Somare told not to destroy PNGSDP

Opposition Leader Mekere Morauta today urged Prime Minister Sir Michael Somare to show leadership by stopping ministers from destroying PNG Sustainable Development Program.

PNGSDP was established by Sir Mekere when he was Prime Minister in 2002. 

His government negotiated the gift by BHP of its 52% equity in the Ok Tedi mine. 

“This was a gift by BHP, with Parliament’s assent, to the people of Western province and to the people of Papua New Guinea,” he said.

“It was not a gift to the Government of the day or to future governments. 

“And the gift was conditional. 

“It was conditional on the gift being managed properly as a trust, independent of Government.

“It was my view that the trust should be insulated from the sticky hands of politicians, so that they could not get their hands on it to spend on personal or political projects. 

“BHP supported my view, and the way PNGSDP was established is the result, with BHP appointing three directors including the chairman. 

“The Treasury, the Bank of PNG and the PNG Chamber of Commerce appoint three other directors, along with an independent international accountant.” 

Sir Mekere said:  “The funds of the Trust were also set up very deliberately – one as a future generations fund, to ensure the people of Western Province had access to services after the mine closes; another as a fund just for the development of Western province; and a third fund as a national fund, for development projects anywhere in Papua New Guinea.

“At the end of 2009, after seven years existence, PNGSDP had assets of K2.8 billion, K2.2 billion kina of the total being the long-term fund.

“Since its establishment, PNGSDP has approved project funding of K531 million, 54% in the Western province and 46% in other parts of PNG.”

Sir Mekere said that he was pleased to see that the Treasurer, Peter O’Neill had retracted his initial statement on PNGSDP last week. 

“However, Mr O’Neill has not denied that he has written to BHP demanding changes to the trust company so that the Government could appoint board members and have access to the funds of the company.”

“The Minister for Planning, Paul Tiensten bolted into the debate, salivated by the prospect of having access to the 2.8 billion kina (and growing) financial assets of PNGSDP. 

“He has not yet explained to the nation what he and his colleagues have done with the 5 billion kina that was parked in trust accounts under his control. 

“The Opposition has reports that there is less than 500 million left in the trust accounts. 

“The thought of the Somare government having access to the assets of PNGSDP is sickening and frightening.”

Sir Mekere said Sir Michael and his ministers should stop destroying institutions that were working. 

“Concentrate on making the public service more efficient, on getting decent health and education services to people, on supplying people with reliable and affordable power and transport services. 

“The Prime Minister, Treasurer and Planning Minister should be reforming the institutions that have become dysfunctional in the last eight years, the scores of institutions that are in intensive care, requiring resuscitation. 

“Don’t kill others that are working.”

Sir Mekere said that the reasons given by O’Neill and Tiensten for wanting control of PNGSDP were spurious. 

“They are a camouflage. 

“Their real interest is getting their hands on the money, not on solving environmental issues in the Western province. 

“And since when has the Government proved itself an efficient spender of development funds? 

“Why should the Department of National Planning have access to PNGSDP money, when it can’t spend its own money properly?

“Unlike the Government, the expenditure of funds by PNGSDP is totally transparent, with full accountability. 

“Government Ministers should be taking a lesson from the model and practice of PNGSDP, instead of trying to pollute it. 

“The books are open. 

“If they have a problem, or have specific projects they would like PNGSDP to consider, act like civilised human beings and talk to the CEO, Mr David Sode, instead of destroying the institution.

“The statements by the Ministers reflect their ignorance of what PNGSDP is doing, in its own right and as the major shareholder in Ok Tedi. 

“If Mr O’Neill studied the environmental mitigation actions of the company since 2002, he would see value in the record of the company in the past seven years. 

“Over US$40 million per annum has been spent on dredging at Bige, which has arrested the expansion of flooding downstream. 

“For the past two years, a flotation plant has removed the sulphur from the tailings, greatly reducing the risk of future acid and related water problems. 

“The capital cost of this plant is around $US350 million, with an annual recurrent cost of around US$50 million.”

“The increased concern for environmental issues is a direct result of responsible national ownership of the mine, a result which Papua New Guineans should be proud of.”

Sir Mekere said that apart from PNGSDP being deliberately set up as a trust independent of Government, with a specific focus on the development needs of the Western province, he also envisaged PNGSDP playing a major role in national development as a partner of the national and provincial governments, of the private sector, of communities, and of churches.

“If the Planning Minister and his colleagues took time to educate themselves, they would learn that PNGSDP is fulfilling this role.

“Instead of criticising it, the government should be encouraging it as a partner in development.

“ I am quite sure the hundreds of thousands of people, especially in rural areas, who have been the recipients of PNGSDP projects, whether schools, health centres, roads, rural electrification, microfinance, rubber, aquaculture, forestry projects or water supply, to name a few, do not share the views of Paul Tiensten or Peter O’Neill about PNGSDP.”

Sir Mekere said that his vision was for the dividend income flowing from the 52% equity in Ok Tedi previously owned by BHP to be used productively, to build up social and economic infrastructure for PNG now, and in the future. 

“That is happening. 

“It would be a national crime if PNGSDP were to pass into the hands of politicians. 

“I hope people will speak out and tell the government to leave PNGSDP alone. 

“We all know elections are nearing. 

“This attempted takeover of PNGSDP smells to me of building war chests for elections. 

“We must not allow it.”