PNG’s new prime minister: Peter O’Neill

Author: Bill Standish, ANU

The opposition’s nomination of Works Minister Peter O’Neill as Papua New Guinea’s new prime minister on 2 August came as a shock to many.

But there were clues in some earlier press comments. Last year, O’Neill and the opposition agreed he would become the next prime minister if he crossed the floor before the mid-year challenge. And although Deputy Prime Minister Sam Abal was acting prime minister during Grand Chief Sir Michael Somare’s continuing absence in Singapore following heart surgery in April, the opposition succeeded in declaring the prime ministership vacant without following constitutional procedures.

The National Alliance led government’s collapse arose in three phases. First was Somare’s coalition’s gradual loss of public support over the last few years on the back of failing government services across most the country and allegations of corruption over the dispersal of development funds. Second was the increasing frustration among opposition members with Somare’s compliant speaker, Jeffrey Nape, who for five years refused to hear the opposition’s procedural points or allow votes of no confidence. Prolonged and unconstitutional adjournments of Parliament also meant that even government members could not monitor (and only rarely question) the ministers. And third was the pernicious rivalry within the coalition and the National Alliance Party itself.

The Supreme Court’s 2010 ruling on the political party ‘integrity law’, known as OLIPPAC, allowed MPs to not only to leave their parties but even to vote against their own party. In the current sitting, the Speaker accepted the opposition’s claim that the prime ministership was vacant. Refusing to hear the angry protests of key government ministers, the Speaker allowed a vote to fill the vacancy. Some 48 members of the coalition, including the majority of the National Alliance, crossed the floor, giving O’Neill a vote of 70 to 24. While the (former) government challenged the constitutionality of this ‘parliamentary coup’, on 5 August the National Court accepted the fait accompli, and implied the old government had also accepted it by voting in Parliament. Abal will challenge this ruling in the Supreme Court.

The media had focused on the divisions triggered since Somare promoted Abal to Deputy Prime Minister in December 2010, replacing Don Polye, who held aspirations to succeed Somare. Although a respected and honest politician, Abal made fierce enemies. He sacked William Duma, whose management of licensing under the Petroleum portfolio and the Liquefied Natural Gas (LNG) project had been under serious questioning. He also sacked the man now PM, Peter O’Neill, from the Treasury and Finance portfolios.

Tensions grew among government ministers. Public attention was focused on the Polye–Abal feud within Somare’s party, and it became clear there would be some form of challenge to government. Under the Constitution, a vote of no confidence had to be initiated within days of parliament sitting on 2 August, but who would be the new PM? The issue came to a head at an Opposition meeting on 1 August, and it seemed that Polye had majority support among the alternate government camp for the top job. However, he reportedly baulked at the position — perhaps to avoid in-fighting with Abal, from his own province. O’Neill seized the moment, positioning himself for his formal nomination as prime minister. Polye is now his treasurer.

Although Peter O’Neill has not escaped controversy, he has gained a reputation among Treasury officials as a highly competent and professional minister. As treasurer between June 2010 and June 2011 he arranged overdue pay rises for public servants, proclaiming there was no place for ‘commissions’ to release funds, arguing: ‘If we don’t say no to corruption the country will be destroyed’.

O’Neill holds an honours degree in accountancy and worked for an Australian firm before making his fortune in real estate. Former PM Bill Skate made him head of Pacific Finance, which managed the state-owned enterprises: the Motor Vehicle Insurance Corporation, the PNG Banking Corporation and the National Provident Fund (NPF superannuation), all of which nearly collapsed a few years later. The Commission of Inquiry into the NPF failure reported that, in 2002, O’Neill had benefitted from suspect transactions, and should be investigated for perjury. He appeared at the Waigani Committal Court in 2005 charged with misappropriation. The case was dismissed for lack of evidence.

Elected to Parliament for Ialibu in 2002, O’Neill was appointed Public Service Minister, but then became opposition leader in May 2004. From 2003 O’Neill proposed, to the dismay of many public administrators, that District Authorities be created, effectively giving MPs control over government activities in their electorates, including the public servants. O’Neill is also said to be preparing detailed policies for his People’s National Congress Party in 2012.

As prime minister, O’Neill must manage major constitutional issues in the next 8 months, including setting the number of electorates for the 2012 House, creating two new provinces and confirming the existence of seats for provincial governors, and deciding whether to support provincial seats reserved for women candidates only.

Peter O’Neill is a strong supporter of mining and the LNG project, but also shows clear signs of economic nationalism. While Treasurer, he argued that sovereign wealth funds to handle revenues from the LNG projects should be established overseas but controlled onshore. Since his election to prime minister, O’Neill has hit the right buttons. He stated that he will not tolerate ‘arrogance’ in government (a dig at PM Somare’s son Arthur?) and he will deal with the ‘massive corruption’ in PNG. O’Neill also wants to promote transparency in government. But his interim ministry comprises several key Somare ministers alongside the Somare government’s strongest critics. Many have asked how governance will change, implying — as was said when Morauta replaced then Prime Minister Skate in 1999 — that: ‘This will be a new game of cards, but with many of the same players’.

Bill Standish is Visiting Fellow at the School of Culture, History and Languages in the College of Asia & the Pacific at The Australian National University.