Papua New Guinea votes to establish an Independent Commission Against Corruption

Allens PNG

On 12 November 2020, Papua New Guinea's (PNG) Parliament unanimously passed a Bill to establish an Independent Commission Against Corruption (ICAC). Almost a decade in the making, the successful passage of the Bill is a significant milestone in progressing PNG's anti-corruption agenda.

On 12 November 2020, Papua New Guinea's (PNG) Parliament unanimously passed a Bill to establish an Independent Commission Against Corruption (ICAC). Almost a decade in the making, the successful passage of the Bill is a significant milestone in progressing PNG's anti-corruption agenda.

  1. How does the new legislation affect you?
  2. How will the ICAC work?
  3. What is 'corrupt conduct'?
  4. Efficacy
  5. What should you be doing now?

How does the new legislation affect you?

The passage of the Bill represents an important regulatory development for businesses with operations in, or connected to, PNG. In particular:

  • The definition of 'corrupt conduct' which anchors the ICAC's jurisdiction is very broad and will capture both primary offenders and conspirators, aiders and abettors (before and after the fact).
  • The ICAC will possess considerable investigative powers and be formally independent from the political arm of the PNG government. Once established and fully operational (which may take some time), the ICAC will be able to scrutinise a wide range of public and private conduct. This is a significant departure from PNG's existing anti-corruption mechanisms.
  • Corporates may be held liable for corrupt conduct due to the broad definition of 'person' which has been imported by operation of section 3 of PNG's Interpretation Act (Chapter 3).
  • The establishment of ICAC builds on other recent efforts to promote transparency and accountability in PNG, including passage of the Whistleblower Act 2020 on 18 February 2020.
  • Businesses that operate in PNG should consider whether their anti-bribery policies and procedures meet the standards and definitions set out in the new legislation, and consider amendments if they do not.

How will the ICAC work?

The Bill that passed on 12 November 2020 is the Organic Law on the Independent Commission Against Corruption 2019 (Organic Law). Organic Laws enjoy a special status in PNG as compared with ordinary laws. In particular, these laws are difficult to repeal and are able to trump ordinary laws if any inconsistency arises.

Shortly after passage of the Organic Law, PNG's Prime Minister James Marape was reported to have said that the ICAC will be set up over the coming months.1 Once established, the ICAC's central objective will be to prevent and combat corrupt conduct in the public and private sectors.

In pursuing this objective, the ICAC's functions and powers will include to:

  • receive and consider complaints regarding alleged or suspected corrupt conduct by another body or agency;
  • conduct investigations (including on its own initiative) into alleged or suspected corrupt conduct. The ICAC's investigative powers will include obtaining a court-ordered warrant to either enter and search premises or to use an interception device, and requiring a person to produce a 'document or thing' regardless of whether doing so incriminates that person;
  • make arrests;
  • hold public hearings (including issuing a summons requiring a person to attend);
  • prosecute indictable offences relating to corrupt conduct;
  • refer a matter involving alleged or suspected corrupt conduct to other relevant agencies;
  • encourage, cooperate and coordinate with other public and private sector agencies in relation to anti-corruption measures; and
  • undertake or commission training or education for both the public and private sector.

The ICAC's Commissioners will be drawn from those qualified for appointment as a judge of the PNG National Court and Commissioners will be appointed for fixed terms of three or six years. Prime Minister James Marape has expressed a preference for the ICAC to involve Commissioners from foreign jurisdictions, in particular from Australia and New Zealand.

What is 'corrupt conduct'?

The Organic Law defines 'corrupt conduct' broadly, capturing conduct of both public officials and private individuals. In summary:

  • Public officials - the Organic Law establishes a two-part test for when the conduct of a public official will be 'corrupt conduct' for the purposes of ICAC. First, the conduct must involve some misconduct, such as dishonestly exercising official functions or misusing information acquired in the course of official functions. The second requirement is that the conduct 'could amount to' a disciplinary or a criminal offence under PNG law.
  • Private individuals (and some public officials) - the Organic Law provides two definitions of 'corrupt conduct' in relation to individuals. The first applies in relation to 'a person (whether or not a public official)' and states that the conduct of that person will be 'corrupt conduct' if it affects or influences (or could affect or influence) any of the conduct proscribed in relation to public officials (eg dishonestly exercising official functions), and if that conduct could amount to a disciplinary offence or criminal offence. The second definition applies in relation to 'any person (whether or not a public official)' and states that the conduct of that person will be 'corrupt conduct' if it:
    • allows, encourages, causes, aids, abets, incites, induces, counsels / procures or assists to conceal corrupt conduct;
    • is an attempt, preparation or conspiracy to commit corrupt conduct; or
    • is directly or indirectly connected with, or is a part of a course of activity involving corrupt conduct.

Conduct may still be considered 'corrupt conduct' where it occurred:

  • before the commencement of the Organic Law establishing ICAC; or
  • outside of PNG in particular circumstances, including where the conduct is committed by a PNG citizen or is 'connected to other conduct that occurs in PNG'. The Organic Law does not set out in what circumstances conduct will be connected to other conduct that occurs in PNG, but we expect it will at least include the circumstances set out in sections 13 and 14 of the PNG Criminal Code (the Code). That is, offences procured by persons outside PNG and offences procured in PNG to be committed outside PNG.

The definitions under the Organic Law are broad and seek to impose liability beyond primary actors to those who may be thought of as aiders or abettors (before and after the fact) and conspirators. They also overlap with existing offences in the Code relating to corrupt conduct, particularly the anti-bribery provisions contained in sections 87 ('Official corruption') and 97B ('Bribery of a member of the Public Services').

Because section 34(2) of the Organic Law empowers the ICAC to investigate 'other offences under the Code that fall within the definition of corrupt conduct', the differing spheres of operation of the two regimes will need to be worked out between the ICAC and PNG's other law enforcement agencies.

Efficacy

The independence of the ICAC will be a key factor determining its efficacy. The ICAC's independence was pre-emptively established by a Constitutional amendment in 2014 which states that the ICAC is not subject to the direction or control of any person or authority. Prime Minister James Marape has also emphasised that the ICAC will be independent, and expressed a desire for overseas commissioners to be involved and ensure the ICAC exists 'at arm's length'.2 How this will be achieved in the current COVID-19 environment remains to be seen.

PNG's Chief Ombudsman has also raised concerns that the ICAC will duplicate the existing role of the Ombudsman Commission.3 It has been noted that the ICAC has a broader scope than the Ombudsman as it may investigate or prosecute individuals, particularly in the private sector, rather than just public officials.4 The PNG Government has previously indicated that it expects the ICAC to complement the work of the Ombudsman as well as the Royal Papua New Guinea Constabulary.

Finally, funding issues are another potential challenge to the ICAC becoming fully operational.

What should you be doing now?

Businesses that operate in or have strong connections to PNG should consider whether their anti-bribery policies and procedures meet the standards and definitions set out in the new legislation, and consider amendments if they do not.

In particular, you should consider whether your internal policies and procedures define 'corrupt conduct' and 'public officials' in a manner that aligns with the broad definitions set out in the Organic Law. You should also ensure that you have and maintain a gifts, entertainment and hospitality register as part of your anti-bribery and corruption risk management program.

Footnotes

  1. ABC News, 'PNG parliament unanimously passes bill to set up an Independent Commission Against Corruption' (13 November 2020), accessed here.

  2. Ibid.

  3. Ibid.

  4. Ibid.

 

Contact for further information

Rachel Nicolson, Partner, Melbourne

Sarah Kuman, Partner, Port Moresby

Emily Turnbull, Senior Overseas Practitioner (Admitted in England and Wales only), Melbourne

 

Please Login or Register for Free now to view all updates and articles

In addition to free-to-view updates and articles, you can also subscribe to the full Legal Centrix Vietnam Service including access to:

  • Overview notes on the law
  • Thousands of high quality translations of legislation covering all key business areas
  • Legal and tax updates
  • Articles on important legal and tax issues
  • Weekly email alerts
  • Sophisticated web platform and search

Legal Centrix is trusted by top law and accounting firms.

Allens PNG

Allens is a leading international law firm with a long and proud heritage of shaping the future for our clients, our people and the communities in which we work.

From playing a pioneering role in the development of legislation and regulatory frameworks in the Asia region for almost 200 years, to acting on numerous 'firsts' across a range of industry and community issues, it is in our DNA to make a difference and help shape what our world looks like.

Over this time, we've grown in scale and reach, today offering clients a global network of 40 offices in 28 locations through our global alliance with Linklaters.

We are privileged to hold some of the world's longest ongoing client relationships, stretching back more than 170 years, and we're committed to bringing our talent, expertise and insights to continue solving their toughest problems and creating ways forward to help them thrive. New and exciting market entrants sit alongside these established companies in our client base, drawn to working with us through the innovative re-packaging of our services for the growing and fast paced start-up market.

 

Papua New Guinea has enjoyed high economic growth in recent years and continued foreign demand for PNG's commodities has positive implications for the country's broader future development.

The current government has embarked upon a wide range of reforms and initiatives, including the establishment of an Independent Commission Against Corruption and a review of taxation, particularly resource project taxation.

We practice local and international law and represent many Papua New Guinean, foreign and multinational companies on their investments and business interests, both in PNG and overseas. Our lawyers from PNG and Australia have extensive local and international experience.

We are experienced in energy, resources and infrastructure; corporate and commercial; banking and finance; international trade; privatisation; litigation and dispute resolution; foreign direct investment; employment law; project finance; and capital markets.

Our work in PNG has included acting on some of PNG's most important resources projects and commercial transactions. This experience is complemented by our close relationships with government and regulatory authorities.

We have unparalleled knowledge of PNG's business environment, developed over decades of advising PNG's key industry participants and new entrants to this emerging market.

We have extensive experience working with the PNG Government on a number of reform projects and have deep knowledge of PNG's legislative process, having been involved in the formulation, drafting and passage of a variety of PNG statutes.

 

Language capabilities

English, Pidgin, Motu

 

Click here to view the author's profile

Author

Related Content

Tags

  • State, Government, Laws & Economy
  • Papua New Guinea

Recent updates

Cookies On
Our Website
We use cookies on our website. To learn more about cookies, how we use them on our site and how to change your cookie settings please click here to view our cookie policy. By continuing to use this site without changing your settings you consent to our use of cookies in accordance with our cookie policy.