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Sir Mekere welcomes PM’s humiliating court defeat over PNGSDP

The Member for Moresby North-West, Sir Mekere Morauta, today welcomed the decision of the Singapore High Court in favor of PNG Sustainable Development Program Ltd against the State of Papua New Guinea.

Sir Mekere said he was commenting as an individual, not on behalf of PNGSDP or its board.

“It is a comprehensive victory for PNGSDP and for the people of Western Province,” said Sir Mekere, who was formerly the chairman of the company and led the defence against Prime Minister Peter O’Neill’s attempt to take state control of PNGSDP.

“It is a humiliating defeat for Mr O’Neill, and an expensive exercise in futility by him.

“It is time he stopped lamenting his defeat and turned his attention to save our struggling country. Instead of wasting time and money on something he cannot win, he should focus on fighting corruption and abuse of public assets and resources. He should focus on solving the problems he has inflicted on Papua New Guinea.”

The Singapore High Court found in favor of PNGSDP on all counts.

“The State had claimed that there existed a partly written/partly oral agreement between the State and BHP Billiton which allowed those two parties to control PNGSDP. But the State could not produce this document to the Court – because it does not exist.

“How Peter O’Neill and his chief adviser the late Dr Jakob Weiss imagined its existence is staggering. I was Prime Minister when PNGSDP was set up and I know that any relationship between the State, BHP Billiton and PNGSDP was exhaustively recorded in legal agreements signed by the State, BHP and PNGSDP.”

The most important findings of the Singapore High Court were that:

  • PNGSDP followed due process in its decisions to change its corporate structure to protect it from people with malicious intent

  • The State has no legal right to interfere in PNGSDP’s internal affairs or to control its operations

  • The company’s founding constitutional documents, the Memorandum and Articles of Association and the Program Rules, do not provide for external control of the company by the State, BHP or any other party (although they do provide for appropriate transparency and accountability as far as the State and BHP are concerned)

  • PNGSDP is not a charitable trust, as claimed by the State, and as such the State has no legal right to interfere with it

“What this amounts to, as I have said all along, is that PNGSDP is an independent incorporated company like any other of its type, “Sir Mekere said. “It was designed to be controlled by its directors, not by the State, not by BHP, nor by anyone else.”

The former Prime Minister called on Mr O’Neill to stop coveting the $US1.4 billion held by PNGSDP in the Long Term Fund. “These monies are to be used for the benefit of the people of Western Province after mine closure,” he said. “I want to assure the people of Western Province that the decision of the court means that those funds are safe.

“PNGSDP was set up by my Government to be independent of future governments, to protect it from sticky fingers. That is exactly how the company was designed and history has proven me right. The High Court of Singapore has found, in its decision, that those who wanted to break into the bank cannot succeed.

“This win means that PNGSDP is free, after mine closure, to carry out its objectives.”

Sir Mekere said any commission of inquiry instituted by Mr O’Neill would be a waste of time and money. Mr O’Neill had already made inquiries into PNGSDP and found nothing untoward. “Sure, he could find some money-hungry legal figures to hold a fake inquiry,” he said. “But I know the company has nothing to hide and will take whatever Peter O’Neill throws at it in its stride.

“At any rate, what he wants is the Long Term Fund, and no commission of inquiry can deliver him that.

“What is really needed is an inquiry into Mr O’Neill’s actions in relation to PNGSDP and Ok Tedi, and whether he personally profited from the expropriation in any way, including through contracts to companies in which he had an interest or through contracts to his cronies.”

Sir Mekere said he was keenly awaiting to hear of any decisions made by PNGSDP in relation to the conclusions of the Singapore High Court, which appeared to leave the way open for the company to seek a variety of remedies, including costs and damages, for Mr O’Neill’s behavior.

The court concluded that “for all of the reasons set out above, I hold that the State fails entirely in its claim against PNGSDP. It is not entitled to the relief sought. I will hear the parties on the form of the judgment to be entered in light of these reasons, any consequential orders and on the issue of costs.”


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