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Gulag politics? Perceptions of PNG-Australia relations and the Paladin contract

By Grant Walton and Sinclair Dinnen

Recent media revelations about the $423 million contract awarded to a relatively unknown company, Paladin, to provide security and other services to refugees on Manus has attracted extensive discussion in Australia. Most of this has centered on Paladin, the extravagant cost of the contract and rate of profit for the company (estimated at $17 million per month), and, of course, the opaque and abbreviated tendering process followed by the Department of Home Affairs. Less has been said about what these events might say about Australia’s ongoing engagement with PNG. In this blog, we argue that this case potentially serves to undermine Australia’s standing among those striving to combat corruption and improve governance in its northern neighbor.

According to the Australian Financial Review, the Australian federal government ran a ‘limited tender’, for two contracts won by Paladin. While permissible under commonwealth procurement rules, limited tenders are the exception rather than the rule. Using a limited tender in this case raises questions owing to the profile of the contractor and the substantial sums involved, as well as the emphasis Australia places on good governance in PNG. Our aid program spends more on good governance in PNG than on any other sector – including health and education.

Over the years there has been a significant tightening in the administration of Australia’s aid programs, as with other Western donors, in light of the potential for corruption in fragile states with weak regulatory capabilities. Indeed, the efforts to immunise aid processes against this potential vulnerability have been proclaimed as a distinguishing feature between OECD donors, such as Australia, and newer entrants to the international aidscape, such as China. Anyone who has tendered for or been otherwise involved in an Australian-funded development project will know only too well how onerous the administrative, procedural and reporting …read more

From:: Development Policy Centre – DEVPOLICY Blog

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