The way i see it, by 2017 election there will be no tough opposition against the current government because there are all eradicated or by then will be afraid to go against the current government.

  4. Dr Patrick Onguglo
    March 8, 2014 at 3:07 pm


    The Prime Minister Peter O’Neill (‘aka O’Steal) has personally and unilaterally directed that the State of PNG borrow US$1.2 Billion Dollars through international financiers syndicated by the Swiss UBS Bank, to buy 10% of Oil Search Limited (OSL) shares. It is believed this transaction is motivated by personal gain. Therefore, this loan is believed to be for a corrupt outcome. This corruption is perpetrated by UBS and other international banks lending the money.

    PNG does not need the loan. It is Peter ONeill who needs the loan for his own corrupt gain. He is using the country’s assets to obtain a personal benefit. This must be made very clear to the international lenders. On this basis no future PNG Government will be liable to repay the funds, lent for an illegal purpose.

    As of this article the international lenders will be deemed to be aware of the allegations I make here.( I invite the Prime Minister to contradict me if he can).

    This is not an ordinary share purchase (investment) made by the Prime Minister on behalf of the people of PNG. What I am about to reveal is only known to a few key people in government circles.

    In 2013 Total, the French Petroleum conglomerate entered into a deal with InterOil Limited wherein it purchased 60% stock in InterOil with the intention to develop the Gulf/Elk-Antelope LNG Project. Total bench marked the price of the InterOil shares against the known oil and gas reserves of InterOil’s Gulf/Elk LNG reserves, and international price indicators.

    Interoil was started by two men in this country, Phil Mulacek and Gayland Baker in early 1990s. These two men, one a Texan and the other from California walked into Port Moresby government offices with empty brief cases promising to build an Oil Refinery in PNG out of one abandoned by Chevron in Alaska. While Curtain Brothers offered the Motukea refinery, these two men with very slick marketing skills, and Gayland Baker’s position as a director of conservative Fuller Christian Seminary, gained the upper hand.

    The rest is history, of the way they manipulated government decision making processes, public announcements, to gain every benefit, favour, approval, license and a free lift up in every other step of that company’s development.

    Interoil today is testimony to how Phil Mulacek has carefully and deliberately manipulated the goodness of the people of PNG and their government, how he has ruthlessly and unscrupulously exploited the weaknesses of key leaders of PNG, to build a personal fortune worth several hundred Million Dollars for himself and his extended family. Mulacek has been ably assisted by Christian Vincent, the Frenchman, his brother-in-law who acts as Phil’s main go-to man who has also gained in the hundreds of Millions.

    In a small town things can get a bit incestuous, as Christian Vincent’s long term girlfriend in PNG happens to be the Fijian-Indian Lady with the short skirt who is the CEO for Peter O’Neill insurance company. Peter O’Neill is no stranger to Vincent and Mulacek having had many private dinners and meetings over the years when Mr O’Neill was a Minister in the Somare Cabinet.

    Having sold 60% of InterOil to the French Company for several hundred Million dollars, Mulacek and co have been holding out the balance of the shares of 40% for a price that is almost triple what the French have paid for per share previously. The French having pre-emptive rights could not pay the price that the Mulacek camp has been asking for the balance of the shares. Meanwhile the Gulf-Elk LNG Project is not going anywhere fast.

    The Mulacek camp have been trying to play Total against Exxon and Oil Search Ltd, who both also expressed interest in a piece of the action. Mulacek had hoped Total would pay the price to own the whole lot or Exxon would pay a premium to participate. No one took the bait. Over the years people have become tired and weary of Mulacek and his antics, always trying to profiteer and gain unreasonably, when he came to PNG with nothing. The InterOil project could have been fully financial 5 years ago had Mulacek not been greedy and held out.

    This game has developed into a stalemate with Total holding majority stock and cant fund the project until it took the rest of the stock. It required a game breaker.

    This is where the creative genius of Phil Mulacek came to the fore once again, and perhaps for the last time against the people of PNG. He approached Peter O’Neill through the lady with the short skirt for a private meeting. In that meeting it was laid out to ONeill that someone should assist Oil Search Limited (who has expressed interest ) to buy the balance of the 40% shares in Interoil for the exorbitant price that even Total would not pay. That Oil Search Limited had already been sounded out on this, and provided someone funded OilSearch Limited for the price of the Interoil Shares they would do the deal to further fortify them against any corporate raid. The State of PNG taking the shares would surely be a poison pill for the Dubai based Arabs seeking to do a raid on OilSearch Limited. The aggregate agreed price for 40% InterOil shares and OilSearch 10% shares was in the vicinity of USD1.0 Billion with enough fat to go around.

    What was put to O’Neill in that meeting was that if he could get the Government of PNG to borrow USD$1.2 Billion from international commercial lenders, and buy 10% of Oilsearch Limited shares, Oilsearch Limited would use the proceeds definitely to buy the 40% shares from Interoil at its ridiculous asking price, AND THERE WOULD BE A VERY TIDY KICK BACK OF USD$100 MILLION FROM MULACEK & CO TO ONEILL for making this happen.

    This was the game breaker. ONeill became the game breaker. He became Peter O’Steal.

    Having shook hands on the deal in last quarter of 2013, Phil Mulacek has been working feverishly with Peter Botten of Oil Search Limited, to get international lenders to lend to the State this huge sum of money, while Peter ONeill has been carefully moving the right people into right places to take the decisions for him, and to cover his arse in the State agencies. The last act was to move the Minister for Petroleum William Duma aside and put his own man Duban in place to approve the deal. ONeill knew Duma would see through the deal as unfair, unreasonable and corrupt and not approve it.

    This week Peter ONeill has had lawyers and Financiers and bankers camping all over town feverishly working to finalize the deal. The only Minister working closely with ONeill to close the deal is Ben Micah, who will support ONeill because he needs ONeill to turn a blind eye to his own stealing.

    Most of the Members of Parliament in the Government side do not know about this very juicy and lucrative deal that is going down just this week.

    In fact most of the Cabinet Ministers do not even know. The Opposition does not have the manpower or the resources to keep up with Peter O’Steall’s very active life of carrying on private business deals while pretending to be Prime Minister of Papua New Guinea. Only a few people close to him only know some of the deals, but not all.

    This Prime Minister has made more money using his position as Prime Minister of this country than any other leader in the history of this country, and that folks, is the understatement of the Century. Nothing over K10 Million passes the Tenders Board, for example, without the Prime Minister getting a look in first. His fingers are so sticky that it is now common knowledge among all his Coalition Party colleagues that this man is not good for PNG.

    Papua New Guineans need to ask, and ascertain very clearly that:

    1. The State does not need the 10% of OilSearch Limited Shares. Oilsearch Limited is a public company. It can bloody well raise its own money and buy the shares. When Peter Botten was first approached to buy the Interoil shares he baulked at the sale price as he knew what Total paid. Interoil was asking far too much. When he was again approached with State Offer, he realized it would be a poison pill to have the State to hold substantial shares in OilSearch, so he happily agreed. Oilsearch quickly overpriced its batch of 10% shares and was also gaining from the sale of the shares to the State. Everybody gains from the State.

    2. The Deal and the Loan is not in the best commercial or financial interests of PNG and its economy. The Country has already pledged its assets, including the previous Oilsearch Shares (18%), to the Dubai based financiers of our LNG interests. Why borrow more to get into debt with Swiss Banks this time and park the interest encumbered (shares) in the same commercial entity (Oilsearch) that the Dubai lenders already have priority in call over? Putting all our LNG eggs (revenue stream) in one basket is not a wise move.

    3. Why didn’t Peter ONeill opt to use the money to allow the State to exercise its option to acquire 22.5% of the Gulf Elk LNG Project?

    4. Why is Peter ONeill helping to protect OilSearch which is a public company- unless there is a catch?

    5. Has Peter ONeill relied on a fair and commercial valuation of the shares of Oil Search Limited to justify the price, despite the prevailing share price? Where is the professional valuation?

    6. Why is Peter ONeill borrowing USD1.2 Billion to fund shares when the money can be best spent on health and education and infrastructure?

    7. How can the PNG economy which is already burdened by debt and currently underpinned by 2 consecutive years of massive budget deficits afford to shoulder this huge debt burden? Why has Peter ONeill further mortgaged our future?

    8. Why has Peter ONeill further exposed the PNG economy to the LNG Project. All the hopes of the politicians are on the LNG Project. This is a huge and monumental gamble; particularly because the State has failed to honour its agreements with the Landowners, and the State ( Arthur Somare) has failed to explain what happened to the 3% of the State’s 22.5% in the PNG LNG Project. What happened to the 3%? Mr ONeill was Finance Minister. He knows what happened to the 3% in the Dubai deal. Perhaps he can explain? The Landowners will not allow leaders to trick and mislead them anymore. They are wiser by the day.

    9. Why didn’t Peter ONeill allow the USD1.2 Billion to be borrowed by Kumul Holdings or National Petroleum Company or even the IPBC, for it to buy outright the shares of Interoil? Why gift Oil Search Limited this money at the expense of the people of PNG? Why does OilSearch have to own the InterOil Shares (thereby the Gulf-ELK LNG Project) when the State could easily acquire it and own it- and not for that price!

    10. What is the underlying rationale and underlying value in the exorbitant price (of the loan) of the InterOil Shares? Who has done independent industry benchmarked valuations based on which Peter ONeill has agreed with Mulacek to do this deal?

    11. What is the nature of the Mulacek-ONeill kickback and how was it designed to be delivered?

    12. Is it true this major investment decision worth approximately K4 Billion was made by one man, Peter ONeill, without Cabinet or Parliamentary approval or debate? If so then it is clearly an abuse of the office of the PM, and he should be referred to the Ombudsman for investigation.

    There are many things absolutely and seriously wrong with this investment decision. The Prime Minister has no power to unilaterally commit this country like he has done with Manus Asylum seekers etc. It has become abuse of power. He has become dictatorial.

    ONeill is currently getting government agencies and Departments to approve this transaction for which even the Finance & Treasury officials and the Bank of PNG have not done any formal prior appraisal of this loan. He is trying to rail road the proper government agencies to approve this transaction, when they haven’t even done any proper evaluation of this loan against the country’s other commitments and debt levels.

    I call on Ministers of Cabinet, Government Coalition Partners and Leaders to demand full briefing on this transaction, and all documentation on this transaction be tabled in Cabinet and Parliament for public scrutiny. I call on the Cabinet Ministers and coalition partners to block this stupid loan.

    I call on Senior Ministers to feel sorry for this country and its people, to take their oaths to serve the people seriously. I call on responsible Ministers to stand firm and not endorse this deal even it means their sacking. It is time for principled leaders to stand up to this PM and his greed.

    Already the PM has set it all up so that he does not sign any documents himself. He is using quiet pressure through other people including, once again Ministers Marabe, Polye, Micah and Duban to sign and endorse this deal that Parliament and Cabinet did not approve. Even if Cabinet approved it, it seems they would have been mis-informed. When the shit hits the fan, the PM will naturally go after these Ministers and once again, blame them, as he did with the Paraka deal.

    This is a stupid deal, designed to benefit a few greedy and selfish people. IT MUST BE STOPPED!

    The Prime Minister needs to declare his interest in this matter publicly and resign. He has taken far too much from this country and the small people. He has to learn that enough is enough!

    By Dr Patrick Onguglo

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