Research School of Pacific and Asian Studies The Australian National Univeristy State Society and Governance in Melanesia PUBLIC POLICY IN PAPUA NEW GUINEA — DISCUSSION PAPER SERIES 2006 / 4 THE PUBLIC SECTOR REFORM PROCESS IN PAPUA NEW GUINEA apua New Guinea has been undergoing A brief history of public sector R.J. MAY1 Pa major process of public sector reform since 1999, with substantial donor assistance. reform With the proliferation of new programs, new initiatives and restructuring, however, it has Public sector reform in Papua New been difficult, even for senior civil servants, Guinea began within the first four years of to keep up with the changes being introduced, independence, and has been a more or less and it is sometimes hard for outsiders to judge continuous process ever since. whether a new initiative represents an active In May 1979 a Committee on Administrative program or simply a good idea which may be Problems in the Public Service, chaired by forgotten or diverted before its implementation. Bank of Papua New Guinea governor Henry Moreover, with a fairly high level of staff ToRobert, was set up by the National Planning turnover, poor documentation processes, and Committee (NPC) to examine the major weak institutional memories, and donors administrative problems facing Papua New frequently poorly informed about the past Guinea and suggest immediate and longer-term history of public sector reform, there has been measures to resolve them (ToRobert 1979). some tendency to overlook the potential lessons The ToRobert Committee identified a range of of past failures and successes. problems and recommended remedial actions. This paper does not attempt a comprehensive Some of the problems were specific to the early history of public sector reform in Papua New post-independence time, but many have been Guinea (on which see Turner and Kavanamur, recurring issues. They included, for example: forthcoming) nor a substantive critique of the poor coordination and communication of present reform process (on which see Whimp national policies; lack of adequate management 2001); its intention, rather, is to provide and performance accountability; poor something of a roadmap to the reform process, coordination between national and provincial The contribution particularly since 1999, in the hopes of better programs and inadequate technical support to of AusAID to informing those participating in it and those provinces; inadequate funding for provincial this series is seeking to understand it. maintenance; ineffective staff development; acknowledged lack of control over funds; poor payroll system; with appreciation. The Public Sector Reform Process in Papua New Guinea problems with trust accounts; and inadequate departmental heads by negotiated employment 2 training and staff development. contracts. Predictably, perhaps, and ironically The ToRobert Report contained a long list given the World Bank’s acknowledgement of of specific recommendations, including the the PSC’s apolitical role, there followed an creation of a Programme for Administrative increasing politicization of the public service. Improvement with a number of specified high As part of a World Bank-assisted public priority projects, a clear policy on manpower sector reform, a Program Management development, and programs to improve police Unit (PMU) was set up in 1984 to oversee effectiveness. It also raised basic questions a restructuring of the public service, and a about the traditional role of the public service Resource Management System (RMS) was in development and proposed a high-level introduced with a view to creating an integrated working group to develop policy proposals on planning system to meet the deficiencies the role of the public sector vis à vis the private identified earlier by the World Bank. The Public sector. However, in a review of public sector Finances Management Act was amended in reform in Papua New Guinea, Turner and 1986, giving departmental heads delegated Kavanamur (forthcoming) comment that ‘there financial authority, and performance-based is little record of action and achievement’ in accountability systems were developed. the areas of concern identified in the ToRobert Turner and Kavanamur characterize the Report. period from 1985 to 1994 as one of ‘creeping Just over three years later, the first of crisis in public sector management’. They a series of World Bank missions visited conclude that, ‘It is doubtful whether the PMU’s Papua New Guinea to look at public sector efforts resulted in improved organizational management in the light of the ToRobert outcomes’, and that despite ‘much objective- recommendations. These visits culminated in writing, timetable-setting and mission- a report (World Bank 1983) which suggested debating….the RMS did not eventuate as the that Papua New Guinea enjoyed ‘basically guiding force of the public sector’. Several strong public sector management’ with ‘strong training initiatives, culminating in the World and carefully controlled budget procedures’, Bank-funded National Training Policy launched ‘close expenditure controls’, a sound planning in 1989, ‘fell well short of targets’ (Turner and process, a Public Services Commission (PSC) Kavanamur forthcoming). Several attempts which had ‘kept itself above politics’, and were made to downsize the public service, with appointments to the public service ‘largely little success, and in 1992 a Rationalisation Task free of nepotism or inappropriate political Force was created ‘to examine ways in which influence’. It was, however, critical of Papua the national departments could be restructured New Guinea’s ‘highly centralized’ manpower and their management practices improved’. A development, budgeting and planning systems, Policy Coordination and Monitoring Committee the lack of mechanisms for the formulation was established. Following an international and implementation of long-term development trend, the World Bank supported a policy of strategies, and the absence of ‘well-functioning corporatization, which commenced in 1991 administrative mechanisms for the transmission (following revelations of corrupt dealings in of national policy directions from centre to the forestry industry) with the replacement of periphery’ (ibid.:4-6). the Department of Forests by a National Forest Notwithstanding its positive comments on Authority. Notwithstanding these reforms, the PSC, the World Bank Report was also critical Turner and Kavanamur suggest that by 1995 the of the strong role of the Commission, suggesting ‘creeping crisis’ had become ‘an acute crisis’: that ‘the PSC and the rest of the government ‘A steady stream of reports reiterated the need seem to work at cross-purposes’ (ibid.:34). By for action to address serious problems in almost 1983 some of the powers previously exercised every aspect of public sector management’. by the PSC had been transferred to a Department Major developments between 1995 and 1999 of the PSC (subsequently restructured, included: the passage of a new Organic Law with World Bank assistance, and renamed on Provincial Governments and Local-level Department of Personnel Management (DPM)), Governments, with provision for a National and responsibility for management policy and Monitoring Authority to develop minimum the appointment of heads of departments and service standards and monitor performance; agencies was passed to the NEC. The Public a series of public sector reforms (including Service Management Act, 1986 saw the demise improved personnel management and payroll of the PSC and the replacement of tenure for controls and some restructuring of departments The Public Sector Reform Process in Papua New Guinea and agencies) under World Bank structural fiscal situation, in August 2002 the government adjustment programs; further efforts at public announced a Program for Recovery and 3 service downsizing, and several institutional Development, which identified as its three main strengthening projects. In 1999 a World Bank objectives, ‘good governance; export-driven review of public sector performance identified economic growth; and rural development, existing personnel management practices as poverty reduction and empowerment through contributing to inefficiency and corruption human resource development’.2 (World Bank 1999:122) and subsequently As a framework within which to pursue supported the revival of the PSC structure it these objectives, the government presented, had helped dismantle in 1986. after a lengthy process of consultation, a revised The later years of the 1990s, however, saw Medium Term Development Strategy (MTDS) a period of deteriorating governance, economic for 2003-2007, which replaced the previous decline, and rising tensions in relations MTDS for 1997-2002.3 The MTDS 2003-2007 with the World Bank and other donors. This has subsequently been replaced by the MTDS culminated in a vote of no confidence against 2005-2010. With regard to its public sector the prime minister, Bill Skate, and in 1999 reform agenda, the Somare government also Sir Mekere Morauta replaced Skate as prime presented, in November 2003, a Strategic Plan minister. Morauta promptly moved to initiate for Supporting Public Sector Reform in Papua policies designed to achieve reconstruction and New Guinea 2003-2007, which superseded the development (see Igara 2000). Morauta government’s Medium Term Plan of Action for Public Sector Reform. These documents define the broad Public sector reform since 1999 framework for government policies. Within this