New civil society report on Papua New Guinea highlights main impediments for implementing UNCAC Chapter II provisions

27 July 2021

Papua New Guinea (PNG) is only partially compliant with its obligations under chapter II (Preventive measures) of the UNCAC, a new civil society report authored by Transparency International Papua New Guinea (TIPNG) finds. Although Papua New Guinea has established laws and relevant agencies to carry out these obligations, improvement is needed to close gaps in legislation and to better enforce laws and policies.

TIPNG produced its report, which is intended as a contribution to the UNCAC implementation second cycle review in the country, with technical and financial support from the UNCAC Coalition. The report does not assess the official review process in Papua New Guinea, since the Department of the Prime Minister, which is the focal point for the second cycle review of UNCAC implementation, had not provided a specific update on the status of the review by the time this parallel report was finalized. The report was produced based on an extensive desk review, interviews with officials from relevant government agencies responsible for anti-corruption, and a compilation of investigated and prosecuted cases, dating back to 2012.

The report highlights significant deficiencies in terms of the implementation of UNCAC chapter II, namely: gaps within existing laws, including the absence of freedom of information legislation; the lack of harmonized working procedures between key agencies such as the police, courts, and the government; political interference in the workings of key government agencies as well as the lack of funding allocated to relevant government departments.

Read the full civil society report in English here.

Main Findings

The following are some of the main findings for each respective topic:

Preventive policies and bodies

Aimed at implementing certain preventive measures, a National Anti-Corruption Plan of Action was established in 2011, as part of the National Anti-Corruption Strategy 2010-2030. This includes the promotion and strengthening of honest leadership and strengthening transparency and public exposure of corruption. The strategies and plans remain minimally implemented and enforced and no evaluation on the effectiveness of these preventive measures has been conducted thus far.

National anti-corruption bodies are underfunded, including the recently established Independent Commission against Corruption (ICAC). The National Fraud and Anti-Corruption Directorate (NFACD) seemingly suffers from political interference. In 2016, the NFACD was allegedly shut down by the former Prime Minister after a warrant was issued for his arrest. Penalties administered by the Ombudsman Commission (OCPNG) are perceived as having insufficient deterrents, not exceeding K1000 (US$277).  There is also a lack of regular statistical information on the number of corruption cases that have been successfully resolved.

Public sector employment

The Public Services Commission is in charge of receiving complaints regarding wrongdoings in public sector employment. However, its review process does not provide for whistleblower protection as complainants are required to disclose their full identity on the complaints form. Alongside the Department of Personnel Management, it is underfunded, and both receive financial support from international agencies to carry out their mandates. Recent surveys found that over 80% of respondents in four different provinces in Papua New Guinea perceived corruption to be common in the public sector with 60% agreeing that it would be difficult to get things done if bribes were not paid.

Political financing

The Integrity of Political Parties and Candidates Commission, which was established under the constitution and following the acceptance of a dedicated organic law, is undergoing amendments to ensure disclosure of contributions and donations. Existing deficiencies include the non-disclosure of contributions made by state-owned enterprises and funds that political parties raise during fundraising events and programs, as well the allocation of funding to political parties which is made according to the number of members of the party in Parliament.

Codes of conduct, conflicts of interest and asset declarations

Laws are in place to establish codes of conduct for leaders (Members of Parliament, Provincial Administrators, Judges, and Senior Non-Elected Public Officials), and the requirements for conflicts of interest to be declared. The Ombudsman Commission for Papua New Guinea (OCPNG) publishes all investigative reports that implicate members of parliament. However, some leaders are suspected to be given favorable treatment and are subject to more lenient penalties as opposed to citizens who commit crimes under the Criminal Code Act. In addition, leaders are not given sufficient training to ensure they are aware of codes of conduct and their applicability.

Reporting mechanisms

Papua New Guinea recently enacted a Whistleblower Act for the purposes of protecting all employees who make disclosures from occupational detriment. The legislation, however, is not comprehensive enough as it does not extend beyond employer-employee relationships, nor does it allow for anonymous disclosures or mandatory whistleblower mechanisms to be in place for all organizations. Furthermore, the legislation does not establish an independent body to whom disclosures can be made.

Public procurement

The establishment of the National Procurement Commission in 2019 under a dedicated law has made procurement more accessible and efficient. However, there is a risk of political interference in the procurement process and the commission lacks capacity and funding resulting, among other things, in limited e-procurement capacity. Moreover, beneficial ownership of bidders is not disclosed, and proactive disclosure of procurement information to the public is limited. In a recent case, the Government approved K10.2 million (US$2.9 million) to fund a newly-registered company, which claimed to have the capacity to deliver Covid-19 medical supplies throughout Papua New Guinea and find a cure for Covid-19, without any proven track record. Once the public found out through a leaked document, there was widespread uproar demanding accountability over this decision. Especially since the company – contrary to the requirements for bidders set out in the National Procurement Announcement – was only in business for a few months when funding was approved and had no history of any completed projects or activities.

Management of public finances

A significant and annually recurring challenge for the Department of Finance is the miskeeping of accounting books and reporting accounts. Financial statements are only submitted for audit 15-16 months after the end of the year. While national budgeting documents are published by the Department of Treasury and are publicly accessible online, there is a distinct lack of civil society and citizen involvement in the process of forming the budget.

Freedom of information

Although the government has recognized the need for a Freedom of Information (FOI) Act and steps are being taken in the drafting of such legislation, there is not yet an FOI act in place. The media and local communities have suffered tremendously due to the absence of FOI legislation. Over-the-counter accessibility of public documents is poor across agencies, as is the overall responsiveness of agencies. So far, only piecemeal measures have been adopted to promote an institutional culture of transparent communication between government and civil society and Papua New Guinea is now a member of the Open Government Partnership (OGP) and the Extractive Industries Transparency Initiative (EITI). The Ombudsman Commission in Papua New Guinea has the power to request information in the public interest from State agencies, but these powers have not been systematically utilized.

Judiciary and prosecution services

The Judicial and Legal Services Commission (JLSC) undertakes reviews of different aspects of judicial conduct, except for the high court of justice. Judges and Magistrates of the Courts are subject to codes of conduct. However, there seems to be a phenomenon of judicial corruption, with low levels of enforcement and prosecution leading to perceived impunity. The judiciary also has a low rate of case disposition, creating a risk of corruption.

Private sector transparency

The Investment Promotion Authority has a publicly accessible company registry with an easy search function. However, when registering a company, there is no requirement for information on beneficial ownership. A key area where corruption is rife is in the forestry industry. Although indigenous communities are recognized as custodians of the forest and granted total land rights under the Constitution of Papua New Guinea, widespread government corruption has enabled the illegal timber trade to continue uncontrolled.

Measures to prevent money-laundering

A legal framework for anti-money laundering and financing of terrorism is in place and the Financial Analysis and Supervision Unit was established under the Anti-Money Laundering and Counter Terrorist Financing Act 2015. However, the public has access to very limited information on the work of this unit.

Key recommendations

In its report, TIPNG makes several key recommendations for priority actions to be taken to ensure the full implementation of the UNCAC in Papua New Guinea, including:

  1. The National Anti-Corruption Strategy Taskforce (NASTF) must hold regular meetings.
  2. Each state agency should develop an internal anti-corruption strategy.
  3. Wide consultation is required to ensure a thorough regulatory framework for OLICAC.
  4. Amendments to go beyond the traditional employer-employee relationship need to be made to the whistleblower legislation to ensure its effectiveness.
  5. Ensure that sanctions under the Leadership Code and the Organic Law on Duties and Responsibilities of Leaders are proportionate and compel reporting by public officials.
  6. Amendments are required to the OLIPPAC to ensure it is constitutional and followed.
  7. Creation of a legal basis for beneficial ownership data to be collected and shared.
  8. Operationalization of PNG’s e-procurement system with reference to global standards.
  9. Support is required for the national chapters of EITI and OGP to achieve their broad objectives and specifically to enact a Freedom of Information law.

More specific recommendations are provided in chapter VI of the report.

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The report has been made possible by support from the Norad, Danida, and the Sigrid Rausing Trust.