Legal battle over PNG govt's Ok Tedi takeover gets underway
The legal battle between PNG's Government and the Sustainable Development Programme over the government's takeover of the Ok Tedi mine has gone to international arbitration
The legal challenge against the move by Papua New Guinea's government to take over control of the lucrative Ok Tedi mine, and a related trust fund under the PNG Sustainable Development Programme, has gone to an international arbitration tribunal.
The former prime minister Mekere Morauta, who the Peter O'Neill-led government has sought to remove along with the board of the PNGSDP, has been fighting the government's nationalisation of its 63.4 percent of Ok Tedi.
Sir Mekere has also launched a High Court challenge in Singapore over Government's move to restructure the Singapore-based fund worth US$1.4 billion intended for the people of the Western Province and PNG.
He's also pursuing arbitration in the International Centre for Settlement of Investment Disputes, which Paul Barker of PNG's Institute of National Affairs believes could be a protracted process. Johnny Blades spoke to Paul Barker.
PAUL BARKER: Unless they see some very clear issue of jurisdiction and if they see it clearly as a company that is owned out of Singapore and clear-cut shareholding and so on, I suppose they could make a quicker ruling and rule that it's a case of misappropriation, but the likelihood would be that it would be extended over some time, I would imagine, yes.
JOHNNY BLADES: But in the meantime can the government get hold of the funds - the SDP and Ok Tedi dividends and so forth?
PB: Well, I suppose they've had accounts effectively frozen. They may apply pressure to the company and the banks to be able to access the domestic funds, but they wouldn't be able to access the bulk of PNGSDP's funds which are held internationally in Singapore or out of Singapore. But clearly a big issue that has been of contention was the distribution of the 2012 dividends from the Ok Tedi mine, and that was under some dispute. And they want to access that, whereas the government has effectively had those funds frozen from transfer to PNGSDP. So you have two things going on - one is the take-over of the Ok Tedi mine and the other is the dispute over the PNG Sustainable Development Programme itself, where the government has also stated that it has appointed its own board and acting chief executive.
JB: The government tends to get blamed for the way public funds aren't used or not used in the right way, so perhaps they're just taking hold of the situation.
PB: There are a lot of legal issues that are clearly going to be debated. There are concerns also about what the various players' motivations are. There are concerns that aspects relate to contracts that are being issued by the Ok Tedi mine. There are concerns over the security contracts and beneficiaries and various other aspects. What you would have expected would there have been some agreed position. PNGSDP was expending its money and the government had some really important priorities it wanted to achieve that the two fo them would have been able to sit down and align their expenditure priorities and work together.
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