Archive for February, 2015

Tackling Corruption at its Root in Papua New Guinea

February 25, 2015 2 comments

cartoon showing Peter O'Neill being fed by Rimbunan Hijau while he sits on a pile of SABL reports

Catherine Wilson | Inter Press Service

Corruption, the single largest obstacle to socioeconomic development worldwide, has had a grave impact on the southwest Pacific Island nation of Papua New Guinea. While mineral resource wealth drove high gross domestic product (GDP) growth of eight percent in 2012, the country is today ranked 157th out of 187 countries in terms of human development.

Key anti-corruption fighters in the country say that money laundering must be tackled to increase deterrence and ensure that stolen public funds earmarked for vital hospitals and schools do not pay for luxury assets abroad.

“Our police officers, school teachers and health workers live and work in very squalid circumstances,” Lawrence Stephens, chairman of Transparency International (PNG), in the capital, Port Moresby, told IPS.

“So when we see the government awarding a contract for pharmaceutical and medical supplies to a company not qualified to tender, a company quoting a price 40 percent higher than the closest qualified tender and costing the equivalent of 160 new homes for nurses each year of the three-year contract, we blame corrupt individuals for destroying development.”

Papua New Guinea has been given a corruption score of 25/100, where 100 indicates clean governance, in comparison to the world average of 43/100, by Transparency International.

The country’s dedicated anti-corruption team, Investigation Task-Force Sweep (ITFS), launched by the government in 2011, has described the country as a ‘mobocracy’, where a patronage system of governance and a culture of secrecy have led to the misappropriation of an estimated half of the development budget of 7.6 billion kina (about 2.8 billion dollars) from 2009 to 2011.

Large-scale theft of public funds, including foreign aid, is alleged to have occurred across government departments responsible for national planning, health, petroleum and energy, finance and justice.

A 2006 Public Accounts Committee Inquiry into the Lands Department alone concluded that it had conducted itself illegally over many years and given priority to the interests of private enterprise and speculators over the interests and lawful rights of the State. The department’s shortfall in revenue was 5.9 million kina (2.2 million dollars) in 2001 and 4.9 million kina (1.8 million dollars) in 2003.

State capture, where powerful private sector interests exert undue influence over state leaders, officials and procurement processes, has had devastating repercussions for national development. Approval of ‘white elephant projects’ has channelled windfalls to criminal syndicates, Sam Koim, the ITFS Chairman, reported in the Griffith Law Journal.

Koim told IPS that, of 302 cases of corruption entailing revenue of up to 5.3 billion kina (1.9 billion dollars) under investigation, 91 had been prosecuted. Twenty-eight senior public servants have been suspended or removed from office, while two Members of Parliament and two senior public servants have been convicted and jailed.

To date, 8.3 million kina (3.1 million dollars) in proceeds of crime have been recovered, but including all outstanding cases this figure could potentially rise to 500 million kina (187 million dollars). Investigation into corporate tax evasion has led to the restitution of 22.6 million kina (8.4 million dollars).

Globally it is estimated that corruption drains the developing world of up to one trillion dollars every year and what is lost is in the magnitude of 10 times the official development assistance budget, claims the United Nations Development Programme (UNDP).

This has impacted increasing inequality in countries such as PNG, where 40 percent of the population of seven million live below the poverty line, maternal mortality is 711 per 100,000 live births, literacy is just 63 percent and only 19 percent of people have access to sanitation.

It is a vicious cycle, as Koim also believes that the state becomes an alternative source of personal prosperity when there are few legitimate avenues available for people to economically improve their lives.

Banks crucial to fighting corruption

The majority of stolen funds have been transferred through banks to offshore investments. Australia receives about 200 million Australia dollars (155 million dollars) of illicit gains from the Melanesian island state every year, claims the Australian Federal Police.

Several PNG politicians have purchased luxury homes with a total estimated value of 11.5 million Australian dollars (8.9 million dollars) in the northern Australian city of Cairns.

“Without banks and financial institutions, it is impossible to commit economic crimes, such as fraud and money laundering,” states the Investigation Task-Force Sweep (ITFS).

In a report last year on the government’s payment of fraudulent legal fees, ITFS identified numerous control gaps, such as lack of written contracts, oversight of procurement and payment clearance processes and the failure of banks to prevent evidently suspicious transactions.

“The duty imposed on banks to avoid engaging in money laundering should not be limited to ticking the boxes or submitting periodic transaction reports, but also taking proactive steps including rejecting transactions and closing bank accounts,” the report recommended. Sixty-five percent of PNG’s financial sector assets are held by commercial banks, including foreign bank subsidiaries.

There are also gaps between national legislation and banking sector regulations. For instance, money laundering is a criminal offence under the Proceeds of Crime Act (2005), but there is no obligation on banks to check inexplicably large or unorthodox patterns of transactions.

Action is also required by recipient nations, experts say. Professor Jason Sharman of the Centre for Governance and Public Policy at Queensland’s Griffith University told IPS that there was a need for improved government “supervisory responsibility to make sure that Australian banks are not accepting suspect funds from PNG Politically Exposed Persons (PEPs).”

“One of the main weaknesses is in the Australian real estate sector with very little scrutiny of foreign money coming in, especially when, as is often the case, this money is routed via lawyers’ or real estate agents’ trust accounts,” he added.

But progress by the anti-corruption team has accelerated broader action. “A number of PNG-based banks have closed accounts of high risk customers and refused suspicious transactions”, while some international corresponding banks “have refused transactions they view to have originated from illicit sources,” ITFS reports.

Reducing and preventing corruption is a long-term battle, which includes addressing the cultural divide between an introduced western government system and centuries of traditional governance based on a leader’s ability to acquire and distribute resources to his own kin. But if corruption is driven largely by the lure of a quick route to untold personal wealth, then a critical measure now is eliminating safe havens for the plunder.


O’Neill’s illegal logging: 609 days and counting…

February 23, 2015 Leave a comment


Peter O'Neill: Theft of forest resources: Guilty


Land owners take action while decision pends in court

February 19, 2015 1 comment

billboard poster - give land back to landowners

Jimmy Kalebe | ACT NOW!

The logging operations in Turubu LLG in Wewak District and parts of Sausso LLG in Yangoru Saussia District, East Sepik Province are still going despite the lease being nullified by the national court last year.

During 6 years of massive logging and round log exporst, millions of Kina in damage have been done to the environment, affecting the livelihoods of local people.

To date, promises of improved infrastructure and other benefits as stated by the landowner company in the beginning have never materialized.

Many landowners have laid complaints with the company for damage done to property, sacred sites, fishing and hunting grounds and about the benefits that they are entitled to.

Most of these complaints have fallen on deaf ears, while police brutality at logging camp sites are an on-going thing to suppress the landowners’ rights and in order to drive the interest of the company.

The landowners though have mobilized and taken the matter up with the courts after learning that the claim by the landowner company to do oil palm was just a pretext to do logging.

Turubu landowners meeting with their lawyers to map out steps involved in taking legal actions relating to the damage done to the environment and properties.

Turubu landowners meeting with their lawyers to map out steps involved in taking legal actions relating to the damage done to the environment and properties.

On 4th of July last year, the landowners through their lawyer obtained a National Court order to stop all logging and oil palm operations on Portion 144c.

The landowners through this order went ahead and stopped all operations at the log pond area and stopped the loading of round logs onto a ship for shipment overseas.

The landowner company retaliated by taking a Supreme Court appeal over the issue which means the matter is still pending in court. It is due to be heard this month.

Regardless of the matter pending in court and the national court decision, the landowner company and its foreign partner are currently still pursuing their interests by luring landowners with money to surrender forested land for logging.

Meanwhile, the lawyer representing the landowners in an interview recently said the court case on SABL Portion 144c is progressing well.

He said with the national court decision nullifying the operations of oil palm and logging, the situation should clear to both parties, the landowners and the companies involved.

The lawyer said in the essence of law, SABL 144c does not exist anymore and adding the appellants have to patient and are not to trespass into customary land in breach of Sections 143, 144 and 145 of the Land Act.

Australian Court Rules In Favour Of MVIL Against Woodlawn

February 18, 2015 1 comment


Read more on the Woodlawn Scandal:

Papua New Guinea Today

The Supreme Court of New South Wales ordered that Woodlawn Capital Pty Ltd (Woodlawn) release AU$20million to Motor Vehicle Insurance Limited (MVIL) as part of the Court’s earlier judgment made in October 2014.

Arthur Somare, son of the Grand Thief, Michael, oversaw the placement of K96 million  with Woodlawn Capital

Arthur Somare, son of the Grand Thief, Michael, oversaw the placement of K96 million with Woodlawn Capital

In accordance with the court ruling, Woodlawn transferred AU$20million to Gadens Lawyers Trust Account in PNG in December and today PGK41.9million is finally being released to MVIL. Gadens Law Firm has provided legal representation for MVIL in the matter since proceedings were initiated against Woodlawn in 2011.

This is the latest outcome in the long-running court case between the parties, who are battling over AU$26million held in bank accounts managed by Woodlawn that has been “frozen” by the Court since March 20, 2012.

The case has been pursued by the Independent Public Business Corporation (IPBC) on behalf of MVIL since July 2011 as MVIL is subject to regulation under the Independent Public Business Corporation of Papua New Guinea Act 2002 (PNG).

The matter contended in the Supreme Court of New South Wales goes back to July 2009 when MVIL transferred 96 million kina (about AU$43million) (the Fund) to Woodlawn to invest and manage the Fund with the aim of growing the Fund over time.

This initial transaction is also the subject of a challenge by IPBC in both the National and Supreme Court in Papua New Guinea. As such, neither IPBC nor MVIL are prepared to make further comment on the matter at this stage.

In relation to the matter in Australia, the IPBC Board has unanimously approved legal action against those responsible for losses incurred in the transaction and the establishment of the Fund.

In regard to the Supreme Court of New South Wales ruling there are a number of outstanding issues that the Court will resolve when the matter resumes on March 30, 2015. Those issues include whether MVIL will be awarded interest on the Fund since November 17, 2011 and whether MVIL will be able to recover its legal costs of the proceedings from Woodlawn.

O’Neill’s illegal logging: 602 days and counting…

February 16, 2015 Leave a comment


There has still been NO ACTION to cancel the huge SABL land grab, revoke the unlawful leases or stop the illegal logging in Papua New Guinea.

It is now 602 days since Prime Minister Peter O’Neill was told that the SABL leases were unlawful and should be cancelled.

On June 24, 2013 O’Neill was given the reports of the SABL Commission Inquiry which detail the widespread fraud and mismanagement used by foreign logging companies to gain illegal access to over 5 million hectares of land.

O’Neill has REPEATEDLY STATED the leases will be canceled and illegal logging stopped.

In September 2013 O’Neill told Parliament:

“We will no longer watch on as foreign owned companies come in and con our landowners, chop down our forests and then take the proceeds offshore”

In June 2014, announcing an NEC decision cancelling the leases, O’Neill said

“We are taking these steps to reclaim our customary land illegally lost to foreigners with the help of corrupt public servants and leaders”

“As a responsible government we want to ensure that all citizens have access to the lands of their ancestors. We will not allow our land to be lost to unscrupulous people out to con our people” 

But, WE ARE STILL WAITING for the leases to be cancelled and the logging stopped.

For 602 days O’Neill has failed to ensure the SABL leases are revoked and he has been complicit in the illegal logging of our forests by foreign logging companies.

Crucially he has failed to take any action to remove the corrupt public servants responsible for the land grab or distance himself from the politicians, including key Minister’s, complicit in the illegal deals and who are now blocking any positive action to revoke the leases and stop the logging.

Prime Minister Peter O’Neill has aided and abetted the theft of logs worth hundreds of million of kina and the destruction of thousands of hectares of pristine forest.

cartoon showing Peter O'Neill being fed by Rimbunan Hijau while he sits on a pile of SABL reports

O’Neill’s illegal logging: 600 days and counting…

February 14, 2015 Leave a comment


Peter O'Neill: Theft of forest resources: Guilty


cartoon showing Peter O'Neill being fed by Rimbunan Hijau while he sits on a pile of SABL reports



Land Titles Registrar using bullshit excuses to defend SABL land grab

February 13, 2015 1 comment

bullshit 1The huge and illegal SABL land grab has seen millions of hectares of forest stolen from rural people by foreign logging companies.

The Department of Lands did not follow proper process in issuing the leases, local people did not give their informed consent and the Forest Authority was negligent in allowing the logging companies to clear-fell the forests.

The fraud and corruption was laid bare in the transcripts and findings of the SABL Commission of Inquiry.

But now their lies and incompetence has been exposed the public servants responsible for facilitating the SABL land grab are using BULLSHIT excuses to refuse to stop the logging and cancel the leases.

Land Titles Registrar Ben Samson says he can’t do anything because of a temporary court order against the Commission of Inquiry [see his interview with ABC Radio below]

bullshit 4BULLSHIT

None of us need a Commission of Inquiry to tell us to follow the law and do the right thing.

The SABL land grab was illegal whether or not the Commission of Inquiry ever existed.

There is NOTHING stopping the Departmant of Lands and the Land Title Registrar doing their own review of the SABL leases, concluding that they were issued unlawfully and canceling them.

Samson all says he doesn’t want to cancel the leases because some companies have spent a lot of money and the State could be liable for any losses incurred.

bullshit 3BULLSHIT

Firstly the companies have NOT made any losses. They have made HUGE profits from the hundreds of million of dollars they have netted from the log exports.

Second, the companies knew the leases were flawed. They are the ones who bribed and bullied to get the leases in the first place. They cannot now sue the State because their crimes have been uncovered.

The only way rural landowners are ever going to see justice is if PM O’Neill gets tough on the corruption and rids the public servant of all the BULLSHIT bureaucrats who are responsible for the SABL land grab and who work to defend the abuses of the foreign logging companies.

Cancellation of flawed Papua New Guinea land leases halted

ABC Radio

The cancellation of controversial flawed land leases in Papua New Guinea has been halted, leaving traditional landowners unsure of when they will get their land back.

 In June last year, prime minister Peter O’Neill and his cabinet ordered the cancellation almost 30 leases identified by a commission of inquiry.

The leases cover millions of hectares of land, most of which has been leased without landowner consent.

Court action by leaseholders reluctant to relinquish their titles has left some landowers powerless as logging companies continue their activities.

Presenter: Jemima Garrett

Speaker: Peter O’Neill, PNG prime minister; Eddie Tanago, campaign co-ordinator of Act Now; Ben Samson, land titles registrar

GARRETT: When prime minister Peter O’Neill presented the findings of the Commission of Inquiry to parliament in 2013 he said they revealed a shocking trend of corruption and mismanagement. The inquiry found land owned by hundreds of thousands of traditional landowners had been leased out mainly for the benefit of logging companies. Unlike other forms of land tenure, these Special Agricultural and Business Leases, or SABLs, allow timber companies to clear-fell forest, rather than use the more sustainable practice of selective logging. Much of the blame for mismanagement of SABLs was laid at the door of the Lands Department, but politicians were also named in the report. Prime Minister O’Neill and his cabinet took nine months before they ordered the cancellation of leases recommended by the Commission of Inquiry for revocation. That was in June last year. Since then, the Land Titles Registrar has cancelled just 3 leases.

Last month Prime Minister O’Neill was again promising action.

O’NEILL: I know there is a lot of public out there enquiring why isn’t the recommendations being implemented fully. Again, I want to reassure the public that NEC and cabinet has made a very firm recommendation that all SABL licences be cancelled.

GARRETT: On some land, logging is continuing against the wish of landowners.

Eddie Tanago from activist group Act Now says the government is failing in its duty to protect the rights of the people.

TANAGO: Landowners continue to lose their land and given the rights that we have we have been forfeited of that right, as customary landowners, and it is a human rights issue. And to add to that the police have been used against the landowners to suppress them. These are not illegal settlers, these are landowners who are fighting for their rights to their land because they have been fooled into signing these agreements which they do not understand and yet then they go and they bring the loggers who are bringing the policemen who suppress them. So they can’t even talk on something which is rightfully theirs.

GARRETT: In East Sepik province, landowners from Turubu were so dismayed about continued logging on their land that they took their case to court. The court ruled in their favour, but that sparked a counter claim from the logging companies calling for a judicial review of the cabinet order.

Land titles registrar Ben Samson says the impact of the court action goes well beyond Turubu.

SAMSON: This court proceeding, they filed to review the decision, which actually means that we shouldn’t do anything until the court has finally made its decision.

bullshit 1

GARRETT: So are you saying the court action has halted all moves to cancel any Special Agricultural and Business Leases?

SAMSON: Yes, yes, that is what I am saying

GARRETT: Last year, Mr Samson told the ABC a bundle of 15 leases would be cancelled within weeks. In September he said they were sitting on his desk waiting for his signature that day. Now he says all leases will be considered by a ministerial task force. With a growing number of leaseholders pushing for compensation, the Lands Department is aiming to convert as many as possible to a new legally valid lease.

SAMSON: The general consensus reached is that those that have projects that are up and running, there we will look at where did we go wrong.

GARRETT: So are you saying that the aim of that process is to continue development on that land wherever possible?

SAMSON: Oh yeah, we have to be realistic. If someone has spent a lot of money and already development has been done, see if we do anything, obviously the state is going to be liable for loss of business, damages, how much money has been done, so we are also mindful of that.

bullshit 1GARRETT: Landowners and non-government organisations are calling on the government to investigate the Commission of Inquiry’s corruption allegations and to implement its recommendations in full.

Eddie Tanago says Prime Minister O’Neill’s renewed assurances in January are being met with increasing cynicism.

TANAGO: It is just one of the publicity stunts that he has made, propaganda that he has made. This is, I don’t know, the fifth or the fourth time he has come out to say that. How many times do you have to come out and say the same old thing, people are just tired of listening to the same old thing. Why can’t you just act?