Scratch the
surface of that mismanaged super federal government department – the Dept. of Home Affairs in the portfolio
of Minister for Home Affairs & Liberal MP for Dickson Peter Dutton – and one finds disturbing information.
Usually this information concerns the abuse of detained asylum seekers' human rights, including right to timely medical treatment and legal advice/representation.
This latest concerns a corporate entity variously identified as the Paladin Group (Paladin Australia Pty
Ltd, formerly Paladin Group Pty Ltd, High Risk Security Group (Asia-Pacific)
Pty Ltd, Nepean Bay SA), Paladin
Solution PNG Ltd (Nepean Bay SA) and Paladin
Holdings PTE Ltd (Singapore) and its est. $423 million in federal government
contracts paid for from the taxpayer's dollar.
It is Paladin
Holdings PTE Ltd out of Singapore (reportedly owned by Craig Trupp and Ian
Stewart) which now appears to hold the primary government contract.
Despite Paladin's thin capitalisation, despite lack of corporate transparency, despite allegations of poor service delivery, despite Craig Trupp/s less than stellar business history and the fact that it appears he is no longer allowed entry to Papua New Guinea and despite another director of Paladin Solutions PNG Ltd allegedly being investigated for fraud/money laundering the Dept. of Home Affairs continues to make exclusive contacts with the Paladin Group.
This Paladin
contract is fast shaping up as the new catchphrase for suspected political
corruption………..
 |
| Paladin premises, Port Moresby. Image Dan Ilic |
The family of one of
PNG's most powerful politicians is directly benefiting from Paladin's $423
million worth of security contracts on Manus Island, awarded by the federal
government in a closed tender.
Documents released under
Freedom of Information show in January last year Paladin Solutions PNG entered
into an agreement with Peren Investment, a company controlled by the brothers
of PNG's parliamentary speaker, Job Pomat.
Mr Pomat is the local
member for Manus, a key ally of Prime Minister Peter O'Neill and deputy leader
of the ruling People's National Congress. His family are among those who claim
traditional ownership of the land where the refugees are being housed.
The agreement, for local
employment and the provision of other services, came just a month after
landowners blockaded the refugee transit centre in December 2017, demanding a
greater share of the money being spent on the island.
When asked about any
link between Paladin and PNG politicians, Attorney-General Christian Porter said
it was not in his portfolio area, but such claims warranted further
investigation.
"I don't have any
line of sight into those sorts of claims and they have to be investigated
thoroughly," he told the ABC's Insiders program on Sunday.
The issue is set to be
examined further at Senate Estimates hearings on Monday and Tuesday, after a
series of articles in the The Australian Financial Review raised
questions about how the thinly
capitalised Paladin, which had little experience, a poor reputation and no
corporate structure, was awarded such a lucrative contract.
The contracts were
awarded as part of a "limited tender", which typically means only one
party was invited to bid.
In the days following
the first Financial Review articles Paladin shuffled its ownership
structure, removed information from its website and changed its Australian
registered office from a beach shack on Kangaroo Island to a serviced office in
Canberra. That office did not have the phone connected on Friday.
One issue that raised
concern was Paladin's peculiar head office set-up. The Kangaroo Island address
had no listed phone number and could not receive mail from Australia Post,
highlighting a general air of secrecy around the company.
Home Affairs Minister
Peter Dutton has moved to distance himself from a controversial government
contractor that is providing security on Manus Island, arguing he had "no
sight" of the tender process and it was a matter for department officials.
In the first public
comments since The Australian Financial Review revealed little-known
company Paladin was earning up to $17 million a month to provide
security at three refugee centres on Manus Island after a closed tender
process, Mr Dutton said those responsible were "the secretary of the
department ultimately or delegated to someone within the department".
The key beneficiary of a
$423 million government contract to provide security for refugees on Manus
Island left a string of bad debts and failed contracts across Asia, raising
further questions about how the Paladin group won such a lucrative tender.
As pressure builds on
the government to explain the hefty cost of its offshore processing regime,
further details have emerged about the Paladin founder, Craig Thrupp, and his
time in East Timor and Indonesia.
As federal Parliament
prepares for another fractious debate around refugees on Monday, an
investigation by The Australian Financial Review has found the
Department of Home Affairs overlooked allegations of deception, lying during
the tender process and questionable payments when it extended Paladin's
contract on January 3. These allegations emerged during a bitter legal dispute
between Paladin and its former chief executive for PNG, Craig Coleman, who is
suing the company for breach of contract.
In addition, Paladin's
founder and key executive, Craig Thrupp, is no longer able to enter PNG, while
another local director, Kisokau Powaseu, was detained in Port Moresby last
month and charged with misappropriating funds and money laundering……
Paladin, controlled by
Mr Thrupp, a former Australian soldier, and his business partner Ian Stewart,
has also recently purchased the contentious PNG security outfit Black Swan, a
company repeatedly
forced to deny rumours it has links to the family of Prime Minister Peter
O'Neill…..
"Australian
taxpayers are expending a huge amount of money but we don't see much of it
being utilised on the ground in Manus," said Abdul Aziz, a Sudanese
refugee who has been on the island for five years.
"The maintenance
service is very poor … and they have not bought any new equipment in many
years," says Mr Aziz.
This was confirmed by a
UNHCR report published last July which noted rooms at the East Lorengau camp
were below international shelter standards for accommodation over three months,
while other areas had leaking pipes, a lack of fire alarms and showers that
were not working.
The report did however
note improvements in other areas like the ratio of toilets and the general
accommodation conditions in other camps.
Calculations by
the Financial Review indicate Paladin is being paid on average $20.8
million a month by the government to provide security at all three sites and
manage the East Lorengau Transit Centre. That amount has risen 48 per cent from
an average of $14 million a month last year. A Home Affairs spokesperson said
there were now 422 people housed at the three camps – 213 at East Lorengau, 111
at West Lorengau and 98 asylum seekers at Hillside Haus.
That means on a daily
basis it now costs the Australian government over $1600 to house each refugee
on Manus, not including food and welfare services, more than double the price
of a suite at the Shangri-La hotel in Sydney.
Typically, profit
margins are as much as 40 per cent on these contracts because of the risks
involved. However, Paladin's margin is "unbelievable", according to
one source familiar with the this type of work. That's because the company uses
mostly local staff and its security guards earn about $2 an hour.
The company is believed
to have just over a dozen expatriate staff, who might be earning $150,000 each.
Home Affairs says it provides security, transport, IT services and emergency
management. Even if you build in generous contingencies for evacuations,
emergency response teams and local consultants, Paladin's total costs are
estimated to be less than $3 million a month. That means they are pocketing
more than $17 million a month to manage the East Lorengau centre and secure the
three camps, which have been used as primary accommodation for refugees and
asylum seekers since the offshore processing centre at the nearby Lombrum naval
base was closed in October 2017.
Penny Wong has
indicated Labor will target the Paladin offshore detention security contract in
Senate estimates this week, accusing the government of failing to explain why
the company was awarded $420m in contracts through closed tender…..
Wong told reporters in
Adelaide the Paladin contract had “a lot of questions around it” and it was
“deeply concerning” a company with “such a poor track record” was awarded
$420m.
Wong accused Porter of
giving answers that were “not consistent” with Dutton’s because “this went to a
closed tender – not an open tender, [it was] not an open competitive process”.
Wong accused Dutton of
“trying to wash [his] hands of it”. “Tomorrow is Senate estimates – what I’d
say to the government is: stop hiding.
“Why don’t you front up
and tell the truth about why that contract is awarded in such circumstances,
why it went to closed tender?”
The Australian Financial
Review visited an office location near the fashionable Kingston Foreshore
precinct in which Paladin staff are based.
Paladin had previously
advised the corporate regulator that its registered office and principal place
of business was a remote location on Kangaroo Island in South Australia that
had no post box and was therefore unable to receive mail.
But as coverage of the
secretive company, which has been awarded contracts totalling $423 million to
provide security on Manus Island, has intensified, Paladin has since made
changes to its address and shareholder structure.
Paladin Australia
notified regulators that its shareholding had transferred from the company's
Hong Kong-registered entity to the Singapore company, which is the entity
granted a government contract worth $333 million. The company is owned by 38-year-old, Canberra-born former soldier CraigThrupp and 41-year-old Ian Duncan Stewart.
But sources with
knowledge of the company, said Paladin actually operated out of another
Canberra location on Eyre Street in the Kingston district.
That address is two
kilometres away from the Servcorp address provided to regulators.
There's no signage or
branding of any kind outside the office and apartment block and the ground
floor workspaces are covered by heavy blinds.
When the Financial
Review buzzed the intercom for the unmarked offices on the ground floor, a
woman answered and Mr Thrupp came to the entrance.
He did not identify
himself or make any comment before going back inside the locked entrance.
Staff walked back and
forth between the two secure office areas, using electronic access cards to
enter and exit.
The secret office
location raises further questions about Paladin and its apparent attempts at
hiding its principal place of business.
Paladin's previously
registered office in Kangaroo Island had no mail box, which made it near
impossible for the company to receive mail and be served legal documents.
Paladin affair:
Fact-checking what Home Affairs said in Senate Estimates
The beach shack
Court documents show
Paladin's former chief executive, Craig Coleman, who was the project director
for Manus Island and exercised control over the Commonwealth contract was
employed by the Australian company, which was registered to that beach shack on
Kangaroo Island.
In November 2017, two
months after Paladin Solutions signed its first letter of intent with the
Australian government it registered with Australian regulators as a foreign
entity. The registered office it provided was the "beach shack". Both
directors provided this location as their address.
Fraud and money
laundering
Under questioning Home
Affairs conceded Mr Powaseu was a director of Paladin Solutions, the entity
which received $89 million of payments after a letter of intent was signed in
September 2017.
Paladin Solutions is registered in PNG and is a wholly
owned subsidiary of Paladin Singapore, the entity which currently holds the
$333 million government contract. Mr Powaseu was appointed a director of the
company in May 2018.
In court documents
relating to Paladin's dispute with its former CEO Mr Coleman, the company
agrees Mr Powaseu was a director of Paladin Solutions PNG which was
"engaged with the Australian government".
The Paladin web
The department expanded
and contracted the Paladin group of companies at its convenience. On the issue
of Powaseu, the department was quick to stress the point that this individual
had no ties to Paladin Singapore, the entity contracted by the Australian
government. (This was later found to be inaccurate - see the Fraud and money
laundering section of this story.)
However, when the
department wished to demonstrate Paladin's long track record, it was prepared
to refer to other companies in the group including Paladin Solutions, Pomwan
Paladin and Paladin Aus.
'Global' Company
Home Affairs also relied
on Paladin's collection of subsidiaries in stressing it was "a global
company" with clients across the region. Deputy secretary Cheryl-Anne Moy
said Paladin has "a very extensive and a very experienced operation"
listing among its key clients the Australian Defence Force, which used it for
APEC security support and the Department of Foreign Affairs and Trade for which
it had provided security in Port Moresby for nearly three years.
The department later
clarified that those clients had come to the firm via Paladin's mysterious purchase of one of PNG's biggest private
security firms, Black Swan, in July last year. That was followed by an
interjection from one of the senators who said the purchase had come about
because "you gave them so much money." At the time the government
awarded Paladin the sizeable contract, it did not have these clients.
In his statement of
claim, former CEO Mr Coleman claimed just three weeks before being awarded the
September 2017 contract Paladin was "not well prepared to perform the role
provided for under the Proposal".
"Paladin did not
have the corporate structure, human and other resources or processes that would
permit it … to perform the roles required under the Proposal," he alleged.
Money up front
When asked whether
Paladin was advanced $10 million of funds by the government prior to delivering
services as part of the contract, Home Affairs initially said this was false.
Upon further
questioning, it emerged Paladin was paid $5.5 million as part of a letter of
intent ahead of any services it provided and subsequently received further
payments totalling $89 million before a formal contract had been agreed.
Access denied
That is despite the PNG
government confirming on Monday "the visa of one of the directors of the
company [Paladin] was cancelled because of the company not adhering to the
government's position on recruitment of local labour".
Paladin also confirmed
to the Financial Review a week earlier Mr Thrupp's APEC Permit (a
regional visa) had been cancelled and said since then he had not attempted to
enter PNG…..
BACKGROUND
Australian Government,
AusTender,
retrieved 18 February 2019:
Agency: Department of
Home Affairs
Amendment Publish Date: 3-Jan-2019
Category: Management
support services
Contract Period: 28-Feb-2018
to 30-Jun-2019
Contract Value (AUD): $333,546,146.40
Amendment Value (AUD): $109,239,312.00
Amendment Start Date: 1-Jan-2019
Description: Garrison
Services at ELRTC & additional sites PNG
Procurement Method: Limited
tender
Limited Tender
Condition: 10.3.e. Additional deliveries by original supplier intended as
replacement parts, extensions, or continuation for existing goods or services
for compatibility.
Confidentiality -
Contract: No
Confidentiality -
Outputs: No
Consultancy: No
Agency Reference ID:0070021821
Supplier Details
Name: PALADIN HOLDINGS
PTE LTD
Postal Address: 4
Battery Road China Building
Town/City: Singapore
Postcode: 049908
State/Territory: Outside
Australia
Country: SINGAPORE
ABN: Exempt
____________________________________
CN ID: CN3496748-A1
Agency: Department of
Home Affairs
Amendment Publish Date: 29-Oct-2018
Category: Management
support services
Contract Period: 28-Feb-2018
to 30-Jun-2019
Contract Value (AUD): $224,306,834.40
Amendment Value (AUD): $47,430,000.00
Amendment Start Date:
1-Nov-2018 Description: Garrison
Services at ELRTC & additional sites PNG
Procurement Method: Limited
tender
Limited Tender
Condition: 10.3.e. Additional deliveries by original supplier intended as
replacement parts, extensions, or continuation for existing goods or services
for compatibility.
Confidentiality -
Contract: No
Confidentiality -
Outputs: No
Consultancy: No
Agency Reference ID: 0070021821
Supplier Details
Name: PALADIN HOLDINGS
PTE LTD
Postal Address: 4
Battery Road China Building
Town/City: Singapore Postcode:
049908
State/Territory: Outside
Australia
Country: SINGAPORE
ABN: Exempt
____________________________________
Provision of Garrison
Services at East Lorengau Refugee Transit Centre, Manus
Agency: Department of
Home Affairs
Publish Date: 27-Nov-2017
Category: Management
support services
Contract Period: 21-Sep-2017
to 28-Feb-2018
Contract Value (AUD): $89,243,817.76 [contract value delivered by four separate letters of
intent as per Senate Estimates Legal and Constitutional Affairs Legislation Committee
evidence on 18.02.2019]
Original: $39,743,817.76
Description: Provision
of Garrison Services at East Lorengau Refugee Transit Centre Manus
Amendments:
CN3470670-A2 -
change to contract term & value (23-Feb-2018)
Amendment Value (AUD): $16,500,000.00
CN3470670-A1 -
Increased value and extended end date (28-Dec-2017)
Contract Value (AUD): $72,743,817.76
Procurement Method: Limited
tender
Limited Tender
Exemption: Paragraph 2.6 was applied in some part. [This contract was a direct
approach to Paladin by way of an initial special measures arrangement as per
Senate Estimates Legal and Constitutional Affairs Legislation Committee evidence
on 18.02.2019. A departmental decision was later taken to include future
contacts with Paladin Holdings Singapore as special measures rather than
conduct open tenders]
ATM ID: RFQ1750034
Confidentiality -
Contract: No
Confidentiality -
Outputs: No
Consultancy:No
Agency Reference ID: 0070020581
Supplier Details
Name: PALADIN SOLUTIONS
PNG LTD
Postal Address:
PARK TOWER ANNEX,
SECTION 25, ALLOTMENT 35, HUNTERS STREET, GRANVILLE
Town/City: NATIONAL
CAPITAL DISTRICT
Postcode:125
State/Territory: Outside
Australia
Country: PAPUA NEW
GUINEA
ABN: Exempt
