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State v O'Neill [2021] PGNC 373; N9213 (14 October 2021)

N9213

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) NO 10 OF 2021

THE STATE

V

PETER PAIRE CHARLES O’NEILL

Waigani: Cannings J
2021: 4^th, 5^th, 7^th, 8^th, 11^th, 12^th, 13^th,14^th October

CRIMINAL LAW – abuse of office, Criminal Code, s 92(1) – trial – whether accused abused the authority of his office as Prime Minister – whether accused did or directed any arbitrary act – whether the act was prejudicial to the rights of another.

The accused was charged with one count of abuse of office under s 92(1) of the Criminal Code. He was Prime Minister and on 4 December 2013 wrote to the acting Secretary of the Department of Treasury, requesting him to identify K50 million from savings within the 2013 National Budget and have it transferred to the Bank of Papua New Guinea for procurement and installation of two diesel turbine generators for Port Moresby and Lae, for use by PNG Power Ltd to ease power shortages. The State alleged that in doing so the accused abused the authority of his office and acted arbitrarily and prejudicially to the rights and interests of the State as there were no supporting documents such as invoices and contracts to authorise the claim, undue pressure was placed on the recipient of the direction to implement it, the payment was processed without necessary approvals, contrary to the Public Finances (Management) Act, there was no approval by the National Executive Council of purchase of the generators, no regular and proper procurement procedures were followed and there was no prior consultation with PNG Power Ltd. The accused pleaded not guilty and a trial was conducted.

Held:

(1) The four elements of the offence of abuse of office are that the accused: (a) while employed in the Public Service, (b) abused the authority of his office, (c) by doing (or directing to be done) an arbitrary act, (d) prejudicial to the rights of another. Dishonesty is not an element of the offence. It is not necessary for the State to prove that the accused intended to gain or that there was any conflict of interests.

(2) The term “employed in the Public Service” is defined to include a member of the National Parliament. This element was uncontentious.

(3) Abuse of authority will occur when bad, improper or wrongful use is made of power given to a public official or when the authority of an office is used other than for the public good. The abuse must be wilful and fall so far below acceptable standards it amounts to abuse of public trust.

(4) An arbitrary act is one that seems not based on reason, system or plan or is unfair or done without restriction or without considering other people.

(5) To prove that the act was prejudicial to the rights of “another”, there must be some person, which can include the State itself as a legal person, who or which has been adversely affected by the accused’s conduct.

(6) The prosecution failed to prove beyond reasonable doubt that the accused abused the authority of his office as Prime Minister because: the writing of the letter to the acting Secretary for Treasury was preceded by a State visit to Israel, involving the signing of a joint declaration of cooperation, including closer economic ties, between the two countries, signing of an MOU between PNG Power Ltd and Israel Electric Company that provided for assistance from Israel in electricity and power supply requiring “immediate follow-up”, a policy submission by the accused to the National Executive Council, which alluded to the MOU, a decision of the National Executive Council that endorsed the policy submission and instructed government agencies to implement what had been agreed on, a supplementary budget passed by the Parliament, which authorised the transfer of K50 million to Treasury and Finance “to cater for power generators”. The purpose of the letter was to make funds available for a legitimate public purpose: to ease power shortages in Port Moresby and Lae. Though the letter of 4 December 2013 facilitated the remittance of a large amount of public money overseas in a short space of time and there appeared to be a departure from the public tender requirements of the Public Finances (Management) Act, there was nothing in the letter that promoted or authorised any such breaches of the law to occur. The second element of the offence was not proven.

(7) The letter of 4 December 2013 was not an arbitrary act and did not direct any arbitrary act to be done as it was written in the context of an urgent need to address power shortages in the country and was part of a chain of decision-making that resulted in two 26-megawatt generators being commissioned in the course of 2014 in Port Moresby and Lae. There was a clear and rational reason for writing the letter. It was part of a plan of action sanctioned by the National Executive Council and the Parliament, carried out for a legitimate public purpose. The third element was not proven.

(8) It was not proven that the State was prejudiced by the actions of the accused. There was uncorroborated evidence that public money was wasted and that the generators were not fit for purpose, but this was not proven to be the case, and it was not proven that value for money was not obtained.

(9) None of the contentious elements were proven. The accused was found not guilty.

Cases cited

The following cases are cited in the judgment:

The State v Hevelawa (No 1) (2017) N6815
The State v Joel Luma (2021) N8798

Counsel

P Kaluwin, H Roalakona & L Ilave, for the State
G J Sheppard & P Tabuchi, for the Accused

14^th October, 2021

1. CANNINGS J: The accused, Peter Paire Charles O’Neill, is charged with one count of abuse of office under s 92(1) of the Criminal Code. He was Prime Minister and on 4 December 2013 wrote to the acting Secretary of the Department of Treasury, requesting him to identify K50 million from savings within the 2013 National Budget and have it transferred to the Bank of Papua New Guinea for procurement and installation of two diesel turbine generators for Port Moresby and Lae, for use by PNG Power Ltd to ease power shortages.

2. The State alleges that in doing so the accused abused the authority of his office and acted arbitrarily and prejudicially to the rights and interests of the State as there were no supporting documents such as invoices and contracts to authorise the claim, undue pressure was placed on the recipient of the direction to implement it, the payment was processed by the Bank of Papua New Guinea without necessary approvals, contrary to the Public Finances (Management) Act, there was no approval by the National Executive Council of purchase of the generators, no regular and proper procurement procedures were followed and there was no prior consultation with PNG Power Ltd.

3. The charge on the indictment states:

PETER PAIRE CHARLES O’NEILL of KAUWO Village, IALIBU-PANGIA, SOUTHERN HIGHLANDS PROVINCE stands charged that he between the 3^rd day of December 2013 and the 31^st day of December 2013 at Port Moresby in Papua New Guinea, being employed in the Public Service as the Prime Minister, did and directed to be done in the abuse of the authority of his office as Prime Minister, the raising of payment and purchase of 2 x 15 Megawatt Diesel Turbine Power Generators valued at Fifty Million Kina (K50,000,000), without complying with the proper procurement process as is required under the Public Finances (Management) Act, prejudicial to the lawful rights of the Independent State of Papua New Guinea.

4. The accused pleaded not guilty and a trial was conducted.

UNDISPUTED FACTS

5. A number of undisputed facts have emerged from the evidence.

6. The accused was Prime Minister from August 2011 to May 2019. In October 2013 he led an official visit to the State of Israel, accompanied by three National Government Ministers and three provincial governors and various departmental heads and statutory heads including the chairman of the board of PNG Power Ltd.

7. On 30 October 2013 he signed policy submission No 310 of 2013 which summarised the visit and attached a signed copy of the Joint Declaration of Cooperation between Papua New Guinea, signed at Jerusalem by the accused as Prime Minister of Papua New Guinea and Benjamin Netanyahu as Prime Minister of Israel, and an implementation matrix regarding decisions emanating from the visit. The policy submission noted that the Chairman of PNG Power Ltd, Joshua Bakire, had signed an agreement with Israel Electric Corporation for assistance in electricity and power supply and that discussions were held for the possible purchase of a mobile power generator to assist ease the power supply problem in Port Moresby.

8. The policy submission was tabled at a meeting of the National Executive Council (NEC) on the same day, and recorded in the following minute of decision No 387/2013 at special meeting 33/2013:

On 30^th October 2013, Council:

1. noted the content of policy submission No 310/2013; and
   
2. directed the relevant Government Departments and Agencies to implement the outcomes of the decisions Prime Minister Netanyahu and Prime Minister O’Neill arrived at including the proposed projects agreed to by the Ministers and Governors as per the attached matrix.
   

9. On 26 November 2013 the National Parliament passed the Supplementary (Appropriation) Act 2013, the long title of which described it as “An Act to grant and appropriate out of the Consolidated Revenue Fund a further additional sum for expenditure for the year ending 31 December 2013 and to appropriate that sum ...” Section 1 of that Act authorised the Secretary for Treasury, subject to authorization from the Minister for Treasury, to issue out of the Consolidated Revenue Fund and apply for additional expenditure for the year ending 31 December 2013, the sum of K379.8 million. Section 4(4)(c) stated:

The approved purposes for which funds are transferred to the trust funds and other government agencies for specific government expenditure as specified in Schedules 2 and 3 are ... K50,000,000 to Treasury and Finance Miscellaneous (Division 207) to cater for Power Generators.

10. On 4 December 2013 the accused wrote to the acting Secretary of the Department of Treasury in the following terms. This is the critical piece of evidence on which the State’s case rests:

Mr Dairi Vele

Acting Secretary

Department of Treasury

P O Box 710

WAIGANI

NCD

My Dear Acting Secretary,

RE: RELEASE OF K50.0 MILLION FOR PURCHASE TWO DIESEL TURBO GENERATOR FOR PORT MORESBY AND LAE

As per our discussion on the above subject matter, please identify K50.0 million from savings within the 2013 National Budget and have it transferred to the Bank of Papua New Guinea for the procurement and installation of two diesel turbine generators for Port Moresby and Lae.

Please note PNG Power Limited, (PPL) has been consulted on the technical specifications and other associated requirements, and they have concurred to the supply of these two generators. These generators will supply a total 30 of MVs which will greatly ease the power shortages faced by the two cities.

Thank you for your immediate facilitation of this request. I would appreciate your advice accordingly.

Yours sincerely,

[Signed]

HON PETER O'NEILL, CMG MP

Prime Minister

Cc: Acting CEO, PPL

Cc: Governor, BPNG

11. In December 2013 officers in the Department of Treasury, led by Deputy Secretary Hamou and under direction of the acting Secretary for Treasury, Daire Vele, processed the accused’s request. Funds were identified and various official forms prescribed for use under the Public Finances (Management) Act were prepared, resulting in a remittance advice and cheque in the sum of K50 million being drawn on 18 December 2013 against a Department of Treasury drawing account, in favour of the Bank of Papua New Guinea.

12. On 17 December 2013 the Minister for Finance, Hon James Marape MP, executed an instrument of approval for PNG Power Ltd to enter into a contract regarding supply of generators for K50 million, in the following terms:

MINISTER FOR FINANCE

I, the Honourable James Marape, MP Minister for Finance pursuant to the powers vested in me by S46B of the Independent Public Business Corporation of Papua New Guinea Act 2002 and Section 61 of the Public Finances (Management) Act 1995 grant approval for a public body being PNG Power Ltd to enter into a contract with LR Group Ltd on behalf of the Israel Electric Corporation Ltd for the purchase of two turbo diesel generators in the sum of K50,000,000.00.

Dated this Tuesday the 17th day of December 2013.

..................................

HON JAMES MARAPE MP

Minister for Finance

13. On 20 December 2013 the Bank of Papua New Guinea remitted the K50 million to the nominated bank account of Israel Electric Corporation in Israel.

14. On 19 December 2013 the Minister for Treasury, Hon Don Polye MP, wrote to both the Acting Secretary for Treasury and the Governor of the Bank of Papua New Guinea, expressing his concern about the raising of the cheque for K50 million, which in his view was illegal, and requesting that processing of the transaction be stopped. His request was not acceded to.

15. On 5 March 2014 the subject of the Port Moresby and Lae power supply was raised again in the National Executive Council and decision No 74/2014 was made, including a revised plan to purchase two 26-megawatt generators, in the following terms:

URGENT SOLUTION TO PORT MORESBY AND LAE POWER SUPPLY

On 5th March 2014, Council:

1. Noted the content of the Policy Submission No 61/2014;

2. approved the procurement of 2 x 15MW new gas (duel fuel) turbines which is now revised to 2 x 26.2 MW turbines (GE Model TM2500+) from Israel Electric Corp at a cost of K94 million as urgent solutions to power generation capacity in Port Moresby and Lae;
   
3. approved funding to be sourced from the savings of the 2013 National Budget and any residuals to be funded through other means including borrowings from external sources or domestic sources;
   
4. approved for PNG Power Limited to enter in an Agreement for K94 million to offset current and future State liabilities, owed by Hospitals, Police, Defence and other Government Agencies;
   
5. approved for PNG Power Limited and Israel Electric Corp to enter into a Commercial Purchase Agreement, inclusive of installation and training;
   
6. approved to grant exemptions under the Customs Traffic Act 1990 and the Goods and Services Tax Act 2003 related to the purchase, installation and commissioning of two (2) 26.2 MW Mobile GT (duel fuel) turbines by PNG Power Limited under a Sale and Purchase Agreement between PNG Power Limited and Israel Electric Corp;
   
7. approve to advise of the Head of State to grant exemptions of Goods and Services Tax (GST) for importation of two mobile power generation systems and related goods and services for the sole purpose of installation, commissioning and operation of the two systems in Port Moresby and Lae in accordance with Sections 8 and 9 of the Goods and Services Tax Act 2003.
   

8. approved and authorized:

1. the amendment of Section 9 of the Customs Tariff Act 1990 to provide for the exemption from customs duty on imports of all materials, parts and equipment for the sole use in relation to investigations, construction and operation of the two projects; and
   
2. directed the First Legislative Counsel to prepare the amendments to the Customs Tariff Act 1990 accordingly.
   

9. approved for the financial transaction to be facilitated through the Bank of Papua New Guinea; and
   
10. directed the Chief Secretary to Government and the Central Agencies Coordinating Committee (CACC) to provide oversight and take all actions required to facilitate approvals and support necessary from all relevant State Agencies to implement this decision and to provide regular reports to the NEC.
    

............................................

PETER O’NEILL CMG Chairman

16. On 5 May 2014 Ekip Kop, Director of Audit in the Office of Auditor-General, presented a report on the K50 million transaction to the Chairman of Investigation Task Force Sweep, highlighting what in his view were serious irregularities and illegalities and recommending that the accused and others including the Acting Secretary for Treasury, the Governor of the Bank of Papua New Guinea and the Deputy Secretary for Treasury be further investigated and charged under the Criminal Code.

17. In June 2014 Mr Marape as Minister for Finance signed an instrument of approval for PNG Power Ltd to enter into the contract with Israel Electric Corporation in the following terms:

MEMORANDUM OF APPROVAL IN PRINCIPLE BY MINISTER REFERRED TO IN SECTION 61 OF

THE PUBLIC FINANCES (MANAGEMENT) ACT 1995

I HON JAMES MARAPE, MP the Minister referred to in Section 61 of the Public Finances (Management) Act 1995, being the State Minister responsible for Finance and having noted that the request by PNG Power Limited (“PPL”) for approval to enter into an Engineering, Procurement and Construction (EPC)/Turnkey Contract with Israel Electric Corporation for the Design, Supply, Installation and Commissioning of two (2) 26.2MW (ISO Rating) trailer mounted GE TM2500+ Gas turbines in Port Moresby and Lae respectively:

1. Contract value of K94 million for the Design, Supply, Installation and Commissioning; and
   
2. K8 million for General and Supervision costs, spare parts for two years of operation and contingency and overhead.
   

is a contract agreement by a Majority State Owned Entity involving the payment of an amount exceeding K10,000,000.00 in terms of Section 46B(1) of the IPBC Act, HEREBY, by virtue of the powers conferred upon me under Section 46B(1), grant APPROVAL IN PRINCIPLE for PPL to enter into the said Contract, subject to PPL amending the (EPC)/Turnkey Contract in line with the advice of the State Solicitor dated 28th May 2014.

.........................................

HON JAMES MARAPE, MP

MINISTER FOR FINANCE

Dated this ... day of June 2014

18. On 13 June 2014 a contract for the “design, delivery, installation and commissioning of 2 x 26MW trailer mounted GE TM2500+ Gas Turbines at Lae and Kanudi” was executed between PNG Power Ltd and Israel Electric Corporation. The contract price was K94 million plus US$1,217,678 for spare parts. It was noted that K50 million of that price had already been paid.

19. The two 26-megawatt generators arrived in the country and were installed and commissioned in the second half of 2014.

LAW

20. Section 92 (abuse of office) of the Criminal Code states:

(1) A person employed in the Public Service who, in abuse of the authority of his office does, or directs to be done, any arbitrary act prejudicial to the rights of another is guilty of a misdemeanour.

Penalty: Subject to Subsection (2), imprisonment for a term not exceeding two years.

(2) If an act prohibited by Subsection (1) is done, or directed to be done, as the case may be, for purposes of gain, the offender is liable to imprisonment for a term not exceeding three years.

21. The accused has been charged under s 92(1) without the circumstances of aggravation provided for by s 92(2). I adopt the analysis of the elements of the offence under s 92(1) of Berrigan J in the leading case, The State v Joel Luma (2021) N8798. There are very few reported decisions on s 92, the only other one of significance being The State v Hevelawa (No 1) (2017) N6815. The four elements are that the accused:

(a) while employed in the Public Service,

(b) abused the authority of his office,

(c) by doing (or directing to be done) an arbitrary act,

(d) prejudicial to the rights of another.

22. Dishonesty is not an element of the offence. It is not necessary for the State to prove that the accused intended to gain or that there was any conflict of interests (Luma, para 230).

23. The term “employed in the Public Service” is defined by s 83A of the Code for the purposes of Part III (offences against the administration of law and justice and against public morality), which contains ss 83A to 207I, to include members of the National Parliament. The accused was a member of the National Parliament at all relevant times, so the first element is satisfied. The other three are contentious.

ISSUES

24. As the accused denies three of the four elements of the offence, they form the issues for determination:

1. Did the accused abuse the authority of his office?
   
2. Did the accused do or direct to be done an arbitrary act?
   
3. Was the act directed by the accused prejudicial to the rights of the State?
   

ISSUE 1: DID THE ACCUSED ABUSE THE AUTHORITY OF HIS OFFICE?

25. Resolution of this issue requires a:

• summary of evidence for the State;
• summary of evidence for the defence;
• formal determination of the question whether the State has proven beyond reasonable doubt that the accused abused the authority of his office.
  

Evidence for the State

26. Eleven witnesses gave oral evidence for the State:

1. Senior Sergeant Pius Peng, Police Force, the lead police investigator in this case: the complaint that led to the investigation was laid by Hon Belden Namah MP in 2014. The investigation was not completed until 2020 upon the arrest of the accused and others. It was a complex investigation.
   
2. Aloysius Hamou, Deputy Secretary, Department of Treasury in 2013-2014: he was under great pressure to expedite identification of K50 million from the 2013 Budget for remission to the Bank of Papua New Guinea, in order to implement the direction from the Prime Minister of 4 December 2013. Pressure was brought to bear on him from his immediate boss, Secretary Vele. He was not subject to any direct pressure from the accused and received no direct communication from the accused at any time.
   
3. Hon Kerenga Kua MP, the Minister for Justice and Attorney-General in 2013-2014: he was not aware of the purchase of the generators for PNG Power in 2013. Though he may have been present at the NEC meeting of 30 October 2013 he was not directly consulted on the transaction.
   
4. Hon Don Polye MP, the Minister for Treasury in 2013-2014: no proper procurement process was followed. He objected to the transfer of K50 million from Treasury to the Bank of Papua New Guinea. He felt that the accused had bypassed him, as Treasurer, by giving his direction directly to the Treasury Secretary. There was no NEC decision to authorise the accused’s direction of 4 December 2013.
   
5. John Tangit, CEO of PNG Power Ltd from 2011 to 2016: he became aware of the MOU between PNG Power Ltd and Israel Electric Corporation and the proposal to purchase the mobile generators in October-November 2013. PNG Power had not asked for the generators. What they had asked for was for the Government to pay its bills. After the accused wrote the letter of 4 December 2013, it soon became apparent that PNG Power would need generators of a larger capacity. In the first half of 2014 PNG Power became closely involved in the process of acquisition and in June 2014 entered into a contract for the procurement of two 26-megawatt generators for the price of about K94 million. The equipment was installed and commissioned but they are fuel-inefficient and expensive to run. They nonetheless useful for “black-start” operation: they could generate power very quickly in a blackout.
   
6. Douglas Mageo, a senior member of management of PNG Power Ltd in 2013-2014: the two generators from Israel Electric Corporation are very expensive to run.
   
7. Ekip Kop, Assistant Auditor-General: as he stated in his report to Task Force Sweep, all irregularities and illegalities that occurred stemmed from the accused’s improper direction of 4 December 2013. Though the Supplementary (Appropriation) Act 2013 was passed in November 2013, it was not certified until February 2014, so government expenditure incurred pursuant to it in December 2013 was unauthorised and unlawful.
   
8. Daniel Rolpagarea, State Solicitor: the role of the NEC is to make policy decisions, which the executive arm of government is obliged to implement in accordance with law.
   
9. Joe Teria, Deputy Governor, Bank of Papua New Guinea: he confirmed that the Bank of Papua New Guinea functions not only as a regulator of the banking and financial industry, but also as the banker to the Government. The Bank remitted the K50 million to the Israel Electric Corporation bank account on the instructions of Treasury. A due diligence process was conducted within the Bank and nothing untoward was found. The supporting documents were in order.
   
10. Chief Inspector Timothy Gitua, Deputy Director, Fraud & Anti-Corruption Directorate, Police Force: he was unable to shed light on the suggestion that the complaint of Hon Belden Namah MP, which led to the investigation, arrest and charging of the accused, had been withdrawn.
    
11. Hon James Marape MP, present Prime Minister, Minister for Finance in 2013-2014: he began by saying that he was not aware of the proposal for purchase of the generators for K50 million from Israel Electric Corporation in 2013, but could not say that he was not at the NEC meeting of 30 October 2013, and confirmed that he would have been in Parliament in November 2013 when the supplementary budget, including the authorisation of K50 million for power generation was passed, as he was the Minister for Finance and the Leader of Government Business. He could not recall the details of signing the statutory instruments in December 2013 and June 2014 but confirmed that the signature on those instruments was his.
    

Evidence for the defence

27. The accused gave sworn evidence and was the only defence witness. He said that in 2013 there was a public outcry over power shortages and blackouts throughout the country, especially in Port Moresby and Lae. He felt it necessary to do something urgently. The issue was discussed, as part of the State visit to Israel in October 2013, as to how Israel, through the Israel Electric Corporation, could assist PNG, through PNG Power, and these discussions were formalised in the MOU signed in Israel between Israel Electric Corporation and PNG Power. The issue was raised in his policy submission to NEC of 30 October 2013, endorsed by NEC at its meeting on the same day. In writing the letter of 4 December 2013, his intention was only to ask the Treasury Secretary to identify K50 million from the 2013 Budget, which included the supplementary Budget, so that it could be parked at the Bank of Papua New Guinea. It was a request, not a direction, and he did not intervene in the process of procurement, which was something for the public servants to look after. Though the Act for the supplementary budget was not certified until February 2014, the fact is that it was passed in November 2013 and in his view it was proper and in accordance with normal practice for it to be acted on immediately. The two generators arrived in 2014 and were commissioned, one in Port Moresby, one in Lae. His letter of 4 December 2013 was his only involvement in the identification of funds in the budget and transfer of funds from Treasury to the Bank of Papua New Guinea. If there was any breach of the Public Finances (Management) Act, that was due to the public servants whose responsibility it was to ensure compliance, and to Mr Marape, who as Minister for Finance in December 2013 signed the statutory instrument that paved the way for the procurement to take place.

Has the State proven beyond reasonable doubt that the accused abused the authority of his office?

28. This is the critical issue and I approach it by adopting the principles highlighted in Luma:

• abuse of authority will occur when bad, improper or wrongful use is made of power given to a public official or when the authority of an office is used other than for the public good;
• the abuse must be wilful;
• the use of authority falls so far below acceptable standards it amounts to abuse of public trust;
• the conduct involves a serious departure from proper standards;
• it is more than an administrative fault and involves misconduct that is sufficiently serious to deserve criminal punishment.
  

29. Having applied those principles and weighed the competing evidence and the submissions of counsel, I conclude that the State has not proven beyond reasonable doubt that the accused abused the authority of the office of Prime Minister. I draw that conclusion for the following reasons.

30. The writing of the letter to the acting Secretary for Treasury of 4 December 2013 was preceded by a State visit to Israel, involving the signing of a joint declaration of cooperation, including closer economic ties between the two countries and signing of an MOU between PNG Power Ltd and Israel Electric Corporation that provided for assistance from Israel in electricity and power supply requiring “immediate follow-up”.

31. The accused made a policy submission of 30 October 2013 to the National Executive Council, which alluded to the MOU, and a decision of 30 October 2013 of the National Executive Council followed, which endorsed the policy submission and instructed government agencies to implement what had been agreed on.

32. Though the NEC did not expressly authorise the expenditure of K50 million on generators from Israel, the foundations for such a decision were laid by the State visit to Israel, the MOU entered into by the Chairman of PNG Power Ltd, the accused’s policy submission and the NEC decision of 30 October 2013.

33. There was a supplementary budget for 2013 passed by the Parliament in November 2013, which authorised the transfer of K50 million to Treasury and Finance “to cater for power generators”.

34. The purpose of the letter of 4 December 2013 – the identification and transfer of funds in the 2013 budget from Treasury to the Bank of Papua New Guinea – was to make funds available for a legitimate public purpose: to ease power shortages in Port Moresby and Lae.

35. Though the letter of 4 December 2013 facilitated the remittance of a large amount of public money overseas in a short space of time and there appeared to be a departure from the public tender requirements of the Public Finances (Management) Act, there was nothing in the letter that promoted or authorised any such breaches of the law to occur.

36. Though the letter of 4 December 2013 was framed as a request, it is properly regarded as a direction or instruction. But whether it is regarded as a request or a direction, it was not accompanied by any threat of consequences for non-compliance. The accused did not put any pressure on the acting Secretary for Treasury or anyone else to do what he wanted.

37. The State has therefore failed to prove any abuse of authority had occurred, let alone wilful abuse. It failed to prove any material departure from normal standards, let alone a serious departure. To the extent that any default in standards was entailed in the signing of the letter of 4 December 2013, it was administrative default only and does not require criminal punishment. The second element of the offence is not proven.

ISSUE 2: DID THE ACCUSED DO ANY ARBITRARY ACT OR DIRECT ANY ARBITRARY ACT TO BE DONE?

38. An arbitrary act is one that seems not based on reason, system or plan or is unfair or done without restriction or without considering other people (Luma, para 171).

39. I consider that the accused’s letter of 4 December 2013 was not an arbitrary act, and he did not direct any arbitrary act to be done. The letter was written in the context of an urgent need to address power shortages in the country. It was part of a chain of decision-making that resulted in two 26-megawatt generators being commissioned in the course of 2014 in Port Moresby and Lae. The State argued that it was a one-man decision but the provisions of the Supplementary (Appropriation) Act 2013 undermine that argument; and the approval of the Minister for Finance, Mr Marape, on 17 December 2013, though given two weeks afterwards, shows that the letter was part of a plan of action to meeting an urgent need. There was a clear and rational reason for writing the letter. It was part of a plan of action sanctioned by the National Executive Council and the Parliament, carried out for a legitimate public purpose. The third element of the offence is not proven.

ISSUE 3: WAS THE ARBITRARY ACT PREJUDICIAL TO THE RIGHTS OF ANOTHER?

40. To prove that an abuse of authority and arbitrary act was prejudicial to the rights of “another”, there must be some person, which can include the State itself as a legal person, who or which has been adversely affected by the accused’s conduct.

41. The State has not adduced sufficient evidence for the Court to be able to conclude that the State or any agency of the State, including PNG Power Ltd, was adversely affected by the actions of the accused. The evidence and submissions on this element of the offence were vague and unconvincing.

42. There was some evidence that public money was wasted. For example, Mr Marape testified that the generators are not being used and are “gathering dust”. He suggested that they were and are not fit for purpose. However, Mr Marape’s evidence was rather general, non-technical in nature and uncorroborated. It was inconsistent with the evidence of Mr Tangit, which was that the generators, though expensive to run, were very useful for black-start operation. It has not been proven that value for money was not obtained.

43. It has also not been proven beyond reasonable doubt that any breach of the law, including the Public (Finances) Management Act, occurred. The fourth element of the offence has not been proven.

CONCLUSION

44. None of the contentious elements of the offence have been proven by the State. All had to be proven beyond reasonable doubt. The accused must be acquitted.

VERDICT

45. Peter Paire Charles O’Neill, having been charged with one count of abuse of office under s 92(1) of the Criminal Code, is found not guilty.
_____________________________________________________________
Public Prosecutor: Lawyer for the State
Young & Williams Lawyers: Lawyers for the Accused