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PNG Constitutional Planning Committee Report 1974

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Constitutional Planning Committee Report 1974

CHAPTER 3

 

THE LEADERSHIP CODE

 

 

Quality of Leadership

 

1.         The success of a nation, we believe, depends ultimately on its people and their leaders.  No amount of careful planning in governmental institutions or scientific disciplines will achieve liberation and fulfilment of the citizens of our country unless the leaders - those who hold official positions of power, authority or influence - have bold vision, work hard and are resolutely dedicated to the service of their people.

 

2.         Our notion of a "leader" is not confined to the Ministers, the Speaker, the Leader of the Opposition and other members of the National Parliament, since they are not the only people who hold official positions of significant power, authority or influence in our country.  Senior public servants, senior Police and Defence officers, constitutional office-holders (including judges and magistrates), senior officers of statutory bodies and boards, government nominated directors and general managers of corporations, members of provincial assemblies and senior officers employed by provincial governments, senior staff of Ministers and Opposition leaders, members of the Advisory Committee on Citizenship Matters, and presidents, chairmen and mayors of local bodies exercising governmental functions (e.g. local government councils and associations such as Warakarai na Gunan and Greater Toma "Council"), senior administrative officers of these bodies, academic and senior administrative staff of tertiary institutions, office-holders of registered industrial organizations, ambassadors, high commissioners and senior diplomatic officers, and office-holders at the national level of registered political parties - all of these people, we believe, should be regarded as leaders for the purposes of this Chapter.

 

3.         Our "leaders" as we have defined them, have a different role from others such as those who have responsible positions in private enterprise.  Persons who hold office in private concerns as such are not the servants of the people of the nation.

 

4.         In his public office, a leader's first responsibility is to the people he (or she) represents or on whose behalf he is working.  This responsibility must override self interest.  A leader's first loyalty must be to his office, not to himself.  Such priority of loyalties might in fact mean some personal loss of opportunity or benefit, but this personal and official responsibility of a leader is assumed when he takes office, and it continues throughout his entire tenure of office.

 

5.         A leader's loyalty to his office must spring from his genuine concern for his country.  It is always expected of a patriot that he will put his country's interests before his own.  In the event of any conflict of interests, the interests of the people he serves must prevail over his own personal interest.  The higher the office held in the state, the more serious the office-holder's responsibility.  The greater the power, the greater the obligations of the person holding the powerful position.  The power he holds is not meant to be for his own honour and fame; much less is it for his own material aggrandisement.  The power he holds is for the betterment of the citizens of Papua New Guinea.

 

6.         If the leader were to use his power for purposes other than the betterment of the citizens, he would be abusing it, and he would thereby be demonstrating his unworthiness of his high office.  In short, his high office and all that it legitimately brings with it is never meant for the office-holder's material enrichment; it is meant to be used in the service of the citizens of the state and for their betterment.  Apart from its citizens, the nation state is nothing.  The state exists for them, and the leaders and bearers of high office are meant to serve the citizens as a whole, who make the nation what it is and what is destined to become.

 

7.         The members of the National Parliament are the elected representatives of all people of Papua New Guinea.  They have been given their high position to represent the interests of their people, and not for their own special interests.  What applies to the ordinary member of parliament is even more applicable to those who hold ministerial office in the nation state.  The Ministers of the nation hold high office and wide powers so that they may be better equipped to serve the people of their nation.

 

8.         What we have said of members of the National Parliament and Ministers applies also to elected members of the Provincial Assemblies (which, in Chapter 10, "Provincial Government", we propose should be established) and to presidents and equivalent leaders of recognised local bodies exercising governmental functions (such as Warakarai na Gunan, Greater Toma "Council" and Kabisawali Peoples' Government).  Senior public servants and other officials are in a similar position.  Though they have not been elected, their role as public servants or persons being paid from public funds is to serve the public.  Office-holders of registered industrial organizations and national office-holders of registered political parties hold influential positions of trust on behalf of or in relation to large numbers of Papua New Guineans, too.

 

9.         We must presume that people who have won or have been appointed to high office are where they are because of  their talents, their energy and personal character.  These same talents and personal characteristics that the leader possesses are, as it were, instruments fitting him for his office.  Those who have given the leader his high position can properly expect that these talents will be put to the best service of the people and their improvement, and will not be used to further the leader's own personal advantage.

 

10.       The holders of responsible positions, the leaders, because of the positions they hold are very often in the public eye.  How they conduct themselves is observed by many.  For their part the people naturally expect great things of their leaders, who can set the tone for the whole nation and make a positive contribution to the national morale.  For without being able to formalise their sentiments the citizens like to see embodied in their leaders all that is best in the nation; and they like to have leaders worthy of identifying themselves with.  To this deep and traditional feeling, the leaders of the country must respond positively and truly.  By doing so they will build up the confidence of the people, and give the nation additional solidarity, so that the citizens, inspired by the high standards set by their elected representative and officials, can feel one with their leaders in contributing to and consolidating the national ethos.

 

11.       No-one can do more to set the tone and style of the nation than the leaders.  Contrariwise, no-one in the nation can do more to lower the standards than the leaders.  Leaders are expected to demonstrate their leadership both by listening to the people, and by speaking to and for them.  More importantly, they are meant to give leadership in action.  Both by inaction and improper action, the leaders can betray the people's confidence in them.  What the leaders do and how they are seen to do it; these are things that can legitimise them in the eyes of the people and set the standards for the nation.

 

12.       Our government is government for the people and the more it represents the felt needs and aspirations of the people, the more it identifies with them and becomes their government.  In this, as we have said, the role of our leaders is crucial.

 

The Leadership Code - underlying considerations

 

13.       Experience in many countries has shown that constitutional provisions and declarations have little effect by themselves.  We believe that perhaps the single most important factor in determining the direction of national development is the quality of leadership.  If Papua New Guinea is to have any chance of implementing its national goals and directive principles, it must ensure that its leadership has a genuine commitment to these goals.

 

14.       We believe also, as do our people, that it is necessary to take positive steps to ensure that our leaders do not use their position in ways that threaten these goals; for example, by accumulating personal wealth, by collaborating with foreign or national businessmen, or by accepting bribes.

 

15.       We recognise that we leaders, like all other people, have our strengths and weaknesses.  And it is with full awareness of our human frailties that we have concluded that clear rules strictly enforced, are required to try to ensure the integrity of politicians at all levels, and of other leaders (as we have defined them) also.  The Chief Minister's recent statement to the House of Assembly, in which  he expressed serious concern about the problem of corruption in government, and announced the Government's intention to take immediate action to prevent corruption from becoming what he described as a "disease" in this country, adds weight to this view.  We welcome and fully support the initiative which the Government is taking to deal with the particular matter of gifts to leaders, which is an important aspect of the total problem of ensuring the integrity of our leaders.

 

16.       Our proposals are designed to meet this need for positive action to be taken so that leaders will not be in a position where their private interests conflict with their public responsibilities.  The personal interests of our leaders must not become identified with elements outside or within Papua New Guinea whose interests are an obstacle to the development of a genuinely just, honest and egalitarian society in this country.

 

17.       There are various ways of regulating the conduct of leaders.  Some of these are already incorporated in the Parliamentary Integrity Ordinance, and also in a proposed (but not officially released) Ministerial Code of Conduct.  We have decided that these provisions should be extended to cover all leaders (as we have defined them), as we feel that to limit it to national politicians - would be to deal with only part of the problem of maintaining integrity in public life.  The available evidence both within Papua New Guinea and abroad indicates clearly that senior government officials, members of provincial governments and other categories of people whom we propose should be included in the definition are often just as much exposed to the temptations of corruption as are national parliamentarians.  The Chief Minister's disclosure that a valuable diamond was recently offered to a senior official clearly demonstrates the nature of this problem.

 

18.       Our proposals also involve greater restrictions on leaders' business activities than are included in either the Parliamentary Integrity Ordinance or the proposed Ministerial Code.  This is because, after full consideration of this matter, we believe it is essential in the interests of our people to introduce these more stringent provisions.  Our reasoning is given below and also later in this Chapter.

 

19.       The proposed Leadership Code gives strong emphasis to firmly restricting leaders in their dealings with foreign controlled enterprises.  We believe that experience both here and in other countries shows that involvement of leaders with foreign controlled corporations including the giant multi-national corporations, can lead to much corruption.  These companies and other enterprises are in a position to offer tempting gifts and other favours, apparently with no strings attached, but in reality with the object of compromising the leader's own position, so that when negotiations or other dealings between the enterprise and the level of government at which the particular leader is working, take place, that leader will not be able to take an objective stand on behalf of his people.  A similar danger exists if the leader has shares or some other beneficial interest in the foreign enterprise.

 

20.       We have not, however, laid down such strict limitations in respect of local business enterprises, except in relation to Ministers, constitutional office-holders, senior public servants and members and senior officers of statutory authorities.  Our reasoning has been that we believe some leaders should be in a position to help promote business activity among Papua New Guineans by their own example.  We also feel that there is, at this stage of our development, significantly greater danger of corruption if leaders are involved in foreign controlled enterprises than if they have interests in Papua New Guinean enterprises.  At a later date, it may of course become necessary to place stricter limitations on leaders' activities in this respect also - but that is something for the future.

 

21.       It has been argued that our Committee could be bringing in measures that might not be suitable at our present stage of development and that they could result in the opposite of our aims being achieved.  It is said that, in practical terms, there may be two opposing dangers; that the ideals we put forward for ourselves become a dead letter, so that we fall into disrepute because of the gap between what we preach and what we practice; or, on the other hand, that we make it impossible for many of our present leaders to pursue the path of leadership, forcing the people to turn to new leaders who might not be their natural choice, and who could even be less sincere and dedicated than the others.

 

22.       We appreciate these anxieties but are convinced that it is not too early to make a start in establishing that high standards of personal conduct and integrity are required of our leaders.  Our country needs men and women who have the courage of their convictions to take stands when vital principles are at stake.  We need leaders who will not compromise the long term interests of our people for short term advantages to themselves.  If our leaders were to be personally involved with foreign business interests, for example, it would surely be impossible for them in their official capacity to deal with those objectively for the benefit of Papua New Guinea as a whole.

 

23.       Corruption in public life is, of course, a world wide problem which has reached very serious proportions in a substantial number of countries - developing and industrialised alike.

 

24.       The scandal of "Watergate" in the United States has highlighted the extent to which bribery, electronic eavesdropping, false smear campaigns, and other gross abuses of political power have infected the whole American political system.  In Britain, too, deep seated corruption at local government level has recently been exposed.

 

25.       In the past, many politicians and members of the public alike around the world have responded to this problem mainly by preaching, not suggesting or initiating any positive steps to remedy it.  Others have simply shrugged their shoulders and resigned themselves to accepting the situation in the belief that nothing can be done about it.

 

26.       However, recent developments in other countries show how much can be done once the public becomes fully aware of the magnitude of the problem of corruption.  In the United States, where corruption in public life has been widespread for decades, though new anti-corruption measures are being taken in legislatures in many parts of the country, leading public figures have been put on trial, and a number convicted and jailed.  Prominent, long-serving politicians of doubtful integrity have lost public support, and a number of those who have had to face the electors at the polls have been defeated.

 

27.       A number of new Commonwealth States have taken firm action too.  In 1973, Jamaica passed a new law concerning members of parliament along very similar lines to our own Parliamentary Integrity Ordinance.  The Constitutional Commission of Trinidad and Tobago has recommended that similar provision be made in that country's new Constitution.

 

28.       Tanzania introduced a stringent leadership code covering parliamentarians and a large number of officials at all levels, in 1967, and last year passed a new law to establish a Leadership Committee to enforce the Code more effectively than had previously been possible.  Zambia adopted a similar code last year after establishing a special enforcement body called the Leadership Committee in its 1973 Constitution.

 

29.       We do not suggest that it will be easy to make the proposed Leadership Code fully effective.  But we do believe that if the political will is behind it, it can be made a potent force in maintaining public confidence in our leaders at all levels.

 

30.       We wish to avoid misunderstanding.  We are not proposing a code of conduct to divorce our leaders from every field of business activity or professional interest.  In fact, no leader is worth his name if he is not in tune and in touch with the social and economic concerns of his people.  But a leader should not place himself in a position where he may well have a conflict of interest due to his shareholdings or business activities, nor should he use his position to gain rewards or benefits which he would be unlikely to obtain if he were not in a position of leadership.

 

Superannuation Scheme for certain leaders

 

31.       We have given careful thought to the view that our leaders should have some long-term security for themselves and their families if they are to be able to work consistently for the benefit of the community.  Public servants and the members of the judiciary have such security both by virtue of the tenure of their office and through the superannuation schemes which apply to them.  We believe other leaders who receive salaries in their capacity as leaders should also have some security for their future, though of course in the case of elected leaders their tenure of office must always remain uncertain.

 

32.       We believe that in fairness to those leaders who are paid a salary as leaders, and therefore come to be dependant upon that income, but are not at present eligible to receive superannuation benefits, a government subsidised superannuation scheme should be introduced without delay.  The early establishment of such a scheme will be vital to the successful implementation of the Leadership Code which we propose in this chapter, as the Code imposes significant restrictions on ways in which leaders may obtain income.  Without establishing such a scheme, the implementation of the Code is likely to be very difficult, as it is partly because of their lack of security that many elected leaders become involved in business activities for their own benefit.

 

33.       Such a scheme would clearly benefit members of the National Parliament in particular, but certain other leaders would gain from it also.  We envisage that the benefits under the scheme would be significant even in the case of a parliamentarian who has served only a four year term.  Otherwise we feel that the incentive to the leaders concerned to accept and abide by the Leadership Code is unlikely to be sufficiently strong for the Code to become effective.  We also see it as important that the superannuation scheme should come into force at the same time as does the Leadership Code.

 

34.       The cost to the country of establishing the proposed superannuation scheme should be quite small, especially when compared with the real cost to our country of allowing corruption among our leaders to develop.  Not only would this be very substantial in purely monetary terms (and it could run to hundreds of millions of dollars if agreements are made which do not provide maximum benefits for Papua New Guinea) but the effect on the integrity of the country could be disastrous, and extremely difficult to reverse.

 

Supervision and enforcement of the Code

 

35.       We intend the Leadership Code to be more than mere directives.  It should be morally and legally binding on "leaders", and firmly enforced.  It is for this reason that we have recommended that a particular, independent institution of government, the Ombudsman Commission (which in Chapter 11 we propose should be established) ought to have responsibility for overseeing the Code and seeing to it that leaders comply with its provisions.  We have preferred not to recommend the establishment of a separate institution to carry out this role as we are opposed to any unnecessary multiplication of institutions of government.  It is our firm view that the Ombudsman Commission is particularly well suited to carrying out this role as its members should be people who themselves have complete integrity, and its procedures and powers can readily be adapted to this purpose.  Experience in other countries has shown that ombudsmen quite frequently come upon instances of corruption in the course of their investigations into administrative malpractices, so that we would anticipate that this additional role will mesh in quite well with its general jurisdiction.

 

36.       We believe, most strongly, that the effectiveness of many of our proposals depends heavily on the acceptance of the Leadership Code which we propose.  The Code is among our most fundamental recommendations, and as such, it should be entrenched in the Constitution, as a schedule to it.  We have not, however, proposed that the Code be unduly difficult to change, as we recognise that it will be necessary to make changes to it in accordance with experience of its practical operation.

 

37.       If it is included in the Constitution, the Code's main provisions should become widely known, and this, in itself, should help to make it more effective, because people will be aware of the type of activities of leaders which are against the rules in the Code.

 

38.       If a leader commits a breach of the Code he should automatically lose his office unless there are extenuating circumstances which justify a lesser punishment.  A breach of the Code may also involve an offence under the Criminal Code or another law.  For example, bribery is already an offence under the Criminal Code, and the Chief Minister is proposing to introduce legislation to make the acceptance of any gift from a company or investor valued at more than a certain amount, a criminal offence.  We have made it clear that the provisions of the Leadership Code do not of themselves affect any offences under existing law, though we believe that the Parliamentary Integrity Ordinance 1971 should be repealed and replaced by new legislation which provides the machinery for the effective enforcement of the Leadership Code.  (The Parliamentary Integrity Committee provided for under that Ordinance would be replaced by the Ombudsman Commission, under a separate Act dealing with the Commission.)  We deal in detail with the enforcement of the Code at the end of this chapter.

 

Annual Declaration

 

39.       Our recommendation that each leader should disclose to the Ombudsman Commission various financial particulars concerning himself and his immediate family, each year, accords with our recommendation that the Leadership Code should be enforceable.  Unless leaders declare their assets, liabilities, and business activities, the Ombudsman Commission will not be in a position to know whether they are living up to what is expected of them.  Information is to be disclosed to and received by the Commission on the basis of confidentiality.  However, such information would be able to be used in disciplinary or criminal proceedings if it were relevant.

 

40.       This recommendation is virtually the same as a provision in the Parliamentary Integrity Ordinance, though its scope is much wider because it applies to leaders generally, not just to parliamentarians.

 

Bribery and misapplication of funds

 

41.       Bribery takes many forms, some being much more obvious than others.  We have mentioned earlier a clear example of attempted bribery which was disclosed by the Chief Minister at the June/July meeting of the House of Assembly.  Other forms of bribery are more subtle - for example apparent generosity in offers of trips overseas, expensive dinners, free services such as the use of cars, etc.  The fact that all of these forms of bribery are already being used in Papua New Guinea highlights the immediate danger to our society that this form of corruption presents.

 

42.       If a leader was found to have accepted a bribe he would not only be likely to lose his office - he could be convicted of a serious offence under the Criminal Code and sentenced to imprisonment for a number of years.

 

43.       The misapplication of funds is another very serious offence which is all too common at present not only in government but in co-operatives and private enterprise as well.  We see a need for our leaders to set an example to others, both inside and outside government service, in the proper use of government funds, and therefore recommend the inclusion of this rule in the Code.

 

44.       These recommendations are similar to sections 36 and 37 of the Parliamentary Integrity Ordinance, though of course those provisions apply only to parliamentarians.  Those sections, however, make breach of them a criminal offence.

 

Interests in government contracts

 

45.       It is clear that if a leader has an interest in a government contract this potentially involves a conflict of interest, especially if the leader is in a position of considerable influence.  The greater his interest in the contract, the greater is the conflict between his private interest and his public duty.  A leader's interest in a government contract could be direct, through, for example, a small firm of which the leader and his family may be the major partners, or relatively indirect, through a shareholding held by the leader or a member of his family.  In either case, we believe the principle is the same.

 

46.       We recognise, however, that there are some situations where a leader's interest in such a contract is insignificant, or the nature of the particular contract is such that the leader's interest should be acceptable.  In particular, we do not wish to prevent leaders from being involved in wholly Papua New Guinean owned enterprises which assist substantial numbers of our people to more fully participate in their own development and which have interests in government contracts which are merely incidental to their main activities.  We think there is an important distinction to be made between enterprises in which a leader is primarily obtaining benefits for himself and his own family, and enterprises in which the leader is assisting the people of his area to engage in commercial activities which actively involve and will directly benefit many of those people.  We have in mind groups such as the Hiri Development Association, Kabisawali Village Development Corporation, the Bena Association and the New Guinea Development Corporation.

 

47.       We appreciate that it is extremely difficult to lay down hard and fast rules to distinguish between these different types of enterprise, and propose that it should be a function of the Ombudsman Commission from time to time to make rules and publish guidelines that the Commission be empowered to grant exemptions from the general prohibition of leaders having an interest in a government contract, in particular, cases where that interest is of little practical consequence.

 

Shares in foreign companies or partnerships with foreign citizens

 

48.       As we have already emphasised, we believe that our leaders should not compromise their position in relation to business enterprise with which they must deal in their capacity as leaders.  We are only too well aware of the experience elsewhere, especially in developing countries, where foreign corporations have dictated the nature and pace of development within the country, through indirect control of the economy.  There is no more effective way for foreigners to control our resources than to silence our leaders by enticing them into partnerships or the acceptance of shareholdings in their businesses.  Our leaders must, we believe, resist this temptation if they are going to be true spokesmen and representatives of ordinary people.

 

49.       Whilst we recognise that the danger to which we refer is not confined to foreign controlled enterprises, we believe that at this stage of our country's development, where foreign companies and firms control virtually the whole of our economy, these enterprises are the ones which should be singled out.

 

50.       To give a concrete example of the type of situation with which we are concerned, suppose a substantial number of the Members of the House of Assembly hold shares in a particular foreign controlled company.  It then becomes an issue in the House as to whether the agreement between that company and the Government should be changed to make it more favourable to the Government and the people, in the light of new circumstances which were not foreseen at the time the original agreement was made.  Clearly all of the Members of the House who hold shares in the company would be faced with a conflict of interests as between their own personal interests which would be best served by voting against any change in the agreement, and the interest of the people as a whole.  We believe that such a situation should not be allowed to arise, as it puts at risk the interests of the nation.

 

51.       We realise that it will be a difficult matter to determine in a particular case, whether a company is in fact subject to effective foreign control, but we believe it is essential that this distinction be drawn, if necessary, by declaring under an Act, from time to time, particular companies as being effectively foreign controlled.  Our recommendation gives a general indication of our thinking in this regard.

 

52.       This general prohibition of leaders holding any shares in a foreign controlled company or being involved in partnership with foreign citizens may be thought by some to be hard, but we believe it is essential if our national integrity is to be maintained.  At this stage in our development, it should be easier to implement this and other similar measures than it will be later on when more of our leaders have a vested interest to protect.  Summing up our reasons for making this and other related recommendations, we believe it is vital that our leaders' sense of judgement of what is in the best interests of our people should not be impaired by their having beneficial interests in foreign corporations which are concerned with making good profits for their shareholders not with achieving Papua New Guinea's national goals.  Our leaders' first responsibility is to the citizens of Papua New Guinea.  Having beneficial interests in foreign corporations, we believe would place our leaders in the position where they are faced with a conflict of interests, and human nature being what it is, this would be likely to result in compromises or, worse still, preference being given to immediate personal benefits at the cost of the long-term interests of our country.

 

Leaders not to accept loans, etc. from foreign controlled companies or firms

 

53.       For similar reasons to those which underlie our recommendation that leaders should not hold shares in foreign controlled companies or be partners in foreign controlled firms, we recommend that leaders should not accept any loan other than a normal bank loan, hold any franchise or accept any other benefit or advantage from a company or firm which is effectively controlled by foreign citizens.  We do not believe our leaders should be obligated to foreign citizens or enterprises in this way, as such an obligation is likely to undermine their independence as leaders.

 

54.       We recognise, however, that provision should be made for exceptions to this general rule.  One such exception would be hire purchase agreements (though we have not provided for this specifically, preferring to leave the matter in the hands of the Ombudsman Commission which we propose should be empowered to make rules, publish guidelines and grant specific exemptions in particular cases, subject to such conditions as he considers necessary).  In exercising these powers, the Commission should, we believe, take full account of potential conflicts of interests, and of the need to ensure that leaders do not use their position to gain advantages of this kind.

 

Outside benefits not to be accepted

 

55.       We view with concern the growing practice, particularly among businessmen, of giving or attempting to give favours, "gestures of appreciation" and other forms of gift to our leaders in decision making positions, in order to obtain from these leaders favourable consideration in their business dealings with the Government.  The Chief Minister has indicated his awareness of this situation and, as we have mentioned earlier, has made a strong statement to the House of Assembly expressing his view that there is an urgent need for legislation to prohibit this type of activity and impose heavy penalties for those who indulge in it.  We fully support the Chief Minister's stand in this matter.

 

56.       We propose that there be provision in the Leadership Code prohibiting all leaders, their spouses and children from asking for, accepting or in any way obtaining any benefit other than the salary, allowances, etc. attached to the leader's office.  We recommend that the Ombudsman Commission be given power to make rules or publish guidelines setting out the types of benefit which it is permissible for leaders and their families to accept, such as very small gifts of little value.  We further recommend that if a leader is in doubt as to whether or not he should accept a particular benefit being offered to him, he should refer to the matter to the Commission for a ruling.

 

Official information

57.       The use of official information of which a leader becomes aware in the course of his duties is obviously an important matter.  As experience in other countries clearly shows, it can be the means by which leaders acquire very significant advantages for themselves and their friends.  Corruption of major proportions can develop rapidly if official information is used for personal gain, either directly or indirectly.  Simply publishing official information prematurely, through the media can be a serious abuse of an official position, and we propose that this practice also, be prohibited under the Code.

 

58.       Whilst we are concerned that generally our citizens should have ready access to official information, this does not mean that there are not a number of circumstances in which the Government or an institution of government, should not, in the public interest, withhold certain information from the public, at least for a certain time.  Matters concerning the Budget and negotiations with other countries are clear examples of this kind of situation.

 

Certain assets to be disposed of

 

59.       A leader and his family who hold assets or other interests which, under the Code they are not entitled to retain, should, we recommend, dispose of those assets or interests within six months of the date when -

 

                     the Leadership Code comes into force; or

 

                     he takes office; or

 

                     he is directed by the Ombudsman Commission to dispose of the particular assets.

 

We recognise however, that it may not always be possible for a leader to dispose of large assets within that period.  Accordingly, our recommendation is that the Commission be empowered to grant an extension of time of up to three months to enable a leader or a member of his family to sell a particular asset or interest if there are special circumstances which justify this action.

 60.       We also propose that the Ombudsman Commission be notified of the disposal of any asset in accordance with an obligation which a leader or a member of his family has under the Code.  This rule will enable the Commission to check that the person concerned has in fact complied with the requirements of the Code.

 

Disclosure of interests before debate or discussion

 

61.       In the Parliamentary Ordinance there is a provision which requires a Member of the House of Assembly to disclose any financial interest which he has in any matter on which he wishes to speak in the House, or in a committee of the House.  We consider this to be an important rule which should be adapted for incorporation in the Code so that it applies to all leaders.  A recommendation has been made accordingly.

 

62.       An important effect of this rule will be to enable members of parliament, members of provincial assemblies, etc. to better assess the weight which they should give to speeches made by their colleagues.  Obviously if a member of parliament has a financial interest in a particular matter, and he speaks in such way as to be effectively supporting his own interest, his speech will be given far less weight by his colleagues than would otherwise be the case and, we believe, rightly so.

 

63.       We have further recommended that the Speaker or other person presiding should be entitled to direct that the person who has a financial interest in the particular matter should not vote on it.

 

Effect of breach of the Code

 

64.       We recommend that when a tribunal which hears charges of breaches of the Code (which we describe later in this chapter) decides that a leader has committed a breach, that leader should automatically lose his office unless the tribunal decides that there are extenuating circumstances which are such that loss of office by the leader would be too harsh a punishment.  If a tribunal does find extenuating circumstances in a particular case, we recommend that it should be able to impose a punishment such as a fine, or a reprimand or require the offender to enter into a bond to be of good behaviour for a certain length of time.  The tribunal should also, we believe, be able to recommend demotion of a leader who is a public officer (a person who is employed by a government or semi government body).

 

Reimbursement of accountancy fees relating to declarations

 

65.       Leaders should not be out of pocket in respect of the cost of preparing their annual declaration, and we have recommended that they be able to claim from the Government all reasonable accountancy fees which they have incurred for this purpose.

 

ADDITIONAL LIMITATIONS UPON MINISTERS

 

66.       As leaders who are responsible for the governing of the country at national level, ministers hold positions of very considerable responsibility and influence.  It is essential that they give the highest priority to their ministerial duties and minimise their private interests.  Any private interest which could conflict with the minister's public duty should be disposed of.

 

67.       Because it would be unduly cumbersome to make detailed provision for restrictions on the private interests of ministers in legislation, we propose that the Ombudsman Commission be given power, after consultation with the Prime Minster, to publish general guidelines concerning the extent to which minsters may properly be involved in outside interests.  We further recommend that the Commission have power to give specific directions to ministers to withdraw from a particular interest if the Commission, in its discretion, considers that interest is or could be in conflict with his public duty. (We envisage that before giving a specific direction to a minister, the Commission would first notify the Prime Minister of its intention.  The Prime Minister could then speak with the minister before he was given the direction.)

 

68.       Such a conflict between a minister's public duty and his private interest could arise from the fact that his private business interest involves him in spending a considerable part of his time supervising any employees he may have, or in carrying out other work associated with that business.  Certain business interests obviously should not be held by ministers holding particular portfolios in which policy decisions concerning those types of business must be made either by the minister himself or by the National Executive Council on the submission of that minister.

 

69.       In relation to ministers, the issue of the extent of the conflict between public duty and private interest goes further than that, however, as the National Executive Council will have the  responsibility for making decisions concerning all aspects of the life of the country.  Just where the line should be drawn is not an easy matter to determine.  However, we believe that our recommendation concerning the Ombudsman Commission's role of establishing guidelines, and if necessary, giving directions concerning individual ministers is the most satisfactory way of handling this problem of differentiating between acceptable and unacceptable degrees of involvement in private business, professional or other activities which provide income or other material benefits for ministers or for the wife, husband and child of a minister.

 

Minister not to hold directorships

 

70.       We believe a minister should not, as a general rule, be eligible to be a director of any company.  Holding a directorship of a company would be quite likely to involve a minister in conflict between his public duty and his private interest as companies are usually involved in business activities on a larger scale than are individuals and firms, and tend to have a more direct and continuous involvement with governments. Our recommendation is that a minister, his spouse or one of his children must not hold a directorship except if it is either an honorary one or is a directorship in a small family company in which more than half of the voting rights are effectively held within the minister's immediate family.

 

71.       To ensure that a directorship of this kind is held by a minister or a member of his family only in circumstances which justify this, we recommend that the approval of the Ombudsman Commission be required if a minister, his spouse or his child wishes to accept or retain such a directorship.

 

72.       Somewhat similar provision in respect of the holding of directorships by ministers is made in both the Parliamentary Integrity Ordinance and the proposed Ministerial Code.  A provision of this kind was also included in the Ministerial Code of Conduct which applied, for a number of years, firstly to Ministerial Members and then to Ministers.  (The Ministerial Code of Conduct was discontinued in May 1973 at a time when a number of powers and functions were being transferred from the Australian Government to the Papua New Guinea Government.)

 

73.       Our recommended provision concerning family companies is, however, more limited than those.  This has been done in accordance with our view that there should be firm restrictions on the involvement of ministers and their families in private interests.  We consider that to allow ministers to retain interests in companies controlled by others would be to allow so much latitude that the provision would have little significance.

 

74.       We have made special provision for government nominees on the boards of directors of corporate bodies.  These people should, we propose, be obliged to pay to the government any fee or other benefit they receive from the company of which they are board members.

 

Behaviour of Ministers

 

75.       As we have said earlier, our people wish to see their leaders set an example in the way in which they conduct themselves.  We also believe that ministers should take particular care to ensure that they do not put themselves into any situation in which they might say or do something which could endanger the security of the country.  There have been a number of examples of ministers in other countries becoming involved in situations which proved to be dangerous to the interests of their country.  Papua New Guinea's security and its national interest should not be put at risk in this way.  We have recommended accordingly.

 

ADDITIONAL LIMITATIONS UPON CONSTITUTIONAL OFFICE-HOLDERS

AND SPECIFIED OFFICE-HOLDERS

 

76.       Not only ministers are in positions of great responsibility and influence.  We believe that constitutional office-holders, departmental heads and other senior public servants, statutory office-holders and certain senior officers who work under them hold positions of such importance that they, also, should be subject to restrictions additional to those which apply to leaders generally.  These people hold high office and have a significant influence upon top level decisions.  If they are to carry out their work capably they should concentrate fully upon, and not be diverted by having other business interests or employment.

 

77.       We have recommended in Chapter 14, "General", that a person should be disqualified from becoming (or being) a constitutional office-holder if he -

 

           is involved in the management of a business for profit;

 

           holds any other office or is engaged in a business, trade or profession;

 

                     buys, rents or hires, accepts as a gift, or holds government property, except in accordance with the terms of his employment, provided that, subject to the Code, he may buy or rent government land in the same way as any citizen may do.

 

78.       We recommend that these restrictions should apply under the Leadership Code to constitutional office-holders, and to specified office-holders also, as their position in this regard is very similar to that of constitutional office-holders.

 

Restrictions on remuneration, gain or profit

 

79.       For similar reasons to those we have just expressed, we believe there should be restrictions on the sources from which constitutional office-holders and specified office-holders should be able to obtain income.  We propose that these be limited to -

                     monies payable to the office-holder in respect of the office he holds;

 

                     interest on money deposited in a bank or government financial institution;

 

                     interest on government bonds; and

 

                     subject to the Constitution (including this Code) gains made from land owned or occupied by the office-holder.

 

80.       We are aware that the fourth of these permitted sources of income is very wide compared with the others, and that it could be used to significantly reduce the effectiveness of this provision.  However, we have given the Ombudsman Commission general responsibility for supervising the administration and enforcement of the Code and the power to publish guidelines designed to ensure that the Code is fully implemented and made effective.  We envisage that if the Commission finds that unreasonable advantage is being taken of this provision by constitutional and specified office-holders contrary to the spirit of the Code, the Commission might either recommend that the  Code be amended appropriately, or alternatively, it might make rules or publish guidelines which would close this loophole.  Similarly, if the wives or children of constitutional or specified office-holders, with significant assistance from their husbands, become heavily involved in, for instance, business enterprises, there may need to be provision made for some restrictions to be placed on the "outside" activities of these family members.  Initially we think this is unnecessary.

 

Limitation on acceptance of directorship or consultancy of a foreign company

 

81.       We are concerned to avoid the situation where a person who holds a senior position in a government department or in a statutory authority abuses that position to assist foreign controlled corporations generally, or a particular foreign corporation with which he may form an unofficial relationship, with a view to his being appointed as a member of the board of directors of such a corporation or as a paid consultant to it.  Whilst no impropriety is necessarily involved in such an appointment, the possibility of it being a reward for past favours is always present.  In any event it does not give a good impression.  Such appointments also mean, of course, that the office-holder is able to assist the company concerned quite considerably through his contacts with senior public servants and possibly with ministers also.  We recommend that these office-holders should not be allowed to accept a directorship of or paid consultancy to any company effectively controlled by foreign interests (whether or not it is incorporated in Papua New Guinea) until three years have expired after the office-holder left his public office.

 

82.       We intend this provision to apply to companies which are carrying on business in Papua New Guinea or have a significant interest in such a company, though we have not spelt this out in our recommendation.  Breach of this rule would result in the former office-holder being fined or punished in such other manner (other than by imprisonment) as the tribunal which hears the case, in accordance with the Constitution and any law, thinks fit.

 

Special provision in respect of non-citizens

83.       We recognise that non-citizens are in a somewhat different position from citizens who hold office as leaders.  Many foreign citizens will eventually return to their own country and we appreciate their wish to make provision by investment for the time when they do return home.  However, we consider that they should not be able to invest in a foreign controlled corporation which carries on business in Papua New Guinea or has a significant interest in such a corporation, otherwise these people would be likely to be faced with a conflict of interests which, in principle, we believe should be avoided by citizens and non-citizens alike.

 

84.       The Committee appreciates that it is a difficult matter to draw a clear distinction between corporations which have a significant interest in an enterprise which is operating in Papua New Guinea and those which do not have such an interest.  However, we believe that it is possible for a meaningful distinction of this kind to be made.  It should be done in ordinary legislation.

 

Code not to affect provisions of Criminal Code and other laws

 

85.       We do not intend that the provisions of the Code should limit the effect of any provisions of the Criminal Code or any other law concerning offences similar to the breaches of the Leadership Code.  It is additional to existing legislation.  However, we envisage that the Parliamentary Integrity Ordinance 1971 would be repealed and replaced by an Act which provides the necessary machinery to enable the Code to be adequately enforced.

 

ENFORCEMENT OF THE CODE

 

Powers of the Ombudsman Commission in relation to enforcement of the Code

 

86.       The Ombudsman Commission has been given responsibility for the supervision and enforcement of the Code under the terms of our recommendations in this Chapter.  We consider that in the interests of flexibility and the overall effectiveness of the Code, the Commission should be given power to make rules and publish guidelines concerning the conduct, financial and business affairs of leaders, their spouses and children, and to make provision in those rules and guidelines for exemptions from the provisions of the Code where such exemptions are permitted by the Code.

 

87.       The Commission should be in a good position to make these detailed rules and guidelines in the light of experience with the problems associated with the operation of the Code.  Of course if, for example, the Commission felt that there was a major loophole in the provisions of the Code which was enabling leaders to circumvent restrictions on their business or professional activities, the Commission could recommend to the Prime Minister and the National Executive Council that the Code be amended accordingly.

 

88.       To ensure that there is adequate political direction and involvement in relation to these rules and guidelines prior to their being made or published, we have recommended that before making or publishing them the Commission consult the Prime Minister, and the Chairman and Deputy Chairman of the First Parliamentary Committee, all of whom will be concerned with the functioning of the Leadership Code and of the Commission itself.

 

89.       These rules and guidelines should be subject to disallowance by the Parliament in the same way as we have recommended that other rules made by the Commission, and regulations and statutory rules generally, should be able to be disallowed.

 

90.       We recommend also, for similar reasons, that the Commission should be able, subject to the Constitution and in accordance with law, to specify by proclamation in the Government Gazette, office-holders who would then be designated "leaders" for the purposes of the Code.  Clearly, the task of identifying which particular positions should be designated as leadership positions is not one which can be satisfactorily done at a particular point of time and then left unchanged for a substantial period.  New positions in government departments and in statutory bodies are constantly being created and old positions abolished.  We feel that our recommendation provides for a continuous review of the situation to be maintained, and that this should improve the effectiveness of the Code.

 

91.       The Commission should also have power to give a direction to any leader to dispose of a particular asset or interest which, in the opinion of the Commission, he holds contrary to a provision of the Code.

 

92.       The maximum period of time within which a leader is to be required to dispose of a specified asset or interest should be six months, but we have provided for the Commission to be able to extend that period by up to three months in special cases such as where a leader has difficulty in finding a buyer for a particular asset which does not have a ready market.

 

Tribunals to hear charges of breach of the Code

 

93.       We have given full consideration to the question as to the kind of tribunal best suited to dealing with alleged breaches of the Code, and have decided that although all members of the tribunal should be drawn from the judiciary, the tribunal should be separate from an ordinary court.  We feel that breaches of the Code are disciplinary offences rather than criminal offences (though some breaches would also constitute criminal offences and be dealt with as such).

 

94.       We also consider that it would be inappropriate for alleged breaches of the Code to be dealt with by a single judge or magistrate as this would be placing an unduly onerous responsibility on a single person.  Our recommendation is that in the case of a leader other than the Prime Minister or another minister, or the Chief Justice or another judge of the National Court, or any other constitutional or specified office-holder, the tribunal by which the charge should be heard should comprise a judge of the National Court and two senior magistrates appointed by the Judicial and Legal Service Commission.  In the case of a minister or a constitutional or specified office-holder, we recommend that the tribunal consist of three National Court judges appointed by the Judicial and Legal Service Commission.

 

95.       These tribunals should have all necessary powers and authority to conduct the hearing, summon witnesses, take evidence, make decisions and otherwise  function as judicial bodies.  We envisage that they may adopt procedures which are somewhat more informal than those of a court, but that there will be adequate protection of the rights of those charged with a breach of the Code.

 

96.       As to the effect of a decision by one of these tribunals that a leader has committed a breach of the Code, we recommend that the leader should automatically be deprived of his office unless the tribunal is satisfied that there are extenuating circumstances which justify the tribunal imposing an alternative penalty, such as imposing a fine of up to a specified maximum sum (provided for by law), demoting the leader (if he is a public officer) reprimanding  him, placing him on a bond to be of good behaviour for a certain period of such other punishment as may be laid down by law.

 

The right of citizens to make complaints of breaches of the Code

 

97.       If the Code is to be adequately enforced much will depend on the readiness and ability of citizens to make complaints about activities of leaders which they believe to be breaches of the Code.  We propose that the investigation of complaints should be facilitated, and have accordingly recommended that these complaints may be directed not only to the Ombudsman Commission itself but to any government department, statutory authority or government officer.

 

98.       Whenever a complaint (other than one which is clearly frivolous or annoying) concerning a leader is received by a department, statutory authority or officer, the department, authority or officer who receives the complaint must forward it immediately to the  Commission either himself or through his superior officer, so that it can be investigated.  When forwarding the complaint, full details of it should be supplied to the Commission.

 

RECOMMENDATIONS

 

Superannuation Scheme for Leaders

 

1.         In fairness to leaders, and in order that a strict Leadership Code may be more acceptable to them, a government-subsidised superannuation scheme should be introduced without delay for political and other leaders who receive a salary as leaders but do not have security of tenure such as that enjoyed by public servants, or are not covered by an existing superannuation scheme.

 

Definition of "Leader"

 

2.         For the purposes of the Leadership Code, the following are "leaders" -

 

                     the Prime Minister, Deputy Prime Minister and other ministers;

 

                     the Leader and Deputy Leader of the Opposition;

 

                     the Speaker, Deputy Speaker and other members of the National Parliament;

                    senior public servants above a specified level or holding specified positions;

 

                     senior members of the Parliamentary Service holding specified positions;

 

                    members of statutory corporations and boards, and officers of those corporations and boards above a specified level or holding a specified position;

 

                     government nominated chairmen, managing directors, directors, and general managers of corporations in which the Government has an equity holding;

 

                     members of provincial assemblies, and senior officers above a specified level or holding a specified position employed directly by provincial governments;

 

                     constitutional and statutory office-holders, and senior public officers subject to their direction and control who hold specified positions;

 

         office-holders at national level of registered political parties;

 

         academic and specified senior administrative staff at tertiary institutions;

 

         specified office-holders of registered industrial organizations;

 

                    specified senior staff of ministers and of the Leader and Deputy Leader of the Opposition;

 

                     ambassadors, high commissioners, and senior officers of Papua New Guinea missions abroad holding specified positions;

 

                     presidents, chairmen and mayors or recognised local bodies exercising governmental functions;

 

                     senior police and Defence Force officers above a specified level or holding specified positions;

 

         members of the Advisory Committee on Citizenship Matters; and

 

         other specified office-holders.

 

Note:               (i)         The Committee recommends that the level in the Public Service at and above which office-holders should be categorised as "leaders" for the purposes of this Code be "Chief of Division" or its equivalent.  This should be done by law.

 

(ii)        The specification of particular office-holders as leaders under this recommendation shall be made by law only after full consultation with the Public Service Commission and the Ombudsman Commission.  The Committee recommends that the Ombudsman Commission have the power set out in Recommendation 4 below to specify by gazettal particular office-holders and positions for the purposes of this Code, as those of "leaders".

 

            (iii)        In this Chapter "law" includes Constitutional Regulations, an Act of Parliament and regulations made under an Act.

 

            (iv)        The reference to the "Ombudsman Commission" is a reference to the Ombudsman Commission which, under recommendations in Chapter 11, the Committee proposes should be established.

 

Leadership Code

 

3.         The following Leadership Code shall be incorporated in the Constitution -

 

"LEADERSHIP CODE"

 

Annual Declaration

 

1.                     (1)        Every leader shall, within three months of the due date for disclosure, and within twelve months of his vacating office, submit to the Ombudsman Commission in a sealed envelope a full declaration in the form and containing the particulars prescribed by law setting out in respect of himself, his spouse and his children -

                                                                       

             (a)        all of their assets, liabilities and sources of income (including full details of all shares and securities held) as at the due date for disclosure; and

 

             (b)        his business transactions and income during the period of twelve months before the due date for disclosure.

 

            (2)        Subject to clause (6) below, the declaration shall set out separately the business transactions of the leader, his spouse and his children (to the best of his knowledge and belief) with, and the income they have derived, (with the approval of the Ombudsman Commission) from, the Government, and also any business transactions with or income derived from the Government by any body of persons carrying on business for purposes of profit -

 

             (a)        consisting of twenty-five persons or less, of which the member, his spouse or one or more of his children is a member; or

 

             (b)        of which any of those persons is a director or secretary.

 

            (3)        If so requested by the Ombudsman Commission, a leader shall furnish further particulars in clarification or expansion of the particulars contained in the declaration required under clauses (1) or (2) above.

 

            (4)        Provision shall be made by law for notification of leaders of the date on or before which a declaration must be furnished under this rule, but failure to do so does not relieve the leader of his obligations under this rule.

 

            (5)        The Commission may, for good cause, extend the period of three months referred to in clause (1) above according to law.

 

            (6)        Unless a leader makes a declaration on his or her behalf, the spouse of a leader shall file a separate declaration setting out all of the particulars in relation to his or her own affairs in respect of which the leader is otherwise  required under this recommendation to provide information.

 

            (7)        Any statement in a declaration made under this or any other provision of the Code that is, to the knowledge of the declarant, or which if he used reasonable care he ought to know to be false or misleading in a material particular, shall be deemed to be a breach of this Code.

 

              Note:  In these recommendations "prescribed" means prescribed by law.

 

Bribery

 

            2.         A leader or any spouse or child of a leader shall not, in consideration (either directly or indirectly) of his actions or omissions as a leader being influenced in any manner, or on account of his actions or omissions as a leader in any manner (whether generally or in a particular case) ask for, receive, obtain, or agree or attempt to receive or obtain, any property, benefit or favour of any kind for himself or any other person or body.

 

Misapplication of funds

 

            3.         A leader shall not intentionally apply, or agree to  the application of any money forming part of a fund under the control of the Government or of any statutory or other body in respect of which the leader has responsibilities as a leader, to any purpose for which that fund cannot lawfully be applied.

 

Interests in government contracts

 

                        4.          (1)        No leader or any spouse or child of a leader may have or seek an interest in a government contract,

                                                            provided that the Ombudsman Commission (referred to below as "the Commission") may give approval in respect of a leader's business interest or in respect of a particular transaction if that interest or transaction is of such a nature that in the opinion of the Commission, it does not involve the leader in any significant potential conflict of interest or did not involve the use of his position to gain the interests.

 

            (2)        In considering whether it should give approval to a particular business interest or transaction, the Commission shall take full account of the composition of any corporation, firm, co-operative or other enterprise in which a leader, his spouse or any of his children has a beneficial interest as an office-holder, shareholder, partner or member, so that more favourable consideration is given in respect of the interests of leaders who are involved in organisations which meaningfully involve substantial numbers of Papua New Guineans, and are wholly controlled by Papua New Guineans.

 

Shares, partnerships etc. in foreign companies or firms

 

            5.         No leader, spouse or child of a leader may hold or have any interest in any directorship, share, or other beneficial interest in a company, firm or property which is effectively controlled by foreign citizens, except in fulfilment of his duties or functions as a leader.

 

            Note:  In this Chapter the term "effective control" should be taken literally.  (In determining whether or not a firm or corporation is under effective foreign control full account shall be taken of the composition of the directorship and of the technical, financial, administrative and commercial management of the firm or corporation, and of its ownership, particular consideration being given to the degree to which the distribution of Papua New Guinean interests affects the ability of Papua New Guineans to limit foreign influences.  A foreign equity interest of twenty percent would normally be sufficient in itself to constitute effective foreign control.)

 

Loans etc. from foreign controlled companies or firms

 

            6.         No leader, spouse or child of a leader may accept any loan other than a normal bank loan, hold any franchise, or accept or be involved in the acceptance of any other benefit or advantage from a company or firm which is effectively controlled by foreign citizens, provided that the Commission may specify exemptions from this rule, either generally, in rules or published guidelines, or in a particular case.  Such exemptions may be absolute or under such conditions as the Commission prescribes.

 

Outside benefits

 

                        7.         (1)        A leader, his spouse or any of his children shall not, either directly, or indirectly, or in any way related to the leader's office, or to his work as a leader ask for, accept or derive any benefit other than the emoluments attached to his office, provided that the Commission may permit the acceptance of specified benefits or types of benefit either generally, by means of rules or published guidelines, or in a particular case.

 

(2)      In case of doubt as to whether or not a particular proffered benefit may be accepted without committing a breach of this Code, a leader shall refer the matter to the Commission which may make a ruling as to whether or not that benefit may properly be accepted.

 

Official information

 

            8.         A leader shall not make public or put to his personal advantage, or to the advantage of any other person, materially or otherwise, any information acquired by him during his term of office as a leader which has not been officially made available to the general public, provided that proper use of such information by a leader for official purposes shall not be deemed to contravene this provision.

 

Leaders to dispose of certain assets etc.

 

                        9.         (1)        Subject to clause (2) of this rule, a leader, his spouse or child who, at the commencement of this Code has, or holds any assets or other interests in contravention of any of the provisions of this Code, or which he is directed by the Commission to dispose of or relinquish shall, as soon as practicable, dispose of those assets or other interests which, under the Code, or under a direction of the Commission, he is not entitled to retain.  A leader shall dispose of, or relinquish, all of such assets or other interests within a period of six months after -

 

            (a)         the commencement of the Code;

 

            (b)        he takes office; or

 

             (c)        he has been notified in accordance with law, of a direction of the Commission which requires him to dispose of, or relinquish those assets or interests, whichever is the later.

 

            (2)        The Commission may, in its discretion, grant a leader an extension of time of up to three months to enable him to dispose of particular assets or interests.

 

            (3)        Full details of the sale or other disposition of a leader's assets in accordance with clause (1) above shall be forwarded to the Commission within fourteen days of the completion of the transaction.

 

Disclosure of interest before debate or discussion

 

                        10.       (1)        Where a leader has a direct or indirect interest or involvement in a matter that is or is likely to be raised in the National Executive Council, in the National Parliament, in a provincial council, provincial assembly (or district government), area authority, local government council or other body of which, as a leader, he is a member, he shall, before speaking on the matter in the body concerned, state the nature of his interest or involvement in that matter.

            (2)        If so requested by any other member of the body concerned (with the leave of the presiding officer), the leader shall give reasonable particulars of his interest in clarification or expansion of his disclosure.

 

            (3)        If so directed by the presiding officer, a leader who makes a disclosure as required by this recommendation shall not vote nor be counted towards a quorum while the matter in respect of which he has made his disclosure is before the chair of the body concerned.

 

Disclosure of new information

 

            11.       Where any information comes to the knowledge of a leader of such a nature that had he known of it at an earlier time he would have been obliged to make a disclosure under this Code he shall, as soon as practicable, make a disclosure in the manner in which he would previously have been obliged to make it.

 

Certain actions of nominee, trustee etc. of leader deemed actions of leader

 

                        12.       (1)        For the avoidance of doubts, a leader who does any act prohibited by this Code through a nominee, trustee or other agent shall be deemed to have committed a breach of this Code.

 

            (2)        It is a defence to a charge based on this rule if the leader establishes that the improper action of the nominee, trustee or other agent was taken without his knowledge or consent.

 

Finding of breach of Code

 

            13.       A leader who is found by the tribunal which determines the matter to have committed a breach of this code shall forthwith vacate his office unless the tribunal finds that there are extenuating circumstances which are such as not to warrant loss of office.  In such circumstances the tribunal may, in accordance with law, impose a lesser punishment, namely demotion, a fine not exceeding a prescribed sum, a bond to be of good behaviour for a given period, or a reprimand.

 

              Note:  Recommendation 6 below specifies the composition and powers of the  tribunal referred to in this provision.

 

Reimbursement of accountancy fees relating to declarations

 

            14.       A leader is entitled to reimbursement by the Government of all reasonable accountancy fees actually incurred in respect of the preparation and submission of the declaration required under Rule 1 above.

 

ADDITIONAL LIMITATIONS UPON MINISTERS

 

Restriction of outside interests, especially private business

                        15.        (1)        A minister's official responsibilities must always take priority over his private interests.

 

            (2)        At his appointment and whilst he holds office, a minister, his spouse and children shall restrict their involvement in all outside interests, including private business, professional practice and other forms of activity, to ensure that they are not involved in any activity which could conflict with the minister's responsibilities.

 

            (3)        The Commission may, after consultation with the Prime Minister, publish general guidelines concerning the extent to which ministers may properly be involved in outside interests and may give specific directions to individual ministers to withdraw from a particular interest if the Commission, in its discretion, considers that interest is, or could be, in conflict with the minister's public duty.

 

              Note:  The Committee envisages that the Commission would advise the Prime Minister of its intention to give a direction to a minister before actually giving the direction.  The Prime Minister could then speak to the minister concerned before the minister received the formal direction.

 

Ministers not to hold directorships

 

            16.       During his term of office a minister, his spouse or child, shall not hold a directorship or nominate a director in any company except,

 

            (a)        with the approval of the Commission,

 

             (i)         in an honorary capacity;  or

 

             (ii)        in a company in which the minister, his spouse or any of his children holds a beneficial interest in at least half of the voting rights and over which citizens exercise effective control.

 

            (b)        as a nominee of the government in a statutory corporation or a company, in which case any fee or other benefit which the minister receives in that capacity shall be paid or transferred to the government.

 

Behaviour of Ministers

 

            17.       A minister shall at all times behave in a manner suited to his office and shall avoid situations which could endanger state security or be detrimental to the interests of the nation.

 

ADDITIONAL LIMITATIONS UPON SPECIFIED OFFICE-HOLDERS AND CONSTITUTIONAL OFFICE-HOLDERS

 

Restrictions on business activity, other employment etc.

 

            18.       In addition to the restrictions imposed by this Code upon leaders generally, a specified office-holder shall not -

 

            (a)        engage, either directly or indirectly, in the management or control of a body of persons carrying on business for purposes of profit;

 

            (b)        hold any other office or engage, either directly or indirectly in any other employment, business, trade or profession (whether gainful or not);  or

 

            (c)        buy, rent or hire, accept as a gift, use or hold in any other manner any government property, (whether immoveable or moveable), or any other benefit in addition to the terms and conditions of his employment,

provided that, he may purchase or lease government land in the same way as may any citizen.

 

Note:               (i)          For the purposes of this Chapter a "specified office-holder" is defined under the heading "Definitions" at the end of this Chapter.

 

            (ii)         The above restrictions apply to constitutional office-holders under a recommendation as to disqualifications for holding a constitutional office included in Chapter 14, "General".

 

Limitation on acceptance of directorship or consultancy to a foreign company

 

            19.       A constitutional or specified office-holder shall not accept a directorship in a company effectively controlled by foreign interests nor act as a paid consultant to such a company (whether incorporated in Papua New Guinea or elsewhere) until after the expiration of three years from the date on which he vacated his office in public employment.

 

Restriction on remuneration, gain or profit

 

20.              No constitutional or specified office-holder, shall receive any remuneration, gain or profit other than

 

             (a)        the emoluments payable to him in respect of the constitutional or specified office which he holds;

 

            (b)        interest on money deposited in a bank or a government financial institution;

 

            (c)        interest on Government bonds;  and

 

            (d)        subject to the Constitution, (including this Code), gains or advantages derived from land owned or occupied by him.

 

Special provision in respect of non-citizens

            21.       A leader who is a non-citizen may invest in a foreign controlled company, firm or other commercial enterprise,                 provided that such enterprise does not carry on business in Papua New Guinea and does not have a significant interest in an enterprise which does so.

 

Note:    Clearly, detailed legislation will be required to implement this

recommendation, which is cast in broad terms.

 

Code not to derogate from provisions of Criminal Code and other laws

             22.       Nothing in this Code shall be interpreted as derogating from any provision of the Criminal Code or of any other law.

 

Note:    The Parliamentary Integrity Ordinance 1971 would, however, presumably be repealed and replaced by an Act which provides the necessary machinery to enable this Code to be adequately enforced.

 

                                              ENFORCEMENT OF THE CODE

 

Ombudsman Commission to make rules, publish guidelines and specify office-holders as leaders etc.

 

4.                     (1)        The Ombudsman Commission (referred to below as "the Commission") shall have power to make rules and publish guidelines concerning the conduct, financial and business affairs of leaders, their spouses and children, and to make provision for exemptions from those provisions of the Code in respect of which exemptions are permitted.

 

            (2)        The Commission may, subject to the Constitution and in accordance with law, specify by proclamation in the Government Gazette, office-holders who shall thereby be designated "leaders" for the purposes of the Leadership Code.

 

            (3)        Prior to making any rules publishing any guidelines or gazetting any office, the Commission shall consult with the Prime Minister, the Chairman and the Deputy Chairman of the First Parliamentary Committee.

 

            (4)        The Commission shall have general responsibility for ensuring the effectiveness of the Code, and to this end shall have power to make recommendations to the  Prime Minister for submission to Cabinet in respect of any constitutional or legislative amendment or administrative change which the Commission may consider advisable in the interests of making the Code more effective in terms of the policies it is intended to implement.

 

Power of the Ombudsman Commission to give directions to leaders

 

5.                     (1)        The Commission shall have power to -

 

            (a)        give a direction to any leader to dispose of any asset or interest it specifies which, in the opinion of the Commission, that leader holds in contravention of any provision of this Code;

 

            (b)        in giving a direction under paragraph (a) above, the Commission shall notify the leader concerned in the manner prescribed by law and may allow such period of time (not exceeding six months) for the leader to dispose of the specified asset or interest for up to three months in special circumstances.

 

            (2)        Failure by a person to comply with a direction by the Commission under clause (1) above shall be an offence and a breach of the Leadership Code.

 

            Note:    This and the preceding recommendation has been included in this chapter for ease of reference.  We consider that when it is incorporated in the Constitution itself, it should be included in the chapter which deals with the Ombudsman Commission.

 

Tribunals to hear charges of breach of the Leadership Code

 

6.                     (1)        Proceedings against any leader, or any spouse or child of a leader, on a charge that he has committed a breach of the Leadership Code may be brought only by the Public Prosecutor.

 

               (2)        Subject to clause (3) below, proceedings under clause (1) above shall be heard and determined by a tribunal consisting of a judge and two senior magistrates appointed by the Judicial and Legal Services Commission.

           

            (3)        If the leader against whom proceedings are brought for an alleged breach of the Leadership Code is the Prime Minister or another minister, or the Chief Justice or another judge of the National Court or any other constitutional or specified office-holder, the tribunal by which the charge shall be heard shall comprise three National Court judges appointed by the Judicial and Legal Services Commission.

 

            (4)        The tribunals referred to in clauses (2) and (3) above shall have all necessary powers and authority to conduct a hearing, summon witnesses, take evidence, make decisions and otherwise function as judicial bodies.

 

            (5)        If a tribunal finds that a leader has committed a breach of the Leadership Code, that leader shall, immediately after the decision of the tribunal has been made, be deemed to have vacated his office, unless the tribunal is satisfied that there are extenuating circumstances which are such as to  justify the tribunal imposing a fine (of up to a maximum sum as provided for by law), demoting the leader (if he is a public officer), reprimanding him, placing him on a bond to be of good behaviour for a specified period, or making any other order provided for by law.

 

The right of all citizens to make complaints of breaches of the Code

 

7.                     (1)        All citizens have the right to make complaints (either orally or in writing) alleging breaches of this Code by leaders.

 

            (2)        These complaints may be made to the Ombudsman Commission or to any government department, statutory authority or public officer.

 

            (3)        Upon receipt of any complaint against a leader, a department, statutory authority or public officer shall, unless the complaint is clearly frivolous or vexatious, either himself or through his superior officer, forward immediately to the Ombudsman Commission for investigation, full details of the complaint.

 

Note:                (i)         This recommendation is not intended to prevent foreign citizens from making complaints also, but the mandatory provisions of this recommendation would not apply to such a complaint.

 

             (ii)         In this Chapter, (and elsewhere in this Report unless a contrary intention appears)-

 

          "public officer" includes any officer employed in or by a government department, provincial government or statutory authority.

 

DEFINITIONS

 

For the purposes of the Leadership Code -

 

                        "benefit"           includes gifts, loans and services (whether or not they have a cash value) and all other personal advantages and favours given beyond the normal standards of hospitality.

 

                        "business"        means any profession, vocation or trade and includes -

 

            (a)         any adventure of concern in the nature of trade;

 

            (b)        any letting of property; and

 

            (c)         farming, other than subsistence farming.

 

                        "child"              means a person under the age of eighteen years, and includes a stepchild, an illegitimate child, a child who has been adopted in accordance with customary or general law, and any child to whom any individual stands in place of a parent.

 

The "due date for disclosure" means -

 

            (i)          in the case of a person who is a leader at the date of the commencement of the Constitution, the last day of the period of three months immediately following that commencement and subsequently, whilst he holds office, the last day of the period of three months immediately following the anniversary of that commencement; and

 

(ii)        in the case of a person who takes office as a leader at any time after the commencement of the Constitution, the last day of the period of three months immediately following the date of his taking office, and subsequently, whilst he holds office, the last day of the period of three months immediately following each anniversary of that date.

 

"emolument"                means any salary, wage, overtime or leave pay, commission, fee, bonus, gratuity, benefit, advantage (whether or not that advantage is capable of being turned into money or money's worth), allowance, pension, or annuity paid, given or granted in respect of any employment or office wherever engaged in or held, except any allowance that may be deducted in the determination of income.

 

"Government"            includes the national government, statutory authority, provincial governments and "recognised local bodies exercising governmental functions" as defined below.

 

"recognised local body exercising governmental functions" includes local government councils and other bodies of persons at the local level which are recognised in legislation as having some powers and functions of a governmental nature.

 

"specified office-holder"      means a leader who is -

 

                                    (a)   .           a senior public servant;

 

                    .           a senior member of the Parliamentary Service;

 

                    .            a statutory office-holder;

 

                      .            an ambassador, high commissioner or other senior officer of a Papua New Guinea mission abroad;

 

                     .            a senior Police or Defence Force officer

 

and holds a position above a level specified by law; or

 

            (b)        a person holding a position which has been designated as that of a "specified office-holder" by the Ombudsman Commission after consultation with the Prime Minister, the Chairman and the Deputy Chairman of the First Parliamentary Committee.


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