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The Ultimate Oceania Travel Guide
Papua New Guinea

Oil Search MPs election gamble

In a little over a week, Papua New Guinea will vote for their next government.

Elections have not been a pretty affair in the nation. Experts have said that no constructive steps were taken to adhere to recommendations by the observer groups.

But one of the biggest outcomes from the result will be whether people responsible for the oil search scam will be held accountable.

Current Prime Minister James Marape has stated that prosecution for those former government members found to have been associated with the scam will take place.

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He said by the time the commission of inquiry into the affair with Swiss bankers UBS gave its report, elections were declared and prosecution was deferred.

He has promised that those responsible would will face the full brunt of the law.

Included in those implicated in this financial pillaging of taxpayer’s billions is former prime minister Peter O’Neill and other former ministers.

Current Prime Minister James Marape has stated that prosecution for those former government members found to have been associated with the scam will take place. Picture: PIFS

They are currently campaigning and contesting the elections. If Mr Marape’s government is thrown out and the former government comes back – which has been known to happen in PNG – the big question is whether prosecution will go ahead or not.

The PNG government announced in April that they will be seeking damages from Swiss bankers UBS, who are alleged to have overcharged PNG AU$175 million.

A Commission of Inquiry investigated the UBS structured AU$1.3 billion financing arrangement that was for buying shares in Oil Search.

The bank ended up making millions while the PNG government lost up to AU$600 million.

According to the Commission of Inquiry the loan was pushed through against Cabinet advice and not put before the PNG parliament until after it was in place.

Mr Marape said in April that he planned to bring in a team of investigators, including Transparency International, to study the findings and decide who should face criminal charges.

The Commission of Inquiry recommended former Prime Minister Peter O’Neill be prosecuted for giving false information to it.

Police controlling crowds at PNG election campaigns. In a little over a week, Papua New Guinea will vote for their next government. Picture: Royal PNG Constabulary

It also recommended that he be referred to the Independent Commission against Corruption and the Leadership Tribunal.

In response, Mr O’Neill has said he was ready to face any action against him and said the moves were politically motivated.

The commission’s 576-page report was presented to members of parliament in April. The findings are the culmination of an investigation that lasted almost three years and cost the government AU$12 million.

The report also stated that UBS and law-firm Norton Rose Fulbright Australia did not cooperate with the inquiry. It was recommended that the firms be banned from acting for state related entities for ten and five years respectively. In response, UBS said it refuted the AU$175 million figure.

The deal which was brokered by the Sydney-based consultants of the Zurich-based investment bank, led to a net loss of AU$600 million for the PNG government.

UBS reportedly profited around AU$115 million in fees, interest and trading revenue from the deal.

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