PNG Sustainable Development Program To Be Probed

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Investigation to look at finances, BHP’s exit from OTML

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Sept. 30, 2013) – Two major investigations will be carried out by the National Government relating to the exit of BHP and the establishment of the Papua New Guinea Sustainable Development Program Limited (PNGSDP).

The Taskforce Sweep will also be asked to investigate huge spending by the management and board of PNGSDPL, including hiring of consultants, where it is alleged that millions of kina have been used for projects which have failed to materialise.

Prime Minister Peter O’Neill announced yesterday that the first investigation will review the manner in which BHP was given an unconditional indemnity as part of its exiting Ok Tedi Mining Limited (OTML), and the second into major spending by the PNG Sustainable Development Program since its establishment.

Mr. O’Neill said the review into the circumstances surrounding the granting of the unconditional indemnity to BHP for environmental and social damage by the then Government, in which Sir Mekere Morauta was Prime Minister.

"The Government needs to ascertain whether any breaches of the Constitution, or the laws of Papua New Guinea was involved in the agreement, which was personally negotiated by the then Prime Minister," he said.

"We will make the report public, and then take advice from the government’s lawyers on whether further action is justified. The fact that Sir Mekere was appointed chairman of PNGDSP, and then OTML, within a short period of his departure from the national Parliament raises serious questions in the minds of many people, given the influence BHP continued to exercise after it allegedly ended its involvement in OTML.

"We need to know exactly how the process was developed and implemented by the Morauta Government."

Mr. O’Neill said many MPs and concerned citizens and business people from the Western Province and elsewhere had raised with him serious concerns about the spending by the PNGSDP on major projects that had either lost money or never eventuated.

The national Government will appoint an independent, highly regarded accountancy firm to conduct an audit of spending on major projects by the PNGSDP since its establishment.

"Two projects that clearly must be independently assessed are the millions of kina lost on the Cloudy Bay timber project, and the expenditure of perhaps more than K100 million on feasibility studies on the Daru port project.

"There are claims that money has just been wasted, and the project is as far away from being developed as ever," he said.

Mr. O’Neill said the national Government would make public the report of the independent audit, and implement any recommendations it made.

"I am sure the independent auditors will look into the approval processes for the spending, and why so much money belonging to the people of the Western Province has been wasted," he said.

Mr. O’Neill said he hoped the chairman, board and management of the PNGSDP would co-operate fully with the independent auditor.

"This is about transparency and accountability-and it must also be about not making the same serious errors in spending on major projects again," Mr. O’Neill said.

In the meantime, the Government will ask the Taskforce Sweep team to investigate huge spending by the management and board of PNGSDP, including hiring of consultants, where millions of kina have been used for projects which have failed to materialise.

"These are monies belonging to the people of Western Province. They have the right to know their funds have been managed, by those trusted to do so. Those responsible must face the law like everyone?" PM O’Neill said.

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