Posts Tagged ‘Ross Garnaut’

O’Neill blasts ‘colonial mentality’ in Garnaut / BHP dispute

January 17, 2013 4 comments

From PNG Mine Watch

Prime Minister Peter O’Neill has attacked “false and misleading claims” by a mining company as reported in the Australian Financial Review, the PNG Post-Courier reports.

O’Neill said BHP Billiton needed to get over its “colonial era” mentality, and appreciate that Papua New Guinea was an independent nation.

He said Australia should negotiate with Papua New Guinea in the “same, mature and reasonable way” numerous other Australian resource companies do.

“Instead of seeking the intervention and assistance of the Australian government, the company should negotiate with my government, and me, as Prime Minister,” O’Neill said.

“The article claims that I had blocked the granting or extension of exploration licences because it would not agree with my proposals regarding the determination of the board of PNG Sustainable Development Programme.

“This is totally and utterly false. It is just dishonest,” the prime minister said, according to the Post-Courier.

“BHP Billiton surrendered the licences entirely on its own accord. It did so when it made a decision early last year not to invest in Papua New Guinea – after I had personally invited the company to meet with senior cabinet ministers, including myself, to consider investing in PNG.

“We did everything possible to encourage the company, just as we encourage and assist other major investors all the time. They decided not to take up the offer.

“That occurred before the mid-year elections, and eight or nine months before I made my comments on Professor Ross Garnaut,” he said.

‘Inaccurate comments’
O’Neill said the central issue was not Professor Garnaut and his “inaccurate and ill-informed comments” on why he wanted the issues surrounding the way the board of PNGSDP was appointed to be changed.

“The central issue is this – 11 years ago, BHP Billiton was done an enormous favour by the then PNG government and allowed to exit ownership of the Ok Tedi Mine without accepting any financial or moral, responsibility for the enormous environmental and social damage that occurred in the 20 years it operated the mine,” he said.

“Surely, 11 years on, there can be no reasonable case made out to justify BHP Billiton continuing to exercise effective control over the PNGSDP, and as a consequence, the Ok Tedi Mine itself.

“The claim by BHP Billiton and by Professor Garnaut that I want the PNG government to get its hands on the funds of the PNGSDP is personally offensive. All I have sought, and will continue to seek, is negotiations that can lead to BHP Billiton ending a role that it is not justified to continue to play.

“My position is supported by my government, and I believe by the national Parliament and the people of the Fly River, Western Province,” he said.

O’Neill said BHP Billiton should reflect on the appalling environmental damage that occurred during its management of the Ok Tedi mine, and the terrible consequences for the people of the Fly River area – consequences which continue to be felt today.

“The PNG government of the day decided just over a decade ago to legislate to allow BHP Billiton to walk away from any responsibility for the damage that was caused during its management of the mine.

“That spared the company the massive costs, and international humiliation it faced because it effectively ended compensation claims by landowners and local communities along the Fly River.

“The provisions that allowed the company to effectively control the appointment of the board of the PNGSDP, and therefore continue its influence over Ok Tedi, were generous. There can be no justification for their continuation,” he said.

“The Australian government is well aware of the position of my government. The legislation that effectively let BHP Billiton off the hook is PNG law, not Australian law,” he said.

O’Neill said he rejected the claims in the article that his position was damaging the PNG investment climate.

“This is total nonsense. Last month I addressed 1400 mining, oil and gas leaders, and financiers and analysts, in Sydney, at the annual PNG Mining and Petroleum Conference.

“At that conference, there was strong confidence expressed about PNG as a country in which to invest, and in the range of policies my government has in place, and is committed to, to give investors confidence and certainty.

“The claim that this issue has undermined confidence could not be further from the truth,” O’Neill said.

At last ‘bikhet’ Garnaut put in his place!

January 16, 2013 2 comments


Sharon Isafe | PNG Mine Watch

Prof Ross Garnaut, perhaps Australia’s most infamous academic-entrepreneur, has lashed out at Prime Minister O’Neill for his expulsion from PNG.

He claims, “My ban was a low point for Australian diplomacy generally, a low point for PNG development, and a low point for Papua New Guinea democracy”.

Without denying the ‘trauma’ Prof Garnaut must feel at his travel ban – though he seems to forget, Australia regularly bans people from entry who fail a character test – I humbly suggest PNG may have had a few lower points than this.

  • Does Prof Garnaut remember 1989? Prime Minister Namaliu, now a Director at BCL, sent in the RPNGC and PNGDF to brutalise and murder landowners who opposed the Panguna mine owned by BCL – all with a helping hand from Australia.  Could this have been a lower point for democracy, diplomacy and development than Garnaut’s travel ban?
  • What about 1984, this was the year Ok Tedi began producing one of the worst environmental catastrophes in the world, that will be felt for hundreds of years to come by people along the Fly River. Could this possibly be a lower point for democracy and development than Garnaut’s travel ban?
  • Or what about PNG LNG? By the government’s own account the agreement with Exxon was rushed through without proper consultation. Now we are lumbered with a massive gas project, run by a company with alleged links to serious crimes against humanity in places like Indonesia, who are employing mobile squads to repress landowner dissent in the Highlands. Could this be a lower point for democracy and development in PNG than Garnaut’s travel ban?

For a corporate high flyer like Prof Garnaut I suspect the answer to all three questions is NO. How could the flagrant violation of the right to life, environment and culture, for hundreds of thousands of Papua New Guineans ever compare in gravity with a modest violation of one corporate executive’s right to exploit.

Elite hubris at its very best!

The Evidence on Rex Paki: A Reply to Kusai Mahn

October 24, 2012 3 comments

Dr Kristian Lasslett | International State Crime Initiative (ISCI)

In a recent ISCI report on the demolition of Paga Hill, the prominent businessman Rex Paki received mention. According to Investment Promotion Authority records, he had been intimately involved in the Paga Hill property development during 1997-2000. ISCI queried Paki’s involvement in light of serious allegations laid against him by two Commission of Inquiries, two Public Accounts Committee inquiries, an Auditor General special investigation, and PNG’s Supreme Court.

Following the publication of our report, social media commentators noted with concern that Rex Paki has also been appointed to the Papua New Guinea Sustainable Development Program Ltd (PNGSDP) Board of Directors, by PNG’s Treasurer. According to PNGSDP’s 2011 Annual Report, Rex Paki is “a member of the Board of Bank of PNG and is the Chairman of the Civil Aviation Authority”, as well.

After these concerns were aired in PNG’s blogosphere, a supporter of Rex Paki, who goes by the name of Kusai Mahn, composed an article slamming the ISCI’s findings, see here. Mahn writes, “a recent report on the ‘Demolition of Paga Hill’ by a UK-based non-government organization…is merely a character assassination of Mr Paki on issues that are considered water under the bridge” (ISCI is in fact a research centre not an NGO, and it is run by King’s College London, Harvard University, the University of Ulster and Hull University).

Mahn continues, “Rex Paki has appeared before only the NPF Commission of Inquiry (COI) and not the Finance Department COI as alleged”. Of course, the report never said Paki appeared before the Finance Department COI, it said Paki’s firm Ram Business Consultants was censured by the Finance Department COI after it allegedly helped Andrew Mald inflate damages in a legal action against the PNG state. You can read the COI findings here. Though here is one telling extract from the report:

Ram Business Consultants deliberately inflated the NPV [Net Present Value] by K4,659,650 for reasons known only to themselves… From the review of the cash flow projection prepared by Ram Business Consultants we conclude that the Cash-flow projection was specifically engineered in a way to inflate the yearly income projection including NPV so that damages claim would be high. The Ram Consultants Report was based on mere trading assumptions supplied by Andrew Maid, not on proper business records and tax returns.

Mahn also argues: “Rex Paki was never ‘intimately’ involved in the Paga Hill development as alleged. He is not a director or shareholder and his only involvement was providing professional accounting services to the project developer for which he was duly paid”. According to Investment Promotion Authority records, Mahn is simply wrong. These records state Paki was a Director, Secretary and shareholder in the Paga Hill Land Holding Company (PHLHC), which was awarded an Urban Development Lease over Paga Hill in 1997 (you can view the lease here). Additionally, Paki’s firm Ram Business Consultants was PHLHC’s registered business address. You can see PHLHC’s company extract here.

Finally, Mahn claims, in reference to a recent Supreme Court decision, “Rex Paki was not ‘evasive and dishonest’ about his role as liquidator of the Motor Vehicle Insurance Ltd (MVIL)”. Once again, neither ISCI’s report or the Supreme Court said this. The Supreme Court’s remarks were in reference to Paki’s evident concerted attempts to avoid the legal process of discovery. Here is the relevant passage for Mr Mahn’s information, though the full decision can be read here:

It is clear to us that the appellant [Paki] was attempting to avoid giving discovery; the refusal was repeated, chronic and designed to conceal the true state of affairs. He was evasive and dishonest. He gave different reasons for not producing the invoices. He said copies of the invoices were available for inspection at Namaliu & David Lawyers, that the originals were in archives at Korobosea, that the copies on his computer have been lost because the computer crashed, that copies have been misplaced and he needed time to locate them, that copies were available at MVIL or at the offices of Mr. Kerenga Kua, a lawyer. He did not give discovery despite agreeing to Consent Orders of the National Court requiring him to produce the invoices for the entire period of the liquidation. Two (2) years after he verified a list of documents, the appellant was still looking for copies of the invoices. In fact, he never gave discovery. He was required by law to retain the accounts and records of the liquidation for seven (7) years (section 306 (1)(b) of the Companies Act). We agree with Mr. Brookes that the actions of the appellant have caused the respondent an enormous amount of wasted time, effort and money. We are of the view that the conduct of the appellant was improper, unreasonable and blameworthy.

And of course, Mahn failed to comment on the successive inquiries into the Public Curator’s Office made by the Auditor General’s Office and Public Accounts Committee. Here, once again, Ram Business Consultants came under fire. Despite being paid K1,561,062 over an eighteen month period, the Public Accounts Committee (2006) allege,

“there was no formal contract … there was no check of the claimed hours worked and no evidence that any benefit flowed to the Public Curator at all. The Auditor General finds that after eighteen months of work, the Public Curator could only a report that a small amount of computer equipment was provided”.

To conclude, there is one allegation Mahn makes which is rather serious, if credible: “Rex Paki was appointed to the PNGSDP Board by the Minister for Treasury as the State’s representative. He was not appointed by Prof Ross Garnaut who nonetheless values Mr Paki’s contributions as a Board member and will defend his appointment. CEO David Sode also holds Mr Paki in high regard”.

I have no evidence to suggest that what Mr Mahn says is true – my focus has been on Paga Hill –  but if the Treasurer, Prof Ross Garnaut and CEO David Sode, are not concerned by the findings of two COIs, two Public Accounts Committee inquiries, one Auditor General’s Office special investigation and a Supreme Court decision, that would indeed be a worrying new revelation.

Garnaut chooses strange bedfellows on PNGSDP board

October 11, 2012 8 comments

Prominent Australian Prof Ross Garnaut, already under fire for his extensive links to the environmentally destructive mining industry in Papua New Guinea – link – has chosen to bring “evasive and dishonest” businessman, Rex Paki onto the board of the PNG Sustainable Development Program. Garnaut is the Chairman of PNGSDP.

Over the past 20 years Paki has appeared before two Commission of Inquiries (Finance Department and National Provident Fund), two Public Account Committee Inquiries, and a Supreme Court case where he was slammed by the full court.

Paki was intimately involved in the Paga Hill development in Port Moresby between 1997-2000, a development which has recently been making headlines for forced evictions and corrupt property deals – link.

In January 2004 the Public Acounts Committee reprimanded Paki’s company Ram Business Consultants (RAM) for issuing an “empty cheque” to the Accountants Registration Board, and then “practicing without … formal registration”.

Two years later in a separate investigation – which Paki attempted to block – the PAC found that over an 18 month period (1998-2000) the Public Curator’s Office had paid RAM K1,561,062 (approx US$640,000), without the existence of a contract, proper invoices, or evidence that any work had been done.

Two Commission of Inquiries (COI) also found reason to censure RAM. Following its first appearance, RAM was accused by the COI of receiving “improper benefits” and charging clients “excessive” fees; in the firm’s second appearance, the COI found that RAM had substantially inflated a cash-flow projection, so a prominent client could amplify his damages claim against the state.

In light of these PAC/COI findings, it is perhaps not surprising that most recently in an appearance before the Supreme Court, Salika DCJ, Gabi J and Hartshorn J, described Rax Paki as “evasive and dishonest”, following Paki’s extraordinary efforts to frustrate the process of discovery (Paki was being sued for allegedly overpaying himself as liquidator of Motor Vehicle Insurance Ltd).