Police Probe Allegations of Transnational Economic Crimes at PNG Ports Corporation

Press Conference Announces Ongoing Investigations

Thursday, June 15, 2023

Royal Papua New Guinea Constabulary Commissioner, David Manning, announced ongoing investigations into various economic crimes allegations in a press conference on Wednesday, June 14, 2023. These allegations include transnational fraud cases involving Papua New Guinea nationals and foreigners.

Bribery and Corruption Claims Against Former PNG Ports Corporation CEOs and Others

Among the current investigations, Papua New Guinea authorities have formally initiated a criminal probe into bribery and corruption claims against former CEOs of PNG Ports Corporation, Fego Kiniafa and Stanley Alphonse, and other parties [1],[2].

Awards of Lae and Motukea Wharves Contracts

According to reports, PNG Ports Corporation awarded a 25-year contract to operate the Lae and Motukea Wharves to International Container Terminal Services Inc. (ICTSI) following a public international procurement process [1]. The allegations state that former PNG Ports Corporation CEOs, Fego Kiniafa and Stanley Alphonse, accepted bribes from Don Matheson, an Australian national allegedly representing ICTSI, to secure the contract [1],[2].

Prime Minister’s Response

Prime Minister James Marape publicly condemned any involvement of his government in these allegations and ordered an independent investigation to determine the truthfulness of the reports [1].

Aim of the Investigation

The investigation aims to establish whether Fego Kiniafa, Stanley Alphonse, Don Matheson, ICTSI, and any other individuals involved in the fraud and corruption allegations breached Papua New Guinea’s criminal laws [1]. Furthermore, given the complexity and transnational nature of the economic crime case, the Police force is conducting an in-depth review of the tender process that led to the contract awarded to ICTSI.

Background of PNG Ports Corporation

PNG Ports Corporation is one of the strongest performing State-Owned Entities (SOEs) in the country, boasting a robust corporate governance framework and a highly effective board of directors [1]. The organization has received substantial financial support from major international financing institutions, such as the Asian Development Bank (ADB) and the Australian Government’s Australian Infrastructure Financing Facility for the Pacific (AIFFP) [1]. PNG Ports Corporation is the sole beneficiary of the latter, having received around K1.21 billion in loans and K234 million in grants over the past few years [1].

Concerns and Importance of a Thorough Investigation

The ongoing investigation raises concerns regarding the alleged involvement of ICTSI in fraudulent activities, given that the AIFFP- and ADB-funded Lae and Motukea Wharves are currently being operated by the corporation [1]. Commissioner Manning stressed the importance of conducting a thorough, independent investigation to address these allegations, emphasizing the government’s zero-tolerance policy against fraud and corruption [1].

Collaboration with Foreign Agencies

Commissioner Manning also revealed that the Australian Federal Police (AFP) and the INTERPOL Financial Crime and Anti-Corruption Centre (FCACC) are conducting their independent investigations into these allegations [1]. In response, PNG Police has requested supportive assistance from both agencies in the pursuit of this complex transnational economic crime investigation [1].

[1]: https://ab.co/3cJQ59d
[2]: https://www.occrp.org/en/daily/15638-png-port-ceo-corruption-scandal-takes-another-twist