DEPUTY Prime Minister and Minister for Justice and Attorney-General Davis Steven says the Government will pursue legal proceedings against the PNG Sustainable Development Programme Ltd (PNGSDP) to ensure it is accountable to the State.
Steven announced this on Friday, adding that while the decision of the Singapore Court of Appeal dismissed the appeal by the State against PNGSDP, the judgment also found that there was an “intuitive attraction” in the State’s case which was persuasive.
“The government will take all steps necessary, including pursuing further legal proceedings against PNGSDP to ensure that PNGSDP is accountable to the Independent State of Papua New Guinea, manages and utilises its assets to promote sustainable development and advance the welfare the people of Western Province and other parts of Papua New Guinea,” he said.
The State brought claim against PNGSDP in the Singapore Courts in 2014 for breach of its agreement with the State and a charitable purpose trust.
The High Court of Singapore did not grant the State’s claims on the basis that there was no such agreement and trust.
The State appealed the decision to the Singapore Court of Appeal, and the appeal was heard in February 2020.
Steven said the recent judgment of the Court of Appeal highlighted that the objects is clause in the Memorandum of Association of PNGSDP defined the very purpose of PNGSDP’s existence, which is to primarily:
- Promote sustainable development within; and,
- Advance the general welfare of the people of PNG, particularly those of the Western.
The object’s clause was also effectively incorporated within the programme rules, which specifies the manner in which PNGSDP must be administered and how its assets must be utilised.
Steven said the Court of Appeal clarified that PNGSDP could not amend the objects clause (thereby changing the purpose of the company and how its assets should be used) without seeking the State’s approval, which was contrary to the position taken by PNGSDP previously.
He emphasised that the Court of Appeal also found that any breaches of the programme rules by PNGSDP could be directly enforceable against PNGSDP by the State.
Steven said the government was concerned that the current directors of PNGSDP failed to provide the level of improvement to the lives of the people since its incorporation in 200I, and despite purported expenditure of hundreds of millions of dollars on development projects in Papua New Guinea and the Western.
“The unsatisfactory manner in which PNGSDP has been run since 2012 has resulted in a significant decrease of PNGSDP’s total assets of about US$144 million (K487.4million) from US$1.513 billion (K5bil) in 2012 to US$1.3 billion (K4.3bil) in 2018.
“The depletion of PNGSDP’s assets are partly due to excessive and unjustified expenditure by PNGSDP on administrative and governance expenses totalling over US$65 million (K216mil) from 2013 to 2018, as well as various unjustified transfers of funds from the long-term fund of PNGSDP which is specifically meant to be used to promote sustainable development after the closure of the Ok Tedi Mine.
“We have reviewed our legal position, including the provisions of the Ok Tedi Supplementary Bill pursuant to (under) which civil claims for general damages in law have been directed to the State as a result of investment activities of PNGSDP in PNG.
“These issues were not before the court in Singapore.
“In fact, the Supreme Court decision in Singapore has helped clarify and enhanced our position in a possible cause of action which the Papua New Government will or may commence against PNGSDP.”