Transaction was lawful, Somare explains

By BOURA GORUKILA
A FORMER cabinet minister told a commission of inquiry that the 2009 Independent Petroleum Investment Company (IPIC) transaction the Government had obtained to purchase shares in the PNG LNG project using the issuance of exchangeable bonds, was in compliance with Section 209 (1) of the Constitution.
Arthur Somare, then minister for State enterprises, told the inquiry into the 2014 Union Bank of Switzerland (UBS) K3 billion loan that processes and procedures were
followed by the Government into obtaining it and related transactions.
Chairman of the commission and former chief justice Sir Salamo Injia asked questions in relation to terms of reference as to how the process of
IPIC commenced, how was IPIC selected and what process was utilised.
Somare said the process started as a consequence of the PNG LNG project agreement dated May 22, 2008.
“Under the PNG LNG agreement, there is section ‘C’ in the project agreement that states the terms by which the Independent State of PNG would participate in the PNG LNG project and also states the terms by which the State had to demonstrate very clear that it had funds and that was time bound in nature,” he said.
“The NEC approved it and the minister responsible then, William Duma, signed off for gas agreement.
“As for the second question, IPIC was selected as a consequence of the process that would have been undertaken by IPBC.
“The IPBC Act is quite clear that I cannot interfere with their process.
“I identified IPIC and recommended to cabinet as the minister responsible for IPBC to take the proposition.
“You can notice NEC decision 223 of 2008, generated from NEC policy paper 167 of 2008 which had basically three sponsors, including minister for treasury, minister for planning and minister for state enterprise who sponsored the paper to go forward and identified strategic advisory and the terms of financing.
“For the question as to what process was utilised, the process was commenced by IPBC, they recommended IPIC to NEC.
“This whole process was triggered by part ‘C’ of the gas agreement.”