Unit 9

Organic Law on Provincial and Local-Level Government

(OLPLLG)
 Objectives

At the end of this unit, students should be able to

understand some of the basic features of the Organic
Law on Provincial Governments (OLPG), including:
o challenges of OLPG, and
o the reasons underpinning reforms
 Introduction
• The provincial government system – OLPG – PNG adopted soon after

independence was given a major revamp in 1995 through the provincial

government reforms.

• Decentralisation was originally intended to provide a degree of autonomy

to provinces and local governments in the interest of economic

development, but nepotism and poor administration at the provincial level

had deprived local governments and communities of the resources and

skills required to provide health, education and infrastructure services.

• The reform aimed to address the challenges resulting from the country’s

first two decades of decentralized government.

 The Challenge
oOLPG connected the national and provincial levels – not the districts (PG

far from LLG).

oThe system of government adopted by PNG in the 1970s had not done

enough to create economic development and provide social welfare at the

village level. Many areas still remained remote from the government and

untouched by progress.

oNational government’s inability or unwillingness to clarify OLPG.

oLG biggest losers in the contest between national and provincial

politicians
 …as a result

• goods and services were not reaching the people,

particularly in the rural areas, resulting in poor health,
low literacy levels, and low incomes of many people;
• government services were concentrated only in the
provincial centres, forcing people to travel far for basic
services;
• politicians and public servant were based in Port Moresby
and provincial capitals and were isolated from rural
populations;
 …as a result

• community and LLG decision-making powers

and processes have been weak;
• community and LLGs were strangulated of
funding by both national government and the
respective provincial governments (even funds
transferred through PGs were not reaching the
intended LLGs)
 …the challenge
The reforms were aimed at:

• improving the delivery of services, particularly in the rural areas;

• increasing participation in Government at the community and local levels;

• decentralizing powers and responsibilities to local levels;

• increasing funding to Local – Level Governments;

• relocating public servants from urban centres to districts and stations

nearer to majority of the people in the rural areas;

• reducing the number of elected politicians; and

• reducing mismanagement or misuse of funds etc.

 Framing a Response

• In March 1990, Parliament appointed a committee

to review the provincial government system.
• In November 1990, Premiers Council retaliated
with its own report, assembled by Stephen
Pokawin, premier of Manus Province.
• In 1993, Ben Micah, MP from New Ireland
appointed to lead the committee.
 Getting Down to Work

• Nationwide consultations

• Provincial reactions (NGI & Highlands, rural and urban areas)

• Debates in the committee
o More powers to PG

o Centralise power in national government

o More funding to PG

• Reactions of the New Guinea Islands

o Premiers adopted a flag and a draft constitution and set 6 January 1996
as Independence Day for Federated Melanesian Republic (FMR)
• The 1995 law – OLPLLG
 The 1995 law - OLPLLG

• Provincial Governments

• Provincial Administrator (PA)

• Joint Provincial Planning and Budget Priorities Committee (JPPBPC)
• District Administrator (DA)
• Joint District Planning and Budget Priorities Committee (JDPBPC)
• Provincial and District Treasuries
• Provincial Audit Service

• Local Level Governments (LLGs)

• Special Purpose Authorities (LLG SPA)
• Ward Development Committees
• National Economic and Fiscal Commission (NEFC)
• Provincial and Local Level Service Monitoring Authority (PLLSMA)
 Provincial Governments

• Provincial Governments were significantly reconstituted and re-

established for each province under Section 10 (1) of the
OLPGLLG but without directly elected politicians.
• Provincial Assemblies were established for each province.
Membership included:
o Governor of the province (Chairman of PA and PEC)
o All MPs of the province representing the electorates
o Presodents of LLGs (until 30 January 2007)
o One women representative nominated by Provincial Council of Women
o Three persons appointed by Provincial Assembly
o Not more than three Chiefs (in provinces that have Chieftancy)
 …provincial governments
The administrative functions, roles and
responsibilities of Provincial Governments relating
to service delivery are set out under Section 16 of
the Provincial Government Administration Act
1997.
 Provincial Administrator (PA)
• The office of PA is a statutory office established

by Section 73(1)(a) of the OLPGLLG.

• PAs are appointed centrally by the National

Government (NEC) from a list of three names

submitted by the PEC, and after consultation

with the Public Service Commission.

• The PA is the CEO of the PG and administrative

 …provincial administrator (PA)

• PA is also the chief accountable officer for purposes of

the Public Finances (Management) Act and is therefore

duty bound to supervise and manage all public funds in

the province in accordance with law.

• PA is of course responsible for the effective and

efficient administration and management of all

administrative services in the province

 Joint Provincial Planning and Budget Priorities Committee (JPPBPC)

• Section 25(2) of the OLPGLLG sets the membership of JPPBPC.

• JPPBPC

• oversee, co-ordinate and make recommendations concerning the overall planning

in the province, including budget priorities, for consideration by the National

Government;

• determine and control budget allocation priorities for the province;

• approve Provincial Government Budgets for presentation to the Provincial

Assembly;

• draw up a rolling five-year development plan and annual estimates for the

province;

• conduct annual reviews and assessment of the rolling five-year development plan.
 District Administrator (DA)

• the DA is the CEO of the LLG;

• the administrative head of all staff in the
district under his control, and
• is therefore responsible for the effective and
efficient supervision and management of
administration services in the district .
Joint District Planning and Budget Priorities Committee (JDPBPC)

• The JDPBPC is directly established under

Section 33A OLPGLLG
• chaired by the MP of the open electorate
• LLG presidents and an additional three
persons appointed by the MP
 …JDPBPC

• oversee, co-ordinate and make appropriate recommendations

for considerations by the PG and the NG concerning all work
plans, programs and activities and budgets and priorities for
the district;
• determine and control the budget allocation priorities for the
LLGs in the district;
• approve the LLG budgets for presentation to the LLG and
make appropriate recommendations concerning these budgets;
• draw up a rolling five-year development plan and annual
estimates for the district; and
• conduct annual reviews of the rolling five-year development.
 …JDPBPC

• Responsible for planning and disbursement of funds under the National Government’s

District Services Improvement Program (DSIP) whereby all 89 Districts (or Open

Electorates) have been given K4 million in 2007 and K10 million in 2008 under this

program for funding of project on:

o district and rural transport infrastructure (District Transport Improvement Program

(DTIP) and District Road Improvement Program (DRIP)

o health facilities (District Health Improvement Program (DHIP)

o education facilities (District Education Improvement Program (DEIP))

o law and justice sector facilities (District Law and Justice Program (DJLP), and

o rural water supply facilities (Water Supply Project

• The various programs are supervised by the Office of Rural Development.

 Provincial and District Treasuries

• Provincial and District Treasuries established in the provinces and districts are not

part of the Provincial or District Administration but are an extension of the

National Department of Finance.

• Hence, the Provincial and District Treasurers who operate these treasuries are

appointed by the National Department of Finance through the normal Public

Service appointment process supervised by the National Department of Personnel

Management.

• This arrangement was instituted in order to protect the provincial and district

finances from mismanagement and misapplications of funds arising from

manipulation or other external pressures and influences exerted by either the

Governor or the Administrator or even the District Administrator.

 Provincial Audit Service

• Provision is made under Section 113 of the OLPGLLG for the Auditor
General to establish a Provincial Audit Service and then appoint a Provincial
Auditor for the later to maintain an effective and efficient audit service within
the province concerned.

• The Provincial Auditor is then obligated by law to audit the accounts of the
Provincial and Local-level Governments annually. This officer is also
authorized by this same law to inspect the accounts of the Provincial and
Local-level Governments at any time.

• Unfortunately this part of the OLPGLLG has not been implemented. Such a
situation is unfortunate because it can only lead to mismanagement of funds
resulting in the poor delivery of service in the province, districts and LLGs.
 Local Level Governments (LLGs)

• Provision for the establishment of LLGs is made

under Section 27 OLPGLLG.
• The administrative functions of the LLG are set out
under Section 38 of the Local-level Governments
Administration Act 1997
 LLG Special Purpose Authorities

• The Special Purpose Authorities were established to serve the

interest of landowners of Mining and Petroleum impact project
areas. The Special Purpose Authorities were created under the
Local-Level Government Administration Act to include Porgera,
Kutubu, Moran, Hides, Komo, Koiari and Nimamar LLG Special
Purpose Authorities.

• The LLG SPAs do not fit well within the decentralization system
established by the OLPGLLG and appear to be more of an appendix
to the system
 Ward Development Committees

• “Wards” in rural PNG has the same meaning as a village. This is the
level at which the Ward Development Committees (WDCs) are
designated to operate at and from.

• Provision for the establishment of WDCs is made under Section 26

of the Local-level Government Administration Act 1997.
 National Economic and Fiscal Commission (NEFC)

• The NEFC provides independent advice to the Government and

Parliament on intergovernmental fiscal arrangements. NEFC is
responsible for:
o assessing and monitoring the economic and fiscal policies of the national,

provincial amd local-level governments and advising the national

government accordingly; and
o making recommendations to the national government and to the national

Parliament on financial arrangements and the allocation of grants by the

national government to the provincial government and local-level
governments and between provincial and local-level governments.
 Provincial and Local Level Service Monitoring Authority (PLLSMA)

• PLLSMA is established by Section 110(1) of the OLPGLLG but to be

administratively located and operating within the Department of

Provincial and Local Government Affairs (DPLGA).

• PLLSMA is the designated central body to coordinate, monitor and

supervise the operations of the Provincial and Local-level government.

• In effect, this was the National Government task force that was designated

to coordinate, monitor and supervise the implementation of the various

aspects and stages of this new system of decentralization and service

delivery through provincial and local-level governments introduced by

the OLPLLG.
 Decentralisation Policies
OLPG OLPGLLG
(1976-1995) (1995-2020)
• Premier Governor (Chairman of
Provincial Assembly and
Provincial Executive Council)
• Provincial Secretary Provincial Administrator
• National Fiscal Commission • National Economic and
(NFC) Fiscal Commission
(NEFC)
• Premiers Council Provincial and Local Level
Service Monitoring Authority
(PLLSMA)
 Decentralisation Policies
OLPG OLPGLLG
(1976-1995) (1995-2020)
• Provincial Government Grants • District Services
Improvement Program

• JPPBPC
• JDPBPC
End