The bank queue
Former PM: Australia must come clean on Paladin contract

The strange case of the Paladin on Kangaroo Island

Paladin headquarters on Kangaroo Island
Paladin headquarters on Kangaroo Island (AFR)


ADELAIDE - When my children were young, my wife and I decided to take them and ourselves on a holiday.

Despite having lived in South Australia for most of my life, I had never visited Kangaroo Island and so we decided that it would be our holiday destination.

Fortuitously, a friend owned a beach shack on the island and kindly allowed us to rent it for a couple of weeks at a very nominal charge.

The latter was important because we were relatively impecunious at the time and the cost of the ferry to access the island was (and remains) perhaps the most costly ferry journey in Australia

KI, as it is known locally, lies a few kilometres off the mainland. It is 145 kms long and 90 kms wide at its widest point, covering an area of 4,405 sq kms. According to the 2016 census, the population is around 4,700.

As its name suggests, the island is hopping with kangaroos, not to mention a whole range of other fauna. Tourists flock there to experience the wildlife, beautiful beaches, great surfing, superb fishing and the excellent food and wine produced there.

In short, KI is a marvellous tourist destination and certainly worth a visit if you are ever in South Australia.

What the island is not especially noted for is being the headquarters for obscure corporations.

After all, it is not a tax haven like, say, the Bahamas or Cayman Islands or even the Isle of Man. Consequently, there is no great incentive to set up a head office there unless, I suppose, the island’s relative obscurity is an attraction.

Anyway, you can imagine my surprise to discover that the Australian government had contrived to award a tender for the provision security and support services at its detention facilities on Manus Island to a company called Paladin, which is (or was until a couple of days ago) headquartered on KI. The contract is worth more than $420 million or about K1 billion.

Now the term headquarters may conjure up images of a shiny, multi-story tower block, with the name of the corporate owner emblazoned upon it in very large illuminated letters. In this case however, the head quarters building takes the form of a non-descript beach shack located amongst others of its kind down a long dirt road.

This is rather surprising because, if my research on the internet is any guide, Paladin Group Australia holds itself forth as being at the very forefront of the provision of project support services in the Asia-Pacific. This includes PNG, where Paladin Group, Black Swan International and ECM appear to be working hand in glove.

Given this background, there seems to be a mismatch between the purported corporate HQ and the ambitions of the company but, hey, from humble beginnings great things sometimes flow, right?

Since the curious location of its corporate HQ became public knowledge, Paladin reportedly has moved swiftly to relocate its HQ to Canberra. It is still not connected to the phone system apparently, but at least it is in a recognisably less obscure location.

According to yesterday’s Australian Financial Review, “the family of one of PNG's most powerful politicians is directly benefiting from Paladin's $423 million worth of security contracts on Manus Island, awarded by the federal government in a closed tender.

“Documents released under Freedom of Information show in January last year Paladin Solutions PNG entered into an agreement with Peren Investment, a company controlled by the brothers of PNG's parliamentary speaker, Job Pomat.

“Mr Pomat is the local member for Manus, a key ally of Prime Minister Peter O'Neill and deputy leader of the ruling People's National Congress. His family are among those who claim traditional ownership of the land where the refugees are being housed.”

The people who control Paladin deny that the arrangement is a means by which to direct funds to Mr Pomat.

Now call me a cynic but I am afraid that I am struggling to believe Paladin’s protestations that there is nothing to see here.

Anyone with even the briefest acquaintance with PNG government and politics knows that corruption and dirty deals lie at its very heart.

Unsurprisingly, the Australian Senate has decided to inquire into just how this contract was awarded to Paladin and, in particular, why it apparently was the beneficiary of a limited tender process whereby only it could actually submit a tender for services.

This whole transaction fails the sniff test. It stinks and the odour cannot be disguised or denied.

My suspicion is that the current Australian government, which is engaged in a desperate fight for political survival, has found it expedient to succumb to suggestions emanating from PNG government sources, that Paladin was exactly the right organisation to undertake the contract.

After all, an open tender process could have become “messy”, with all sorts of unpredictable consequences, especially within PNG. This could lead to unhelpful complications with implementing the contract which, in turn, might attract the interest of the Australian media at an inconvenient time in the electoral cycle.

The current Australian government is running a full scale “fear and loathing” campaign in which it asserts that only it can prevent a deluge of illegal immigrants attempting to reach Australia by boat. This is its proverbial “ace in the hole” for the election, where it knows it can put the opposition parties on the back foot.

It simple cannot afford to talk much about the health or education or energy policy or water policy or, God forbid, climate change, because it is hopelessly compromised in these areas.

This has made it vulnerable to suggestions of the type I have outlined. It has become, in effect, a hostage of fortune over Manus Island.

This is deeply ironic given that those being kept on Manus are, in practice, being kept hostage to discourage both prospective illegal immigrants and the Indonesian based criminals who control the people smuggling business.

Of course, I am engaging in speculation as to the motives and machinations of those involved in this matter but, given the track record of the PNG government over things like medicinal drugs, logging, SABLs and so forth, there must be reasonable grounds for suspicion that I am right.

If the Australian Senate focuses upon following the money in this case, I will be surprised if it does not lead back to the PNG government.

There is already prima facie evidence that the pernicious infection of corruption that has PNG in its grip is now spreading within Australia too.

I hope I am wrong but greatly fear that I am not.

Time will tell.


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