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

STANDISH, Dr William, Private capacity

Committee met at 0 9:18

CHAIR ( Senator Gallacher ): I declare open the public hearing of the Senate Foreign Affairs, Defence and Trade References Committee. This public hearing is in relation to the committee's inquiry into the delivery and effectiveness of Australia's bilateral aid program in Papua New Guinea. Copies of the committee's terms of reference are available from the secretariat. I welcome everyone here today. This is a public hearing and a Hansard transcript of proceedings is being made. Before the committee starts taking evidence, I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee. Such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee.

I would like to emphasise that, while the committee prefers all evidence to be given in public, under the Senate's resolutions witnesses have the right to request to be heard in private session. If you would like any of your evidence to be heard in camera please to not hesitate to let the committee no. If a witness objects to answering a question, the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground on which it is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. As noted previously, such a request may be made at any other time.

The committee welcomes Dr Bill Standish. Do you wish to comment on the capacity in which you appear today?

Dr Standish : Thank you. I am appearing in an individual capacity today. I am a political scientist. I am an associate with the Australian National University College of Asia and the Pacific.

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

Dr Standish : I will try to keep it brief. I have not used the highlighter effectively yet. My focus today is the context in which Australian aid is delivered to Papua New Guinea. That is why I submitted a couple of existing articles to show how PNG's governance operates, or does not work. I hope the committee can see the aid program and the other submissions in their political context so the aid program is not seen as fully responsible for what happens and what partial outcomes it may have. The Australian Auditor-General 25 years ago tried to evaluate aid to PNG looking at social indicators—health, literacy, GDP growth et cetera—and hoping to see direct results were made. We tend to do that without remembering the geophysical barriers, varied levels of development, multiple cultures and so on in this very different society.

I argue that there is no direct connection between aid and social and economic development or the UN's human development indicators. I am not saying do not do aid, but I hope the committee can see that when operating in a foreign country many factors constrain the impacts of the aid. My written submission stressed the basic significance of the context, governance structures and political cultures. PNG has a parliament and regular elections, but it is very different to Australia and in terms of service delivery to its citizens I would say its democracy is dysfunctional. I have studied PNG politics on 50 visits since 1966. For nine years I worked on AusAID programs but not as an AusAID staffer. What I have to say comes not from that but, rather, from personal observation and off-the-record conversations with Papua New Guinea people I have known during that period. I am working much like a journalist who does not really want to identify sources on sensitive matters.

Australia is PNG's big, rich neighbour, one which dominates the high points of the economy and its television culture; but it does not control PNG, despite some neocolonial aspects to the relationship which people identify at times. There is a real ambivalence towards Australia. Some see the colonial era as having being a golden age; it brought peace, started schools, roads and health services, and built power stations. But Bob Hawke rightly talked about the colonial hangovers of Papua New Guinea, and there are stories of colonial violence as well as myths and contemporary resentments, such as the difficulty of getting a visa to visit Australia. Papua New Guineans are proud people and especially in government they rightly want to assert their autonomy while being aware of their own need for assistance or dependency.

The bilateral aid program has to operate within this environment of partial dependency, not just through long-established economic trade patterns and media culture with Australia but with expectations for assistance yet with resentments of the need for assistance. Inevitably, some Australians have a tendency to assume they know what is good for PNG even if they do not know much about PNG itself. The aid program is designed to bring about change in the recipient; to change the way Papua New Guinea's systems operate or influence government and civil society priorities. Inevitably, Australia's intentions may not match the interests or priorities of the PNG political and bureaucratic elites. If they match the wishes and desires of NGOs and churches in the civil society they well may be perceived as supporting the actual or future political rivals of the current politicians. Not surprisingly, that can upset some of the political elite, which includes the senior bureaucrats.

Aid programs are intended to influence what is done and how it is done. In the mid-2000s, Australian staff in Port Moresby openly talked about Papua New Guinea's national planning department declining programs which were proffered by AusAID. There can be reluctance. It took weeks in, I think, 2005 for Australia to be asked to assist in helping after the massive flood and cyclone damage in northern Oro Province. Last month I heard that PNG has not asked Australia for assistance yet with the El Nino drought and frost crop failures in a lot of the country. There is upwards of one million people who are short of food. What is happening is that a lot of money is being distributed through MPs to assist their voters, but I dare say that is not an efficient process.

Aid programs can be affected by diplomatic and other tensions, but I believe aid can be seen as more politically neutral if it is notionally separate from the political drivers of successive prime ministers on both sides of the relationship. In other words, AusAID previously was somewhat distinct from the Australian DFAT and the rest of the High Commission and that can have advantages.

I hear from Papua New Guinea, and I was last there 18 months ago, or a bit less, that tensions are affecting the Australian aid programs arising from the burden of the regional processing centre on Manus Island. It is said that cooperation and planning of programs has been damaged, as have contacts with the Australian government at the highest level in Port Moresby. It is clear from the PNG foreign affairs minister's recent statement that the Papua New Guinea government does not want to resettle many of the hundreds of transferees at the Manus Island processing centre who have already been deemed to have refugee status. It is clear from social media that many people are resentful of the resettlement project. Some say that Papua New Guinea was conned by former Prime Minister Rudd and that damages Prime Minister Mr O'Neill. Others say that Papua New Guinea has prostituted itself for aid, so aid is getting caught up in political issues that are very significant for Australia.

There are two Supreme Court challenges to the bilateral processing and resettlement arrangement on constitutional grounds in PNG. One of them has concluded its hearings and the judgement will be very significant. Papua New Guinea judges take their Constitution seriously and they have overturned major political schemes. Quite recently they made a major ruling by ruling unconstitutional the extension of a period in which it is not possible to have a vote of no confidence; that went against the interests of the Prime Minister. Recall that in 2005 the Supreme Court ruled the enhanced cooperation program void because the AFP police were responsible to Canberra and thus were a foreign force which, like the immunity provisions they had, was deemed unconstitutional.

Incidentally—I am sure you have been briefed on this—the AFP clarified on Monday, that its 70 advisers currently in PNG are unarmed and have no powers of arrest or investigation of their own. Prime Minister O'Neill has said that he would like them to have police powers; indeed, Mr Abbott said so publically on one occasion. But that would require a constitutional amendment in Papua New Guinea. That is not impossible; they have amended the constitution 44 times and the government has 100 MPs in the 111 seat parliament.

Getting back to development issues: one of the myths I hear in contemporary PNG is that the Australian government created the system of 19 elected provincial governments in 1977, which were built upon the existing administrative provinces. In fact, Australian officials were wary of states' rights type issues, but PNG went ahead, partly in reaction to centralized colonial rule and also to placate Bougainville secession threats. The national members of parliament soon resented the provincial politicians, the lower level politicians, delivering the goods and saw them as political rivals. National budgets gradually starved most of the provinces of funds.

Provinces politicised the local public service, training programs declined and so did services. This decline in services made it possible for so-called reforms in 1995 to create great powers for the Open MPs, who represent the administrative districts below the provincial level, and increasingly gave the MPs discretionary and sectoral funds to work with. So they become dispensers of largesse or projects. During the 2000s, in particular, Prime Ministers Somare and—

CHAIR: Dr Standish, can you indicate how much longer your opening statement is going to be?

Dr Standish : I will try to cut it short.

CHAIR: It is just cutting into time for questions, that is all. I generally ask people to given about five minutes of an opening statement.

Dr Standish : I am aware of that. I will do my best.

The funding of district support grants, district services improvement grants and so on—very high levels of funding are going to MPs and this is argued that it is there to provide political support for the Prime Minister and government within parliament. You have roughly A$9 million going to each MP each year. That is about $900 million a year for the entire parliament. MPs, however, cannot design projects, mostly, or use these funds in sustainable services. They do not have the staff capacity in most of the districts, according to recent research

Meanwhile, crucial access roads are not maintained, schools and health services are run-down. There is next to no evaluation of these funds, although the Attorney-General has given very low success rates to a number of provinces and the National Economic and Fiscal Commission also showed very low service areas in many areas. Many MPs have been prosecuted for misappropriation of these funds. The 22 provincial governors have less discretionary funding and the Open MPs are the dominant ones, politically.

These arrangements severely weaken the very services which aid programs seek to influence. The financial and policy linkages are not there for consistent national policies and programs across development authorities. With the new district development authorities, you could have 84 distinct sets of policies around the country. It is a very complex and dysfunctional system. It is hard for Australian advisers, officials and aid workers to understand what is happening outside Port Moresby. There are some who work at provincial level. In general, the best services in rural areas, with one or two exceptions, are those run by church agencies; however, their subsidies from government often come late and are inadequate. There are some good Australian projects in some districts—you will have heard from CARE Australia; I have heard good things about their work. But there also can be resentment of aid-funded NGO projects amongst provincial staff who themselves lack operating funds.

Another issue reported to me, though I have few details, is that government ministers and departmental heads in Port Moresby tend to monopolise funds for aid projects, and the provinces and districts do not benefit greatly. It is good that they want whatever the program is doing, but it means that few provincial or district staff get to the workshops or participate in policy making, and the donors learn less about rural areas and issues. We have heard of explicit government hostility to advisers in departments—I am sure you have heard about that one. I could answer questions about that. This is very much in the context of PNG's fiscal crisis, losing oil revenues and so on, but also the Prime Minister's $1.2 billion loan in recent years that has been challenged by the Ombudsman Commission.

I attached to my submission Dr Joe Ketan's important and detailed study of the Western Highlands, just to given an example of how a province works; it is not the worst-run province in Papua New Guinea. I stress that there are some success stores stories, one or two on the mainland even, but Papua New Guineans have documented those well. Papua New Guinea is investigating its current system of decentralisation, and some provinces are seeking increased autonomy, particularly New Britain and New Ireland. These things all illustrate complexities for aid donors working from the capital. The work of volunteers in provinces has been a mixed success and certainly they can become key workers, depending on how well the local agencies use them.

Previously, AusAID has posted experienced but young staff in provincial governments assisting the secretariat around the governor and the Provincial Administrator. Some of those worked extremely well, but I think that system has wound down, I do not hear about it at present. AusAID spent years trying to design the Strongim Pipol Strongim Nesen program, but it seemed over-ambitious. A contract was let but the program is not well known in Papua New Guinea now. Australia cannot be a shadow state and cannot redesign Papua New Guinea's polity. It is up to Papua New Guinea.

One problem often heard about is the chopping and changing in Australian policies. AusAID, for instance, ran the very successful Community Development Scheme in the early 2000s, with excellent local staff and Australians working to assist local NGOs. However, that scheme was largely phased down in 2010; the headquarters were kept going, but a lot of good staff were dispersed because the Strongim Pipol Strongim Nesen program was being developed. I am told there is a rapid increase in the number of local NGOs being formed—up to three a day being registered in the newspaper every day—apparently hoping to get more resources and make improvements in local areas where the government has all but disappeared. Not all of these NGOs' activists are competent, and some are con men, but they are an important development. Once again, they will be, and are, caught up in PNG's political rivalries, which is another complexity for Australia in seeking to assist Papua New Guinea.

Clearly, I do not have many major recommendations—I am talking about the context—but I would like to support increased support for universities and the few government research institutes, which train the people who run and advise the PNG state, the public servants and members of parliament—most of whom are graduates these days. PNG governments have almost systematically let higher education systems run down for several decades now. The few successful programs I have mentioned, such as placing advisors out in provinces and some NGO programs and the like—volunteer programs, in many instances—should be strengthened if Papua New Guinea governments agree. But aid donors can only assist; they cannot run the recipient country. The PNG government, given its political vulnerability at this time and the very strong criticism it is receiving—some of it is rude, exaggerated and insulting, to put it politely, but some of it is well researched and funded. PNG governments have been very hostile to anyone who is critical of them and that includes some people in research institutions, so this is a sensitivity and it makes for a difficult context in which DFAT is working.

Ideally, I had hoped the committee would be able to visit Papua New Guinea, talk to a range of people and make up your own minds on these important issues. Meanwhile, I hope these points are of interest and assist your deliberations.

CHAIR: Thank you, Dr Standish. There has been a fairly lengthy period of sustained economic growth and, interestingly enough, a fairly lengthy period of low achievement against the world health indicators. We have invested $5 billion over a reasonably long period of time. Are there any success stories at all? Should we be going to churches or NGOs who are basically looking after infants in their first six months of life to make sure they have got a chance? Where should we be targeting our aid? It is clear there is no inclusive growth in the economy there. Economic growth is not translating to children being fed and sustained in their first six months of life.

Dr Standish : And medical services and PNG parliaments are doing some quite dramatic investigations into that at present and medical services have collapsed in many areas. The bright young critics of PNG government development are mostly in the opposition. Those funds going to MPs are not being translated into services. Australia has done a lot of rescue work, for instance. One example would be helping PNG make it possible to have an election every five years. Some of that in the last election was just a last-minute rush of Australian technical people coming in. The PNG electoral commissioner retired recently but he gave great warnings about corruption, pressure on polling officials, stacking of the rolls and weakening of the system. A project like that is full of political risk and there are likely to be problems, yet it is the sort of thing which Foreign Minister Downer and others decided had to go ahead whether or not it could be an absolute success. The successes I can see are often just individuals. There are Australian advisers and Australian officials embedded in a number of the technical departments—Treasury, Finance, Justice—who are doing good work. What usually happens with advisers is that they are kept at a level away from political sensitivities. They are not at the very top level and they are not privy to the inner workings of the PNG government. These are real issues, even though very good technical work is being done by some of them. I am talking about some good success by health advisers that people in health desperately want—

CHAIR: Just on those advisers, the Prime Minister has indicated that they will have to be employees of the Papua New Guinea now; they cannot be employees of a foreign power.

Dr Standish : He has.

CHAIR: Does that translate to a better outcome or a more ambivalent outcome?

Dr Standish : If they are well chosen, if they are not chosen for political reasons and if PNG can fund them. Given their current budget deficits and revenue problems, I do not think they will be able to sustain anything like what Australia has assisted with. I talked about tensions and the little bit of suspicion about Australia. Prime Minister Peter O'Neill said that there is a problem with them spying. There is a concern about them making public comments and certainly reporting back to the Australian government. That is what people do on AusAID projects, and sometimes, I know, they can be circulated around other government departments here in Canberra. So that is a problem.

He accused Papua New Guinea that public servants have been made lazy by the presence of advisers. One problem can be that if you have an adviser who is earning $100,000 or more a year working alongside a Papua New Guinean, who is getting $10,000 or $20,000 a year there can be resentment and the Papua New Guinean might not be lazy but he is resentful and says, 'Well, you are being paid for it, you do the job'. You hear stories like that often. It is a difficult relationship.

CHAIR: I understand that. But if we contribute eight per cent of Papua New Guinea's budget in aid, how do we ensure it is spent, or administered, or delivered effectively without some oversight?

Dr Standish : DFAT will tell you they have oversight and they do have evaluation. The evaluation scheme is often done by people who themselves are aid consultants and they are not necessarily highly critical. I have known cases where I personally would have been more critical. It is a problem. It is a foreign country; it is a sovereign county. If people are benefiting from the current system then they do not want to have it changed. We say that all aid we give is tied and goes to particular projects and so on, but it is impossible to check everything that is done, whether it is by a department or an NGO. Contracts can be given that look good, but in fact they turn out to be phantom contractors who just have a PO box and a bank account. It is not something that can be managed. We are not running the country.

CHAIR: I do not think we want to run the country. We just want effectiveness for the $5 billion that we have spent. More importantly, we want some human capital return. We want kids to be fed in the first six months of life. We want some health outcomes that are beneficial to both Australia and New Guinea. We have TB, we have antibiotic resistant TB and we have malaria on our doorstep.

Dr Standish : Yes.

Senator BACK: Dr Standish, you mentioned that the MPs are provided with about $9 million funding each per annum. Did I hear you right?

Dr Standish : Yes, it is 15 million kina, that is two grants of $10 million and a $5 million to-

Senator BACK: If there is 110 of them that is almost a billion dollars?

Dr Standish : Yes. Officially, these days, it all goes through on projects and there has been next to no evaluation or follow-up of the expenditure of that money.

Senator BACK: No wonder 100 of the 111 people in their parliament are in the government. Incumbency gives you a huge advantage, doesn’t it—to the tune of $9 million a year to do what you like with.

Dr Standish : It gives you that advantage, but 60 per cent of them lose their seats every election.

Senator BACK: Bloody hell. You did make one comment: be wary of people who believe they know what is good for Papua New Guinea, even if they do not know much about the country. I find myself in that position of being very concerned about forming any views. Australia's contribution is about $553,000—so, as you say, just under 10 per cent of their budget. I have to admit to being very interested in participating in this inquiry because I have never been to Papua New Guinea and I know nothing about it. Am I too pessimistic in the conclusion that I am coming towards, and that is that it is almost getting to failed state circumstance?

Dr Standish : One Papua New Guinean academic has said that. It must have been 10 or more years ago. He was really slapped down and was told he was a communist.

Senator BACK: I am no communist, I can give you my word on that.

Dr Standish : That was the direction of the rhetoric of Minister Downer and Mr Howard in 2003 when they set up the Enhanced Cooperation Program, which Papua New Guinean ministers wanted. They were very concerned. This exercise gets me back to Senator Gallacher's issue that it is not readily fixable. The education standards right through are weak. Training of public servants and medical people and so on, particularly field workers in the rural health context, is very weak, very limited. The police are often out of control. Even though that can be denied by police commissioners and the AFP here, they have received official reports about this issue. These are indications of a state that is not functioning at all levels of providing basic essential services and personal security for people.

I wrote an article 30 years ago for the Defence Force Academy and, at that time, there were 25, from memory, unexplained and uninvestigated deaths, allegedly, at the hands of police, and they had not gone through coronial inquiries. PNG has been a very limited state with very limited capacities. Sean Dorney, the journalist, argued—and he is quite right—that the police were weak. We did not leave them with a strong or effective police force and they were trying to do extremely difficult things with people fighting each other in the bush, urbanisation pressures and all of that. Those things still exist. Over the years, the PNG government have systematically weakened the universities. They have weakened state capacities right across the board.

Senator BACK: This committee has got to report to the Senate and it has got to make some recommendations. There is no point us doing this exercise if we do not come up with something that is of some value. Further to Senator Gallacher's question, is it your advice that the Australian contribution should be directed to a limited number of areas where it actually might have some effect—for example, nutritional levels of young children or stopping the violence against women? We have heard percentages of 80 to 90 per cent—some linked with Christianity, then we turn around and we hear that one of the more common causes of death of women in remote areas is as a result of sorcery.

Dr Standish : Alleged.

Senator BACK: Alleged. Others that I have consulted with: 25,000 new cases of TB a year, one-third of which are children. We are not going to take Papua New Guinea over. We are contributing eight per cent of their revenue base—are we trying to spread it too thinly?

Should we be actually saying: these are areas in which Australia can legitimately improve the wellbeing of Papua New Guineans—realising that we just cannot go across it all, we cannot go across the higher education sector, the police and the like? It is very frustrating, from my point of view—40 years after independence. We have heard, for example, the nutritional levels of young kids are worse than they were. Once upon a time they may have obtained local products and got a level of protein, now the children are being fed mainly a rice based diet because it is easy and convenient and in fact their nutritional levels are lower. Where should Australia direct its aid?

Dr Standish : I sat in this building in the late eighties when Professor Helen Hughes said we should cut aid to Papua New Guinea—get them to tighten their belts, pull up their socks and start delivering services with the money they have. In fact, the PNG population has tripled since independence. The real value of government revenues is not very much greater than it was at the time of independence. So you have got increased demand and so on, but what you do not get is a government committed, as I think Australian governments were. You do not have a political and bureaucratic system that is fully committed to delivering services.

You probably heard about the scandal associated with buying drugs and medical supplies a few years ago. The Australian government cut that funding because it was going to a shonky operator with a known record for producing ineffective drugs and materials. So Australia has been tough—that is a very tough decision to take. The sorts of things that I am praising here in my submission, and pointing towards, are that an effective individual in a province can make a difference. Even better is effective people operating in some districts. One or two NGOs are doing this. It is not possible for the Australian government to assist right across the country.

The reason I gave in that submission on governance being so political is, I think, the failures of the PNG state in terms of delivering these services at all levels—birth attendants are a very low proportion, all sorts of things like that—and the PNG state being focused on distribution of funds and it is going through politicians. That money which could create useful and effective services across the country is just not getting out at all. No, I will not say 'at all', but, in most cases, it is not used effectively. PNG intellectuals know that and that argument is increasingly being heard, but there is total resistance from what we could call the 'political class' in Papua New Guinea to changing the system, because they think that is what will keep them surviving politically, but it does not work. Can we change that? It is a catch 22—it really is. They have to change it, but the people who have got to change it are the ones who are occupying the benefits.

Senator BACK: Thank you.

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