The State -v- Achilles James Peni (2013)

On the 5th of December, 2013, Achilles James Peni was convicted by the National Court of misappropriating property, namely K2.7 million belonging to the Autonomous Bougainville Government between the dates of 1st Dec 2008 and 31st Dec 2009.

The National Court alleges that this criminal act was concocted and organised by the regional member for Bougainville, Fidelis Semoso, who is said to have benefited to the tune of K470,000.

The Autonomous Bougainville Government subsequently appointed Semoso Minister for Economic Development.

Given this is a cash-strapped region, rebuilding after a decade long war that decimated infrastructure and took up to 20,000 lives – stealing much needed grant funds, damages the peace process, regional stability and the future aspirations of Bougainville’s youth generation.

That one of the alleged ring-leaders was rewarded by the Autonomous Bougainville Government with a Ministerial post, is a worrying indication of systemic governance challenges as the island approaches an independence referendum.

The Details

The court found the Department of National Planning initially granted K4.1 million to the Bougainville Treasury for the development of 10 feeder roads in South Bougainville. This project had been submitted by former MP Michael Laimo.

When Laimo lost his seat in the 2007 general election, Fidelis Semoso was his successor. Semoso then diverted K2.7 million of the K4.1 million  towards a water development project for Buka General Hospital. The company hired to carry out this project, Millennium Water Ltd, was owned by Achilles James Peni.

The key facts, as related in court:

  • On the 1st of August, 2008, Peni submitted a proposal to construct water treatment for Buka General Hospital.
  • On the 13th of December, 2008, Millennium Water Ltd received a cheque for K2.7 million from the Bougainville Treasury Office.
  • This cheque was then deposited into the company’s bank account on the 30th of December, 2008.
  • On the 2nd of January, 2009, Peni wrote a cheque to Salonakori Cocoa Rehabilitation Centre for K470,000. Salonakori was listed as a sub-contractor for Millennium Water Pty Ltd. Derrick Tangua, the arresting officer on this case, stated in his testimony that Salonakori Cocoa Rehabilitation Centre was in fact owned by the wife of Fidelis Semoso, the then Regional Member for Bougainville in Papua New Guinea’s National Parliament.

Peni also wrote cheques to companies; such as Air Niugini,Brian Bell, Ela Motors, Kina Financial Ltd, LG Construction, Noble Waters Pty Ltd and Southern Cross Pumps and Irrigation, as well as to individuals, such as, Moses Peni, Roger Token, and Joseph Risti.

Additionally, there were many cheques made payable to ‘cash’. It is alleged, these ‘cash’ cheques were used for Peni’s own personal use. All these cheques were deemed by the court to be unrelated to the Buka General Hospital water development project.

In fact, the proper tender process had not been observed for work at the hospital and there was no evidence work had begun at the hospital, apart from one small hole dug in preparation for a water pump.

A complaint had been made, and an investigation was requested, by former MP Michael Laimo into the use of the funds .

An investigation was initially  conducted by Richard Pagen, from the Ombudsman Commission.

It revealed that no formal tender had been called, and proper channels were not followed.

Dr Cyril Imako, who was the CEO of Buka General Hospital at the time testified that Millennium Water Ltd had failed to provide the proper paperwork and stated that the hospital did not request such a project.

John Karai, who was the CEO for Finance in the Autonomous Region of Bougainville as well as the Executive Officer for the Provincial Supply and Tenders Board, testified that work exceeding K300,000 must go through the board. Protocol was not followed in this case.

Patrick Koles, who was a member of the Provincial Tenders Board, supported this version of events. Koles also stated that, as the Finance Officer, he was threatened into signing the payment voucher, as were some of his associates. They had allegedly been threatened  by the Office of Fidelis Semoso. The Provincial Treasurer, Paul Amera, was also verbally threatened by MP Semoso after refusing to pay the K2.7 million to Millennium Water Ltd.

Peni was found guilty of misappropriation after dishonestly using property belonging to another.

Read the full Court Judgement.