THE UBS LOAN IS UNLAWFUL, CORRUPT AND UNNECESSARY.

By BELDEN NAMAH MP

The Opposition has consistently maintained that Prime Minister O’Neill is dishonest, and unreliable. We have branded Peter O’Neill as a clinical surgeon, because of his deceptive, deflective and manipulative skills. He is cunningly melodious, to say the least. He makes very bad decisions which are to the detriment of our nation, yet he eloquently and skillfully convinces the unsuspecting and mostly ignorant public that all is fine, and that there is nothing to worry about.

We have therefore warned Papua New Guineans to be vigilant and mindful about the dangers of the very high level of corruption and maladministration under Peter O’Neill’s leadership.
Papua New Guineans will recall that we have taken issue with numerous controversial and questionable dealings and decisions by the Prime Minister and or his Government. You will also recall, that the Prime Minister has never answered any of our questions and queries. Instead, the Prime Minister has continued to water down every issue being raised and has accused the Opposition Leader of misleading the nation and of being power hungry, and having no policy alternatives to offer.

Time and time again, the Prime Minister and his senior Ministers have assured Papua New Guineans that all is great and that Belden Namah’s words were just hot air.
Upon the sacking of Don Polye as Treasurer, and from what he has had to say, Papua New Guineans can now see that the Opposition has been right or correct in all the issues we have raised since the O’Neill/Dion Government came into office.

We now wish to remind Papua New Guineans about some of the bad decisions of the O’Neill/Dion Government since taking office, which the Opposition has questioned or queried, and the reasons we have given:

1. RUSHED SIGNING OF DEEP SEA MINING PROJECT

We said that the decision to grant a Deep Sea Mining License to Nautilus Minerals was bad because it was taken by a caretaker Cabinet, and not the full Cabinet, only two days after the Government took office. We asked why such an unprecedented project, to be undertaken with untested and yet to be proven technology, was rushed. We said this action was questionable and improper.
As a result, the people of PNG will now pay a massive K300 Million to Nautilus Minerals for the O’Neill/Dion Government’s mishandling of the project.

2. MYSTERY PLANE

A plane carrying two international fugitives of Vanuatu citizenry mysteriously and unlawfully landed on our soil. This was in violation of our Civil Aviation Act, Customs Act and Immigration Act, however it was watered down and no satisfactory explanation was provided. No one was prosecuted and the offending aircraft was also released without question because of the involvement of two senior Ministers. We said this was highly scandalous and inappropriate.

3. DJOKO CHANDRA SAGA

An Indonesian Multi- Millionaire Fugitive was granted entry into Papua New Guinea and within record time, issued a PNG Passport under a fictitious name and eventually made a citizen of PNG. The series of facilitative actions were in violation of our Immigration Act and the Citizenship Act. However, the O’Neill/Dion Government has condoned this scam, irrespective of the fact that the actions of Government Ministers and officials were in breach of the above laws. This major saga was swept under the carpet because of the involvement of certain senior Ministers, and possibly the Prime Minister himself.
We said this was highly questionable and inappropriate.

4. CONSTITUTIONAL TERORISM

Peter O’Neill has smartly manipulated Members of Parliament by getting them to support him to secure himself 30 months of uncensored rule. Further amendments to the Constitution were made which would enable him secure a full five year term without censorship. We said, granting Peter O’Neill 30 months of rule without Parliamentary accountability was inconsistent with and or violated section 145 of the Constitution. The result is that the Parliament is prohibited from exercising its inherent power of censorship against the Executive Government inside the 30 months period. The Prime Minister has also caused the Constitution to be amended in order that the interest of a foreign government is served. We have stated that, the Constitution must only be amended to preserve or promote national interest and not a foreign interest.
We termed this as both Constitutional terrorism and Constitutional vandalism.

5. ASYLUM SEEKERS DEAL

The Prime Minister unilaterally signed the Asylum Seekers Deal. We said the deal was bad and dictatorial because the deal was signed without the approval of the National Executive Council and the National Parliament. Also, Manus Provincial Government, Manus Leaders and the people of Manus were never consulted. We said the Prime Minister’s decision violated section 142 of the National Constitution and the Immigration Act. The recent amendment to section 142 by Parliament to allow the Government to detain persons on behalf of or at the request of a foreign government, proves that the Opposition was right all along. We said the Prime Minister’s action was dictatorial and inappropriate.

6. EXPROPRIATION OF PNG SUSTAINABLE

The Prime Minister unilaterally decided, then used the NEC to expropriate PNG SUSTAINABLE FUND. We said that this decision was to the detriment of Ok Tedi and Affected Area Land Owners because the Government was taking over their 63.4 percent equity in the mine without any commitment from the O’Neill/Dion Government that the 63.4 percent was still available to the affected Land Owners. We said this was inappropriate and amounted to expropriation.

7. PRIME MINISTERIAL DIRECTIVE TO PAY K71.8 MILLION TO PARAKA LAWYERS

The Prime Minister and his ministers improperly directed the payment of K71.8 Million of Public Funds to Paul Paraka Lawyers when the Law Firm was owed nothing by the State. We stated that these directives were inappropriate and unlawful.

8. CONFLICT OF INTEREST AS POLICE MINISTER

The Prime Minister inappropriately appointed himself as Police Minister while he was under a criminal investigation, putting himself in a compromising position.
We stated that this was totally inappropriate.

9. DELIBERATE WITHHOLDING OF DSIP FUNDS

The Prime Minister deliberately caused to be denied timely payment of DSIP Funds for six Electorates simply because the Members of these Electorates have chosen the noble duty of keeping the executive government accountable to the people. We have stated that this amounted to a serious act of misconduct in office by the Prime Minister and other relevant Ministers. We said this was unconstitutional, discriminatory and inappropriate.

10. UNDUE INFLUENCE DURING TWO BI-ELECTIONS

The Prime Minister has violated the Organic Law on National and Local Level Government Elections by saying things which have the effect of undue influence on voters in the Bye- Elections of Madang Open, and the Kairuku Hiri Open, seats. We have stated that this amounted to the criminal offence of undue influence and an inappropriate conduct by the Prime Minister.

11. AWARD OF INFLATED CONTRACTS

The Government of Peter O’Neill holds the record of awarding highly inflated Government contracts in the construction industry. We have said that this amounted to financial mismanagement and maladministration by the O’Neill/Dion Government.

12. CRONYISM

The Prime Minister has used his position to appoint cronies and persons from his own Electorate to key positions in government. These appointments, to the extent that disclosures have not been made by the Prime Minister, were inappropriate.

13. UBS LOAN OF K3 BILLION

On top of, and in addition to all of the above bad decisions, the Prime Minister has again unilaterally decided to commit the people of Papua New Guinea to a major foreign Loan. The Opposition totally opposes this loan on the following basis:

First and foremost, this loan is absolutely unnecessary, risky and highly questionable.

Secondly, the K3 Billion Loan has been executed and obtained by the Prime Minister in violation of the express letter of the National Constitution under section 209 and in breach of seven other Laws of Papua -New Guinea.
Section 209 (1) is in the following terms: “Notwithstanding anything in this Constitution, the raising and expenditure of finance by the National Government, including the imposition of taxation and the raising of loans, is subject to authorization and control by the Parliament, and shall be regulated by an Act of the Parliament”

The Act of Parliament referred to here is the Loans (Overseas Borrowings) Act.
It is very clear, that the raising of finance, and in particular the raising of loans, must have the prior authorization or approval of the National Parliament. The act of authorization and control by Parliament is performed through an appropriation law, which comes in the form of an Annual Budget or a Supplementary Budget.
The 2014 Budget Appropriation Act does not have any provision for a K3 Billion loan. No Supplementary Budget providing for the K3 Billion Loan has been approved by Parliament.

The Executive Government has powers only to initiate loans, under section 210 for budgetary purposes. It has no other power(s) under the Constitution to obtain loans outside of the budgetary process. The Constitution has therefore been violated in two respects; first there was no budgetary authorization given by Parliament, and second, the PM or the NEC has no constitutional authority to obtain a loan outside of the budgetary process.

Thirdly, the loan is in violation of the following Laws:

(i) The Loans (Overseas Borrowings) Act
This Law limits the annual Debt to GDP Ratio at 35 percent. The loan of K3 Billion is in breach of this cap of 35% of GDP in a single year. 
This is an act of misconduct in office by the Prime Minister and an act of maladministration by the O’Neill/Dion Government. It is to be noted that this is the Act of Parliament which is required and authorized by section 209 of the Constitution.

(ii) The Fiscal Responsibility Act.
This Law requires that at any one time, National Debt must be maintained below 35% of GDP. In other words, the law fixes the Debt to GDP ratio at 35 percent permanently. The execution of the Loan without the necessary amendment by Parliament amounts to an act of misconduct in office by the Prime Minister and an act of maladministration by the O’Neill/Dion Government.

(iii) The 2014 Budget Appropriation Act.
There is no provision made in the 2014 Budget appropriation for this Loan to be obtained. As such the only way the Government could lawfully obtain the loan is through a Supplementary Budget Appropriation Act. Executing and transacting on the Loan without a Supplementary Budget is in breach of the 2014 Budget Appropriation Act. The Prime Minister therefore, must be held accountable for misconduct in office, and his Government held accountable for maladministration.

(iv) The Public Finance Management Act.
This Law requires that, any borrowing by the State must comply with the Loans (Overseas Borrowing) Act. This simply means that the cap of 35% of annual Debt to GDP ratio must be observed, except if Parliament raises it upwards. The UBS Loan has not satisfied the requirements of these two laws. Execution of, and draw down on the UBS Loan therefore, amounts to misconduct in office by the Prime Minister, and maladministration by the O’Neill/ Dion Government.
(v) The Organic Law on Sovereign Wealth Fund.

This Organic Law provides for all proceeds from the PNG LNG Project to be channeled to the Sovereign Wealth Fund Account(s). Contrary to the letter of this Organic Law, the Financing Packaging terms of the Loan Agreement seem to have committed all proceeds from the PNG LNG to servicing the UBS Loan should issuance of government bonds or other means of repayment fail”.
The Loan Agreement, in such terms, appears to be in breach of the Organic Law.

(vi) The IPBC Act.
A borrowing from UBS by offering the assets and revenue of the National Petroleum Company or Petromin as security would be in breach of the IPBC Act, as this Law places property ownership in the General Business Trust of IPBC, and not in each one of the SOEs. The actions of the Prime Minister and his Government are therefore unlawful and inappropriate.

(vii) The Attorney General Act.
The Attorney General Act has been violated when Pacific Legal Group, a private Law Firm associated with Jimmy Maladina, was engaged by the Prime Minister to provide legal services in the Loan Agreement. Under the Attorney General Act, only the AG has authority to issue Brief Out to private legal firms.
It is to be noted that the State Solicitor was not involved in the loan negotiations and drafting of the Loan Agreement, which is deplorable and adds further doubt to the transparency of the loan deal.

OTHER FACTS ABOUT THE UBS LOAN
Papua New Guineans must take note of the following facts:

1. This is the first time in Papua New Guinea’s history that a loan of this magnitude has been obtained for a purpose other than for funding development. This will result in greater inflation and depreciation of the value of the Kina.
2. The loan will go down in the history books of Papua New Guinea as a loan that has been negotiated with lightning speed. This calls for a major and thorough investigation into how this deal was struck and the parties involved, including Oil Search Ltd, Inter Oil Ltd and UBS International.
3. The total debt of this country has now more than doubled.
4. The return on this massive loan which now exposes Papua New Guineans to all manner of risk is very minimal and will take years to recover. It is not worth the pain that the people will experience for years to come.
The Opposition demands answers to the following questions from the Prime Minister and Oil Search to answer:

1. Why wasn’t there a public disclosure of the issuance of 10.1 percent Oil Search share prospectus?
2. Why weren’t other shareholders given the opportunity to buy shares as Oil Search is a public company?
3. How did Oil Search make available 10.1 percent of the shares in the company; is it through a dilution of all existing shares or did somebody off-load their shares for Government to purchase?
4. As the State has got no call option remaining in Oil Search after it originally took up 18 percent shares which is now owned by the Arabs, why was the State given a preferential treatment and why was the sale negotiated and transacted in complete secrecy?
5. Why was this transaction concluded at lightning speed and without the approval of the Securities Commission?
6. Can the Bank of Papua New Guinea be an independent assessor when one of its Board Members in Bart Philemon, is also a Director on the Oil Search Board of Directors?

CONCLUSION

The good people of Papua New Guinea! Your Parliamentary Opposition has done all it can within its means to fight the unprecedented high level of corruption perpetrated by the Prime Minister, Peter O’Neill, and his Government. Our numbers cannot make any difference on the Floor of Parliament. We have therefore resorted to taking our concerns to the Courts of Law but are faced with lengthy processes.

There is nothing further the Opposition can do to put a halt to this open secret of Government corruption of a magnitude never seen in this Country.
This Country does not belong to the six (6) Members in the Opposition. It belongs to you and your children and their children. We therefore call on all Papua New Guineans and civil society groups to take responsibility in calling on the Prime Minister to resign and allow the Parliament to elect a new Prime Minister forthwith. We also call on all Members of Parliament to do the most honorable thing and withdraw their support for a man who has no respect at all for other leaders, the National Parliament, the National Constitution and the Laws of Papua New Guinea.

As we have demonstrated here, the Prime Minister has become a dictator and has made numerous unilateral decisions which are not good for Papua New Guinea while at the same time has brought the office of the Prime Minister into public disrepute.

All of the above unconstitutional, unlawful, inappropriate and dictatorial actions of the Prime Minister and his Government, we believe, amount to maladministration and gross financial mismanagement.
Prime Minister Peter O’Neill and his Executive Government are guilty of misconduct in office and are unfit to continue to run the affairs of the Independent State of Papua New Guinea.

GOD BLESS PAPUA NEW GUINEA