There are concerns that this practise is being ignored by Australian legislators amid the claim that about one-quarter of PNG's budget is being syphoned away.
Jenny Hayward-Jones is the director of the Melanesia Program at the Lowy Institute in Sydney.
She was watching last night and told Campbell Cooney there weren't many surprises.
Presenter: Campbell Cooney
Speaker: Jenny Hayward-Jones, from the Lowy Institute
HAYWARD-JONES: Unfortunately not me maybe because I know too much about Papua New Guinea. What did surprise me though was the sheer audacity of Wartoto, he's a very corrupt individual businessman, but his denial was very obvious evidence against him was somewhat surprising, but the rest of it was unfortunately unsurprising.
COONEY: We've heard similar allegations made in recent weeks, another commercial television program did a very detailed report, very similar to this one as well. You've got that one previously, you've got a number of reports over the years, you've got the PNG report on Four Corners, so it's not been hidden. What's going on there and allegations of what's going on are well known. Why I suppose has there been no significant change?
HAYWARD-JONES: Well I think we have to take it home to political will. Certainly under the Somare government there was very little interest in investigating large-scale corruption. We did of course have the commission of inquiry under the Somare government, which uncovered the department of finance that was reported on the Four Corners report, which was a huge case of fraud, up to 780-million kina was lost in dubious claims of compensation, that was the one involved in the ?? lawyers. And since O'Neill has taken power he's initiated a taskforce this week, so we've heard some efforts there. But I think it really requires enormous political will, not just on behalf of the politicians of Papua New Guinea, but also its entire public service and police to act on this. And we haven't seen that will emerge yet.
COONEY: Certainly when it came to the use of this money being siphoned off and you mentioned Waipato(?) there was well, but one of the things that was raised was that that money going overseas to Australia, I think the word used was it's become the Cayman Islands of the Pacific Australia, and at times it seems a lack of willingness on Australian lawmakers to do anything about this as well. Should that be something, I'm curious how this goes on, how that happens?
HAYWARD-JONES: Well I think it might be somewhat unfair to say that Australia's the Cayman Islands of the Pacific or the Cayman Islands of Papua New Guinea. If you look at what the Australian government's response to this was, and admittedly they didn't go on Four Corners to state their case and they should have, they have made it clear that they're working with Papua New Guinea to tackle corruption, they've got a number of programs in place in the law and justice sector and with police. The previous government stepped up its cooperation with police, announcing in May another slate of support. There's a lot of work that goes on between anti-money laundering and counter-terrorism financing authorities in Australia and with Papua New Guinea. But obviously Papua New Guinea remains frustrated, so there must be a problem there that Australian authorities are perhaps to slow act on. It may also be a case that evidence is not being presented correctly. I know from experience working in government that when you ask another jurisdiction to follow up and investigate crime that's occurred in your jurisdiction, the burden of proof is on the home country, you have to provide quite a lot of documentation and in a strict format to induce or to encourage the other jurisdiction to act or allow them to act rather I should say. So it may be a case of Papua New Guinea's authorities perhaps not being able to collect enough information for Australian authorities to act. It may just be a case of they're having a name and a report, but perhaps not the evidence that will enable Australian police or Australian banks to act on that report.
COONEY: One part of the report certainly did raise allegations about this involving Australian aid money through the international aid organisation, AusAid, and also I suppose given the fact that we've seen an announcement of a significant cut in Australia's aid budget and if nothing else this might bring home to an audience in Australia that there's concerns about how that aid budget is being used. There is nothing that makes a government sort of I think take action than suddenly seeing something publicly being spoken about this. Do you think that that will sort of trigger something?
HAYWARD-JONES: Well I think we have to be clear that there's no allegation that Australian aid money is being stolen or is subject to any of the reports of corruption that we heard last night. It is true that Australia has about 500-million dollars of aid going to Papua New Guinea at the moment, but there are very strict rules around how that aid is dispersed. And AusAid has very impressive control measures in place. So I would find it extremely difficult to believe that any Australian aid money was being stolen. Yet the report that a quarter of Papua New Guinea's budget was being lost to corruption referred to a quarter of Papua New Guinea's own development budget, not AusAid money. So I think we need to be clear that this is about Papua New Guinea officials or politicians siphoning off their own development budget. But sure, given Papua New Guinea is one of our biggest, if not the largest out of the recent increases recipient of Australian aid that Australia must be very concerned about the amount of money from Papua New Guinea's own development efforts is being lost to corruption. If that money was able to be recovered or was indeed not lost in the first place, Papua New Guinea's ability to pursue its own development agenda would be much greater.
COONEY: One of the final things in the story, and we'll finish on this too Jenny Hayward-Jones, was the fact of course that last week we saw Prime Minister Peter O'Neill take over the PNGSDP, which is the company which owned a fair bit of the Ok Tedi mine, a deal done between BHP Billiton when they moved away. And also I suppose the link that was made in the story about that happening at the same time that Australia and then thinking about this happening at the same time that Australia is coming to Papua New Guinea and asking that they open up Manus Island for detention and processing of asylum seekers, and also the allowing of the resettlement of asylum seekers on Papua New Guinea, rather than letting them move to Australia. Now the link was made in the program that it does give somewhere like Papua New Guinea a little bit of ammunition if you want to use that word in going ahead with that takeover of the PNGSDP, and that would lead to a muted response from Australia, which many would feel would probably sail to the defence of one of its biggest businesses?
HAYWARD-JONES: It's very possible, certainly the reliance on Papua New Guinea to help Australia with its asylum seeker problem has meant that the Australian government's ability to criticise actions of Papua New Guinea is significantly diminished. I think it probably was diminished even before that time, I think when Prime Minister O'Neill took power back the year before the election we've just had last year, I think the Australian government realised that he was the leader of the future and was determined to cultivate him as a friend of Australia. So I think its goes back really to that time, that Australia is being cautious about criticising any actions that O'Neill is taking at least openly in the public domain. But certainly that is a problem, although BHP is a pretty big company, I think it probably feels confident it can defend itself in Papua New Guinea. But certainly this is a big challenge for BHP that it would no doubt like to have the Australian government with, and we don't know but assistance may be going on behind the scenes, it's not just being carried out in public.