Trust Issues

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Trust issues

Blair Price Wednesday, 10 April 2013 PNG Prime Minister Peter O’Neill has confirmed that the proposed Kumul Trust, born out of government plans to restructure state-owned enterprises, will have former prime ministers as shareholders. But the standard of the draft policy to date is under question. Prime Minister Peter O'Neill. Photo by Michael Cairnduff. Institute of National Affairs PNG executive director Paul Barker is concerned about the draft documentation for the trust he has seen so far.  He told PNGindustryNews.net on Monday that the new mechanisms raised a lot of questions.  “They do involve very new and unchartered waters with respect to these constitutional amendments and trusts and the use of various current and past PMs as shareholders and the current PM having veto power in that role,” he said. He added that a lot of the details needed to be “spelt out” and even said he wasn’t sure if many cabinet members knew of these plans, which had been “very much behind closed doors”.  Barker was right in this regard, according to blogger Deni ToKunai.  “Was sitting next to a cabinet minister when I read your story,” he tweeted toPNGIndustryNews.net’s twitter account PNGReport.  “Fair to say he was as shocked as I.” The National has since reported on O’Neill’s views of the Kumul Trust, which he said would be managed in a transparent and accountable way.  “By having our former prime ministers as shareholder/trustees we will be drawing from their wisdom and vast experience,” the PM reportedly said. “I’m confident this structure will have political and commercial integrity.” While this report made the point that the trust “will be managed by independent and highly professional managers”, this proposed safeguard might be overstated at this stage.  Barker told PNGindustryNews.net that the documentation he had seen on the proposed trust looked “prepared by someone with little experience in this type of field”.  “There are references to management and administration being separate although what the difference between management and administration is a little bit to be ascertained.” He also explored the significance of getting such policies right.  “We’re talking about a major portion of the contingent liabilities that the state has been taking on, and over the next period of time the state is planning on borrowing considerably more to finance its 2013 and 2014 budgets. “If a large portion of the state’s exposure is effectively under these state-owned enterprises it’s absolutely crucial that they and any proposed sovereign wealth fund … that they are totally under the public and parliament’s purview.”