THE AUSTRALIAN NATIONAL UNIVERSITY Research School of Pacific and Asian Studies State, Society and Governance in Melanesia StateSociety and in Governance Melanesia DISCUSSION PAPER Discussion Paper 2004/6 HORSES FOR COURSES: SPECIAL PURPOSE AUTHORITIES AND LOCAL-LEVEL GOVERNANCE IN PAPUA NEW GUINEA It is generally agreed that local government My interest in this subject arose from my recent COLIN has been the weakest of the three main tiers experience as a consultant engaged in the FILER of government in Papua New Guinea since it production of a sustainable development policy gained independence in 1975. The reasons for for the mining sector that would seek to improve this have been documented in the literature on the management of project benefits disbursed to the decentralisation that was brought into effect local communities and mine-affected areas (PNG by the Organic Law on Provincial Government Department of Mining 2003). While one of my 1977 (Ghai and Regan 1993; Peasah 1994; May aims is to document the potential significance and Regan 1997; May 1999). Although this law of SPAs for this particular policy framework, I gave provincial governments the power to create also wish to consider the broader question of forms of local government more appropriate how such exceptional institutional arrangements to local social circumstances than the model might be an instrument of national policy outside previously advocated by the Australian colonial of the mining sector. administration, few took advantage of this opportunity. Whatever the standing of individual councillors within their own communities, the THE LEGACY OF THE NEW councils themselves generally lacked the financial ORGANIC LAW and human resources required for them to function effectively as organisations engaged in the delivery The Organic Law on Provincial Governments of public goods and services. This problem is still and Local-Level Governments 1995 established a apparent in most parts of the country. whole new set of relationships between the three I do not propose to discuss here what could levels of government in PNG. In setting a new have been done, or should now be done, to standard for the way in which these relationships improve the performance of this third level ought to be constructed, it also removed those of government. Instead, I wish to discuss an elements of regional variation and local flexibility institutional arrangement, known as a Special The contribution which had developed under the Organic Law Purposes Authority (SPA), which has been of AusAID to of 1977. The new Organic Law removed the used to perform some of the functions of local this series is power of provincial governments to make government in specific local circumstances. acknowledged laws about local government, it increased the with appreciation. Horses for Courses legislative powers of Local-Level Governments Section 98 of the 1995 Organic Law, which 2 (LLGs) themselves, but it also placed their plans is concerned with ‘benefits derived from natural and budgets under the control of the national resources’, appears to provide a way for LLGs to Members of Parliament (MPs) representing each finance their operations outside of this planning open electorate. and budgeting process. It says that the developer Section 44 of the new Organic Law allows of a natural resource shall pay ‘development LLGs to make laws about: (a) labour and levies’ at its own expense to the Provincial employment (but not industrial relations); Government(s) and LLG(s) of the province or (b) labour or community industries; (c) self- area in which the development is situated, as well help and tokples schools, but not curriculum; as ‘land owners benefits’ which are payable to (d) cemeteries; (e) provision of water supply; all three levels of government for redistribution (f) provision of electricity; (g) improvement to the ‘owners of the land from which the of villages, towns, cities and communities; natural resources were obtained’. It then goes (h) maintaining peace, good order and law on to say that the development levies ‘shall be through consultation, mediation, arbitration controlled through a trust fund which shall be and community forums; (i) dispute settlement; managed and administered in accordance with an (j) town, city, village and community planning; Act of the Parliament’; that resource developers (k) cottage industries; (l) social services; shall provide to all three levels of government (m) bride and groom wealth; (n) general licensing; ‘expertise and professional support as to the use (o) community sport, recreation, cultural of the development levies’; and that other laws and industrial shows; (p) local environment; ‘shall make provision for the rates, management, (q) local tourist facilities and services; sharing arrangement, and application of the (r) housing; (s) domestic animals, flora and fauna; development levies’. If this part of the new law (t) human settlements; (u) census and village was intended to ruffle the feathers of extractive or community records; (v) traditional barter industry (Filer 1997), it also had the effect of system; (w) control on consumption and use of creating a space in which policy makers were alcohol, betel nuts, and betel nut related products obliged to think of ways to incorporate these or any other marketable items; (x) hygiene strange new forms of taxation into the laws and sanitation; (y) local trading (not mobile); regulating each industrial sector. (z) the protection of traditional sacred sites; (aa) community day work or service programmes; (ab) the imposition of fines for breaches of any of THE PRESERVATION OF SPECIAL its laws; (ac) village communities; (ad) local aid PURPOSES AUTHORITIES posts and clinics; (ae) traditional and customary copyrights. However, these law-making powers Those aspects of the new Organic Law have no organic connection with the planning which pertained to the operation of LLGs were and budgeting process that determines the brought into effect by the passage and gazettal allocation of financial resources. of the Local-level Governments Administration Act Section 33A of the new law establishes 1997.2 Section 38 of this act sets out the key Joint District Planning and Budget Priorities administrative functions of LLGs as follows: Committees (JDPBPCs) which comprise: the MP preparing corporate plans and estimates; representing the open electorate who shall be • preparing a rolling five-year development the chairman of the committee; the heads of • plan taking into account rolling five year LLGs in the district or their nominees; and up development plans for the wards as prepared by to three other members appointed by the MP in the elected ward members; consultation with the heads of the LLGs. The preparing an annual plan taking into functions of the JDPBPC are: to oversee, coordinate • account the rolling five-year development plan; and make recommendations as to the overall preparing annual budgets based on the district planning, including budget priorities, for • annual plans; consideration by the provincial and national keeping proper accounts and records of its governments; to determine and control the budget • transactions and affairs; allocation priorities for the LLGs in the district; ensuring necessary arrangements and to approve the LLG budgets for presentation to • participation at forums on renewable natural the LLG and make recommendations concerning resources; them; to draw up a rolling five-year development constructing and maintaining infrastructure plan and annual estimates for the district; and to • and facilities that are the responsibility of an conduct annual reviews of the rolling five-year LLG; and development plan. Horses for Courses • initiating and implementing programmes • maintain the Kairik airstrip; for youth and women. • receive and distribute royalties from the 3 Part VII of the Local-level Governments provincial government; Administration Act allows the Head of State, • administer the spending of monies under acting on advice from the National Executive the mining company’s Community Facilities Council, and following a recommendation from Grant; the Minister for Inter-Governmental Affairs, • advise on liquor licensing matters in to ‘establish a Local-level Government Special Porgera District; and Purposes Authority in and for an area of one • assist the Provincial Town Planning Board or more Local-level Governments’ to assist in planning any township in Porgera District in the implementation of one or more local- (Bonnell 1999: 76). level government functions. The Minister’s In 1994, the New Ireland Provincial recommendation is to specify the purpose, Government passed a bill to transform the management, funding and staffing arrangements Nimamar Community Government into the of the SPA, and does not necessarily require any Nimamar Development Authority in the context consultation with the relevant LLGs. SPAs are of negotiations to develop another large-scale corporate bodies whose powers are determined gold mine on the island of Lihir.3 In this case, the by their constitutions rather than the laws and constitution specified the functions as being to: regulations which normally govern the operations • receive and disburse grants such as monies of government agencies. Section 45 of the Act paid from the Special Support Grant associated says that the affairs of an SPA shall be conducted with development of the mine; by a ‘managing body’ which is not to include the • organise, finance, engage in or assist