Promises,promises:adecadeofallocationsforandspendingon

anti-corruptioninPapuaNewGuineaGrantWaltonandHusniaHushang

Abstract

InPapuaNewGuinea(PNG),governmentresponsestocorruptionhavereceivedagreatdealofmediaattentionoverthepastdecade.ThisisparticularlythecasewithInvestigationTaskforceSweep(ITFS),withthePNGgovernmentinitiallyprovidingthisagencywithsignificantresourcesandsupport,onlyforsupporttodisappearin2014,whentheagencyhelpedcoordinateanarrestwarrantforPrimeMinister,PeterO’Neill.WhilethetrialsandtribulationsofITFShavebeenattheforefrontofmediaattention,theycanmaskbroadertrendsconcerningthestate'santi-corruptionefforts.InthispaperwecomparethePNGgovernment’sallocationsforandspendingonfivekeyanti-corruptionorganisationsbetween2008and2017.Analysingadecadeofnationalbudgetdocumentswefocusonfundingfor:theOmbudsmanCommission,theNationalFraudandAnti-corruptionDirectorate,ITFS,theFinancialIntelligenceUnit,andtheAuditor-General’sOffice.Weshowhowallocationsfortheseagencieshaveoftenexceededspending,andthatcombinedanti-corruptionfundinghasdeclinedsince2013.WethencomparecombinedspendingontheseorganisationstotheDepartmentofJusticeandAttorneyGeneralandtheRoyalPapuaNewGuineaConstabulary;weshowthat,overthepastdecade,fundingfortheformerhasgrownsignificantlycomparedtoanti-corruptionspending.Finally,weshowthatasaproportionoftheoverallPNGbudgetallocationsforandspendingonanti-corruptionhasbeenonthedeclinesince2013.Thesefindingssuggestthatreductionstoanti-corruptionfundingpre-datethedramaticreductionoffundingforITFSafterithelpedorganiseanarrestwarrantfortheprimeminister,andthatcomparatively,overthepastfiveyears,anti-corruptionagencieshavefaredworsethanotherareasofgovernmentspending.WediscusswhatthesefindingsmeanforpolicymakersandactivistshopingtoseethePNGgovernmentstrengthenanti-corruptionefforts,andaddresscorruption.

DiscussionPaper60July2017SERIESISSN2206-303X

Promises,promises:adecadeofallocationsforandspendingonanti-corruptioninPapuaNewGuinea

GrantWaltonHusniaHushang

Grant Walton1 is a Research Fellow and Husnia Hushang theProgram Officer at the Development Policy Centre, CrawfordSchoolofPublicPolicy,TheAustralianNationalUniversity.

Walton,G&Hushang,H2017“Promises,promises:adecadeofallocationsforandspendingonanti-corruptioninPapuaNewGuinea,”DevelopmentPolicyCentreDiscussionPaper60,CrawfordSchoolofPublicPolicy,TheAustralianNationalUniversity,Canberra.

The Development Policy Centre is a think tank for aid anddevelopment serving Australia, the region, and the globaldevelopment community. We undertake independent researchandpromotepracticalinitiativestoimprovetheeffectivenessofAustralianaid,tosupportthedevelopmentofPapuaNewGuineaand thePacific island region, and to contribute tobetterglobaldevelopment policy. For more information on the Centre, visithttp://devpolicy.anu.edu.au/

The Developmental Leadership Program (DLP) is aninternational research initiative that explores how leadership,power and political processes drive or block successfuldevelopment.DLPisbasedattheUniversityofBirmingham,UK,andworksinpartnershipwithUniversityCollegeLondonandLaTrobe University inMelbourne. DLP’s independent program ofresearch is supported by the Australian aid program.http://www.dlprog.org/

The views expressed in discussion papers are those oftheauthors and should not be attributed to any organisationwithwhichtheauthorsmightbeaffiliated.

1Authorcontact:grant.walton@anu.edu.au.ThisresearchwasmadepossiblewiththegeneroussupportoftheAustralianaidprogram.Thispaperisapartof theStrengtheningStateandSocietyResponsestoCorruptioninPNGproject,whichisbeingundertakeninpartnershipwith theDevelopmentalLeadershipProgram.TheauthorswouldliketothankRohanFox,MatthewDornanandthe tworeviewersfortheirinsights,aswellasAshleeBetteridgeforediting.

5

Introduction

Formany,corruptionisakeythreattodevelopmentinPapuaNewGuinea(PNG).Itis

oftenassociatedwithpoorenvironmental,socialandpoliticaloutcomes.ThePNGstate

fundsanumberofanti-corruptionorganisationsonayearlybasistoaddress

governmentcorruptionandmismanagement.Whiletheseorganisations–suchasthe

OmbudsmanCommission,InvestigationTaskforceSweep(ITFS),andtheNationalFraud

andAnti-CorruptionDirectorate–areinthebusinessofimprovingandmonitoring

accountabilityandtransparencywithingovernmentinstitutions,oftentimesthey

struggletoprovidethepublicwithbasicinformationabouttheiroperations.For

example,atthetimeofwritingtheOmbudsmanCommissionhadnotmadeavailable

annualreportsonitswebsite;itswebsitehasalsobeenunavailableforsometime.Given

theresourceandpoliticalconstraintsfacinganti-corruptionorganisationsinPNGthis

absenceofinformationmightbeunderstandable,however,itmeansthatpolicymakers

andactivistshavelittleinformationaboutthehealthofstate-basedanti-corruption

organisations.

Giventhepaucityofinformationfromanti-corruptionorganisations,thenationalbudget

isakeyresourcetoevaluatethestateoftheseorganisationsovertime.Analysisofthe

budgetshowshowmuchfundingispromisedandthenspentonanti-corruptionefforts.

Thiscanhighlighthowfinanciallyhealthyorganisationsare,andthedegreetowhich

governmentsarewillingtoputtheirmoneywheretheirmouthsare.Withoutadequate

funding,anti-corruptionagenciescannotpayforinvestigations,reports,maintenanceof

websites,andsoon.Admittedly,itisnottheonlymeasuretoassessthehealthof

agencies–howanti-corruptionagenciesspendtheirfundsisalsoimportant.However,

withlittlepublicinformationabouthowfundsarespent,trackingtheamountoffunding

isacritical(andfaroverdue)firststepinunderstandingthestateofPNG’santi-

corruptionagencies.Suchanalysisisnecessaryastherehavebeennopublically

availablestudiesintohowmuchhasbeenpromisedandspentonthestate’santi-

corruptioninitiativesovertime.Whilethemediahasoccasionallyhighlightbudgeted

fundingallocationsforselectanti-corruptionorganisations–particularlyforthetravails

oftheshort-livedITFS(forexample,Cochrane,2015)–itcanbedifficulttoputthese

figuresintocontext.

6

Inthispaperweaddressthisgapintheresearchbyexaminingthreequestions,which

oftengounansweredindebatesaboutthestateofPNG’santi-corruptionefforts:

1. Howhaveallocationsforandspendingonanti-corruptionorganisationschangedovertime?

2. Howdoallocationsforanti-corruptionorganisationscomparetootherlawandjusticeorganisations,andforoverallgovernmentspending?

3. Whatistheevidencethatchangestoanti-corruptionspendingimpactsonperceptionsaboutlevelsofandresponsestocorruption?

Thispaperexaminesthesequestionsbylookingatadecadeoffundingallocationand

spending2forkeyanti-corruptionorganisations:theOmbudsmanCommission,the

NationalFraudandAnti-corruptionDirectorate,ITFS,andtheAuditor-General’sOffice.

Italsoreportsonfouryears–theyearswecouldfindfundingforthisinstitution–of

fundingfortheFinancialIntelligenceUnit.Forpointofcomparisontheanalysisincludes

trendsfortwoorganisationsthathelpfightcorruption,buthaveabroadermandate

thantheafore-mentionedorganisations:theRoyalPNGConstabulary(RPNGC)andthe

AttorneyGeneral’sdepartment.Thepapershowshowtotalanti-corruptionspending

haschangedoverthepastdecade,andthepercentageofthetotalPNGbudgetallocated

toandspentonanti-corruptionagencies.Inaddition,itpresentstrendsofperceptions

aboutthelevelofcorruptioninPNGandthecountry’sabilitytocontrolit.

Thereportdrawsonadecadeofpubliclyavailablenationalbudgetdocuments,with

reportedspendingandallocationsconvertedintoconstant2016pricestoensure

comparisonsovertimecanbemade.Thenationalbudget(particularlyvolumesoneand

two)andtheFinalBudgetOutcome(2016)aretheprimarysourceforanalysis;key

stakeholdersinPNGhavealsobeenconsultedtoverifyfigures.Itisimportanttonote

thatthereportpresentsnationaltrends.SubnationalgovernmentsinPNG,particularly

theprovinces,docontributetheirownfundstolawandjusticeandmayfundanti-

corruptionmeasures.Thesearenotcapturedinthebulkofthisanalysis(althoughwe

doexaminetheimpactofdecentralisationintheAppendix).Inaddition,thisanalysis

focusesonwhatweconsiderkeyanti-corruptionorganisations–thosewhoseprimary

2Seethisspreadsheetfordataandcalculations:http://devpolicy.org/excel/PNG-GovSpending-on-Anti-

corruption.xlsx

7

purposeistoinvestigatecorruptpractices–wherefundinginformationhasbeen

providedinthenationalbudget.Therearemanyotherorganisationsconductinganti-

corruptionwork,includingnon-governmentalorganisationsanddonorsthatarenot

capturedinbudgetaryfigures.Inturn,thispapershowshowthenationalgovernment

hasprioritisedanti-corruption,nothowmuchfundingisspentonalltypesofanti-

corruptioneffortsinPNG.

Thepaperproceedsasfollows.First,itshowshowfundingallocationsforandspending

onanti-corruptionhaschangedovertime.Thesecondsectionprovidespointsof

comparison:itreportstrendsforotherlawandjusticeorganisations,andshowshow

overallspendingonanti-corruptionhaschangedinlinewithbudgetarychanges.This

sectionalsopresentsperceptionsaboutthelevelandstrengthofresponsetocorruption

inthecountry.Thefinalsectionconcludes,highlightingkeyimplicationsforpolicy

makersandanti-corruptionactivists.

AllocationsforandspendingonfivePNGanti-corruption

organisations

Thissectionfirstexaminesfivekeyanti-corruptionorganisationsseparatelybefore

comparingthemandanalysingtrendsofanti-corruptionefforts.Itincludesabrief

commentaryonsomeofthepoliticalfactorsthatmayhaveinfluencedallocations3.

TheOmbudsmanCommissionofPapuaNewGuinea(OCPNG)

TheOmbudsmanCommissionisPNG’slongest-runningstate-basedanti-corruption

body;itwasmandatedthroughthenation’sconstitutionatindependencein1975.As

mentioned,itcanbedifficulttotrackdowninformationonthisorganisation,makingit

difficulttoassessgovernments’commitmenttoit.Ithasbeenlongreportedthatthe

organisationsuffersfromalackofresources(Walton,2016).Thepastdecadehasbeen

particularlytoughfortheOmbudsmanCommission.ChiefOmbudsmanChronoxManek

3Foramorecomprehensivediscussionontheseagenciesreferto Walton (2016).

8

wasshotinthearmin2009–inwhatmanysuspectedwasanattackbythosehewas

investigating–andaftersufferingfrompoorhealthdiedin2012.Thisleftavacuum

withinthecommission,untilRigoLuawasappointedinmid-2013;Luareinvigorated

theOmbudsmanCommission,bypublicallyleadinginvestigationsintoprominent

politiciansandpublicservants.Thisreinvigorationwasmetwithresistance,with

politiciansattackingtheorganisationanditsmandate.InMay2015,itwasrevealedthat

Lua’sappointmentwouldnotberenewedbyacommitteeincludingprominent

politicians.Giventhiscontext,howhasfundingfortheOmbudsmanCommission

changedoverthepastdecade?

Figure1showsthatthePNGgovernment’sbudgetedandactualspendingfortheOCPNG

from2008to2014incrementallyincreased.In2008,approximately18millionkinawas

bothallocatedandspentontheOmbudsmanCommission,whichrosetojustover20

millionkinaby2014.Thesegainsstartedtounravelin2015,whenmorewasallocated

totheorganisationthanspent.UnderLua,theOmbudsmanCommissionsawa

continued(albeitslight)declineinfunding,despitethepromiseofsubstantiallymore

moneyfor2015(Cochrane,2015).In2016actualspendingfurtherreduced.Allocations

for2017suggesttheorganisation’sfundingwilldeclineevenmore;oncurrent

projectionstheorganisationwillendthedecadeinthesamefinancialpositionitwasat

thebeginning.Insum,intermsoffundingallocationsandrevenue,theOmbudsman

Commissionhasmostly(butnotaltogether)weatheredpoliticalattacksonitoverthe

pastdecade,butincrementalgainslookliketheyarebeingwashedaway.

9

Figure1:OmbudsmanCommissionallocationsandspending(2016prices)

Keyanti-corruptionunitswithintheRoyalPNGConstabulary(RPNGC)

TheRPNGCplaysacriticalroleinaddressingcorruption–itisoftenthefirstportofcall

forcitizenswhowanttoreportit.However,becauseitsscopeismuchbroaderitisnot

classifiedasananti-corruptionorganisationforthesakeofthispaper(forcomparison,

wereportonfundingallocationsandspendingfortheRPNGCinthefollowingsection).

Despitethis,theNationalFraudandAnti-CorruptionDirectorate(referredtoasthe

‘FraudSquad’inthispaper),whichsitswithintheRPNGC,doesfocusoncorruptionand

itsbudgetisseparatelyreported.Theorganisationwasattheforefrontofanattemptto

arrestPrimeMinisterPeterO’Neillin2014(AAP,2014).Italsohasahistoryof

controversy,andhasbeenclosedanumberoftimes.Forexample,in2016itwasshut

downforthreeweeks,allegedlyduetoitseffortstoarrestseniorgovernmentministers

andpreparationstoarrestthePrimeMinister(ABCNews,2016).Itwasonlyreopened

afterthethenPoliceCommissioner,GariBaki,wasorderedtoreinstatetheagencyby

thenation’sSupremeCourt(Tlozek,2016).

Figure2demonstratesthatspendingontheFraudSquad,despiteitsroleinattempting

toarrestthePrimeMinisterandotherseniorministers,increasedbetween2008and

2015,yettherehasbeensignificantvariation.Between2011and2015therewerelarge

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Millionsofkina

Budgeted Actual

10

gapsbetweenallocationsandspending,althoughthegaphasbeendeclining.Reduced

spendingbetween2011and2013islikelyduetoresourcesbeingreallocatedtoITFS,

whichwasestablishedin2011.Budgetallocationsdeclinedby23percentbetween

2016and2017.

Figure2:NationalFraudSquadallocationsandspending(2016prices)

Anotherkeyanti-corruptionorganisationthathas,untilrecently,beensituatedwithin

theRPNGCistheFinancialIntelligenceUnit(FIU).TheFIUwascreatedwithinthe

RPNGCunderSection13oftheProceedsofCrimeAct(POCA)2005;itwasestablished

inJuly2007andcommencedoperationslaterthatyear(Chevis&Barrum,2012).InJuly

2015PNGParliamentenactedasuiteofanti-moneylaunderingandcounterterrorist

financinglaws,whichcameintooperationinFebruary2016.Oneofthesepiecesof

legislation-theAnti-MoneyLaunderingandCounterTerroristFinancingAct2015–

establishedaFinancialAnalysisandSupervisionUnit(FASU)withintheBankofPNG.

ThisorganisationreplacestheFIU.

Table1showstheavailableallocationsandspendingontheFIUandFASU.Itshowsthat

fortheyearsavailable(2014-2017)allocationsreducedfromover730,000tojustunder

455,000realkina.Atthetimethe2015budgetwasannounced,themediamademuchof

thefactthattheFIUwasallocatedlessthanthepoliceband’sbudget(Cochrane,2015);

comparingallocationstospendingrevealsthelackofsupportfortheFIUwaseven

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Millionsofkina

Budgeted Actual

11

worsethanthesemediareportssuggested.Forthetwoyearswheredataisavailable

(2014and2015),spendingontheagencywaslessthanhalfofallocations.In2015,1.07

millionrealkinawasspentonthePNGpoliceband,whichroseto1.31millionkinain

2016–sothepolicebandreceivedthreetofourtimesmorethantheFIU.While

allocationandspendingonthisorganizationisnotavailableinpreviousbudgets,

reportssuggestthattheFIUwasconstrainedbyfewresourcesandasmallbudgetwhile

itwaslocatedwithintheRPNGC(Chevis&Barrum,2012).

Table1:FinancialIntelligenceUnit:Allocationsandspending(kina,2016prices)

Years Allocation Actual

2014 730,340 310,563

2015 714,228 264,364

2016 641,700

2017 454,476

TheAuditor-General’sOffice

TheAuditor-GeneralofPapuaNewGuinea(referredtoastheAuditor-General’sOfficein

thispaper)commencedoperationsin1973andwasestablishedasthecountry’s

supremeauditinstitutionunderSection213oftheConstitutionin1975.The

organisationistaskedwithinspecting,auditingandreportingonaccounts,financesand

propertiesofgovernmentdepartments,agencies,andpubliccorporations.Overthepast

decadetheAuditor-General’sOfficehassufferedfromchallengestoitsleadership.In

2011thenAuditor-General,GeorgeSulliman,steppeddownamidcontroversial

circumstances(Anonymous,2011).Whiletheagencytriestoremainnon-partisan,ithas

beencaughtupintheto-and-froofPNGpolitics–forexample,in2015,DonPolye,

leaderoftheopposition,accusedtheorganisationofbeingpoliticised(PNGPost-

Courier,2015).Despitethis,theAuditor-General’sOfficecontinuestooperateandshed

12

lightonmismanagementandpotentialcorruptionwithingovernment(e.g.see:Auditor-

General'sOfficeofPapuaNewGuinea,2014).

Therehavebeencallsfortheorganisationtobestrengthened,bothoutsideandwithin

thecountry.Theorganisationhasbeenratedasprovidingonly‘limited’budget

oversightbytheInternationalBudgetPartnership’sOpenBudgetSurvey.The2015

surveycalledfortheagencytohave‘adequatefundingtoperformitsduties,as

determinedbyanindependentbody’(InternationalBudgetPartnership,2015).Thecall

forthegovernmenttobetterfundtheorganisationhasbeenechoedbycommentators

withinPNGforsometime(Kaiok,2008).Havethesecallsbeenheard?

Figure3showsbudgetedandactualspendingontheAuditor-GeneralOfficebetween

2008and2017.Between2009and2011allocationsandspendingwereinsync–

stayingataround20millionkina.In2012theagency’sallocationroseabovespending,

andin2013spendingroseaboveallocations.By2015,spendinghaddeclinedto21

millionkina,andthenincreasedslightlyin2016to22.3millionkina.However,funding

issettodecline,withallocationsreducingto16millionkinaby2017;inrealkinathisis

lessthantheagencywasallocatedatthestartofthedecade.Thisanalysissuggeststhat,

overall,callsformorespendingfortheAuditor-General’sOfficewererespondedtoearly

onintheO’Neill-ledgovernment(whichbeganinlate2011),althoughthesegainsnow

appeartobelost.

13

Figure3:Auditor-General’sOfficeallocationsandspending(2016prices)

InvestigationTaskforceSweep(ITFS)

PeterO’Neillcametobeprimeministerundercontroversialcircumstances;in2011he

tookoverfromMichaelSomarewhowasgettingmedicaltreatmentoverseas.Inan

attempttodifferentiatehimselffromhispredecessorO’Neillquicklyintroduceda

numberofmeasures,includingpromisingtoestablishanIndependentCommission

AgainstCorruption(ICAC).AsitwouldtakesometimetolegallyestablishanICAC,the

O’Neill-Namahgovernmentsetupanorganisationtoinvestigatecorruptioninthe

interim;thatorganisationwasITFS.Intheshorttimeitwasoperating,theagency

helpedfacilitatenumerousarrests,includingofprominentpoliticians,andrecover

millionsofkina.TheagencyhelpedcoordinateanarrestwarrantforthePrimeMinister

inJune2014afterwhichitsabilitytooperatewassignificantlycurtailedthroughbudget

cuts.

Figure4depictsthePNGgovernment’sbudgetandactualspendingonITFSandtheyet

tobeestablishedICACbetween2011and2017.Thebudgetallocationsrose

significantlybetween2013and2014,peakingatroughly23millionkina.AfterITFS’s

roleinO’Neill’sattemptedarrest,fundsslumpedsharplyto5millionandzeroin2015

and2016respectively.However,theamountsreportedlyspentarefarlowerthan

allocations.WhiletheO’Neill-Namahgovernmentquicklyspent7.5millionkina(non-

0

5

10

15

20

25

30

35

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Millionsofkina

Budgeted Actual

14

budgeted)ontheagencyin2011,sincethenthedifferencebetweenallocatedand

spendingissignificant.Spendingontheorganisationpeakedat7.7millionin2013,

whichwassignificantlylowerthanthe23.6millionkinaallocated.Justunderone

million(real)kinawasallocatedforICACin2017.Whenitwasfirstestablished,thePNG

governmentpublicallystatedthatitwaschannelingmoreresourcesintoITFS(PNG

Post-Courier,2012);however,comparativelylittlemoneyreachedtheorganisation.

Overall,Figure4showsthatthemeteoricriseandfallofITFSwasaccompaniedby

unfulfilledspendingpromises.

Figure4:ITFSandICACallocationsandspending(2016prices)

ThefundsthatdidnotreachITFSwereslatedforotheragencies,inparticularforthe

Auditor-General’sOffice,OmbudsmanCommissionandthejudiciary(Cochrane,2015).

Figure1showsthatwhilemorefundswerebudgetedfortheOmbudsmanCommission,

itreceivedlessin2015thanin2014.Figure3showedthattheAuditor-General’sOffice

waspromisedmorefundsfor2015;however,ittooreceivedlessmoneyin2015thanin

2014.Aswe’llseebelow,theDepartmentofJusticeandAttorneyGeneral(DJAG)also

haditsbudgetreducedandreceivedlessmoneyin2015comparedtothepreviousyear.

Thus,fortheotherkeyanti-corruptionorganisationsthepromisedredistributionof

fundsaftertheclosureofITFSdidnotmaterialize.

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Millionsofkina

Budgeted Actual

15

Overalltrends

Togetasenseoftherelativeamountsofspendingoneachorganisation,Figure5

comparesactualspendingovertime.Itshowsthatoutoftheagenciesweexamine,the

OmbudsmanCommissionandAuditor-General’sOfficearebyfarthemostheavily

funded.Traditionallymorehasbeenspentonthelatterthantheformer,althoughin

2017thisappearssettochange,withtheAuditor-General’sOfficefacingseverefunding

cuts.Incomparison,otheragenciesreceivepaltrysums.

Figure5:Spendingonfiveanti-corruptionorganisations2008-2017(2016kina)

Notes:Actualspendingsolidlines,budgeteddashedlines.2016figuresforOmbudsmanCommissionand

Auditor-General’sOfficefromFinalBudgetOutcome(2016).

Figure6pullsdatatogetherfromthesefiveanti-corruptionorganisations–alongwith

anextraallocationof520,000kinain2016and2millionin2017foraprogramto

combatcorruptionintheDepartmentofFinance.Itshowstrendsofallocationsand

spendingoverthepastdecade.Overall,budgetsforandspendingontheseanti-

corruptionagenciesincreasedgraduallybetween2008and2013,butdeclined

thereafter.Thisdeclinestartedin2014eventhoughthisbudgetwas,atthetime,PNG’s

largestever,cominginat15billionkina(PriceWaterhouseCoopers,2014).Duetothe

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Millionsofkina

OmbudsmanCommission FraudandCorruptionActual AuditorGeneral

ITFS/ICAC FIU

16

quickspendingonITFS,actualspendingoutstrippedallocationsin2011.However,

thereafterpromisedspendingonanti-corruptionhasnotmatchedactualspending.The

7millionkinareductioninfundingforITFSmadeuphalfoftheoverallreductioninanti-

corruptionspendingbetween2013and2014.Thecontinueddeclineofbudgetedanti-

corruptionspendingwillmeanthattheseorganisationswillnotreceiveanymorethan

39millionkina,fourmillionkinalessthanwasspentonthematthestartofthedecade.

Figure6:Totalanti-corruptionallocationsandspending(2016prices)

Notes:Totalanti-corruptionspending-OmbudsmanCommission/NationalFraudandCorruption/Auditor-

General’sOffice/NationalAnti-corruptionStrategyTaskforce(ITFS)/FIU/Anti-corruptionprogram

DepartmentofFinance

Pointsofcomparisonand(anti-)corruptiontrends

Itcouldbearguedthattherecentdeclineinanti-corruptionspendingshowninFigure6

(above)simplyreflectsthePNGgovernment’sreducedbudgetsduetothecountry’s

flailingeconomy.Indeed,whilethe2014budgetboasted15millionkina(nominal)in

allocations,the2017budgetwassetatonly13,350million(nominal)(Price

WaterhouseCoopers,2016).Totestwhetherthereductioninthegovernment’soverall

budgetexplainedthefallinanti-corruptionallocationsandspending,Figure7illustrates

totalanti-corruptionspendingandbudgetaryallocationsasaproportionofPNG’s

0

10

20

30

40

50

60

70

80

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Millionsofkina

Budgeted Actual

17

nationalbudget.Thefirstthingtonoteisthatanti-corruptionspendingmakesupavery

smallproportionofgovernmentspending:between2008and2015spendingvaried

between0.25and0.44percentoftheoverallbudget.Thisfigurealsoshowsthat

allocatedfundinghasdroppedsignificantlysince2013;by2017thePNGgovernmentis

settospendlessonanti-corruptioneffortsasaproportionofthebudgetthanitdidin

2008.Thus,reductionsinanti-corruptionspendingarenotsimplyafunctionofsmaller

budgets;anti-corruptionspendinghasreducedrelativetootherareasofgovernment

spending.

Figure7:Anti-corruptionspendingasproportionofnationalbudget

Notes:TotalAnti-corruptionSpending-OmbudsmanCommission/NationalFraudandCorruption/Auditor-

General’sOffice/NationalAnti-corruptionStrategyTaskforce(ITFS)/FIU/Anti-corruptionprogram

DepartmentofFinance.InAppendixAweaccountfortheeffectofdecentralisationonthesefigures;our

analysisshowsthattherelationshipbetweenactualandbudgetedissimilartoFigure12.

Itmightbearguedthatothergovernmentdepartmentsalsosufferfromreceivingless

thantheywerepromised,andthatthereisnothingspecialaboutanti-corruption

organisationsinthisregard.Totestthis,wecomparehowtheproportionofactual

spendingtobudgetedcomparesacrosstimeforanti-corruptionorganisationsversus

wholeofgovernment(minusanti-corruptionorganisations).Figure8showsthatthere

hasbeenasignificantunderspendonanti-corruptionagencies,comparedtothe

governmentasawhole,since2012.ExtrafundingspentonITFSexplainsthereversalof

-0.1%

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Budgeted Actual

18

thistrendin2011.Thissuggestsunderspendsarenotsimplyduetoabroaderissueof

capacitythataffectsothergovernmentdepartmentsandoperations.

Figure8:Comparisonofpercentageofspendingtobudgetfortotalbudgetand

anti-corruption

Notes:TotalAnti-corruptionSpending-OmbudsmanCommission/NationalFraudandCorruption/Auditor-

General’sOffice/NationalAnti-corruptionStrategyTaskforce(ITFS)/FIU/Anti-corruptionprogram

DepartmentofFinance

Areotherlawandjusticeagenciesexperiencingariseinsupportattheexpenseofanti-

corruptionorganisations?Figure9comparesthePNGgovernment’sbudgetandactual

spendingontheRPNGCwithspendingonPNG’sfiveanti-corruptionorganisations(and

2016/2017allocationsforthecorruptionprogramintheDepartmentofFinance).

SpendingonkeyorganisationsistinyincomparisontospendingontheRPNGC,

althoughwithrecentcutstotheRPNGC’sbudgetthegapisreducing.FortheRPNGC,the

largeincreaseinbudgetedexpenditurebetween2013and2014canbeexplainedbythe

expectedcostofhostingAustralianFederalPolice(GovernmentofPNG,2014:99).

Between2008and2014actualspendingwashigherthanbudgetallocations;both

graduallyincreaseoverthistime.From2014spendingandallocationsreduced;317

millionrealkinawasspentontheRPNGCin2008,whichismorethanallocatedforthe

agencyin2017(294millionkina).Giventhis,between2014and2017theRPNGCis

facingafundingcutof40percent.SowhiletheRPNGChasseentheirfundingincrease

0%

20%

40%

60%

80%

100%

120%

140%

2008 2009 2010 2011 2012 2013 2014 2015 2016

Totalbudget Anti-corruption

19

atahigherratethananti-corruptionorganisationsbetween2008and2015,thesegains

aresettounravel.

Figure9:ComparingRPNGCandanti-corruptionallocationsandspending(2016

prices)

TheDepartmentofJusticeandAttorneyGeneral(DJAG)isanotherkeylawandjustice

agencyinPNG.Itisthe‘centralagencyresponsiblefortheadministrationoflegal

servicestotheStateanditsinstrumentalities,andtheprovisionoflawandjustice

services’(DepartmentofJusticeandAttorneyGeneral,2017).Theagencyhasawide-

rangeoffunctions,includingpolicing,corrections,overseeingthejudiciaryandcourts,

prosecutions,andinvestigatingcorruptionandabusesofleadershippositions.Overthe

pastdecadetheagencyhasseenthecomingandgoingofanumberofAttorneysGeneral

responsibleforthedepartment.ThishasincludedAllanMaratwhoresignedfromthe

positionin2010aftercriticisingtheSomaregovernment;andKerengaKua,whowas

sackedbyPrimeMinisterPeterO’Neillin2014andreplacedbyAnoPala.Thelatter,in

turn,wasarrestedbythecountry’sFraudSquadinApril,2016formisusingRigodistrict

funds(specifically,fundingfromtheDistrictServicesImprovementProgram).Atthe

timeofwritingthematterwasmakingitswaythroughthecourts.

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

MillionsofK

ina

RPNGCBudgeted RPNGCActual Anti-corruptionactual(solid)/budgeted(dashed)

20

Figure10comparesallocationsandspendingontheAttorneyGeneral’sdepartmentand

keyanti-corruptionagencies.Whilelessthan20millionrealkinaseparatedspendingon

theAttorneyGeneral’sdepartmentandkeyanti-corruptionorganisationsin2008,by

2015thegaphadrisentoover70millionkina.Thiswashelpedalongbythe300million

kina(2010-2015)PNG-AustraliaLawandJusticepartnership(LJP)(Governmentof

PNG,2012:19).TheAttorneyGeneral’sdepartmenthasexperiencedasubstantial

increaseinfundingsince2010,withtheagencybudgetinganextra101millionkinain

2011mostlyfromLJP(94million)withtheremainderfromtheUnitedNations(7

million).

Theagency’sfundinghasfluctuatedsignificantly.Whiletheagency’sallocationroseto

176millionin2012,spendingwas85millionkina,adifferenceof52percent.Agap

betweenallocationsandspendinghascontinuedeversince.Between2012and2014

(duringKua’stimeastheAttorneyGeneral)theagencyexperiencedsignificantcutsto

budgetaryallocations.Althoughtheagency’sallocationshavereducedsince2015itis

settobesignificantlybetteroffin2017thatitwasin2008.

Figure10:ComparisonofDJAGandanti-corruptionspendingandallocations

(2016prices)

0

20

40

60

80

100

120

140

160

180

200

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Millionsofkina

Budgeted Actual Anti-corruptionactual(solid)/budgeted(dashed)

21

Finally,itisworthwhileaskingwhetherornotthesechangestoanti-corruption

spendinghavemadeanydifferencetoperceptionsaboutcorruptioninPNG.This

questionisdifficulttoanswer,fortwokeyreasons.First,outcomesofanti-corruption

effortsarenotalwaysmadepublicandeffortstoreleaseinformationcancomeunder

attackfrompoliticalelites.Forexample,inlate2014ITFSreleasedanupdateonits

operations(itwasstilloperatingdespitebeingdefunded)(ITFS,2014).Thepublishing

ofthereportresultedinitschiefSamKoimbeingtakentocourtforallegedly

transgressingamediaban.Thereissomedataavailable:forexampleby2015ITFSwas

stillworkingon350casesofcorruptionandhadsecured12convictions(Koim,2015).

Thoroughagency-by-agencyresearchisrequiredtoassesstheabilityofanti-corruption

organisationstobringaboutjustoutcomes.

Thesecondlimitationisaroundhow‘corruption’ismeasuredandtherolethese

agenciesplayinreducingit.ThepopularCorruptionPerceptionsIndex(CPI)released

eachyearbyTransparencyInternationaldidnotallowcomparisonsovertimeuntil

2012.AbettermeasureovertheperiodofanalysisistheWorldBank’sControlof

Corruptionindex.Whileitdoesbetterincomparingdataovertime,thismeasureisvery

broadasit‘capturesperceptionsoftheextenttowhichpublicpowerisexercisedfor

privategain,includingbothpettyandgrandformsofcorruption,aswellas‘capture’of

thestatebyelitesandprivateinterests’(WorldBank,n.d.).Itincludesdataabouthow

trustworthythegovernmentisaswellasmeasuresaboutperceivedlevelsofdifferent

typesofcorruption.Givenhowbroadthemeasureis,anti-corruptionspendingalone

willnotaloneinfluencetheseindicators;however,itlikelydoesprovidesome

explanationoftheshiftsinthesemeasures–alongwithotheranti-corruptionefforts

suchasthefreemedia.

Withthesecaveatsinmind,Figure11comparesPNG’scontrolofcorruptionandCPI

score(highernumbersmeanbettercontrolofcorruptionorlessperceivedcorruption

respectively).Perceptionsaboutthecountry’scontrolofcorruptionappearstohave

improvedsince2010,althoughitplateauedin2012.TheCPIscoredidnotchange

between2012and2015,althoughitimproved,thoughnotsignificantly,in2016.Itis

notablethatimprovedperceptionsaboutthecountry’scontrolofcorruptionoccurat

thesametimefundingfortheDJAGsignificantlyincreased.NeithertheCPIorcontrolof

corruptionindexesrespondedtothedefundingofITFS.Thissuggeststhat‘expert’

22

perceptionsabouthowwellcorruptionisaddressedcouldbemorecloselytiedtothe

activitiesoforganisationsinvolvedinbroaderlawandjusticework,ratherthantherise

andfallofspecificanti-corruptionorganisations.

Figure11:ComparisonofPNG’sControlofCorruptionandCPIscore

Conclusions

Theintroductionofthispapersetoutthreequestionsthatguidedsubsequentanalysis.

Thefirstquestionfocusedonhowfundingforanti-corruptionagencieshasfaredover

time.WhilefundingforITFSdramaticallyroseandfellwithinashortperiodoftime,the

FraudSquadsawincreases.TheOmbudsmanCommissionandtheAuditor-General’s

Officehaveseensomegains.Alloftheseorganisationshavesufferedfrompromised

budgetaryallocationsnotmaterialising,andthedifferencebetweenpromisedfunding

andactualspendingwasparticularlyacutewithinITFSandtheNationalFraudandAnti-

CorruptionDirectorate.Overall,thedifferencebetweenallocationsandspendinghas

beengrowingsince2011,suggestingtherehasbeenlittlepressureonthegovernment

toliveuptoitspromisesonanti-corruptionspending.

Theanalysisalsoshowedthat,overall,bothallocationsandspendingonkeyanti-

corruptionorganisationshavedeclinedsince2013.Becausebudgetaryallocationsare

madetheyearbefore(i.e.the2014allocationismadein2013),thismeansthatthePNG

governmentwassignificantlyreducingitscommitmenttoanti-corruptionagencies

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

CorruptionPerceptionsscore(lefthand) ControlofCorruption(righthand)

23

beforeITFShelpedorganiseanarrestwarrantfortheprimeminister.Inotherwords,

ITFS’moveonthePMhelpedtoreduceoverallanti-corruptionfunding,butthereare

signsthegovernment’ssupportforanti-corruptionagencieshadpeakedbeforethis

event.Projectionsshowthatspendingonkeyanti-corruptionorganisationsissetto

reducefurther.

Thesecondquestionaskedhowallocationsforanti-corruptionorganisationscompare

tootherlawandjusticeorganisations,andtooverallgovernmentspending.Fundingfor

keyanti-corruptionorganisationshasreducedinimportancerelativetootherareas;

thissuggestsreductionsinspendingarenotsimplyafunctionofsmallerbudgets.

Combinedanti-corruptionspendingisnowminisculecomparedtotwokeylawand

justiceorganisations:theDJAGandtheRPNGC;butinthecaseoftheDJAGthiswasnot

alwaysthecase,withthisagencyreceivingsignificantlymoresupportfromthenational

governmentoverthepastdecade.

Thethirdquestionwasabouthowthesechangesrelatetoperceptionsaboutcorruption

andanti-corruption.Perceptionsaboutthecontrolofcorruptionseemedtobemore

relatedtochangesinfundingtoDJAGthantoanti-corruptionorganisationsperse.

Perceptionsaboutthelevelofcorruptiondidnotchangedespitewell-publicisedattacks

onkeyanti-corruptionorganisations.Havingsaidthis,wecautionagainstreadinginto

thesefindingstoomuchandsuggestmoreresearchisrequiredtoshowadirect

relationshipbetweeninputs(finances),outputs(e.g.prosecutions)andoutcomes

(reducedlevelsofcorruption).

Togetherthesefindingsprovidesomekeyinsightsforthoseseekingtobolster

governmentanti-corruptionefforts.Forastart,theysuggestthereisacriticalrolethat

anti-corruptionadvocatescouldplayinmonitoringbudgetaryallocationsandspending.

Thoseconcernedaboutbolsteringfundingtotheorganisationsthataremostableto

monitorandexposecorruption(particularlycorruptionbypublicofficials)–i.e.the

anti-corruptionorganisationsincludedinthisanalysis–woulddowelltopressurethe

PNGgovernmenttoclosethegapbetweenbudgetpromises(allocations)andactual

spending.Inaddition,thoseconcernedaboutthecapacityoftheseorganisationsshould

beworkingtoensurethatspendingdoesnotcontinuetofall–bothinrealandrelative

(tootherbudgetareas)terms.

24

Therearealsoquestionsemanatingfromthisanalysiswhichdeservefurtherattention.

Inparticular,arethesignificantincreasestoDJAGoverthepastdecade–relativeto

anti-corruptionspending–justifiable?ItmightbearguedthatDJAGprovidesamore

holisticresponsetoanti-corruption,andthatbolsteringlegaloversightcanbemore

effectiveinaddressingpoorgovernance.Trendsonthecountry’seffectivenessto

controlcorruptionsupportthisthesis.Ontheotherhand,thefiveanti-corruption

organisationsanalysedinthispaperhavehadauniqueroleinmonitoringcorruption

andkeepingleadersaccountable,andthismightsuggestthatincreasestoDJAGhave

been(relatively)excessive.Debatesaboutthebenefitsorotherwiseofincreasingfunds

toanti-corruptionagenciesinrelationtootheragenciesshouldbemadewithsuch

trade-offsinmind.

Therearealsomorequestionstobeansweredaboutwhyunderspendsandoverspends

occur.Whilesomecanbeexplained–particularlyinthecaseofITFS–othersrequire

furtherresearch(forexample,overspendingfortheAuditor-General’sOfficein2008).

Thesequestionsarebeyondthescopeofthispaper,however,giventhepaucityof

researchconductedonanti-corruptionspendingtheyareworthwhileperusingin

subsequentresearch.

Insum,thispaperhasprovidedalonger-termviewofthePNGgovernment’ssupportfor

anti-corruptionagencies.Itishopedthatitsanalysiscontributestodebatesaboutthe

gapbetweengovernmentpromisesandspending,decliningspendingonkeyanti-

corruptionorganisations,andtherelativeimportanceofkeyanti-corruption

organisationsagainstotherbudgetpriorities.

25

Appendices

AppendixA

PNGhasundergoneaprocessofincreasingdecentralisationandhasincreasingly

allocatedfundingtosubnationaladministrations.Figure12belowaccountsforthis.It

showsasimilarrelationshipbetweenbudgetedandactualspendingtoFigure7,which

doesnotaccountfordecentralisation.TakingoutfundingtoprovincesandBougainville

(toaccountfordecentralisation)increasesbudgetedandactualspendingbyaround0.1

ofapercentagepointovertime.

Figure12:Anti-corruptionspendingasproportionofnationalbudgetminus

provincialexpenses

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2,017

Budgeted Actual

26

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