Vanuatu provident fund members’ savings ‘safe’ but improvements needed, says inquiry

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Article by AsiaPacificReport.nz

The 127-page Vanuatu National Provident Fund report. Image: Vanuatu Daily Post

By Jane Joshua in Port Vila

The 27,400-plus members of the Vanuatu National Provident Fund (VNPF) have been assured that their savings are safe, but the performance and situation of the fund must be improved without further delay.

This was confirmed when the Commission of Inquiry handed its 127-page report into the alleged mismanagement, illegal and improper conduct of the past and present VNPF staff to Justice Minister Ronald Warsal and Acting Finance Minister, Jean Pierre Nirua, yesterday afternoon.

The commission uncovered multiple examples of alleged conflicts of interest in which rules appear to have been ignored.

Specific serious alleged conflicts by board members as presented by the commission yesterday include:

• Paul Montgolfier’s involvement as a board member and an adviser for the vendor selling Banian land.

• Santos Vatoko’s involvement as general manager and a close personal friend of the vendor of the No. 2 Lagoon land.

• Anniva Tarilongi’s close involvement, through her husband, with the advisers recommending the Bouffa be converted from housing to farming.

Other alleged conflicts
Other alleged conflicts of interest by non-board members as presented by the commission yesterday include:

• Tukana Bovoro’s membership of the Board Investment Committee at the time of the Wilco acquisition while he was chief executive of the Wilco company, which was selling properties to VNPF.

• Ridgeway and Blake lawyers engagement to provide legal advice to the fund and draft the sale of shares agreement and lease agreement with Wilco, while being directors and shareholders of companies who were shareholders of Wilco Ltd.

• Corporate manager Hollingsworth Ala Ngwele’s close connection with the consultant in the i-Pacific contract.

The commission was also presented with allegations of political interference by the then Prime Minister in the appointment of Mrs Tarilongi, the then Minister of Finance in the Interchange Limited investment, the Ambassador to EU in the CLA loan and the then Minister of Education in the Fiji Student Accommodation investment proposal.

All of these situations raised suspicions, although the commission did not have enough evidence to draw conclusive recommendations on prosecution.

Investigation taskforce
The commission has recommended the establishment of a taskforce on the criminal side to further investigate recommendations relating to prosecutions.

The taskforce, it said, should comprise representatives from the Office of the Public Prosecutor, police and Office of the Ombudsman and engage forensic accountants where necessary.

The commission recommended that the criminal taskforce and/or the Ombudsman follow up on all the named allegations of political interference, identify any wrongdoing and determine subsequent action.

The commission further recommended the establishment of a taskforce on regulatory frameworks, to further develop specific regulatory reforms.

“This is very important,” said commission chairman Olivier Fernandez.

“This is the only way of avoiding past mistakes from happening in the future.”

This taskforce should comprise legal, finance and organisational and management specialists and should also include the new general manager.

Breaches of guidelines
The commission also considered breaches of Investment Policy Guidelines (IPGs) and irregularities in investment cases as well as breaches of procurement rules and irregularities in contracts and tenders.

Acting Minister of Finance Jean Pierre Nirua thanked the commission team for the excellent work achieved.

“It is true it is not often that we get to hear the outcomes of a commission of inquiry in the presence of media,” he said.

“On behalf of the government, my colleague minister and myself want to see accurate media reports which will reflect the reality and status of the report.

“It must not be seen as preempting any decision which will be taken by the government.

“Some hear the outcome of the report as very sensitive and critical, let us take it as it is. It is only a report.

“The report outlines some processes, let us give respect to these processes. No one wants to see a repeat of the 1998 scenario.

‘Safeguard the credibility’
“In order to safeguard the credibility of this institution for the purpose of which it was set up, let us handle the report properly.

“It doesn’t mean that just because the report recommended criminal recommendations and prosecutions then we will take it for granted that this will happen.

“Let the process take its course. On behalf of the government, we assure that the government will follow the process and follow up the recommended actions within the law.

“We all have a collective responsibility.”

The handover of the report was witnessed by the Ombudsman, the Deputy Governor of the Reserve Bank of Vanuatu (RBV), government officials and VNPF staff.

Jane Joshua is deputy editor of the Vanuatu Daily Post.

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