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Conflicts of interest and the Government’s procurement process

It is the goal of all democratically-elected governments to govern free of the tentacles of conflict of interest which can subsume any Government and its Cabinet.

Public office holders will always be held in high esteem by their constituents, who expect them to continue to raise the bar for matters of public’s interest, when it comes to being accountable and transparent to the people.

And in any thriving democracy, public officials should strive to be free of perceived conflicts of interest, in order to give confidence to the people that they take their mandate as public office holders seriously, with the interest and welfare of the constitutuency their primary focus.

The issue of conflict of interest came to the fore this week in the Wednesday, April 15, 2020 edition of the Samoa Observer, when it was revealed the Minister for Works Transport and Infrastructure, Papali’i Niko Lee Hang had shares in a New Zealand finance and lending company.

An investigation by the Samoa Observer shows Papali’i is a shareholder in a company called Samoa NZ Finance Company Limited based in Manukau, New Zealand. Company searches revealed that his holdings include an equity stake – registered under his name – of slightly less than five per cent in the firm.

The company’s website has gone offline but an archived copy showed that it offered personal and automobile loan and financing packages, at advertised interest rates of 25 per cent per annum for personal and debt consolidation loans, and vehicle loans were advertised at between 14-19 per cent per annum. 

Papali’i told Samoa Observer that the shares in Samoa NZ Finance Company Limited belong to Lee Hang Enterprises Limited.

“Those shares [in the overseas company] belong to the [Lee Hang Enterprises Limited] Company,” he said. 

“[That is a] company that belongs to my family that was established long before, I entered Parliament.” 

Papali’i then defended his family-owned Lee Hang Enterprises Limited, saying: “I have been in business for a long time. I have been a public servant for almost forty years; and I started my company when I was working as a public servant and it wasn’t until 15 years later I went into Parliament.”

“There is no logic to change my company only for that reason, and I know very well the Government will not be in any way affected by my business, it's just a store. Unlike contractors, which is different.” 

“It does not make any sense that I will have to give up [my business] because I am in Parliament.

“As long as I know what I am doing does not affect the Government in any way, my conscience is clear and I can sleep at night.” 

According to the Ministry of Commerce, Industry and Labour (M.C.I.L.) records, Papali’i is one of the two major shareholders of Lee Hang Enterprises Limited, which comprises him and his family members. 

Documents state that he owns shares in the amount of 78,000 in the company, which runs a shop and a gas station at Vailima.

But therein lies the problem when Papali’i puts on his cap as the Minister for Works Transport and Infrastructure, which by virtue of that ministerial portfolio makes him the Vice Chair of the Government’s Tenders Board.

As the Vice Chair of the Government’s Tenders Board, his family business’ link to the New Zealand-registered Samoa NZ Finance Company Limited, immediately raises red flags. 

The other shareholders of Samoa NZ Finance Company Limited have business interests in Samoa, which could at any material time put in bids for any Government contract, which as part of the Government’s procurement process could go before the Tenders Board of which Papali’i is the Vice Chair.

The public would demand that the Government’s Tenders Board conducts its business above board and is seen to be acting in the best interest of the nation. 

But the Minister’s connection with Lee Hang Enterprises Limited, and its links to Samoa NZ Finance Company Limited, can create doubt in the minds of the public about the integrity of the procurement process, especially if and when a contract is awarded to a firm connected to a business associate.

Prime Minister Tuilaepa Dr. Sa'ilele Malielegaoi has previously highlighted his concerns about Ministers and Associate Ministers’ continued involvement with family businesses in October 2018, and urged them to divest their shareholding to family members.

Tuilaepa’s comments at that time concerned the awarding of a T$3.57 million contract to local firm Aldan Civil Engineering Company Ltd – owned by the family of the Associate Minister Peseta Vaifou Tevaga – to build an airport runway at Ti’avea.

Aldan Civil Engineering Company Ltd, was awarded a T$3 million contract variation by the Government early in the year with Papali’i confirming in the Thursday, April 16, 2020 edition of the Samoa Observer that the contract variation did not go through the tender process. 

Again, this raises more red flags, albeit a company connected to the family of an Associate Minister in the Human Rights Protection Party (H.R.P.P.) Government. 

Around the world governments have introduced laws that make it illegal for Cabinet Ministers to be involved in the daily workings of a business, and are required to divest themselves of shareholding in any company, which has direct interests in the area of their portfolio responsibilities.

Raising the bar, in terms of upholding the integrity of the Samoa Government’s procurement process, should be the final destination that everyone including Cabinet Ministers and other public office holders should strive to arrive at.

Ultimately, it is a destination that should translate to tangible outcomes and progress in terms of Samoa’s development as a nation.

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