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Foreign Affairs, Defence and Trade References Committee
27/11/2015
Australia's bilateral aid program in Papua New Guinea

MORGAN, Mr Richard Vincent Henry, Director, Pacific Future Foundation

CHAIR: Would you like to make a brief opening statement before we go to questions?

Mr Morgan : I thought I might just give you a little bit of my background. I am originally an archaeologist but I have been involved in museums and in the cultural and heritage space through my life. I have been involved in education as an administrator. Currently I am the director of tourism, community and cultural development at Forbes Shire Council in central New South Wales. I am involved with and helped set up the organisation Pacific Future Foundation so that a group of interested individuals and myself could start to do something of benefit to the communities in our Pacific region, our neighbours. What we are attempting to do is coordinate and assist the governments and organisations within those countries to access funding, perhaps UN funding, where aid projects could actually be better targeted to improve social justice and the communities. We currently have a real focus on Timor. We are about to pull together some private corporations and hopefully some UN funding to move some projects along for the government in Timor.

I had the opportunity and privilege to do some private contracting work in New Guinea two years ago and was working for an organisation called the Institute of Business Studies, which is an organisation that was set up by a local entrepreneur who had been originally from Sri Lanka and has become a Papua New Guinea citizen. He is the chairman of cricket PNG, and a mover and shaker in the community. I had the wonderful opportunity to meet many people in high office in New Guinea and to go up to the Enga Province with him and visit his institute as well as give them some governance and future development advice on how to get the institute to grow and to develop and increase the student numbers there. For several weeks, I had boots on the ground and was able to see some of the issues, some of the problems and actually experience lifestyle in Port Moresby.

In my submission, I talked about how important the aid is that Australia is giving for the development of Papua New Guinea and for creating a peaceful environment. But the pace of development has really not kept up with the deterioration of the social structures, law and order, and health over the last 30 years. Not having been there 30 years ago, I am of the view that Papua New Guinea was in a much better place socially as far as health, law and order, and governance goes than it is today. Obviously there is significant reliance on Australia as a provider of many services and support but, as you know, it has the worst health and education problems probably in the Asia-Pacific region. I saw poverty everywhere while I was there.

One of the specific things that happened was the Black Cat Track attack occurred while I was in Port Moresby. It was very well publicised here in Australia. A number of Australians were injured. The company, PNG Trekking Adventures, was dealing with that, trying to manage that. They were in a very remote part of the island when it happened. I was watching that closely, listening to the ABC news and then reading the local newspaper. The two stories were completely different, as you can imagine. It was a shame that Australians hear about the issues in New Guinea from the perspective of a couple of Australians who were not that badly injured but who were certainly shaken up compared to the porters who were killed and very badly chopped up. Interestingly enough, the porters who survived managed to be evacuated to the Lae hospital. I was at a meeting with an AusAID senior representative of the Australian Embassy a few days after that and we talked about this incident. She said, 'I hope those porters do not end up at the Lae General Hospital because they will not get any treatment.' I asked, 'Why?' She said, 'Because there is so much corruption, even in the hospital system, that when AusAID was giving medicines to the general hospital, the next day they would all be gone—sold on the black market.' The general view was that we do not give medicines to the general hospital. She said she hoped they went to the private hospital, which is also there in Lae. Sure enough, when I came back to Australia and found out more about it, those particular porters were left high and dry in the hospital with very little treatment. One of them, I believe, ended up back in Australia and it took him a year to recover.

The other thing I have included in my submission, which I thought you should be aware of, was that the general chat of expat Australians in places like the Royal Papua Yacht Club, when I was there for lunch one day talking about this issue of aid and things like that, was that it is general knowledge that most of Australia's support ends up in people's pockets and does not get to the people it is destined for. The joke around the table was: look at the properties in Cairns and who owns them and you will find that it is many Papua New Guinean politicians and senior public servants. They fly in and out of there. A part of their escape from the rigors of Port Moresby is to get into Cairns. One of the ways in and out of Port Moresby is to fly through Cairns. It sort of made sense as an easy place to deposit their gains.

It seemed to me that bribery was business-as-usual. The company IBS, Institute of Business Studies, was stridently resisting all of that by not getting involved in making any payments or anything like that. It was very evident to me that they were really pushing back when those things were asked, which meant that the company had to struggle along and not pay bribes.

One activity I tried to implement was to get high-speed wireless internet to a number of schools that were in the 11 Mile district, where IBS had one of its campuses. There is very slow internet out there. My contacts back in Sydney, who specialise in remote and regional wireless applications, were very keen to get involved and get in there, to set up. They had everything sorted out about two months after I got back in terms of where to put antennas and things like that but the whole project came to a halt when they got to Telecom PNG. The manager of the racking system who allocates the racks of the ISP—the provider—in Port Moresby wanted a cash bribe. That was where that company just said, 'Stop, we are not having anything more to do with this project,' which was such a shame because those schools and those kids could have benefited from that high-speed-internet opportunity. They are all trying to actually access world information in the schools that have got the systems.

I was fortunate to have a conversation with Peter O'Neill, the Prime Minister at the time. Again, the chairman of IBS is very influential, had access and introduced me to the Prime Minister. We had quite a frank discussion—me as essentially a nobody talking to the Prime Minister. He told me that he was committed to reforming the public service and that was one of his visions was to do that. He said the public service in New Guinea has been asleep for the past 28 years—this was two years ago—and he is trying to wake the beast up, which I thought was quite amusing, and something that he said he was struggling with.

CHAIR: The recommendations you make, 1 to 6, are very specific and perhaps we might put those to a later witness. Your conclusion says:

The current foreign aid given to PNG has assisted in contributing to a system with endemic corruption. Current methods of doing business must change if Australian foreign aid to PNG is to get its money worth.

Do you have any concrete examples or is it anecdotal? Is it observational? You have given us a specific example about the internet.

Mr Morgan : That is my only specific example; others are anecdotal. I have a copy of an article from PNG Report from June 2013, which I picked up out of the slot in the aeroplane coming back to Australia, about money laundering and indeed amplifying what I said about money going back to Cairns from PNG officials. Again, it is somewhat anecdotal but that is a published document there. I think there are many more examples of that in various PNG press that you may find would assist.

CHAIR: In your opening statement you mentioned some involvement in Timor-Leste. Are there any similarities or is there anything working in that arena? Given the proximity and that we send a significant amount of aid that way, is there anything working in Timor that would be able to get into New Guinea as a program?

Mr Morgan : In its simplest terms, the biggest difference is that the government in Timor are anticorruption. They are making a huge effort to ensure that in all of their processes at every level that there is none of that corrupt activity going on. I have actually spent less time in Timor than I have in Papua New Guinea but even in those 10 days that I spent in East Timor, I did not see or hear about anything like the level of corrupt practices that are going on in New Guinea. Timor has a much smaller population and they have similar issues in terms of child mortality and just trying to get from a to b. But the Timor government has a commitment to transparency and that makes a big difference, in my view. We are able to do business in East Timor, whereas it is quite hard to do business in Port Moresby, as evidenced by my friend's company that wanted to get involved in providing internet services.

Senator BACK: Would you have any idea at all of the average per capita income for people working in Papua New Guinea, or would it be too difficult?

Mr Morgan : That is not the area I have studied. But the people in the highlands and some of the general population around Port Moresby are walking around in rags. They are not surviving on very much at all. The highlanders are a very proud group of people and obviously, depending on which area they have come from, have different characteristics and cultural differences across the Papua New Guinea nation. They will turn up in Port Moresby in their traditional dress, for example. I was at a Western-style shopping centre one night buying the groceries I needed, and a highlander warrior came through with his full feathers; his ass grass, as they call it; his spear; and nothing much else. Goodness only knows why he was there. I think he was there just having a look at what this other side of the world is like.

Senator BACK: You do not think he was dressed up for a market promotion exercise?

Mr Morgan : No, but there was somebody who was proud and in their traditional cultural garb. I think there is an issue there with the deterioration of traditional culture in Papua New Guinea, because the culture underpins people's efforts and pride—wanting to get on and do good things, stay healthy and help others—whereas that has been diminished in a lot of places. A lot of change that occurred in the 1940s when the country was opened up to Western influences certainly deteriorated that culture. In Enga Province in the town of Wabag they have a beautiful museum. The curator, who I talked to, said, 'We've got so little original cultural material here because when the missionaries came through they made us burn it all.' I said, 'There's a better collection at the Australian Museum in Sydney than what you've got here.' He said, 'Thank goodness,' for the fact that the cultural material—

Senator BACK: Got preserved.

Mr Morgan : was preserved and brought to Australia. He said, 'We have a great relationship with the Australian Museum in terms of interpretation'—because they have lost a lot of those skills as well.

Senator BACK: A few in Britain could say the same about the—the reason I asked is that we heard from a previous witness, Dr Standish, that each of the 111 national or federal parliamentarians get an annual $9 million allocated to them, presumably to be spent within their electorates. We are trying to understand whether there is any level of accountability. I would absolutely hesitate to think what would happen if the 226 of us were all given $9 million or whatever the multiplier is. It is almost a culture set up to fail, isn't it, in terms of corrupt expenditure of moneys?

Mr Morgan : That is obviously the business of the Papua New Guinean government. But I think anybody who is not accountable for large sums of public funds, or even small sums of public funds, is in grave danger of it going astray. I work currently in local government and I know how critically important it is with our procurement procedures and policies. There are so many checks and balances—

Senator BACK: In a very sophisticated western economy.

Mr Morgan : but even then things can go wrong.

Senator BACK: We have had representations from witnesses from NGOs et cetera. Would it be your recommendation that the safest way for Australian aid funds to be spent would be for them to be allocated to NGOs who are engaged in activities that Australia thinks it can assist with? For example, earlier you heard the witness Mr Schaefer highlighting health education and child protection. If, for example, Australia decided that that is where our resources are best spent, do you think we are most likely to see the greatest level of those funds being effectively spent through NGOs on the ground?

Mr Morgan : Yes. I have suggested a system of prequalified institutions—

Senator BACK: You have, yes.

Mr Morgan : so that they have already gone through a rigorous process of screening. If the funds are targeted to specific projects, with accountabilities, acquittals and all that sort of thing, you end up with a far better result, in the end. Hopefully, with the money flowing pretty directly, without going through a whole lot of layers of bureaucracy, the funding ends up more fully arriving at the people who really need it.

Senator BACK: Your example of the Telikom person demanding corrupt funds flows through organisations, doesn't it? As soon as the rest of the mob see that this is what that person got it is open slather, at whatever level they are. It is, 'Why wouldn't I be in this?'

Mr Morgan : Yes. There is a whole series of levels. At some point, at the top, they are probably raking off the most. Lower down they are getting a little bit of it. How do you counter that? That is the big question. You start at the top, with the big guys, but the discipline needs to filter down.

Senator BACK: You are not the first person to raise it. You have given us specific examples. You get the sense that Australians are generous—want to be—but the worst thing we all hear is, if the effectiveness of the spend is so low, the natural reaction is: what's the point? We are exacerbating the situation rather than helping the situation.

Mr Morgan : I do not think Papua New Guinea is alone, in terms of being a least developed country—

Senator BACK: Neither do I.

Mr Morgan : that is having this problem. Because Papua New Guinea is our nearest neighbour and we were a coloniser, originally, we should have a greater emphasis on supporting the country and supporting it not just by providing aid but also by providing some really good advice.

Senator BACK: Yes. This committee informally met with a group based out of Townsville called YWAM, who have a catamaran, a vessel, a floating hospital, largely staffed by volunteer doctors, nurses, dentists and others and it will ply up and down the coast of Papua New Guinea. It is supported by the Papua New Guinea government, centrally, and by some of the provincial governments, and DFAT. It would appear to be highly successful. It is limited, probably, in its capacity to provide medical, nursing and dental services.

It causes me to wonder, again, in the health space, is Australia's investment best spent on those sorts of activities where there is a high level of voluntary input, a high level of control—in fact, the highest level of control—and the ability to lever the expenditure? We know, in that context, with YWAM, there is a very significant contribution by pharmaceutical companies and others to assist with the provision of equipment, of pharmaceuticals. It would appear to me that this is a very effective spend and, indeed, a very effective way of delivering those sorts of medical parturition and post-parturition services in areas where they simply do not exist.

Mr Morgan : Certainly. Giving the aid opportunity to the non-government organisations and the private organisations that are delivering would be a very positive thing—until the government hospitals improve their efficiencies and remove the corrupt practices.

Senator BACK: My last question is probably more for the next witnesses, although you mentioned you spoke to the Prime Minister of Papua New Guinea. With you as a business person, bearing in mind diplomacy and fear of allegations of paternalism and colonial mastery et cetera, how can Australia influence the political decision makers in Papua New Guinea to address, get on top of and remove or diminish corruption et cetera in their system? Is there a way that Australia can do that?

Mr Morgan : I think there is an opportunity for mentoring, for visits to Australia to see how our system operates—and our systems operate very well—for example, bringing senior bureaucrats in to have an experience in Australia; perhaps it could be an education experience. One of the staff members at the Institute of Business Studies, a Papua New Guinean, had done her degree at James Cook University and had been in Australia for about three years. When she was back in the organisation she was thinking completely differently to just about everybody else there; her thought processes were quite different. I had suggested that she was probably the person who would become the natural leader of the IBS in its future structure.

So, I think education is the key. I have heard other submitters talking about the education of children as being critically important, and getting everybody through at least primary school is the first thing. Timor has done that quite successfully now. The next step is secondary school et cetera. But there is an opportunity to also start at the top. If you have a senior public servant, get them out here to do a master's program or a PhD program, because they are going to be naturally exposed to the way our parliament and our systems of government work, and what better place to have them educated than, say, here in Canberra? Again, that would have to be a funded program, I would suggest, because that would also be very appealing, to get them to come here. So, that is one suggestion for you.

Senator BACK: Thank you.

CHAIR: On a broader level, the foreign minister is keen on leveraging private sector and foreign aid together, as well as an innovation hub and the like. When we look at some of the evidence we have seen in New Guinea, that seems to me to be a recipe for catastrophe. If we do have endemic corruption and the potential for people to hive off funds, and they are predominantly in the public sector, if we went to the private sector and put some taxpayers money on the table, would we be likely to see a different outcome?

Mr Morgan : I believe there is an opportunity for people in Papua New Guinea who want to grow business and do well, such that they would be very pleased to not have corrupt practices every step of the way, which I think is occurring now. When the business is trying to avoid those corrupt directions it slows down progress and makes it somewhat difficult to move forward. If there is a way to support companies—again, prequalify them somehow, or perhaps put them through a rigorous program of assessment—and then ensure that there is a very good acquittal system, then I think a lot of companies that are domiciled in Port Moresby, for example, or in the highlands would be very interested in using those funds to progress their operations.

CHAIR: So, you are saying, essentially—I will put it to you as straight as I can—that there are potentially private sector organisations with better governance and an aversion to corrupt practices which we could partner with for a mutually beneficial outcome?

Mr Morgan : Yes.

CHAIR: And stepping around the 'asleep Public Service', to quote your meeting with the Prime Minister, maybe a very good thing?

Mr Morgan : It would certainly show up; you would see—

CHAIR: You would certainly try and test it, because what we have been doing is not working too well—well, that is just my view, anyway.

Mr Morgan : I agree with you.

CHAIR: Thank you very much for your submission and your evidence here this morning.