Businesses warned against working with PNG government

NZ and Australian businesses warned against working with PNG government

A Wellington company owed $600,000 by the Papua New Guinea government is urging other businesses not to take on contracts with the island nation without being paid up front.

Last year, Wellington company Evaluation Consult won its court case in Papua New Guinea to recover the debt. However, despite pressure from New Zealand Foreign Affairs and Trade officials, Minister Murray McCully, PNG’s own High Commissioner to New Zealand, and others, the government has ignored the ruling.

Evaluation Consult directors Kate Averill and Brian Rumbelow have heard of other New Zealand and Australian businesses who are owed millions of dollars. “As far as we know, no one else has taken the matter through the PNG legal system. This was an expensive process and the only result has been to learn the PNG government does not honour its debts or comply with its own law.”

In 2014 Evaluation Consult was invited by the PNG government to support the development of a national strategic sustainable development plan.

“It was a farsighted initiative and important for the future of the country. The project involved working with all 35 sectors of government from forestry and fisheries through to mining and manufacturing. Ironically, it also included the law, order and justice sectors. Together, with PNG officials and Ministers we developed a draft framework for sustainable development. In December 2014, four months after the PNG government stopped paying our invoices, we left the project but continue to support the country through NGO work,” said Kate Averill who led the project for Evaluation Consult.

“New Zealand Foreign Affairs and Trade promotes PNG as a place for companies to do business. However, for PNG to succeed as a thriving, modern economy its government must act ethically and within the law. Who is going to do business with a government that won’t pay them? This type of behaviour threatens the business partnerships that today’s economies are built upon.”

Evaluation Consult, is a specialist results-focused governance, management, planning, monitoring, and evaluation business. It has worked alongside other Pacific nations without any issues. However, it is warning other New Zealand businesses not to take on contracts with PNG unless the full payment is received in advance and held in an escrow account operated by an entirely independent (preferably offshore) third party.

“A company our size cannot withstand such a huge loss in income without it having severe knock-on effects. We struggled to survive and are only now recovering and rebuilding our capacity,” said managing director Brian Rumbelow.

They say there are many businesses and emerging leaders in PNG who are ashamed and embarrassed by the behaviour of those in power who act outside the law. Evaluation Consult believes the New Zealand government should use its aid dollars to support to the push for transparency and good government.

“Over the next two years, Papua New Guinea is set to receive $70 million in aid from New Zealand. We would like to see this money used to help establish better government processes and accountability,” said Kate.

The company is once again calling on the PNG government to act honourably, comply with the court ruling, and pay its debt.

ENDS

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