Without fear or favour? O’Neill’s District Authorities to build capacity and consolidate MP powers in PNG

Few people may know that PNG’s current Prime Minister, The Honourable Peter O’Neill, authored an ANU discussion paper [pdf] in 2006 while leader of the opposition. His paper proposed an amendment to the Organic Law on Provincial and Local Level Governments to establish District Authorities across PNG. In late November 2013, O’Neill finally got to present the District Authorities Bill to Parliament as Prime Minister.

The District Authority will replace the increasingly prominent committee with the always convoluted name – Joint District Planning Budget Priorities Committee (JDPBPC). All public servants in the district, including police, teachers and health workers will come under the District Authority, whose CEO will be the District Administrator. The Members of Parliament that represent open district electorates and hold 89 of the 111 seats in the National Parliament, commonly referred to as Open MPs, will be the Chair of their respective District Authority, giving them greater influence over funding allocations and human resources.

Surprisingly, the Bill passed through uncontested 92 votes to zero, with even Governors of Provinces, who represent the other 22 seats, voting for (or at least not voting against) a bill that could potentially undermine their own political influence. O’Neill’s proposed District Authorities will further decentralise governance arrangements to improve the capacity of districts to deliver better public services. This may make sense when considering districts across PNG have received enormous increases in devolved development funds for capital projects in consecutive budgets, even though they lack an administrative structure capable of spending and reporting on it all. District Authorities are likely to give Open MPs greater control in deciding what gets spent and where in their districts.

Peter O’Neill’s District Authorities – His vision coming together

Peter O’Neill has been a strong advocate of District Authorities for many years. His 2006 ANU discussion paper not only articulates the benefits of establishing District Authorities, it even provides a published copy of the proposed amendment to the organic law. Clearly, the District Authorities Act is Peter O’Neill’s initiative and his ownership over these reforms has not diminished since 2006.

From transcripts of O’Neill’s recent address to Parliament, his arguments for establishing District Authorities have also stayed the same. Essentially, O’Neill claims that PNG lacks the institutional and human resource capacity to effectively deliver services. Therefore, it must strive for a public sector with management practices purposely fit to the PNG context. O’Neill believes national development programs are not responsive to the needs of the majority of the population in rural areas. Instead, he is a strong advocate for further decentralisation to district and local levels in recognition that development needs across PNG are widely variable. O’Neill’s paper states:

The disparities in affluence, basic life-support services, and essential infrastructure between provinces are criminal.

In Parliament, O’Neill compared his District Authorities Bill to major constitutional amendments and law reforms since independence. He told Parliament that District Authorities are the way forward for PNG:

Mr Speaker in order for the country to continue to grow we must take action to strengthen districts. We must return to the original intention as expressed in the CPC (Constitutional Planning Committee) – we need to bring government to the people and empower people to make decisions for their own future.

Financial and operational realities in PNG districts

There are already two financial reforms that reflect the decentralization of service delivery financing, decision-making and spending in PNG. O’Neill’s speech to Parliament states that:

unprecedented levels of funding are now flowing directly to provincial and Local Level Governments.

The first reform, which predates O’Neill, relates to greatly increased operational funding to provinces for activities like health outreach patrols and delivery of materials to schools. These functional grants are released from the national budget to provinces and districts on the basis of need. As a result, most provinces, especially poorer ones with less internal revenue, have received substantial increases of funding to meet their operational requirements for delivering basic services over the last few years.

The second reform relates to devolved development funding for projects. The massive increase in this type of funding was the signature reform of O’Neill’s first (2013) budget. As the PM proudly declared:

Mr. Speaker, as a direct response to the cries of our people in rural areas in the 2013 Budget Provincial Governments and Local Level Governments received significant amounts of development funding for the districts… Finally money was being paid directly to where it matters the most – districts and Local Level Governments.

Districts have become the center of development financing across PNG with their  key funding and decision-making body, the JDPBPC and soon to be District Authority, firmly in control of spending these increased allocations. The JDPBPC has become critical in funding projects in the Open MP’s name under the controversial and rapidly expanding District Services Improvement Program (DSIP). There have been many critics of DSIP spending through the JDPBPC, who claim these committees are dominated by the Open MPs political interests and used as their personal ‘slush funds’.

Of course, Open MPs strongly disagree with these sentiments and claim the opposite is true, as reflected by O’Neill’s address to Parliament:

Mr Speaker, the JDPBPC has been so successful that it has outgrown its original design.

By law, the JDPPBC is not directly answerable to any level of government. The national government, which funds the DSIP, cannot practically monitor 89 districts and may risk political backlash if it tried. The Prime Minister acknowledged the gap between the legal framework and operational realities:

Mr. Speaker, we all know that in reality the JDPBC is doing far more. It is now involved in the implementation of plans and programs at the district level. We need a proper legal framework for it to operate in.

Replacing the JDPBPC with the District Authority, which will become a Statutory Authority, further legitimises the Open MPs’ control over their districts. All public servants under and including the District Administrator will be accountable first and foremost to the priorities of the District Authority. This is different to current arrangements under the JDPBPC, where Open MPs have to rely on district and provincial administrations to implement their projects. Their projects often compete for priority with increasing provincial budgets that fund service delivery programs. With limited implementation capacity, the projects of District Authorities are likely to be prioritised. This could shift focus away from spending recurrent function grants on basic services in order to implement capital projects decided on by Open MPs.

Possible implications of establishing District Authorities

Funding dedicated to improving service delivery is available in abundance at the district level. However, there is a serious lack of capacity to effectively utilise available funds and decision-making is often politically driven. In comments made  on the 2014 budget last year, the National Economic and Fiscal Commission claimed that less than half of service delivery function grants had been spent with less than a month remaining in the 2013 financial year. On the development side, of the DSIP K10 million allocations, only about K5 million had been released in November 2013. Releasing funding so late in the financial year with a ‘spend it or lose it’ policy, as specified in the 2013 budget instructions, does not build a foundation for promoting effective expenditure. The incentive to spend quickly late in the year can often result in purchasing expensive assets that are easy to procure, such as new 4WD’s, rather than rehabilitating an aid post or teacher’s house.

Given this context, building greater capacity at the district level so more funding can be spent may appear to be the logical next step. However, getting projects finished and launched so the Open MP can cut the ribbon and claim ownership over the project can become the primary motivation. Effectively delivering completed projects serves to consolidate their position of authority in the district, especially if they can choose the communities that receive projects. Considering Open MPs are primarily motivated to be re-elected, District Authorities may help to strengthen existing patronage networks for the Open MP. This can also serve to promote a system of narrowly appropriating private goods to supporter bases as opposed to public goods and services for the whole electorate. It should be acknowledged, however, that there are other Open MPs who may be committed to restoring public services broadly across their electorate and could view the District Authority as a way for them to better represent their constituents.

In time, District Authorities may also seek to control other aspects of the national and provincial budget. This could and perhaps should include recurrent funding for important service delivery activities that may be best allocated to the District Authorities as well. Committing to new capital projects or rehabilitating existing social infrastructure requires an ongoing recurrent component to fund operational expenses. However, too much control over budgets needs to be carefully considered as Open MPs may have their own incentives to favour particular sectors over others. It could be more useful for the Open MP to have the support of the district police station than the health centre when election time comes around. The same could also be said for supporting religious groups in the district that may advocate support to the Open MP amongst their congregation in exchange for project support.

While District Authorities seem to decentralise powers to district and local levels, their creation also centralises power at the national level. Recent media reports suggest that the Prime Minister may be trying to strengthen his parliamentary coalition in asserting control over other Open MPs, particularly the opposition, by withholding their DSIP funding. Prominent opposition MP, the Honourable Samuel Basil, took to social media stating that Open MPs had to line up for their DSIP cheques after they passed the 2014 budget. He posted‘DSIP has allowed the PM to manipulate MPs in parliament… DSIP has replaced without Fear or Favour with Fear and Favour!!!.’ This is not the first time opposition MPs have voiced concerns that they may have received less or late DSIP funding compared to Open MPs in O’Neill’s coalition government. If District Authorities, similar to the JDPBPC, continue to be funded through the national government, the potential for national level politics to impact district allocations may become more prominent in the future.

While the incentives to establish District Authorities seem clear, there are many unanswered questions about how they will work in practice. Simply creating an amendment to the organic law is not enough to increase capacity and control for Open MPs at the district level. Further policy considerations about core funding, human resources, enabling infrastructure, reporting, accountability and relationships with the provincial and local governments still need to be addressed.

O’Neill is personally invested in the District Authorities concept and will further advocate for its implementation in 2014. As Prime Minister, he is also likely to receive strong support from Open MPs in his coalition government, who may welcome greater control and more capacity to initiate their own plans and projects. While District Authorities may help Open MPs to consolidate influence and power across their electorate, pursuing these political objectives may ultimately conflict with the goal of improving broad-based service delivery for the whole district.

Colin Wiltshire is the Devpolicy Program Manager for the PNG Promoting Effective Public Expenditure Project. He is also undertaking a PhD in the State, Society and Governance in Melanesia Program at ANU.

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Colin Wiltshire

Colin Wiltshire is a Research Fellow at the Department of Pacific Affairs at the Australian National University. He conducts research on political economy aspects of development in Melanesia. Prior to completing his PhD on the politics of service delivery in PNG, he worked at AusAID where he served in Timor-Leste and PNG.


  • I recently attended a Healthy Island training of trainers (TOT) in a district to get the TOT participants into helping village people to do their own ward planning so that it provides a direction in development at the community level where people are. However when asked if the LLG and District have the LLG and District plan, there was no such thing in the district. The CEO of the District and even the CEO of the LLG was nowhere to be seen in the district. This also meant that there was no work in the district as the CEO of the District has a new office and is living and working in the Provincial headquarters. To make the matter worse, the District was made a DDA not less than six months ago and most work and development should be happening in the district by now. There was no district and LLG plans in which a ward plan could be linked to.

    People nowadays are not stupid to ask how their plan will be linked up if their LLG and district does not have their plans. DDA is an opportunity for development where 90% of the population lives but it seems public servants are taking this as an opportunity to be away from their districts to perform other duties and on weekly allowances. I think a very bad precedent is being set here.

    Coming from a sector in which we advocate for better living and development at the community level and are always working closely with communities, l find it difficult to explain to people about such weaknesses and how they can overcome them. It is not easy when weakness hinders progress when people are at it. DDA is supposed to begin with capacity building to equip the district with skilled people, their place to work and to progress the development where it matters most. However, if the district is not prepared for that and cannot prepare to change to enhance DDA, than how do we expect DDA to work at the district level. And importantly, those of us trying to improve villages for a healthier and more prosperous life, how do we come into play? It is not easy to explain when people who do not know how they can make change are in such a position and if they cannot rally to make changes.

    Aggression in development should come about now. Every district needs people who have the vision to do so to take up these posts to make moves to change their district, so that some form of development takes place.

  • Colin you are commended for the very interesting article. The District Authority Bill gives almost absolute powers to the open MPs in each district but on the other hand it seeks to empower the local people to take ownership of their development aspirations. On paper it is very attractive and promises so much good for the long suffering rural populace. However, my first impression is the authority in terms of decision making and voting for authority resolutions favours the Open MP as there will compose 7-members on the Board (generally as many districts are allowed by law for 3 LLGs each) of which three are nominated by the MP, 3 heads of the LLGs and the MP. Surely the nominated members will always take sides with the MP – absolute power and meetings are gimmicks to window dress illegal decisions.

    The other thing that comes to mind is that with this new approach should come the public restructuring reform so that each district’s ability to deliver and implement is strengthened. It should not happen as in the past where any person in the district administration was appointed as a LLG Manager without proper qualification and experience to manage the affairs of the LLG. This has resulted in lack of proper development planning at ward and LLG level to communicate effectively to MPs to access some of the funds for the respective LLGs.

    Laws need to be worked on to safeguard the system. Rules need to be put in place whereby people abusing their roles and powers are dealt with appropriately and effectively. For instance an MP deemed to have misappropriated funds with overwhelming evidence should be refer to the police for criminal investigations rather than to Leadership Tribunal via those long processes.

    I would personally think that District Development Authorities is a way forward for the country and reiterate the PM’s views. However, I am not party to his intentions implied but as I see and gather from public media and documents such as this.

  • Congratulations on a discussion which hits a key issue in the future of PNG.

    in the areas I know DSIP and its control has led to almost total collapse of the system of Ward Development Committees and Local-level Governments. The sections which should be relevant in the OLPGLLG and the LLG Administration Act have ceased to have any real meaning. The Ward Committees see little point in preparing Ward Development Plans which are never considered by a LLG which hardly ever meets.

    1/19 Ward Development Committees has prepared a plan – in 2010 and which has never been considered by the LLG.

    The LLG has met once or twice since the August 2013 General LLG Election. the second meeting has been disputed – whether it ever happened – or it was a few Members chosen to support a budget? – no one could give copy of the budget or minutes of the meeting – or agenda. . The LLG has not appointed the required women members.

    The LLG President – who is related to the Provincial Governor’s third wife has been in the Provincial Capital since the last meeting. A relative said that he has been given such extensive work by the Provincial Governor that he has never had time to return to the LLG area – but could not tell me what the work is.

    The now Provincial Governor when standing for election had brought a sledge hammer to the LLG Council Chamber – and demolished the outside walls. This was his promise to build a new Council chamber when elected – and a better and more effective Council to be a voice of the people. The LLG Council Chamber remains as before – with its fractured wall.

    The Open MP when standing for Election went round the villages stating that eh was going to introduce a haus man system where each village could debate its future. I visited a village which had then built a haus man – but the Open MP has never returned to the LLG area.

    The Open MP nominates three members of the JDPBPC. This allows him with his casting vote and the support of his nominees to outvote the LLG Presidents. the media and public are not admitted to meetings.

    The Open MP has held meetings of the JDPBC in Port Moresby. No one in the LLG area had any knowledge of a District Plan, approval of an LLG budget, or the content of such meetings.

    Bottom-up governance has for this electorate and LLG area disappeared.

    The LLG Councillors and the Ward Development Committee members are totally frustrated. However, they have no copies of the OLPGLLG or the LLG Administration Act – and do not know what they can do to address the situation.

    The Station used to have an electrical supply and piped water. These have disappeared.

    The LLG area used to have road access and a road system around the LLG area. this has totally disappeared. Dead tractors and road graders are scattered around the side of the previous road system.

    • Thank you for your insightful comments, James.

      I think your example would make a terrific case study. The politics of allocating and deciding on development projects certainly seems to be changing with huge increases in SIP funding to provinces, districts and LLGs as your example helps to illustrate. I would be interested to know if Ward Councillors feel more or less empowered with the separate election of LLG Presidents in 2013. My guess would be less, since the LLG Assembly can no longer dismiss the President through a vote of no confidence. Therefore LLG Presidents may feel less accountable to Wards and WDCs in spending LLGSIP. If this is the case, it seems that current expenditure policies have the potential to undermine the OLPGLLG. Perhaps the situation is playing out differently in other districts and LLGs. I think further case study research would be very useful to better understand the situation on the ground.

      • Presidents are now elected in the LLG General Election by the voters through the electorate. They can be dismissed for neglect of duty. The OLPGLLGE and the LLG Administration Act give different pathways for dismissal. It may be by appeal to the Provincial Governor, or through appeal to the Minister for Inter-Government Relations who may commission an enquiry by the Department of Provincial and Local Government Affairs.

        In this case, Councillors and community leaders counseled by outside expertise appealed to the Minister.

        Shortly after the President returned to the LLG and called a meeting.

  • The District Authority concept won’t quite work as our open mandated MPs are not necessarily highly educated. Some are village leaders and will genuinely need support and guidelines from the district administration, such as the District Authority (DA) and District Treasurer (DT).Furthermore services will be marginalised to MPs’ cronies or voting bases, unfairly distributed. When the District Authority is in place, the DA and DT would be useless, the open MP can simply hire chartered accountants or consultants to run the show and spend district funds at will. Clearly District Authority is heading in a dictatorship fashion, very power-hungry fasion.

  • Great article Colin! I’m amazed on how little information there seems to be on DSIP spending. PM O’Neil in his speech said “Joint District Priority Budget Committee (JDBPC) around the country are rehabilitating roads, building foot bridges and purchasing much needed vehicles and equipment for police and other public servants.” I would like to know where this information was obtained and if it’s available publicly.

    I checked out the Auditor-General’s report on the DSIP (most recent is 2009 – see Part 3[pdf]) which documents massive amount of mismanagement or worse, for example in one district it says “This Office noted instances of payments totaling over K5.6 million which were made without any evidence or proof that they had been made with the approval and endorsement of JDP & BPC” (p. 202). Not exactly ringing endorsement of JDPBPC’s success.

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