The ugly side of morality: exploitation

Lepani whacks wasted Australian aid

CHARLES LEPANI, PNG’s High Commissioner to Australia, has claimed that half of the $450 million aid program to PNG is frittered away instead of delivering lasting benefits.

Delivering remarks that a daily newspaper termed “extraordinary”, Mr Lepani’s comments were echoed by the Opposition, which has called for an urgent investigation into apparent "systemic criminal behaviour" in foreign aid.

The Melbourne Herald Sun revealed yesterday that Australia's $4.5 billion foreign aid program was plagued by fraud with 175 cases being investigated, including 71 in PNG.

AusAID director-general Peter Baxter denied the scheme was riddled with fraud.

But Mr Lepani lashed out at spending on Australian-based contractors and consultants, which he said made up about half the $450 million spent each year in PNG.

"Fifty percent of that has not worked," he said.

"It has not built capacity in PNG and a lot of it has to do with Australian management companies getting a lot of money, but not delivering on what they are supposed to do, in terms of building capacity in Papua New Guinea."

He suggested the lack of lasting reform was a factor in the high level of foreign aid fraud in PNG.

Mr Lepani denied fraud was out of control in his homeland. "No, I wouldn't say that," he said.

Much of the problem lay with Australian companies, which were paid handsomely to manage projects, he said.

"Some who are hired - they don't even produce reports."

Source: ‘PNG lashes our foreign aid waste’ by Steve Lewis, Melbourne Herald-Sun, 25 March 2011


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I wonder what His Excellencies response is to queries about the reported 50% of PNG budget siphoned off through corruption.

There's almost pin drop silence on this issue.

And we're worried about the money someone else gives us?

The size of that log...impressive.

Peter Kranz

Mind you, that 0.14% is probably equivalent to an Australian consultant's AusAID salary. That's the real story.

Phil - The AusAID figures are the ones used in the original Adelaide Advertiser report.

I agree with Paul. However waste and mismanagement are not the same as fraud. I think these are separate issues and should not be confused.

Widespread corruption clearly occurs in PNG, but this again is a separate issue and needs to be addressed locally.

Paul Oates

The issue is simple. No one should be paid anything unless they produce pre-set results or meet agreed benchmarks established prior to the commencement of the project.

With respect to Mr Lepani, the responsibility must be with those who are directly responsible for managing the funding. Contractors will only rort a system where they are allowed to get away with whatever are the minimum requirements to achieve payment.

If the PNG government knew about this problem then why didn't it raise the issue with the Australian government?

That begs the question of who actually was benefitting from this situation?

It also begs the question of the conpetence of senior AusAID and DFAT staff who must surely be culpable?

Phil Fitzpatrick

I think the telling thing about those figures might be the source, Peter.

Also, what one person thinks is money well spent might very well be thought to be outrageous misuse by another.

I produce social mapping studies for the petroleum exploration industry among other things. I spend a lot of time on them to make sure they are accurate.

However, the studies are just one of the hoops that the companies have to jump through to get their approvals. I doubt very much whether the company people get past the executive summary at the beginning and I know damn well that government doesn't read them. Neither do the people I'm writing about unless I pass on copies to them.

Up against the immediate problems that someone like Lydia has in Kaugere it is all an outrageous waste of money and time.

Peter Kranz

I'm not quite sure who to believe on this one. According to AusAID's figures, fraud under investigation in PNG's AusAID program is a very small percentage of the total.

This hardly warrants the description of PNG as 'corruption central' with accusations of widespread and systematic fraud in the AusAID program.

Papua New Guinea:
Active fraud cases 30
Actual/potential loss to AusAID $597,208
AusAID funding 2010-11 $415m
% at risk 0.14%

Source - AusAID

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