PNG Constitutional Crisis

Publication | December 2011

Introduction

On 12 December 2011 the Supreme Court of Papua New Guinea (PNG) held that the election of Peter O’Neill as Prime Minister (PM) of PNG in August this year was unconstitutional and unlawful. The Supreme Court ordered, among other things, the immediate reinstatement of Sir Michael Somare as PM.

The Supreme Court’s decision and the events that have followed it have raised a number of legal issues which may significantly impact the private business sector in PNG. The purpose of this briefing is to inform you of those issues and to assist you to plan around them to the extent possible. This briefing is based primarily on publicly reported information that has been released during a challenging constitutional crisis which has placed PNG in unchartered waters. Critical information continues to unfold and therefore this briefing should be considered preliminary in nature.

Background

Earlier this year, Sir Michael Somare travelled to Singapore to receive medical treatment. Sir Michael was granted ‘sick leave’ by the PNG Parliament for this purpose. Sir Michael was absent from PNG for five months and his deputy, Sam Abal, assumed the position of acting PM in his absence. There was widespread media speculation at that time about the mental and physical status of Sir Michael (now 75 years old) and whether he had the capacity to continue to perform the duties of PM.

During Sir Michael’s absence, Parliament in August this year voted under section 142(2) of the PNG Constitution (Constitution) to appoint Peter O’Neill as PM and Belden Namah as deputy PM. This election was promptly challenged before the Supreme Court by way of a reference under section 19 of the Constitution by the East Sepik Provincial Government. The key issue was whether a vacancy had arisen at the relevant time to enable the election to be held. 

On 12 December 2011, in a 3 to 2 majority decision, the Supreme Court determined, among other things, that:

  1. there was no legal vacancy in the office of PM at the time Peter O’Neill was elected. Therefore, section 142(2) of the Constitution as relied upon by Parliament did not apply and the election of Peter O’Neill was unconstitutional and void;
  2. the Speaker’s decision to declare a vacancy in Sir Michael’s seat as member for East Sepik Regional was unconstitutional and void. Accordingly, Sir Michael remains the current member for that electorate; and
  3. Sir Michael is to be immediately reinstated as PM.

The Supreme Court’s decision has since been disputed by Peter O’Neill and other members of Parliament who argue that a subsequent amendment to the Prime Minister and National Executive Council Act 2002 had automatically resulted in a vacancy in the office of PM and that Parliament’s decision to re-affirm Peter O’Neill as PM in those circumstances should prevail. 

The Governor General, Sir Michael Ogio, was subsequently suspended by the National Executive Council (chaired by Peter O’Neill as PM) after his initial decision to recognise Sir Michael rather than Peter O’Neill as PM. Sir Michael Ogio’s suspension was lifted on 19 December 2011 after he purported to revoke his earlier decision and reinstated Peter O’Neill as PM. The head of PNG’s Defence Force, Brigadier General Francis Agwi, has publicly ruled out the possibility of military intervention.

Legal implications

The key legal implications that could arise as a result of the recent events in PNG are discussed below.

Potential for executive actions of Government to be null and void

It has been reported that all executive decisions by the O’Neill/Namah Government (i.e. at Cabinet and Ministerial level) have been rendered null and void as a result of the Supreme Court’s decision on 12 December 2011.  This could include decisions by Departmental heads or the Boards/directors of statutory authorities (e.g. the Independent Public Business Corporation) who have been appointed by the O’Neill/Namah Government since its formation in August 2011.  Whilst Norton Rose Group has yet to review a copy of the Supreme Court’s decision, we note that the Constitution expressly preserves the validity of executive decisions by Ministers in circumstances where they may not be empowered to make such decisions (section 153(4) of the Constitution).  The Supreme Court’s decision should therefore be considered in light of the law on this specific issue.

Early dissolution of Parliament and fresh elections

Peter O’Neill currently has the support of the majority of Parliament (75 of the 109 members in total).  If Sir Michael is accepted as PM but is unable to attract the parliamentary majority required to effectively govern, then Parliament could be dissolved and early elections called.  This could be avoided if, as has been reported, Sir Michael and Peter O’Neill agree to form a grand coalition; however, the likelihood of such an outcome and when it may occur is unclear, and Peter O’Neill has denied that there will be any such coalition.

Potential legal defect in instruments executed during ‘suspension’ of the Governor General

Any legal instruments executed by Sir Michael Ogio and the Speaker of Parliament, Jeffrey Nape (in his capacity as acting Governor General), during the former’s ‘suspension’ may be legally defective and unenforceable.  This will primarily depend on whether the decision to ‘suspend’ Sir Michael Ogio, and the subsequent appointment of Jeffrey Nape as acting Governor General, was legal and valid.

Review of Supreme Court decision

Peter O’Neill has indicated that he will apply for a review of the Supreme Court’s decision of 12 December 2011.  Whilst the Supreme Court is the final court of appeal in PNG, it is possible for the Supreme Court to vary a final order if it has made a ‘glaring’ error or mistake (known as the ‘slip rule’ principle); however the circumstances in which the Supreme Court would apply the ‘slip rule’ principle are very limited.

What it could mean for you

The legal consequences considered above could impact the private business sector in a number of ways depending on the specific circumstances of each business. Some general examples are discussed below.

Delays in key public sector processes

There could be significant delays in the public sector whilst Departmental heads and senior public service management seek legal clarity from Government on the relevant Minister responsible for their Department. Decisions requiring Cabinet/Ministerial approval could also be delayed (e.g. the grant of mining or petroleum titles). As mentioned above, as of the date of this briefing, Peter O’Neill appears to have the support of the majority of Parliament. Chief Secretary of Government, Manasupe Zurenoc, has indicated that the public service will adopt the status quo and abide by the decision of the majority of Parliament. He has urged public servants to continue to work on that basis (i.e. to deal with the Government of Peter O’Neill). This could be the interim position until a clear legal determination has been made.

Delay in the tabling and enactment of key legislation

The tabling and/or enactment of legislation relevant to the private business sector by Sir Michael as PM of a minority Government could be delayed pending resolution of the current political situation. As Peter O’Neill appears to have the support of a clear majority of Parliament, the tabling and enactment of legislation by his Government may not be materially impacted.

Uncertainty in Government policy and implementation

The Government’s position on key policy issues, and how they might inform the decision making processes of Government, may be unclear during this period. This could also impact the way in which Ministerial discretion under relevant laws may be exercised. However, if the Government of Peter O’Neill is allowed to continue (as seems to be the case at present) the position taken by his Government on key policy issues (e.g. with respect to the ownership of minerals) will likely continue.

Defects in legal instruments signed by the Governor General

All instruments signed by the Governor General during the ‘suspension’ of Sir Michael Ogio could be legally defective. To the extent that they are defective, the legal instruments could also be unenforceable.

Next steps

PNG has entered uncharted territory as a result of this crisis and it is not yet clear whether an ultimate resolution will be achieved through the court process or alternative means. Because of the competing legal interests and constitutional issues involved, it is likely that further applications to the Supreme Court will be made to determine the relevant issues once and for all. The Supreme Court is unlikely to make a final determination on any legal challenge before the end of 2011 and may likely take several months. The present legal uncertainty with respect to the party that is the legitimate Government, and the acts and decisions of the various individuals and parties involved, may therefore continue until after the 2012 general elections (scheduled to be held in June) when a new and undisputed Government has been sworn-in.

The nature, extent and complexity of the relevant legal implications will vary depending on the specific circumstances of your business. Detailed legal advice should be sought to ascertain how and to what extent your business could be affected during this period, including what steps you should take to avoid or minimise any adverse risk exposure to your business from a legal perspective.


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