Constitutional Planning Committee Report 1974

CHAPTER 2

NATIONAL GOALS AND DIRECTIVE PRINCIPLES

The significance of Self Government and Independence

1. When a country achieves Self-Government and Independence, its

Constitution tends to be concerned largely with the tensions that exist at
that time. While it is important that these tensions - reflected as they are
in Papua New Guinea in the demands for secession, autonomy, restrictions
on powers of the national government, etc. - be taken care of, partly
through constitutional provisions if necessary, pre-occupation with this
problem can have one unfortunate consequence. It is that the
Constitution does not face up to the problems of the future, and this tends
to defeat the great opportunities presented by Self Government and
Independence.

2. We believe that the significance of Papua New Guinea's attainment

of Self Government and Independence is that, by transferring power into
the hands of the people of this country, it gives us a chance to define for
ourselves the philosophy of life by which we want to live and the social
and economic goals we want to achieve. If the Constitution is to be truly
the fundamental charter of our society and the basis of legitimate
authority, it should be an instrument which helps to achieve these goals
and not one which obstructs. Our Constitution should look towards the
future and act as an accelerator in the process of development, not as a
brake. It should be related to the national goals that we leaders of this
country are enunciating. We have therefore framed our recommendations
for the proposed Constitution with these goals in mind.

3. A clear definition of Papua New Guinea's most fundamental

national goals, and a statement setting out the implications of their
acceptance for the ways in which the Government seeks to achieve those
goals, is of great importance to the welfare of our people and to the
effectiveness of the Constitution in promoting it. Now that our country
has become fully self-governing and its duly elected leaders have taken
over virtually complete control of all internal governmental activity, the
need for definite, widely known, long term objectives to guide them in
their decision-making, is apparent. With the need for development so
widespread, it is crucial that national priorities be in accordance with
these objectives.

4. We leaders and people must know where we want to go before we

can decide how we should get there. Before a driver starts a motor car,
he should first decide on his destination. Otherwise his driving will be
without purpose, and will achieve nothing. We Papua New Guineans are
now in the driving seat. The road which we should follow ought now to be
marked out so that all will know the way ahead. The Committee believes
that at present our country's leaders have a unique opportunity to change
the existing foreign-imposed system of government, which is widely
recognised as being inappropriate to our needs. This opportunity must be
firmly grasped.

5. Now is the historic moment in our search for identity and self-
fulfilment to take the necessary measures to make substantial changes in
all of our institutions, to create new ones and to redirect development
when things are fluid and tractable. But for us to know clearly what
measures should be taken, our objectives must be clearly established.

6. The Committee has decided that, as the Constitution is the basic

charter of the country, it is essential that it incorporates the fundamental
national goals towards which the people and we leaders are working. This
should help to ensure that these objectives will become known throughout
the country and provide a yardstick against which government
performance can be judged.

What kind of society do we want?

The relevance of the Eight Improvement Aims

7. Over the last two years, there has been much discussion about the
kind of society that our people want. There was a wide ranging debate on
the socio-economic aspects of this topic in the House of Assembly last
year resulting in the adoption by unanimous decision of certain
fundamental guidelines for national improvement known as the "Eight
Aims". These are:
� a rapid increase in the proportion of the economy under the
control of Papua New Guinean individuals and groups, and in the
proportion of personal and property income that goes to Papua New
Guinea;

� more equal distribution of economic benefits, including movement

toward equalisation of incomes among people and toward equalisation of
services among different areas of the country;

� decentralisation of economic activity, planning and government

spending, with emphasis on agricultural development, village industry,
better internal trade and more spending channelled to local and area
bodies;

� an emphasis on small-scale artisan, service and business activity,

relying where possible on typically Papua New Guinean forms of economic
activity;

� a more self-reliant economy, less dependent for its needs on

imported goods and services and better able to meet the needs of its
people through local production;

� an increasing capacity for meeting government spending needs

from locally raised revenue;

� a rapid increase in the active and equal participation of women in

all forms of economic and social activity;

� government control and involvement in those sectors of the

economy where control is necessary to achieve the desired kind of
development.

8. There are several basic principles which lie behind these

aims. These have been summed up in the ideas of Equality, Self-Reliance
and Rural Development. The Government has clearly stated its
commitment to these aims in developing the country's human and natural
resources to bring about improvement in the lives of our people, and there
is general consensus on these principles all over the country.

9. In evolving the National Goals and Directive Principles of Policy

which we propose should be incorporated in the Constitution, we have
taken full account of the Eight Aims. The Goals and Directive Principles
we recommend are broader and more comprehensive than the Aims in
that they provide for the full development of our people, whereas the
Aims emphasize the economic aspects of our society. The Goals and
Principles are generally consistent with the Aims but are more specifically
aimed at achieving a free and just society in Papua New Guinea.

10. We did not determine these national goals in a matter of days or

weeks. We have distilled them after a great deal of thought and
discussion over the twenty-two months during which our Committee has
been at work. During that time, as we have mentioned in our
Introduction, we held well over one hundred public meetings in all parts of
the country, and we received thousands of submissions, verbally and in
writing, many of which were concerned either directly or indirectly, with
the type of society we should seek to build for ourselves.

11. We believe that these goals, and the principles which should guide
the government and our people in order to achieve them, express the
needs and aspirations of our people in meaningful terms, and that they
are stated in such a manner that people will readily understand and
remember them. The particular form in which they have been cast -
spelling out the goals first, and then stating the goals and the principles -
is intended to assist our people to fully understand and appreciate them.

12. We consider that they should be given the widest possible

publicity at all levels of government; in towns and villages; in schools and
tertiary institutions; in churches and other organizations so that our
people will become fully aware of them, discuss them and obtain a clear
sense of the direction in which our country is heading. It should give each
man and woman a clear appreciation of the need for him or her to
participate fully in the building of our new nation - a nation which is firmly
based on equality and social justice.
NATIONAL GOALS

13. National Goals which we recommend should be incorporated in the

Constitution are:-

INTEGRAL HUMAN DEVELOPMENT - LIBERATION AND

FULFILMENT

1. ALL ACTIVITIES OF THE STATE SHOULD BE DIRECTED TOWARDS THE

PERSONAL LIBERATION AND FULFILMENT OF EVERY CITIZEN, SO THAT
EACH MAN AND WOMAN WILL HAVE THE OPPORTUNITY OF IMPROVING
HIMSELF OR HERSELF AS A WHOLE PERSON AND ACHIEVING INTEGRAL
HUMAN DEVELOPMENT.

EQUALITY AND PARTICIPATION

2. ALL CITIZENS SHOULD HAVE AN EQUAL OPPORTUNITY TO

PARTICIPATE IN, AND BENEFIT FROM, THE DEVELOPMENT OF OUR
COUNTRY.

NATIONAL SOVEREIGNTY AND SELF-RELIANCE

3. PAPUA NEW GUINEA SHOULD BE POLITICALLY AND ECONOMICALLY

INDEPENDENT AND ITS ECONOMY SHOULD BE BASICALLY SELF-RELIANT.

NATURAL RESOURCES AND THE ENVIRONMENT

4. THE NATURAL RESOURCES AND THE ENVIRONMENT OF PAPUA

NEW GUINEA SHOULD BE CONSERVED AND USED FOR THE COLLECTIVE
BENEFIT OF THE PEOPLE: AND SHOULD BE REPLENISHED IN THE INTEREST
OF FUTURE GENERATIONS.
 PAPUA NEW GUINEAN WAYS

5. DEVELOPMENT SHOULD TAKE PLACE PRIMARILY THROUGH THE

USE OF PAPUA NEW GUINEAN FORMS OF SOCIAL, POLITICAL AND
ECONOMIC ORGANIZATION.

1. INTEGRAL HUMAN DEVELOPMENT - LIBERATION AND

FULFILMENT

14. We do not take development to be synonymous with material

progress. For us the only authentic development is integral human
development. This means that we use the term development to mean
nothing less than the unending process of improvement of every man and
woman as a whole person. We take our stand on the dignity and worth of
each Papua New Guinean man, woman and child. In effect, this means
that integral human development must reach out to and enrich Papua
New Guineans in every part of the country.

15. All Papua New Guineans have an inalienable right to liberation and
fulfilment through this process of development. This right does not
depend on our Constitution. The Constitution is merely restating the right
and explicitly confirming it.

16. No particular area or grouping of people should be developed at

the expense of another, materially or in other ways. There should always
be an equitable distribution and balanced sharing of all the benefits and
opportunities the national has to offer. For this type of development to
come into being, it is necessary for such conditions to be created and to
obtain throughout the nation at all times as to be conducive to that
development.

17. These conditions can only be brought about when the running of
the country is in the hands of Papua New Guineans who cherish a genuine
respect for the traditions of our country, and our people; who can
distinguish those features of the peoples' traditions that should be
retained from those that should be allowed to lapse; and who know how to
discern what is good in what other nations and people have to offer to
Papua New Guineans.

18. The best judges, therefore, of what contributes to the full human
well-being of the people of Papua New Guinea are to be found among
Papua New Guineans themselves. In probably no other matter is self-
reliance more necessary. The Government will always have its proper and
key role to play in helping to create the conditions in which Papua New
Guineans can thrive and enthusiastically pursue their own full human
development.

19. By tradition, Papua New Guineans are a spiritual people. This

fundamental tradition must always be respected and given the conditions
of freedom to develop and to be enriched. Closely tied with the spiritual
and religious features of Papua New Guinea's traditions are the cultural
elements of the nation. Here we are in touch with the spirit of the people,
with their roots and with their authentic creative genius, the nurture of
which will ensure our true national identity.

20. The social aspects of the life and progress of the people draw
attention to how rich and deep is the meaning we give development.

21. Our National Goals and Directive Principles are intended to provide
guidance for the full development of our people. People are the common
denominators of progress, improvement and development. This is why all
social, political, cultural, religious and economic activity should be
directed towards the personal liberation and fulfilment of every citizen.

22. Although social progress is not synonymous with economic

progress, economic development has meaning insofar as it promotes the
well-being of the people in many of the important aspects of their lives as
members of a community.

23. Without political development of the people of Papua New Guinea,

the genuine progress of the nation will be seriously hindered. What is at
stake is human freedom. One main key to political progress is the
increasing participation of Papua New Guineans at all levels of political
activity. This promotes human responsibility and enhances personal
dignity as well as helping to safeguard personal freedom.
24. Acceptance of equality among Papua New Guineans with their
active participation in the affairs of the nation will mean a substantial
contribution to integral human development.

Education

25. We are concerned by the way in which in the past development

and modern institutions have alienated our people from one another. Our
schools have tended to make children strangers to their parents and their
villages. Universities have furthered this process of alienation. At least
until recently the whole education process was leading towards social
stratification, increased difficulty in communication among members of a
single social group, and a decline in the level of tolerance and inter-
personal respect among our people.

26. To reverse this process of alienation is not an easy matter. We

acknowledge this. The present government has begun the task, but it is
one of great magnitude and will involve constant effort for real change to
be achieved.

27. Education should be based on and should promote dialogue and

co-operation. It should foster integral human development and tolerance
among our people, awaken their social conscience, their awareness of the
essential dignity of man, and their appreciation of the need to stand up for
their rights, both as members of the community and as individuals, in the
face of pressures from foreign interests and arbitrary government. It
should help to develop a spirit of solidarity of one with another, and an
appreciation of our inter-dependence.

28. We cannot build a democratic, just society unless our children's

education and all educational institutions are geared to achieving these
objectives.

International solidarity
29. In today's world it is essential for all countries - industrialised and
developing alike - to have effective links with other states. However, as
our Government recognizes, a new state such as Papua New Guinea needs
to look very carefully at the kinds of relationships it forms with other
countries. As a general rule we do not wish to become involved in formal
alliances, or to become too closely linked with particular
countries. However, we do believe that we should clearly recognize our
position as a country of the Third World, and actively support initiatives
aimed at improving the present underprivileged position of developing
countries.

30. We recommend that our people should be encouraged and given

greater opportunity, through education, the media and by other means, to
increase their awareness of other emerging states. They should then
obtain a greater realization of the common problems of developing
countries, and fully support the participation of our government in joint
international measures aimed at strengthening the solidarity of these
states in the fight for "the establishment of a new international economic
order based on equity, sovereign equality, interdependence and co-
operation to ensure economic and social development in peace and
justice for present and future generations" in all countries, including our
own.

31. A number of developments in the United Nations Organization and

in different regions of the world in recent years give reason for optimism
that the first positive steps are being taken towards changing the present
grossly unjust international economic system which allows wealthy
corporations and countries to exploit the people and resources of
developing countries. We must play our part in strengthening the
bargaining position of other developing countries and ourselves.

32. The principle of international co-operation which we recommend is

similar to one which was adopted, by the General Assembly of the United
Nations in May this year, at a Special Meeting called to find a way to
reform the present world economic order which is so dominated by the
wealthy industrialized countries, and heavily weighted in favour of their
interests.

2. EQUALITY AND PARTICIPATION

33. As we have said in relation to the first goal - "Integral Human
Development - Liberation and Fulfilment", the kind of society which we
believe our people want to build is one which is fundamentally based on
the right of each one of our citizens, whether he or she lives in a village, a
town, or a city, to fully develop himself or herself as a whole person.

34. We recognize that people are not born equal either in the talents
they possess or in their determination to use them to the best of their
ability. But everyone should have an equal chance to develop the talents
he or she has whether they be in farming, teaching, the arts, technology
or in any other field of human activity.

35. At present the place in which a child happens to be born is an

extremely important factor in determining the opportunities he or she will
have of obtaining any education at all, of winning a place in a high school,
of obtaining health and other government services and of being able to
participate in the cash economy.

36. This situation has resulted from the fact that some areas of the
country have been very much neglected in the past - in their economic
development and in the education, health and other services established
there. Not surprisingly this situation has given rise to wide-spread
resentment and has been a major underlying cause of disunity at this
crucial stage of our country's development. The goal of achieving equality
of opportunity and participation in our national life is not, then, something
for which we may piously hope, but a vital necessity if we are to achieve
genuine national integration.

37. Our present Government is seeking to reduce these inequalities of

educational and economic opportunities and access to other government
services in different parts of the country, and we fully endorse this policy.

38. But inequalities of opportunity as between different areas are not

the only inequalities with which, as a nation, we should be
concerned. There is also emerging a class structure which did not exist
before - well educated Papua New Guineans are tending to lose touch with
their relatives in the villages, and gaining substantially greater
opportunities to advance themselves than their village counterparts.

39. We must take firm steps to prevent this situation developing

further. There is a clear need to reshape our society now before this
emerging class structure becomes entrenched, so that all of our people
have an equal opportunity to develop themselves; so that they can use
their abilities to achieve personal fulfilment, and at the same time, make a
full contribution to the welfare of the nation.

40. We do not underestimate the difficulties we face in seeking this

goal of equality and participation, but we are convinced that now is the
time to direct all major policies toward this end. Nothing less than a full
scale effort will have any chance of success. Despite the recent steps
taken by our Government to redirect development in this manner, the
effects of the development policies which were vigorously pursued by the
Australian Administration during the second half of the nineteen sixties
and into the seventies, aimed at achieving the maximum economic return
in the shortest possible time, are widespread and not easy to reverse.

41. But we must reverse these effects if we are to achieve this

fundamental goal. Without equality of opportunity the level of
participation in the political process and in other aspects of the life of our
nation will be uneven. Those who have had the fewest opportunities will
not be able to adequately press for their rights as against others who are
more educated, have greater mobility, and more experienced in making
their views known and taken into account by the national
government. The more privileged groups will be in a position to dominate
the less privileged and may well do so. Such a situation must not be
allowed to develop. Action on a broad front must be taken now to begin
about real equality of opportunity for all of our citizens.

Political and administrative decentralization

42. Our political institutions must not only appear to be open to all
citizens - they must in fact provide maximum opportunities for our citizens
to be involved in decision-making that affects them. In our country, which
stretches over a substantial land area, includes many island groups,
comprises a great number of different ethnic, cultural and language
groups, and does not yet have well developed road links, we believe it is
vital that political and administrative decision-making be decentralized to
the maximum extent that is consistent with promoting and safeguarding
the national interest. That is one of the main reasons why we have given
so much thought to the need for the establishment of a new level of
government - "provincial government".

43. In Chapter 10 "Provincial Government" we have spelt out this

underlying philosophy and have set out our detailed proposals for putting
it into practice. But we would emphasize here that without a fundamental
change in our present system of government, it will be virtually impossible
for the goal of "equality and participation" to be fulfilled. As we point out
in Chapter 10, the present governmental structure, inherited from the
colonial administration, is one of the most centralized in the world, giving
maximum opportunity to public servants, especially at headquarters, to
influence policy, and minimum opportunity to our own people to be
meaningfully involved in their own government. Most local government
councils have not been able to provide a satisfactory avenue for the
people's participation in their own development, as the councils have
been dominated by the central administration for many years, and thus
had much of their initiative and energy sapped.

44. We are convinced that only by establishing this new system of

provincial government at the district level will the undue dominance of
centralized administration be broken, and the will of the people be
adequately reflected in the policies and institutions of government in
every part of the Papua New Guinean nation.

Equality of opportunity and equitable sharing of benefits

45. One of the most accurate measures of the degree to which a

society is meeting the great challenge of attempting to achieve a just
society is the evenness of the spread of the economic benefits of the
country's development among those who live and work in that
country. Few countries have gone very far in meeting this
challenge. Even in the great majority of the most highly industrialised
countries of the world the gulf between the richest and the poorest
citizens is prodigious, and makes far less meaningful the fundamental
rights and freedoms enshrined in the constitutions of some of these
countries.

46. In many developing countries the contrast between the wealthy

few and the mass of ordinary people, the great majority of whom are
barely able to eke out a subsistence living, is even more
stark. Independent Papua New Guinea must be very different from this,
and we have every confidence that it will be.

47. In seeking to build an egalitarian society, Papua New Guineans

have two important advantages that many other countries lack. Firstly,
we have no traditional ruling class whose members regard privilege and
wealth as their rightful possessions. Secondly, the vast majority of our
people have significant land rights which they have jealously guarded
over centuries, and which enable a substantial number of them to obtain a
basic living, quite apart from any involvement they may have in the cash
economy.

48. The recent report of the Commission of Inquiry into Land Matters
emphasized the need to ensure that our people are not deprived of their
ancient land rights, stressing that Papua New Guinea does not want to see
the emergence of a class of landless people as has occurred in so many
other developing countries.

49. We believe all papua New Guineans want each one of our people
to have a decent standard of living, with no citizen living in luxury,
enjoying a surplus of the benefits produced by the hard work of ordinary
people. This aim is very much in keeping with the second of the Eight
Aims, though it spells out more clearly the objective of substantial
equality of incomes among all Papua New Guineans.

50. As we said earlier, we are well aware that no two people are
exactly alike, in personality, ability or initiative. Some have more
determination and drive than others. Certainly the rewards which highly
talented and hard working people receive should, in any system of
government, be above the average level of incomes in the country, but
consistently with the Eight Aims we consider that the disparities between
those with the highest incomes and those with the lowest should be
minimized as far as possible. The Government should actively seek to
increase the proportion of the economic benefits of our country's
development which goes to those who have the lowest incomes, whether
they be living in villages or towns. We believe our people are firmly
against "elitism" which is both unjust and undemocratic, and leads to the
kinds of social problems which we are experiencing now in our main
towns, where disparities in wealth are most obvious.

51. We welcome and fully support the basis of the agreement recently
reached between the Public Service Association and the Public Service
Board for a flat pay increase for national public servants to take account of
high inflation since their salaries were last increased. The amount
involved, namely $350 per year, is to be paid irrespective of whether
public servants are in a high position or at or near the base of the public
service salary range.

52. The effect of such a salary increase is, of course, that the person
on a lower salary benefits proportionately far more than does a person at
a high level. Thus the gap between those public servants in responsible
positions who earn high salaries and those who earn low salaries is being
reduced. Already the ratio between the highest paid Second Division
officers and the lowest paid Third Division officers has been reduced
substantially since 1968. At that time the ratio between these two salary
levels was 1:13. It is now 1:61.

53. We believe that practical examples of this type of forbearance on

the part of our more privileged people can have a significant and very
beneficial effect on the attitude of all of our people (including the
Government) to greater equality of incomes. Such practical action carries
far more weight than words can do. We believe action must be taken on a
wide front to deal fully with this basic problems of income inequalities,
and the initiative which the Public Service Association has taken to apply
the principle of reducing wage and salary differentials between the
highest and the lowest paid workers in the private sector as well as in the
Public Service, deserves full support.

54. The incomes of expatriates should also be taken into account

when looking at income levels in this country. It is not enough to hold
down the incomes of our own senior people, if those of foreign citizens
living and working here continue to rise with the same rapidity as they
have been doing in recent years. There should be a firm policy on this
matter developed immediately.

55. In seeking to achieve greater equality in the sharing of benefits,

our Government should be particularly conscious of the present wide
disparities between the standards of living of people in the various
districts. To achieve this greater equality is an extremely urgent matter,
but it will take a very substantial sustained effort to successfully change
this situation.

56. We recommend that it should be a constitutional principle that the

number of citizens participating in every aspect of development should be
maximised. Thus co-operatives and general purpose corporations should
be actively encouraged and promoted. The relatively few large scale
enterprises which we allow to operate here should involve as many of our
people as possible, in various capacities; not only as employees but as
sub-contractors, suppliers, etc. Projects of any kind should meaningfully
involve the people of the area in which they are being carried out.

57. The Government's recent legislation providing for the

incorporation of land holding groups, and of groups that wish to involve
themselves in development activities which are not necessarily linked with
land, is a significant step in applying the directive principle which we
propose, namely, that "the organization and legal recognition of all groups
engaging in development activities should be facilitated". It should help
to stimulate more self help business activity - something which is urgently
needed if we are to become more self reliant.

58. We believe it is a strongly held view of our people that no citizen

should be deprived of the opportunity of performing any beneficial task
which he or she does well, and particularly that, in the economic field, for
example, a particular activity should not be monopolised by a single
company or person. Our people are totally against allowing large
enterprises, whether expatriate owned or Papua New Guinean owned to
dominate a particular field of economic activity, such as operating fork lift
trucks, taxis or road transport, or marketing produce, thereby effectively
depriving individual citizens or small groups of citizens, of the opportunity
to compete.
Equal status and opportunity for women

59. We have also emphasized the importance of women being able to

make their full contribution to the welfare of the country, on an equal
footing with men. In recent years women have played a significantly
greater part in the country's national life - in politics, in business, in social
and cultural activities. But more effort should be made by government to
hasten this development. Obstacles to educational and other
opportunities which face women at present should be removed, and
insofar as it is within the power of the Government to do so, the difficulties
facing women who wish to involve themselves in the affairs of the nation
should be reduced.

Broad representation in official bodies

60. Whilst we believe that it is of considerable importance that people

chosen to fill positions of high responsibility in government such as in the
National Executive Council, parliamentary committees and statutory
authorities, etc., should be selected primarily on the basis of their
personal qualities and experience, we recognize that another important
factor should be taken into account. It is a strongly held view among
many of our people that as far as possible official bodies should be
composed of persons who are "broadly representative of the various areas
of the country". If they are composed in this way the people of the
different areas of Papua New Guinea will feel a greater sense of
involvement than would otherwise be the case. Particularly at this stage
of our development, this is a vital necessity.

National languages

61. We strongly recommend that the State clearly recognize Pidgin,

Hiri Motu and English, as national languages. Literacy in these languages
should be actively promoted to encourage better communication between
many different groups of our people, and enable them to participate more
fully in the affairs of the country.
62. Literacy in local languages should not, however, be discouraged as
they should be safeguarded from falling into disuse. Thus we envisage
that as many as possible of our people will be multi-lingual.

3. NATIONAL SOVEREIGNTY AND SELF-RELIANCE

63. It follows from what we have said that it is a fundamental goal of

our people that Papua New Guinea should make its own decisions, and
that its sovereignty should not be reduced by external political, economic
or military dependence; that national leaders should always be free to
make national decisions.

64. The economies of the developing countries of the world are in

most cases strongly affected by foreign interests. Papua New Guinea is no
exception. A study made last year by the Australian Government's Joint
Intelligence Organization is reported to have found that almost two-thirds
of the developed section of Papua New Guinea's economy is controlled by
Australian companies and individuals. And with the rapidly increasing
extent of Japanese involvement in large scale economic activity here, it is
clear that we Papua New Guineans at present control only a very small
part of our own economy, and will remain in this subservient position
unless firm action is taken to change the existing situation in a meaningful
way.

65. If Self-government and Independence are to have real meaning

these milestones must be accompanied by a substantial measure of
control by Papua New Guinea over economic enterprises throughout the
country. In the present circumstances this can only be achieved by
developing solidarity between all peoples within the country and giving
second place to relationships with outsiders. It may well be that it will be
necessary for us to forego some immediate material benefits which might
be derived from dealings with outsiders, in order to enhance our own
political sovereignty.

66. Far too many countries of the Third World are forced, by economic
relationships with industrialised countries, to build their societies more in
accordance with the interests of the industrialised countries than with
their own national wishes. We firmly believe that Papua New Guinea must
avoid a situation where foreign capital controls the destiny of its people.

67. However, for many years Papua New Guinea's development has
been steadily fitting into the type of development typical of many Third
World countries. This is seen as basically a matter of obtaining money for
development activities. To get this money, foreign investment (and
foreign domination of the economy) is uncritically encouraged; inequality
is often deliberately promoted so that there will be a band of rich people
who (so it is argued) will reject their traditional obligations and retain
money to invest. This kind of development has generally not been
successful elsewhere and has led to very serious social inequalities, but it
is still dominant in Papua New Guinea. It can be accurately called
"dominant development".

68. Other trends in this country are opposed to dominant

development. One such is the Eight Aims which we set out in full earlier
in this Chapter. Another trend opposed to dominant development can be
seen in the growth of development groups such as the New Guinea
Development Corporation, Kabisawali Village Development Corporation,
the Hiri Hanua Development Corporation, the Bena Association and the
Komge Oro Association.

69. In comparison to these new trends, dominant development is

much more effectively organised; it has a headstart, it is well entrenched
and it has access to considerable resources and skills.

70. The fact that dominant development is better organised and well
established means that it is in a superior position to take advantage of
new situations. A most important emerging situation is "provincial
government" which, in Chapter 10, we recommend should be established
throughout the country as soon as possible. We must be constantly aware
of the danger of dominant development exercising an undue and improper
influence on provincial governments, and take the necessary steps to
ensure that such influence is firmly contained.

71. We should accept foreign investment only if it is in accordance with

very strict controls, and to the extent that it does not overtax our capacity
to cope with its direct and indirect effects. We have specifically provided
in a directive principle under this goal of "National Sovereignty and Self-
Reliance" for full account to be taken of the skilled manpower resources
which we have when we are deciding whether a particular foreign
enterprise should be accepted. We believe it is seriously detrimental to
the long-term

interests of our people for large scale foreign enterprises to be

established, employing substantial numbers of skilled expatriates, with
our own people being involved only at the lower levels of management
and operations for many years to come. We are also aware, however, that
too many foreign enterprises can attract a substantial proportion of our
highly skilled people, whose numbers are very small at present, thereby
diverting these people away from governmental activities which are more
directly relevant to the needs of the country.

72. Bringing foreign investment into our country at this stage of its
development can be likened to using a bucket of water to fill a cup. The
cup can only contain a small amount of the water in the bucket and the
excess water simply overflows and runs away, as do the benefits of
excessive foreign investment.

73. It is essential that we be highly selective as to the type of

enterprise we allow into this country - not only should we very carefully
consider whether the industry which a foreign company proposes to
establish is in accordance with our national objectives, but we should
thoroughly investigate the history of the company's activities in other
countries. We must not allow any foreign enterprise to operate in our
country unless we can be sure that it will fully abide by our laws, and will
not make any attempt to interfere with our political and civic affairs.

74. Companies whose history shows that they have evaded

substantial taxes by various unscrupulous means should not be allowed to
operate here. The recent allegations by the Leader of the Opposition, Mr
Abal, (which the Government has recently agreed are correct) that certain
foreign companies operating here have, by "juggling" their operations,
evaded their obligations to Papua New Guinea, thereby costing this
country millions of dollars in taxes, gives weight to this concern.
75. On a different plane, we know there have been too many instances
of undue influence or even outright manipulation of the governments of
developing countries (and some industrialized countries also) by multi-
national corporations sometimes backed by their home governments, to
achieve their own ends. Foreign corporations which have interfered with
any other government or taken steps to try to bring the government of
any other country to its knees by economic pressure, should not be
allowed to operate in this country.

76. Foreign companies which fall into either of the above categories,
but are already operating here should not be able to obtain any new
agreement with our Government, and consideration should be given to
whether any existing agreement between the Government and such a
company should be cancelled.

77. We do not suggest that all foreign companies operate in this way,
or that foreign investment in itself is necessarily bad. But we are
concerned to ensure that foreign investment is firmly controlled in the
interests of the majority of our people. When our economy is largely in
the hands of foreign investors, as it is now, what real political power do we
have, whether we are independent or not?

Impact of Multinational Corporations on development

78. The great problems which developing countries face in relation to

the impact of the activities of multinational corporations, the largest and
most powerful of the foreign investors, have been drawn together and
analysed in a recent report (published on 9 June, 1974) prepared for the
United Nations by a group of "eminent persons", concerning the "Impact
of Multinational Corporations on Development and International
Relations". That Report (which we refer to below as "the Report" makes
reference to the benefits which such corporations can bring to a country,
but emphasizes the dangers to developing countries if they do not -

(a) clearly spell out their national goals and priorities and their
policies for the control and channelling of foreign investment; and
(b) ensure that all foreign investment accords with those policies.

79. The Report points out, on page 17, that multinational corporations
generally continue to own and control the package of resources and
capabilities which they introduce into a host country (the country in which
they invest) -

"They also tap resources on a world-wide basis and syphon them

off to markets where profitable possibilities exist. Their impact depends
on the one hand on the nature of the package and the attitude and
strategies of the multinational corporations, and on the other hand on the
environment in which they operate. For example, foreign capital may
augment the resources of the host country and relieve bottle-necks in
foreign exchange; but it may also generate a series of large outflows in
dividends and service payments. New technology may improve the
utilization of resources, but may not always be appropriate for local needs
such as for employment creation. Managerial and marketing skills may
enhance productivity and the availability of goods, but they may also
divert resources from where they are most needed to where they are most
profitably sold".

80. The Report stresses the importance of looking at the total impact
of multinational corporations on the host countries, and indicates that
these corporations can increase the degree of dependence of host
countries rather than strengthening their economic position.

81. As to the non-economic effect of these corporations on host

countries, particularly developing countries, the Report says these are -

"frequently as important as or even more important than the

economic impact. The effect of multinational corporations on the social
institutions and cultural values of host countries may be especially striking
if the tenor, tradition and stage of development of these countries differ
considerably from those of the home countries. For example, the
"business culture", with its emphasis on efficiency, may be considered too
impersonal in traditional societies. The very cultural identity and the
entire social fabric may be at stake, especially if multinational
corporations attempt to transplant their own models of social
development to the host country."

82. The Report concludes that these problems are more pronounced in
developing countries because most multinational corporations originate in
countries with very different social and cultural backgrounds. The fact
that multinational corporations feel they can count

on the support of a powerful home country or on the co-operation of a

broad service network, strengthens their economic power.

83. Finally, the Report says, on page 18, that even in strictly economic
terms, the benefits which the operations of multinationals confer on host
countries is open to question.

"Spurs by multinational corporations to productive activities do not

always provide a basis for sustained and sound development. Isolated
foreign enclaves have few linkages with the domestic economy. The
extraction of natural resources may generate few processing industries or
do little to raise the level of local skills. Branch plants which operate
purely as off-shoots of their parent companies, such as component
manufacturers, are unlikely to integrate fully into the local
economy. Restrictions to competition may benefit the enterprise but not
the individual countries in which its affiliates operate. Export market
allocation and tied purchases affect the foreign exchange gained or saved
by the host country. The attempts of host countries to raise taxes or to
place limitations on foreign exchange remittances can be negated by
vertically or horizontally integrated multinational corporations through
transfer pricing and the use of tax havens."

"...even if a host country increases its share of benefits from the

activities of multinational corporations and enjoys high rates of growth, its
income distribution may not improve or may even deteriorate. Welfare
standards for workers may be kept low, owing to weak or non-existent
trade unions. Consumers may not benefit from low prices. High income
obtained locally from the activities of multinational corporations may
accrue largely to domestic elites associated with foreign interests. The
vigorous sales efforts of the affiliate on behalf of products usually
consumed in high-income countries may cater largely to upper income
groups and promote consumption habits beyond the means of a poor
country and unsuitable for the development of local industries. Basic
needs of the population, such as food, health, education and housing, may
be left unattended. The location of activities of multinational corporations
in the developing countries may be influenced by more stringent
requirements for protection of the environment in developed countries."

84. We have quoted extensively from this important Report because

we believe the views expressed in it are very relevant to our own
situation. We have already experienced most of the detrimental effects
both of foreign investment generally and of multinational corporations, in
particular, to which the Report refers.

85. We believe strongly that the preservation of national sovereignty

and integrity is crucial to our country's future well-being and that the
Government must take a strong stand now to restrict the flow of foreign
capital into our country if we are not to be overwhelmed by the influence
of excessive foreign investment.

86. For this influence to be successfully contained, a thoroughgoing

policy of self-reliance should be established to provide the basis of Papua
New Guinea's attitude to foreign investment.

Self-reliance

87. The policy of self-reliance means various things: it means self-

sufficiency in basic products, but also greater participation by Papua New
Guineans in the economy, and an emphasis on small-scale business
activity. We believe there is recognition throughout the country of the
need for participation by the people in decision-making, and to open
channels for the useful employment of the energies and enthusiasm of the
people. This is reflected in the emphasis in the "Eight Aims" on
decentralisation and the typically Papua New Guinean forms of business
activity.
88. It is clear that our people want economic development, but not
just any kind of economic development. Our people are becoming
increasingly aware that an obsession with economic development can
lead to many harmful consequences; the disruption of traditional systems
and values, the alienation of man, the exploitation of the poor by the rich,
pollution of the environment and an unjustified depletion of our natural
resources.

89. We believe that there is broad consensus among our people that
economic development should not bring about disparities in incomes,
either as between individuals or regions. Development above all, must be
development of the people. It should be based on our people's own
talents and hard work and emphasize Papua New Guinean ways in the
manner we have explained earlier in this Chapter. True development is
not to be measured by the Gross National Product. The degree to which
people throughout the country have the opportunity to achieve personal
fulfilment is a much more meaningful measure of a country's
development. The total development of all our people, largely through
their own efforts, should be our aim.

4. NATURAL RESOURCES AND THE ENVIRONMENT

90. This goal is based on four fundamental principles. These are:-

1. In considering the natural resources of Papua New Guinea, our

human resources should be included. Our human talent should be
directed to providing benefits to the majority of the people.

2. The basic concept in our society with regard to use of natural

resources is that one generation holds and uses resources in the capacity
of trustee for future generations. We, the generation of today, cannot
squander our country's resources. We would clearly be failing in our
responsibility if we sold our resources to foreigners for our own short term
benefit, without regard to the needs of generations after us.

3. The resources of the world are limited. Our country and its
resources are finite. For the sake of those who come after us, we must
strictly limit the speed with which we exploit our natural resources. We
must also replenish them as far as possible; (for example by replanting
with new trees after mature trees have been cut down by a timber
enterprise).

4. Our ancient animistic belief is that everything has a spirit. While this
belief should not frighten us from "subduing the earth" for our collective
benefit, it

should remind us that blind destruction fo the environment will lead not
only to pollution but to the "death of the earth" which is vital to our
nation.

91. Making the best use of the talents of our people, in the interests of
the nation, is clearly of the highest importance. Particularly at our present
stage of development when skills among Papua New Guineans which can
usefully be applied to the modern "sector of productive activity are scarce,
we need to channel those skills into activities which will most affectively
promote the welfare of our people. At the same time, the skills of the
people in all kinds of traditional activities should be encouraged and
further developed.

92. We believe that the people of Papua New Guinea, both of today
and tomorrow, should be continually aware that in striving to improve
their human lot they should not make the mistake of blindly destroying
their rich natural environment - the land, the rivers, the sea, the fish, the
animals, and the birds. Use of these resources should be weighed
carefully against the real cost to the country in terms of the damage
which will be caused to the whole way of life of the people living in the
vicinity of a particular project, the destruction of land, rivers and wildlife in
the course of the operations of, for instance, a large mining or timber
enterprise, the need for the integral development of man which also
concerns spiritual, psychological, cultural and social development.

93. It is true that man can create a new landscape through reshaping
the environment. But this should be done only with full regard to the
natural scenic beauty of the environment. Man is inclined everywhere to
use the modern tools of technology to demonstrate his mastery over
matter. We believe that our mountains, our rivers and our valleys should
not be destroyed for short term material benefits.

94. Historic sites, our objects of spiritual significance, for example,

carved wood, spirit houses, etc. should be protected against deterioration
and destruction. Everyone in our country should develop a true sense of
pride and appreciation of our history and the objects which depict our
yearnings, our struggles and our achievements.

95. We should develop a sense of respect for all our natural resources
and the environment. We should not be afraid to use those resources to
contribute to our development, but should be sure not to over-use them to
the extent that they are rapidly exhausted, especially at this stage of our
history when it is foreign interests who gain by far the most benefit from
the exploitation of our natural resources. Our needs should be weighed
against the needs of our children, their children and the generations which
follow them.

96. The Government's recent establishment of the Ministry for the

Environment is a welcome step towards the creation fo effective
institutions and policies for the adequate protection and improvement of
the environment.

5. PAPUA NEW GUINEAN WAYS

97. In Chapter 4 of our Second Interim Report dealing with Provincial

Government, we said-

"When Europeans settled in Papua New Guinea, they did not find a
political vacuum on the shores and plains, and in the mountains of our
islands. Our ancestors had well organised, self-sufficient communities
or wanples, clans and

tribes, to meet the needs of their times. The price of the impact of
Western colonisation has been the sapping of the initiative of our people."
98. The process of colonisation has been like a huge tidal wave. It has
covered our land, submerging the natural life of our people. It leaves
much dirt and some useful soil, as it subsides. The time of independence
is our time of freedom and liberation. We must rebuild our society, not on
the scattered good soil the tidal wave of colonisation has deposited, but
on the solid foundations of our ancestral land. We must take the
opportunity of digging up that which has been buried. We must not be
afraid to rediscover our art, our culture and our political and social
organizations. Wherever possible, we must make full use of our ways to
achieve our national goals. We insist on this, despite the popular belief
that the only viable means of dealing with the challenges of lack of
economic development is through the efficiency of Western techniques
and institutions.

99. We should use the good that there is in the debris and deposits of
colonisation, to improve, uplift and enhance the solid foundations of our
own social, political and economic systems. The undesirable aspects of
Western ways and institutions should be left aside. We recognise that
some of our own institutions impose constraints on our vision of freedom,
liberation and fulfilment. These should be left buried if they cannot be
reshaped for our betterment.

100. At the heart of our feelings is the Papua New Guinean human
person. Full use should be made of the talent, skills and the abilities of
our own people. We must place an unswerving trust in papua New
Guineans and their wisdom.

101. Our insistence that development should take place primarily

through Papua New Guinean ways, should not be understood in its narrow,
structural sense. What we mean is that since development is a process of
growth in our people, it must take place through and in our human
persons. Our social, political, economic and religious organisations are
external manifestations of our human depth. Any development that is
pursued outside our humanity is externally imposed and is inherently non-
conducive to our true human development.

102. Development must take place through our people. It must be a

process. It must not be a prefabricated, predetermined set of answers,
formulae and solutions by foreigners to the problems and hopes we alone
can feel and yearn for. Technology, scientific discoveries and institutions
of the most recent times can, in many respects, be inappropriate for
us. Proper development should take place through institutions and
techniques that are not only meaningful to us, but also recognize our
human dignity and enhance it.

103. Development through our ways should not be thought to

involve stagnation. Papua New Guinean ways, contrary to a commonly
held view, not only of foreign citizens but of our people also, are not
stagnant and closed. Our ways have always been open to external
influences. It is this inherent openness which has enabled us to achieve
so much in such short time and adapt to the new structure which has
existed since Europeans first arrived here. Our ability to cope with new
demands, our ability to readjust our ancient ways to new needs, have
enabled us to develop, though not in the manner which we are now

104.

striving for. It is this ability which is the centre of what we call "Papua
New Guinean ways".

104. This ability to accept new ways is evident in the manner in which
our people are quietly accepting the demands of a modern nation. There
is the danger, however, that in so doing, we, as a people and as a nation,
might become borrowers only. There is the danger that we might discard
our ways or place them in subservience. No matter how hard we try to
copy foreign ways, we will always end up being second-rate unless we
make full use of our own traditions and institutions to achieve our national
goals.

105. It is inevitable that we should make intelligent use of foreign

ways. But we should do so only after we have set our national goals and
priorities. The second step is to determine and make sound use of our
own resources, both human and material. We should use foreign ways
only to supplement our own resources. This is self-reliance. This is self-
respect. It is our way, a Papua New Guinean way. It is a matter of our
survival as a people to preserve our identity and still keep abreast of the
changing times.
106. In this goal, we seek to promote our traditional ways such as
participation, consultation and consensus and a willingness of privileged
persons to voluntarily forgo benefits to enable those who are less
privileged to have a little more. The example we have given earlier of the
attitude of the Public Service Association to salary rises is a good example
of this. We do not claim that these values are exclusive to papua New
Guineans. However, they are inherent in our people. Among friends, our
way of life was to come to decisions by a long process of consultation and
consensus. This process is the central element of true democracy and
government by common will. This is a process which is most conducive to
social harmony, co-operation and common good.

107. This process may appear to be costly in time and in money. It is

our firm belief, however, that if these processes of true mass involvement
are not undertaken by our people, then in the long run, the new political
institutions which we have either inherited or which the Committee has
recommended in this Report will not take root. The result would be even
more costly. Participation should grow out of commitment. Any
commitment should grow out of an understanding fo the real needs of the
people and the measures being taken to meet these needs.

108. Consultation and consensus are inevitable where people recognise

the need to depend on each other. They are based on respect for the
individual and his dignity. Faced with real and pressing demands of one
kind or another, we may despair and resort to drastic steps. And yet, the
success of our labours will ultimately depend on the extent to which the
masses understand our strategies and are able to identify with these.

109. Our colonisers have paid little regard to these values. They
imposed their "government" their democracy, their institutions and their
will with little or no regard to our own values and institutions. This way is
a blatant denial of our humanity. By their practices, they have to some
extent changed the natural growth of our human development and our
organizations and forced them into positions of subservience.

110. We refer to the systems of local government we have

inherited. There can be little doubt that the effect of local governments
has been, in some places, to reduce if not destroy the
power of the traditional leadership and government structure. A serious
consequence has been the division of life into things political or
governmental and things economic. Traditionally, life consisted of an
integrated approach to our daily tasks. Law and morals, religion and
spirituality, economics, politics and government were practised as a single
system. In our societies there was not the word "responsibilities". We
knew only of "responsibility and authority". Thus, whilst certain "big men"
or "women" or chiefs assumed authority and responsibility, on the whole,
men, women and children from a very early age assumed responsibility
and authority.

111. Now, at this juncture of our development, we can do no less than

to insist that the directive principles we have enunciated above should be
renewed. We should seek to imbue all of our people with enthusiasm to
work in the interests of the nation. They should be sufficiently motivated
so that they are prepared to voluntarily accept the new authority required
of them by new responsibilities.

112. Unless we revitalise those practices of participation, of

consultation and consensus, and sacrifice for the common good, we are
continuing the colonial process of holding our people subservient.

113. True democracy will not work until our people in every village and
hamlet accept that they cannot be free and independent unless they
actually think something, say something and take action about what
should happen to their own lives and those of the people of our country. If
we do not take development into our hands, we will become apathetic,
disinterested, disillusioned and eventually destroyed. We will inevitably
depend on others to supply us with answers to our problems - answers
which only we, ourselves, are equipped to give.

114. We recognize our ethnic diversity and its varying forms of cultural
expression as positive strengths. Despite our apparent differences, we are
united in common spirit. All our people were deeply spiritual. Our
technological achievements are similar. At this time, we can proudly claim
that though in languages and in external forms of cultural practices we are
diverse, we are, in essence, one people. We are a "nation" within a
nation, perhaps a model for a future world government.
115. Foreigners often say, "but there are so many differences. What
are the Papua New Guinean ways"? We recognize the legitimacy of this
question. However, it betrays a lack of appreciation of what a Papua New
Guinean person is. Our ways emphasize egalitarianism and commitment
to the community. They recognize the individual as a member of his
community. We place great stress on our obligations to our extended
families. We share our wealth. We view life in an undivided total
picture. These ways of thinking and acting should be encouraged, even in
the face of the great emphasis of Western thinking on artificial
differentiation between things spiritual or sacred and things physical or
profane.

116. We see the darkness of neon lights. We see the despair and
loneliness in urban cities. We see the alienation of man from man that is
the result of the present machine orientated economy. We see true social
security and man's happiness being diminished in the name of economic
progress. We caution therefore that large-scale industries should be
pursued only after very careful and thorough consideration of the likely

consequences upon the social and spiritual fabric of our people. Great
emphasis, we believe, should be given to small-scale, artisan services and
business activity. That man should live decently in conditions fitting to his
dignity is an objective we cherish. We believe that that humanity can be
achieved in simplicity. There is overwhelming evidence to suggest that a
significant number of people who live by the fruits of multi-million dollar
multi-national corporations live in misery, loneliness and spiritual
poverty. We believe that since we are a rural people, our strength should
be essentially the land and the use of our innate artistic talents.

117. We should not be misunderstood. We are not here urging our

people to become a nation of woodcarvers and banana-taro
producers. What we say is that secondary and tertiary industries should
be pursued only to supplement and to support our primary
industries. Many of our people must, in time, become commercial
entrepreneurs, capable of dealing with giant industries. But we should
proceed in that direction with caution, and ensure that, in respect of each
new large-scale enterprise it is conclusively established that the net
benefit of the enterprise to Papua New Guineans as a whole will far
exceed the net detriment in terms of our national goals and directive
principles and to our human persons.

118. Our ways emphasize the needs of the community. We exercise our
rights in the context of our obligations to our community. We consider our
village and tribal units as our greatest elements for common care and
support. Modern corporations, companies and business houses in our
country should use the "tribal spirit" to create a sense of solidarity and
responsibility. In our village and tribal units, no-one is a master and no-
one a servant, no-one is an employer and no-one an employee. Most of
our societies are classless and egalitarian. This does not mean that, in
earlier times, we were lawless or that we lived in anarchy.

119. Social obligations and customary las governed our lives. We

should redirect the government departments and the private sector to
that "tribal spirit" which is and can still be vital in efficiency, maximum
output and eventual fulfilment.

120. Our rich variety in the cultural and artistic forms of expression
should not be confused with our common unity. Making use of our ways,
is a living process which places it beyond question that all material
development is necessary only if it enhances the inherent good in
ourselves and our social, religious, political, cultural and economic forms
of organization. The fundamental premise is that we are a people. We are
a race. We are a nation. It is through our ways that we should grow.

IMPLEMENTATION OF THE GOALS AND PRINCIPLES

121. We are well aware that it is one thing to establish inspiring

goals for the nation, and sound principles to guide the government
and our people in seeking to achieve those goals, yet quite another
for effective steps to be taken which are directed towards achieving
those goals. Clearly the Government of the day, as well as the
people themselves, must be committed to taking the necessary
action, much of which will be difficult, since it means confronting
powerful vested interests and reducing their dominant position. We
have had clear evidence of this in the course of our work. We fully
realize that no Constitution can supply the necessary political will to
 ensure that all activities of the State and its institutions are directed
towards the achievement of the goals of the nation, as we have
recommended in this Chapter. That is something which only the
people and the leaders can provide. As we make clear in Chapter 3,
"The Leadership Code", we believe a heavy responsibility rests with
our leaders in this regard, as they are in the best position to see
clearly the way ahead, and it is they who make the crucial decisions
which set the nation on its course.

122. It is possible, however, for a Constitution to contribute to the

direction taken by the people and their government. To the extent that
this is practicable, we have tried, in our recommendations, to facilitate the
implementation of the Directive Principles in this Chapter, which, in turn,
are aimed at promoting the achievement of the National Goals. Thus, our
recommendation that all activities of the State and its institutions should
be based on the Directive Principles and directed towards achieving the
National Goals is designed to help to reorient the thinking and attitudes of
everyone who is a member of an elected body or who works in a
government department, institution or authority; and to redirect the
policies of those bodies towards the Goals.

123. Such a reorientation cannot be achieved overnight. The slowness

with which the Eight Aims are being accepted and acted upon is some
evidence of this. However, we believe that if both the people and the
leaders work together to follow the Directive Principles, keeping the Goals
steadily in view, there is good reason to be optimistic about the extent to
which our objectives will be achieved.

124. Naturally, it will not always be possible to proceed in a straight line

towards the achievement of the goals. There will be times of stress and
difficulty when short-term measures to deal with particular situations will
be necessary. However, everyone should still be able to keep the goals
and principles in mind, and endeavour to take fresh steps towards
implementing them as soon as circumstances permit.

125. Our third recommendation is more specific than is

Recommendation 2 (to which we have just referred). It is mainly directed
to the courts and other tribunals which decide cases involving different
interests. We propose that, like other institutions of government, they be
guided in carrying out their functions by the National Goals and Directive
Principles.

126. By this we mean that the courts and other tribunals should, in
interpreting the law, in the procedures they adopt for the hearing of cases,
and in other aspects of their work, try to give effect to the goals and
principles. In some cases this will not be possible. If, for example, an Act
of Parliament has been passed which clearly cuts across a particular goal
or principle, a court may be unable conscientiously to give any other
reasonable interpretation of the provisions of the Act than that it conflicts
with the goal or principle, but is nevertheless a valid law. However, where
the meaning of a particular law or rule of law is unclear or ambiguous, the
courts should give an interpretation which is consistent with the goals and
principles, not contrary to them.

127. The Committee appreciates that cases will almost certainly

arise in which there will appear to be conflict between, for example, a
human rights provision in the Constitution and a directive principle. In
such a case, giving a proper interpretation of the provision in question will
not be an easy matter, but we do not see the duty of the court in such a

case as being significantly different from that where a provision in an Act

of Parliament appears to be contrary to a common law principle of "public
policy".

128. We have recommended also that the Government (and here we

mean all levels of government - national, provincial and local) and all
institutions of government (including the universities and other
educational or statutory bodies) should make specific reference to the
goals and principles indicating their relevance to national policies and
programs such as the Development Plan and the Budget. Already this is
being done to some extent in relation to the Eight Aims.

129. In a note to this Recommendation we refer to a Recommendation

we have made in Chapter 5, "Human Rights and Obligations, and
Emergency Powers", for the establishment of a body to review all existing
legislation and policies with a view to bringing them into line with the
National Goals and Directive Principles as well as with the Human Rights
and Obligations recommended in that Chapter for inclusion in the
Constitution. We propose in that Chapter that this body should be the Law
Reform Commission, the establishment of which Cabinet has recently
approved, or a special committee comprising Papua New Guinean public
servants, and perhaps politicians also, with appropriate skilled staff and
possibly outside consultants.

Investment Code

130. Earlier in this Chapter under the heading "National Sovereignty

and Self-Reliance", we indicated our concern that unless a clear-cut policy
in relation to foreign investment is spelt out and rigorously implemented
there is a serious danger that our national integrity will be undermined by
foreign influences.

131. We believe that in order to give Papua New Guinea's foreign

investment policy maximum publicity and effectiveness, it should not
simply be in ordinary legislation but in a schedule to the Constitution
(though we do feel that it should nevertheless be as easy to change as is
an ordinary law).

132. The Committee is aware of the arguments that foreign investment

policies should not be incorporated in a law because this is too difficult to
do in an explicit manner, and also because to do so would be to reduce
the flexibility of approach which the government needs in this field. We
find these arguments unconvincing and consider that they seriously
underestimate the political importance of spelling out for all to see, the
basis on which foreign investment is acceptable in our country.

133. The Committee does not propose that the foreign Investment Code
which it recommends should be able to be enforced in a court. It should
be treated as a set of firm guidelines which the government should adhere
to except in very unusual circumstances, in which case it should justify its
action by stating its reasons in parliament.

134. By having our country's policy on foreign investment spelt out

in this way and given the force which provisions of the Constitution should
have, we believe foreign investors are likely to take thee guidelines more
seriously than they would do otherwise. This is an important factor as we
believe it is far better for all concerned if potential foreign investors know
exactly where they stand rather than be left in a state of
uncertainty because of the degree of flexibility which exists in the
Government's foreign investment policy. The Report on the Impact of
Multinational Corporations on the Development Process and International
Relations (referred to below as "the Report") to which we referred earlier
in this Chapter, as we interpret it, implicitly supports this view.

Contents of the Code

135. The great majority of the provisions in the Code we recommend

already form part of existing government policies either in relation to
foreign investment generally or to agreements for the exploitation of
natural resources or mining agreements. In these circumstances, our
comments here are mainly directed to those provisions which do not
already form part of government policy.

Non-interference in Papua New Guinea�s affairs

136. The first provision we recommend is designed to protect Papua

New Guinea�s national integrity and its independent foreign policy. In
particular, we propose that foreign investors be prohibited from interfering
in the affairs of our country. There have been too many Third World
countries where giant foreign corporations have interfered in their political
affairs, assisting and even inspiring the violent overthrow of
democratically elected governments either by direct means, or indirectly
through the government of the country in which they are based.

137. The Report, on page 28, has this to say on the issue -

"One of the reasons the subject of multinational corporations came

to world-wide attention was the exposure of an attempt by one of the
largest corporations to overthrow the elected Government of a developing
country (the International Telephone and Telegraph Corporation in Chile
several years ago). Such incidents are uncommon but, in a number of
cases, multinational corporations have actively promoted political
intervention in the domestic affairs of host, particularly developing
countries..."

"It is obvious that such intervention is incompatible with the long-

term existence of multinational corporations in host countries and clearly
infringes upon national sovereignty.

Action by multinational corporations in the political field can take

less direct and obvious forms. In home countries, they may attempt to
influence foreign and domestic policy by utilizing their broad financial
power and their often close relationship with government cadres. They
can lobby for or against Governments of host countries, depending on
whether or not they receive specially favourable terms of treatment.

In host countries, the affiliates of multinational corporations can

seek to influence government policies in undesirable ways. Being closely
connected with domestic groups favouring foreign investment, they can
use their own or their parent company's resources to support particular
political parties of their choice and they can rally against groups
advocating social reforms."

138. In order to try to ensure that this type of activity does not occur,
the Report recommends that host countries should clearly define the
permissible public activities of the affiliates of multinational corporations
(companies controlled by multinational corporations, such as Bougainville
Copper Limited) and also provide for penalties for breaching the defined
rules. It further recommends that the financial contributions of
multinational corporations, as well as of others, to interest groups, should
be regulated and disclosed. Our recommendations in Chapter 6, "The
Legislature" deal with the latter aspect of the above recommendation in
the Report and, in fact, go further in that a complete ban on contributions
by any foreigner to a political party is proposed. In Chapter 3, "The
Leadership Code", we have made a number of recommendations aimed at
trying to ensure that our leaders do not become involved with foreign
business interests in any way, or accept any gift from such interests.
139. We consider there is a need for constant vigilance to ensure that
these foreign corporations do not put improper pressure on our elected
leaders, or bribe them in order to achieve their own ends, and these
recommendations reflect this view. The Government should certainly also
give urgent consideration to the need to clearly define the limits of other
public activities of foreign investors.

140. The type of industrial activity in which a foreign investor is

involved is also an important consideration in this regard. There is
obviously a great difference between having a foreign company
manufacture soft-drink on one hand and having such an enterprise
enriching uranium on the other. We believe there are significant
implications for the host country's foreign policy and national integrity in
the latter case.

Investment must make important, positive contribution to

national well-being

141. We believe that a particular foreign investment should only be

acceptable if, on balance, it will make an important, positive contribution
to the well-being of citizens generally, and will not have serious adverse
effects on citizens in the area in which the foreign enterprise is to be
located.

142. From the experience of people in a number of parts of the country,

it is clear that people in the area in which a foreign enterprise is located
can suffer very serious effects from a large operation carried out by a
foreign corporation, and in any event, the benefits of the particular
enterprises to our people as a whole, given the terms of the agreement
made with them, are not always apparent. Foreign investment for its own
sake should be totally rejected. Any foreign investment project must
clearly provide substantial benefits for our people generally if it is to be
permitted to proceed. The disruption to the life of the people in the area
of the operation and the extent to which the surrounding environment is
to be affected should be regarded as of the greatest importance, and the
whole project considered in light of those effects, which should be
thoroughly researched before any operation is approved.
Benefits to Papua New Guinea to be maximized

143. We have recommended that in respect of industries involved in

the exploitation of our natural resources (which include the mining, timber
and fishing industries) the benefits

which Papua New Guinea obtains both at the national and local levels are
to be at the highest level consistent with the foreign investor continuing
its operation.

144. Natural resources are in very great demand in today's world, and
countries which possess them in abundance are, we believe, in a strong
position to make hard bargains with foreign investors for the exploitation
of those resources. If a particular foreign investor does not accept the
terms on which we are prepared to make an agreement, we believe that
we can afford to wait for another investor who is prepared to accept them,
especially as our skilled manpower resources, and general capacity to
absorb large-scale foreign investment, is already stretched to the limit.

Foreign investors not to be treated more favourably than

nationals

145. We have also recommended that foreign investors should not

receive more favourable treatment from the Government than do national
investors. We believe it is quite wrong for foreign investors to be given
special privileges which are not open to Papua New Guineans. This is a
reversal of proper national priorities.

146. Foreign investors are in a far stronger position than are our own
nationals to establish themselves in new enterprises here. They usually
have a large organization behind them which has long experience in the
particular industry and can provide highly skilled staff and sophisticated
technology to enable the enterprise to entrench itself and begin making
profits in a short space of time.
147. Our own people have no such advantages. It usually takes a very
long, using trial and error methods and semi-skilled staff for a Papua New
Guinean enterprise to become viable. Even then it is certain to be on a
very much smaller scale than an equivalent foreign enterprise, and much
less able to effectively compete with such an enterprise.

148. There is a good deal of evidence both here and overseas to the
effect that providing tax free holidays, reduced taxes and tariffs, setting
special low rates of charge for power or services do not provide
commensurate benefits for the host country. Both the Report (on
Multinationals) and the recent Report to the Australian Government by Mr
T M Fitzgerald on "The Contribution of the Mineral Industry to Australian
welfare" confirm this. We have noted the Government's recent decision to
begin to move away from the previous policy, inherited from the colonial
days, of giving preferential treatment of this kind to foreign investors. We
consider that only in the interests of decentralisation can preferential
treatment be justified and, even then, we do not see why preference
should be given to foreign investors as against citizens.

Papua New Guinean Equity

149. We recommend that the equity of the Government and of citizens

should be maximized in the case of all large-scale enterprises for the
exploitation of natural resources; that this equity should normally be as
great as possible and should constitute at least a majority
shareholding. This proposed provision is in line with the resolution passed
by the House of Assembly in November, 1972 in relation to mining
enterprises. We believe it should be extended to all enterprises for the
exploitation of natural resources, as similar considerations apply to these
other industries.

Progressive transfer of control to Papua New Guinea

150. In the interests of achieving greater control of our economy, we

recommend that provision be made in investment agreements for control
of foreign enterprises to be progressively transferred to Papua New
Guinean hands. here are various devices by means of which this can be
done, and we believe this should be a very high priority in Papua New
Guinea's foreign investment policy.

151. The Report (on Multinationals) on page 47, refers with approval to
the work of the Atlantic Community Development Group for Latin America
(ADELA). It says -

"Formed by many corporations from a number of countries, none

of which has a large share of the capital, its purpose is to engage in joint
ventures with local private or public capital, and to start new industries. It
gradually relinquishes its investment once a project is well established
and makes new investments with the resources thus released. Such an
arrangement has favourable effects on the balance of payments of the
host country: the capital, instead of being repatriated at the conclusion of
an investment, is reinvested in the country. The technology and
managerial skills which the investor provides are also switched to new
fields as nationals take charge of the established industries."

Dispute settlement

152. In keeping with the principle of national sovereignty, we

recommend that all agreements between the Government and foreign
investors should provide for disputes between these enterprises and the
Government to be settled by Papua New Guinean courts in accordance
with domestic laws. The Report (on Multinationals) provides support for
this position. It says, on page 33 -

"...once an affiliate of a multinational corporation is established in

another country, home country laws should cease to govern its behaviour,
and only host country laws should apply."

153. The Government's present investment policy in this regard is

similar to this recommendation.

RECOMMENDATIONS
1. "WISHING to be guided in our lives by our worthy customs
and Christian principles,

WE, THE PEOPLE OF PAPUA NEW GUINEA, set before

ourselves these goals and principles.

NATIONAL GOALS

INTEGRAL HUMAN DEVELOPMENT - LIBERATION AND FULFILMENT

1. ALL ACTIVITIES OF THE STATE SHOULD BE DIRECTED TOWARDS

THE PERSONAL LIBERATION AND FULFILMENT OF EVERY CITIZEN, SO THAT
EACH MAN AND WOMAN WILL HAVE THE OPPORTUNITY OF IMPROVING
HIMSELF OR HERSELF AS A WHOLE PERSON AND ACHIEVING INTEGRAL
HUMAN DEVELOPMENT.

EQUALITY AND PARTICIPATION

2. ALL CITIZENS SHOULD HAVE AN EQUAL OPPORTUNITY TO

PARTICIPATE IN AND, BENEFIT FROM, THE DEVELOPMENT OF OUR
COUNTRY.

NATIONAL SOVEREIGNTY AND SELF-RELIANCE

3. PAPUA NEW GUINEA SHOULD BE POLITICALLY AND ECONOMICALLY

INDEPENDENT AND ITS ECONOMY SHOULD BE BASICALLY SELF-RELIANT.

NATURAL RESOURCES AND THE ENVIRONMENT

4. THE NATURAL RESOURCES AND THE ENVIRONMENT OF PAPUA

NEW GUINEA SHOULD BE CONSERVED AND USED FOR THE COLLECTIVE
BENEFIT OF THE PEOPLE: AND SHOULD BE REPLENISHED IN THE INTEREST
OF FUTURE GENERATIONS.
 PAPUA NEW GUINEAN WAYS

5. DEVELOPMENT SHOULD TAKE PLACE PRIMARILY THROUGH THE

USE OF PAPUA NEW GUINEAN FORMS OF SOCIAL, POLITICAL AND
ECONOMIC ORGANIZATION."

THE GOALS AND DIRECTIVE PRINCIPLES

INTEGRAL HUMAN DEVELOPMENT - LIBERATION AND

FULFILMENT

1. ALL ACTIVITIES OF THE STATE SHOULD BE DIRECTED TOWARDS THE

PERSONAL LIBERATION AND FULFILMENT OF EVERY CITIZEN, SO THAT
EACH MAN AND WOMAN WILL HAVE THE OPPORTUNITY

OF IMPROVING HIMSELF OR HERSELF AS A WHOLE PERSON AND

ACHIEVING INTEGRAL HUMAN DEVELOPMENT.

(1) Everyone should be involved in our endeavours to achieve integral

human development and each individual should seek fulfilment in his or
her contribution to the good of all.

(2) Education should be based on and should promote dialogue and

co-operation. It should foster integral human development and tolerance
among our people and encourage among them a spirit of solidarity and
interdependence.

(3) All forms of beneficial creativity and culture, both of individuals and
groups, should be encouraged.
(4) Improvement of the level of nutrition and of the standard of public
health is essential to enable our people to attain self-fulfilment.

(5) The people of Papua New Guinea should increase their awareness
of, and solidarity with, the peoples of other emerging countries, with a
view to the establishment of a new international economic order based on
equity, sovereign equality, interdependence, common interest and co-
operation to enable people everywhere to achieve full development.

(6) The family is the fundamental unit of Papua New Guinean society
and every step should be taken to protect and promote its moral, cultural,
economic and social standing.

EQUALITY AND PARTICIPATION

2. ALL CITIZENS SHOULD HAVE AN EQUAL OPPORTUNITY TO

PARTICIPATE IN AND BENEFIT FROM THE DEVELOPMENT OF OUR COUNTRY.

(1) Every citizen should have an equal opportunity to take full part in
the political, economic, social, religious and cultural life of the country.

(2) To provide for effective and meaningful participation by the people

in their own development, a structure conducive to such participation
must be evolved. In view of the diverse nature of Papua New Guinea and
its peoples, that structure must provide for substantial political, economic
and administrative decentralisation.

(3) Every effort should be made to achieve equalisation of incomes

and equal distribution of the benefits of development among individuals
and different areas of the country.

(4) Every citizen should have equal and effective access to all
governmental services and legal processes. Therefore, strong emphasis
should be placed on equalisation of services among different areas of the
country.
(5) Women should be able to participate equally in all social, political,
religious and economic activities.

(6) The number of citizens participating in every aspect of

development should be maximised.

(7) The organisation and legal recognition of all groups engaging in

development activities should be facilitated.

(8) No citizen should be deprived of the opportunity to perform any

task that is beneficial and that he or she does well and, in particular, no
citizen should be deprived of such an opportunity because of the
predominance of another.

(9) Every citizen should be able to participate, either directly or

through a representative, in the consideration of any matter affecting his
interests or the interests of his community.

(10) The State should, as far as possible, ensure that official bodies are
so composed as to be broadly representative of citizens from the various
areas of the nation.

(11) The State should endeavour to achieve literacy in Pisin, Hiri Motu
or English, and in "tok ples" or "ita eda tano gado".

(12) Marriage rests on the equality of the rights and duties of both
spouses and responsible parenthood is based on that equality.

NATIONAL SOVEREIGNTY AND SELF-RELIANCE

3. PAPUA NEW GUINEA SHOULD BE POLITICALLY AND ECONOMICALLY

INDEPENDENT AND ITS ECONOMY SHOULD BE BASICALLY SELF-RELIANT.
(1) Leaders should be committed to the National Goals and should
ensure that they are always able to freely make decisions in the national
interest.

(2) The government should be responsible for the planning of social

and economic development, based on principles of social justice, in the
best interests of all Papua New Guineans.

(3) Internal interdependence and solidarity among citizens and

between provinces should be vigorously promoted.

(4) The bulk of commercial enterprise and production should be

controlled by citizens and the government.

(5) The entry and use of foreign investment capital must be

subordinate to the goal of national sovereignty and self-reliance and, in
particular, be geared to internal social and economic policies, and to the
integrity of the nation and its people.

(6) The government should take strong and effective measures to

control and actively participate in the national economy and especially to
control major enterprises engaged in the exploitation of natural resources.

(7) Economic development should conform to the skills and resources

that can be provided at any given time by citizens and by the
government.

(8) Papua New Guinea's sovereignty must not be undermined by

political, economic or military dependence on foreign countries or foreign
capital. In particular, no investment, military or foreign aid agreement or
understanding should be entered into that imperils the self-reliance and
self-respect of the people and state of Papua New Guinea, or their
commitment to these national goals and directive principles, or which may
lead to substantial dependence upon or influence by any single country,
investor, lender or donor (or any group of countries, investors, lenders or
donors).

NATURAL RESOURCES AND ENVIRONMENT

4. THE NATURAL RESOURCES AND THE ENVIRONMENT OF PAPUA NEW

GUINEA SHOULD BE CONSERVED AND USED FOR THE COLLECTIVE
BENEFIT OF THE PEOPLE; AND SHOULD BE REPLENISHED IN THE INTEREST
OF FUTURE GENERATIONS.

(1) The natural resources including land, forests, birds, animals, fish,
water, sea, air and minerals should be used wisely in the interest of the
integral development of all citizens throughout Papua New Guinea.

(2) The environment and its sacred, scenic and historical qualities
should be conserved and replenished for the benefit of posterity.

PAPUA NEW GUINEAN WAYS

5. DEVELOPMENT SHOULD TAKE PLACE PRIMARILY THROUGH THE USE

OF PAPUA NEW GUINEAN FORMS OF SOCIAL, POLITICAL AND ECONOMIC
ORGANIZATION.

(1) To achieve our goals, there must be a fundamental re-orientation of

the institutions of government, commerce, education and religion towards
Papua New Guinean forms of participation, consultation and
consensus. This re-orientation should be combined with a continuous
renewal of the

responsiveness of these institutions to the people, and a willingness on

the part of those adversely affected by these changes to forgo
disproportionate benefits for the good of all.
(2) In economic development particular emphasis should be placed on
small-scale artisan, service and business activity.

(3) The cultural, communal and ethnic diversity of our peoples is

recognized as a positive strength. There should be fostered a respect and
appreciation for traditional ways of life and culture - including language -
in all their richness and variety and a willingness to apply these ways
dynamically and creatively for the tasks of development.

(4) Traditional villages and communities should exist as viable units of

Papua New Guinea and every step should be taken to improve their
cultural, social, economic and moral quality.

IMPLEMENTATION OF THE GOALS AND PRINCIPLES

2. All activities of the State and its institutions should be based on

the directive principles and directed towards achieving the National Goals
set out in this chapter.

3. The goals and principles as a guide in judicial

interpretation

(1) All courts and other adjudicatory tribunals shall be guided in the
exercise of their functions by the National Goals and Directive Principles.

(2) Except to the extent provided for in this recommendation, the

National Goals and Directive Principles shall not be directly
justiciable. However, these goals and principles should not be regarded
by any court, other adjudicatory tribunal or institution of government as
being of less weight than other directly justiciable provisions.

(3) Government (including institutions of Government) should make

specific reference to the National Goals and Directive Principles indicating
their relevance to national policies and programmes such as the
Development Plan and the Budget.
Note: (i) To exemplify the manner in which Clause (1) of this
recommendation is intended to be applied as an aid to interpretation, we
envisage that where the meaning of a constitutional provision is in
question, or there is doubt as to the constitutional validity of any law or
administrative action, or there is ambiguity in any law, or no particular law
or principle of law appears to apply to the circumstances involved in any
matter before a court, the court will give an interpretation which is
consistent with the National Goals and Directive Principles rather than an
alternative interpretation.

(ii) In Part 1 of Chapter 5, Human Rights and Obligations, the

Committee has recommended that the proposed Law Reform Commission,
or another body comprising Papua New Guinean public servants, and
possibly politicians also, with appropriate skilled staff, and outside
consultants (if needed), be established to review all existing legislation
and policies with a view to achieving their conformity with the National
Goals and Directive Principles in this chapter and the Human Rights and
Obligations in Chapter 5.

4. Investment Code

An Investment Code as set out in the schedule to this Report shall

be included in the Constitution in the form of a schedule.