Source: Radio Australia

Papua New Guinea's Prime Minister, Peter O'Neill, says leading Australian economist Ross Garnaut is not welcome in PNG.

Last Friday Prime Minister he told Parliament that Australian economist Ross Garnaut is no longer welcome in PNG.

Late last week Ross Garnaut resigned as chair of the PNG-SDP Board, and was quickly replaced by former Prime Minister, Sir Mekere Morauta.

The strong comments about him from Mr O'Neill are the latest development in an ongoing dispute over control of PNG Sustainable Development Ltd, the company formed a decade ago, to take over BHP's shareholding in the OK Tedi mine, when BHP pulled out of the country.

Last month Prime Minister O'Neill told Radio Australia it was time BHP handed back control of Board appointments to his government.

Jemima Garrett joins us on the line to explain the latest development.

Presenter: Corinne Podger

Speaker: Peter O'Neill, Jemima Garrett

O'NEILL: I'm very concerned because this particular person has a very disrespectful way of conducting himself in this country and I intend to take appropriate action. Mr. Speaker, that may include migration issues, but Mr. Speaker, I'm very concerned about this particular statement where he says that when I made the statement on behalf of the country, that BHP reduce the way they conduct the management of sustainable on behalf of our people. Now that is a fair call by our leader of our country that concerns about the management of billions-and-billions of kina by foreigners on behalf of our people. They need to be accountable. This is not funds that belong to BHP anymore, this does not belong to a few directors of that board anymore, but by the comments he made undermining the political leadership and undermining the people of this country. Let me quote and he goes to say many other things but he says 

"Naturally, he says with such accumulation of wealth in a poor country, poor country, it is very tempting for political figures to think of better ways of using".

He says "it's very tempting for political figures to think of better ways of using right now, rather than putting it into long term development".

Now, nobody eluded to the fact that we wanted to use that money right now, nobody told BHP or Ross Garnaut that this was a fact. Mr. Speaker, I will put him on notice today that he's no longer welcome to this country, that he stay out of Papua New Guinea and contact himself and I want to put on record in this parliament that we will not tolerate people of such standing coming into our country and disrespecting leaders of this country.  So Mr. Speaker, I am aggrieved by that fact, because I think he has got no care whatsoever. He think that he is above everybody. He's not accountable to anybody. So Mr. Speaker, I want to put on record that he will be no longer welcome to this country until BHP surrenders the control of that to the government of Papua New Guinea and the people of Papua New Guinea will maintain that position.

PODGER: Prime Minister, Peter O'Neill, telling the PNG Parliament that Australian economist, Ross Garnaut, is no longer welcome in his country.

Late last week, Ross Garnaut resigned as Chair of the PNGSDP Board. He was quickly replaced by former prime minister, Sir Mekere Morauta.

And Jemima Garrett joins us on the line to explain the latest development.

Welcome to Pacific Beat Jemima.

GARRETT: Thanks Corinne.

PODGER: Now, Ross Garnaut has a long track record in PNG. He's still Chair of the Board of Ok Tedi Mining Limited. How's he managed to anger the Prime Minister enough to be banned from the country?

GARRETT: Well, I think the Prime Minister spelt it out fairly correctly. The perception of being patronising when the Prime Minister asked for BHP to consider returning control of those three board positions. It controls three of the seven board positions, including the Chairman on Papua New Guinea Sustainable Development Limited. When he asked that BHP consider returning those, Mr. Garnaut made the comments that the Prime Minister quoted there. He suggested that political figures would think of better ways of using it right now, rather than putting it into long term development. Well in fact when I did that interview with Prime Minister, Peter O'Neill, when he made that call, he wasn't even suggesting that the government would control it. He was saying that it should come back to a Papua New Guinea-based, Papua New Guinea-run organisation, which I guess now it's ten years since BHP pulled out of Papua New Guinea, that's a fair call for any nation's leader to make.

PODGER: And it does still appear to have quite a bit of control over PNGSDP all these years later?

GARRETT: It does indeed and it's a controversial issue, because Papua New Guinea Sustainable Development Program has $1.4 billion now in assets and it's a very important development organisation in Papua New Guinea. In fact some people put it as the second biggest aid donor if you could call it that, which it isn't I guess seeing it's a local organisation, but after Australia. So it is a significant organisation. There has been criticism in the community the way its operated, but in actual fact, I think you'd have to say with the extra money that's been going into the company, into PNG Sustainable Development over the last two years, because of the very high gold and copper prices, that organisation is now really getting its teeth into some development. We've seen things like the whole mobile phone network in Western Province. It's got health programs, it's got road programs, providing schools, all sorts of things like that and while no organisation is perfect and I wouldn't suggest that PNG Sustainable Development is, it certainly has been doing more. And in fact there has been an independent review recently of its operations, which wasn't particularly critical of what it was doing.

PODGER: And does Ross Garnaut have a point. Would PNG control of PNGSDP risk the assets of that company?

GARRETT: Well, I think Papua New Guinea's Prime Minister, Peter O'Neill, has made a huge push on anti-corruption, even if it was going to be squandered, the point is should it be controlled in Melbourne or should it be controlled in Papua New Guinea? It's a big call to suggest it would be squandered. Certainly there's track records in previous times of problems of that sort in Papua New Guinea, but I guess it's about getting the governance arrangements right. I think you'd have to say to that there is the possibility of compromise, that independent review I mentioned which was conducted by Professor Stephen Howes, from the Australian National University suggested that BHP did indeed hand over control of those three board positions to an independent organisation. That independent organisation could very easily be domiciled in Papua New Guinea, controlled by Papua New Guineans, so there is a way forward. I think perhaps people need to work together on this one.

PODGER: Just very briefly Jemima, where to from here. Ross Garnaut's stepped down. He's been replaced. What's the next step for this, just briefly?

GARRETT: Well look, it's a very complicated matter. We're currently seeing the consultations over the mine life extension plan, that's a plan to extend Ok Tedi's life for ten years and now there's a lot of landowners who are saying that they want some action to. So the whole thing is becoming very political, but perhaps people should look at the evidence, because there has been since I guess in fact, perhaps where I should start is that at the beginning of 2011, when the Canadian company, IMET, sold out of Ok Tedi Mines, that company has been entirely owned for the benefit of Papua New Guinea and what we're looking at is who now controls that and how much say they have and that's where the focus needs to be.

PODGER: Indeed, and it's something that we'll have to keep an eye in the coming days. Jemima Garrett, thanks very much for your time.