Tag Archives: Kumul Petroleum Holdings Limited

Pruaitch Says PAC Faces Daunting Task On KPHL

Post Courier | September 23, 2019

National Alliance Party leader Patrick Pruaitch says the Parliament’s Public Accounts Committee will face a daunting task when it looks into the financial a airs of Kumul Petroleum, which holds the government’s 16.57 per cent stake in the PNG LNG Project.
Mr Pruaitch said the Marape government has taken a responsible stance by rejecting claims by Kumul Petroleum that it is not answerable to the PAC inquiry chaired by Sir John Pundari.

“I have raised several issues with regard to the financial affairs of Kumul Petroleum, which is the only state-owned enterprise that operates as though it is not accountable to anyone even though every toea that it has rightfully belongs to the people of PNG,” he said.

“The financial accounts released by Kumul Petroleum, covering the period from 2014 to 2017, indicates that it has been in receipt of over K5 billion as a result of government equity in the PNG LNG Project. Only a tiny portion has been returned to the government as dividends and corporate tax.

“It has now come to my attention that the 2017 annual accounts of Kumul Petroleum, which have been endorsed by the Auditor-General, discloses that total revenue it received from PNG LNG in 2017 was US$411 million, or approximately K1.37 billion.

“However, the 2017 annual report from the Government’s Extractive Industries Transparency Initiative (EITI) shows that it received K2.097 billion from PNG LNG, suggest- ing under-reporting of 2017 revenue by over K700 million.

“Has there been an accounting problem or has this money simply vanished? An additional discrepancy is that the Kumul Petroleum 2017 accounts show the company paid US$56.74 million in corporate tax in 2017, while EITI only records a payment of K13.3 million, as confirmed by the Internal Revenue Commission.”

Mr Pruaitch said it was notable that key agencies that have not cooperated with the government mandated EITI process have been Kumul Petroleum and the Bank of Papua New Guinea, which has been recipient of landowners’ royalty payments from the PNG LNG Project.

Mr Pruaitch, who recently left his position as opposition leader to join government, said it was praiseworthy that Prime Minister Marape has shown a determination to ensure that government bodies, such as Kumul Petroleum and Mineral Resources Development Company, were transparent and accountable.
Former prime minister Sir Mekere Morauta has raised a series of issues regarding the operations of MRDC and Prime Minister Marape has agreed to hold a public inquiry into MRDC.

The National Executive Council has also instructed Kumul Petroleum to appear before the PAC inquiry.

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Please review appointment of new KPHL chairman

Ivan Gordons | YuTok, Post Courier | August 5, 2019

Just recently I wrote a letter that was published in the local daily questioning the appointment of Andrew Baing as the chairman of KPHL on whether he was the same person who was found guilty by the leadership tribunal years back on misappropriation grounds and dismissed from holding public office.

I simply stated that this was not right for someone with such a record to be appointed to such an office that was dealing with public monies especially of such magnitude.

A reply was published also from a person saying that he was grateful for the last Prime Minister for the appointment and that he was going to prove the country proud or something along those lines.

Not much was said after that.

Fast forward to this present day and we all can see for ourselves. It is ridiculous how KPHL has addressed this saga to date.

Yes they can rant on about this law and that, this Act and that but with all that aside they are dealing with public funds.

Just provide the information to the PAC and explain yourselves to the people of this country where their money from the 500 shipment of gas has gone. There are many stories out in the public domain on the abuse and misuse of these funds benefiting the well off while the people are struggling.

I have faith and trust in our new PM honourable James Marape that he will not let his people down.

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Deputy PM Orders KPHL To Go Under PAC Scrutiny

Isaac Nicholas | Post Courier |  August 5, 2019

Kumul Petroleum Holdings Limited must do the right thing and respond to the summons of the Public Accounts Committee, Minister for Justice and Attorney-General Davis Steven said on Friday.

“I want to clarify to the people of Papua New Guinea and to the KPHL Board and management that the powers of the Public Accounts Committee are quite clear under the Constitution,” he said in a statement.

Mr Steven said there had been arguments raised questioning and challenging the PAC mandate that the oil company was separate from the State-owned entities and was not subject to processes, including scrutiny of its financial affairs by the Permanent Parliamentary Public Accounts Committee.

“These arguments, in my view, are erroneous and misleading to the general public as to the intention of the law,” Mr Steven said.

“The fact that the State owns the interests in petroleum projects and the KPHL is a nominee of the State to hold its interests for and on behalf of the people of PNG, this brings the KPHL under the jurisdiction of the Public Accounts Committee.”

He said the PAC is the body that the Constitution has mandated with that responsibility by giving it a broad mandate to examine and report to the Parliament on the public accounts of Papua New Guinea, and on the control of and on transactions with or concerning, the public moneys and property of PNG.

“It is not in PNG’s national interest and has always not been the intention of establishing the KPHL that it should not be open to public scrutiny of its financial accounts, where such requests made by the Public Ac- counts Committee.

“KPHL must now do the right thing and respond to the summons of the Parliamentary Accounts Committee,” Mr Steven said.

“I am concerned that State institutions and businesses like KPHL are questioning the authority of the Parliament. KPHL including the Mineral Resources Development Authority (MRDC ) are trust companies holding the interests of the citizens of Papua New Guinea.

“I therefore urge all government departments, agencies, SOEs to answer to the demands of our people and work together with the political leadership and the relevant bodies established by the Constitution to change PNG. Our people demand that.”

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Yalo: KPHL answers to Parliament

The National aka The Loggers Times | August 2, 2019

KUMUL Petroleum Holdings Ltd (KPHL) is answerable to the legislature, former judge and lawyer Nemo Yalo says.

“The legislature, like the judiciary, has the ultimate oversight role on the executive arm and its agencies,” Yalo said in a statement.

“KPHL chief executive and the board are appointed by and are answerable to the executive arm.

“Therefore, by extension, KPHL is answerable to the legislature.

“Who does the KPHL board and CEO ultimately declare and present dividends to?

“To themselves or to the people through their executive government?”

Yalo said he was only expressing his opinion on the matter.

He said only the National Court and the Supreme Court could settle the issue of whether or not KPHL was subject to the Constitutional oversight powers and functions of the legislature.

Yalo said the Supreme Court, in the case MRDC vs Ombudsman Commission SC931 (August 2008), ruled that MRDC, a company registered with the IPA and of which the prime minister was the sole shareholder holding shares for and on behalf of the State, was subject to the scrutiny of the Ombudsman Commission (OC), in particular its CEO being subject to the Leadership Code, including the ex-officio board members, who by virtue of their substantive offices, were also declared as being subject to the same law.

He said the committee on public accounts was a Parliamentary committee performing the role of the legislature when it was not in session.

Those very roles and functions each Parliamentary committee was obligated to perform.

“If one were to buy the KPHL’s legal proposition, it is amazing that an Act of Parliament passed by the Parliament itself restricts its own ultimate power to supervise the executive.

“Was the Parliament blind to the doctrine of separation of powers when it passed laws to tie its own hands behind its back?

“It is immaterial that KPHL, or any state-owned enterprise was registered with the IPA,” Yalo said.

“The Parliament through the PAC has power to review and probe the Auditor General’s reports, OC reports and others, and compel relevant persons and entities to give information.

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Pundari Cautions KPHL Against Confusing Public, Private Monies

Post Courier | July 31, 2019

The Public Accounts Committee chairman Sir John Pundari has cautioned Kumul Petroleum Holdings Limited management against confusing public funds with private revenue.

He said this yesterday following a letter from KPHL director Wapu Sonk outright rejecting to meet with the permanent parliamentary committee and present their audit reports.

In a media statement yesterday, Sir John said that KPHL needed to identify the clear distinction between the two different types of funding and subject themselves under the same scrutiny as other statutory bodies.

He said that as an organisation which was instituted by the Independent State of PNG (by operation of the Kumul Petroleum Authorization Act 2015), KPHL was subject to scrutiny by the Public Accounts Committee.

Sir John that the overarching consideration in the matter was the Constitution. And that in the event of any contradictions with other laws, that applicable provisions within the Constitution naturally overruled these contradictions.

“KPHL merely collects on resources (property) owned by the people of Papua New Guinea and this is where the mandate of the Public Accounts Committee kicks in. The Public Accounts Committee’s key function is to examine and report to the parliament on the public monies and property of Papua New Guinea,” said Sir John.

“This is a constitutional mandate under Section 216 of the Constitution, the mother law hence any other laws whose provisions are contrary to the Constitution is invalid to the extent of that contradiction.”

This statement was made following a recent statement by KPHL chairman Andrew Baing that KPHL was a government business governed by its own laws, and was not subject to the Public Finance Management Act.

The ongoing stalemate between the Public Accounts Committee and KPHL reached a head last Wednesday when the PAC gave KPHL two weeks to produce details of liquefied natural gas (LNG) shipments and payments since the first delivery in 2014.

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