REPUBLIC OF VANUATU

OFFICE OF THE OMBUDSMAN

PUBLIC REPORT

ON THE

IMPROPER CONCESSIONS GIVEN
BY THE FORMER MINISTER OF
PUBLIC WORKS MR. AMOS ANDENG
TO MR. LI ZHONG HENG

25.02.2000

7035/2000/01

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PUBLIC REPORT
ON THE
IMPROPER CONCESSIONS GIVEN BY
THE FORMER MINISTER OF PUBLIC WORKS
HON. AMOS ANDENG TO MR. LI ZHONG HENG

SUMMARY

This report discloses improper financial concessions given by the former Minister of Public Works, Mr. Amos Andeng, to a local businessman Mr. Li Zhong Heng, who is also the owner of Hong Kong Supplies at Tebakor, Port Vila.

In 1996 Mr. Li Zhong Heng, who was trying to set up a business in Port Vila, needed to rent machinery from the Department of Public Works. After he was informed of the unit rates at the Public Works’ workshop, Mr. Li Zhong Heng used the machinery. But at the same time he went to see Mr. Amos Andeng (former Minster of Public Works) trying to get a cheaper rate for the rent of the machinery despite the official agreed quotes provided to him by the Formen of the workshop.

After a discussion between Mr. Li Zhong Heng and Mr. Amos Andeng, the Minister agreed to reduce the rate. He did this by sending three letters to the Public Works workshop instructing them to reduce the unit rate for the rent of the machinery to Mr. Li Zhong Heng.

The Foreman of the Public Works workshop at that time did not agree with the decision of the former Minister and the workshop stood firm in applying the official rate payable by Mr. Li Zhong Heng for the machinery being hired.

The workshop sent invoices to Mr. Li Zhong Heng for the rent of the machinery. The charges on the invoices were calculated according to the normal official agreed unit rental rates.

To date and despite numerous reminders sent to Mr. Li Zhong Heng, he has paid nothing to the Department of Public Works, because he maintained and insisted that he should have been charged the lower rates ordered by the former Minister.

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TABLE OF CONTENTS

SUMMARY
1.	JURISDICTION
2.	PURPOSE, SCOPE OF INVESTIGATION AND METHODS USED
3.	RELEVANT LAWS, REGULATIONS AND RULES
4.	OUTLINE OF EVENTS
5.	RESPONSES BY THOSE WITH FINDINGS AGAINST THEM
6.	FINDINGS
7.	RECOMMENDATIONS
8.	INDEX OF APPENDICES

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1.	JURISDICTION

1.1	The Constitution and the Ombudsman Act No.27 of 1998 allows me to look into the conduct of government, related bodies, and Leaders. This includes the conduct of the then Minister of Infrastructure and Public Utilities, Mr. Amos Andeng, and the Department of Public Works. I can also look into defects in laws or administrative practices.

2.	PURPOSE, SCOPE OF INVESTIGATION AND METHODS USED

2.1	The purpose of this report is to present my findings as required by the Constitution and the Ombudsman Act.

2.2	The scope of this investigation is to establish the facts about some concessions given to Mr. Li Zhong Heng and to determine whether the conduct of the former Minister of Infrastructure and Public Utilities Mr. Amos Andeng, in granting those privileges to Mr. Li Zhong Heng, was proper; and whether Mr. Amos Andeng breached the Leadership Code of the Constitution.

2.3	This Office collects information and documents by informal request, summons, letters, interviews and research.

3.	RELEVANT LAWS, REGULATIONS AND RULES

3.1	The constitutional provisions and the financial regulations relevant to this report are reproduced in Appendix M at the end of the report.

3.2	The Constitution prohibits leaders from engaging in certain types of conduct. The Constitution also specifies that the holders of certain offices are to be considered leaders.

3.3	The Financial Regulations (66-68) set out the procedure that government officers should followed to collect payments due on unpaid debit notes.

4.	OUTLINE OF EVENTS

4.1	In February 1996, Mr. Li Zhong Heng, a businessman who owns the Hong Kong Supplies Centre and a few other businesses in Vila, contacted the Department of Public Works (PWD) to rent machinery for work on his Lemonard moulds. He was informed of the unit rates for using the machinery (see Annex A) and he orally agreed with the price of 5000VT per hour.

4.2	Work was carried out for Mr. Li Zhong Heng on 23, 26, 27,28, 29 February and 1 March 1996. Mr. Zhong Heng used the machine for 33 hours. Therefore the amount of invoice for the work done in February was 165 000 VT. (See Annex B).

4.3	On the 8 March 1996, the PWD sent Mr. Li Zhong Heng his first invoice of 165 000VT. (See Annex C).

4.4	Mr. Li Zhong Heng continued to work at the PWD’s workshops on the 7, 8,11,12,13, 19, 20, 21,22 and 23 March 1996 using the PWD’s lathe. The rent for the lathe machine at that time was 5 000VT/hour. (See Annex D).

4.5	On 12 April 1996, the former Minister of Public Works, Mr. Amos Andeng sent a letter to the foreman of the PWD’s workshops, Mr. Wesly Simon requesting him to give 'a reasonable price to Mr. Li Zhong Heng for any of his work done whether it concerns welding or any other work' (Annex E).

4.6	On 15 May 1996, by letter sent to the Minister Amos Andeng, the former Director of Public Works Department, Mr. Benoît St Omer explained that the workshop had fixed the rental cost of 5 000VT per hour after considering the workshop’s investment costs as well as salaries, electricity and overhead expenses. (See Annex F). Mr. Saint Omer stated that he was unable to determine the exact weight that had been given to each expense in setting the rental cost. He provided the Minister with examples of rental costs that the workshop had set. The rental rates included a range of hourly costs from 5 000 VT for milling and larger drilling; through 4 000 VT for welding, 3 800VT and 1 800 VT, respectively, for the use of two presses; to 1 500 VT for a skilled mechanic’s labour only, and 1 000V VT for the labour of an assistant. (See Annex A).

The Director of Public Works asked the Minister to consider the financial information that the Director had provided and then to state how the PWD should charge Mr. Li Zhong Heng.

4.7	On 23 May 1996, the former Minister wrote a letter to the Foreman of the workshop, Jimmy Ngwero, asking him to reduce the hourly fee previously charged to Mr. Li Zhong Heng from 5 000 VT to 3 000 VT and to inform the officers who were dealing with Mr. Li Zhong Heng. The Minister stated explicitly, 'this exception is for Mr. Li Zhong Heng only' (Annex G).

4.8	On 30 May 1996, the PWD sent Mr. Li Zhong Heng a second invoice for 255 000 VT for the use of the lather machine for 51 hours. The rental charge was 5 000 per hour. (See Annex H).

4.9	ON the 27 May 1996, Mr. Li Zhong Heng again used the lathe machine for half an hour. The PWD sent him an invoice for 1 500 VT. The PWD sent this invoice to Mr. Li Zheng Hong on the 4 June 1996. (See Annex I).

4.10	The PWD received no payment on its invoices. The PWD sent Mr. Li Zhong Heng reminder notices for each invoice. The first reminder for the invoice of 165 00 VT was sent to Mr. Li Zhong Heng on the 6 June 1996. The reminders for the amounts of 265 000 VT and 1 500 VT were sent on the 23rd October 1996. (See Annexes J & K).

4.11	On 7 June 1996, the former Minister again wrote to the foreman of the PWD’s workshop and instructed that the workshop was to reduce the hourly fee that it charged Mr. Zhong Heng from 5 000 VT to 1 500 VT. Again, the Minister made it clear that the concession was to be for Mr. Li Zhong Heng only. (See Annex L).

4.12	To date Mr. Li Zhong Heng has still not paid anything for the rent of the PWD’s workshop’s facilities. Mr. Li Zhong Heng maintains that this is due to the dispute about the amount he should pay. Mr. Li Zhong Heng claims that rate for the lathe machine and the milling machine should not have been 5 000 VT per hour but 1 500 VT per hour.

5.	RESPONSES BY THOSE WITH FINDINGS AGAINST THEM

5.1	Before starting this enquiry, the Ombudsman notified all people or bodies complained of and gave them the right to reply. Also a working paper was provided prior to this public report to give another opportunity to respond. Responses were received from the following people:

Mr. Amos Andeng

Mr. Amos Andeng agreed with all our findings. In his statement he said that Mr. Li Zhong Heng had come to see him several times and it was during Mr. Li Zhong Heng’s third visit, that he asked to Mr. Andeng to reduce the unit rate of the machinery.

As Mr. Li Zhong Heng wanted to set up a new business in Vanuatu, Mr. Andeng thought that he could help him by reducing the price, as in the future Mr. Li Zhong Heng would create more jobs for Ni-Vanuatu people.

The former Minister said that after he received our letter he went to see Mr. Li Zhong Heng a few times to try to convince him to pay his invoices, but each time Mr. Li Zhong Heng refused to meet with him.

The former Foreman Mr. Jimmy Ngwero

According to Mr. Ngwero all our findings are just.

He explained that many times Mr. Li Zhong Heng asked the PWD’s workshop’s staff to reduce the rate of the machine rentals, but they never complied with his request. Then Mr. Zhong Heng went to see the Minister, but despite the letter received from Mr. Andeng they still keep the same price.

The Foreman Mr. Wesly Simon

In a telephone conversation with the Ombudsman’s Office, Mr. Simon confirmed his agreement with the findings of this investigation.

5.2	The Ombudsman’s Office received no responses from Manasseh Tary, Mrs Noelin Thomas, Mr. Mark Bebe and John Roqara.

6.	FINDINGS

6.1	Finding 1:	The conduct of Mr. Amos Andeng was improperly discriminatory.

6.1.1	It is evidence from the instructions Mr. Amos Andeng gave to the foreman of the PWD’s workshop that Mr. Andeng acted in a discriminatory way in Mr. Li Zhong Heng’s favour: Mr. Andeng ordered that the workshop make concessions to Mr. Li Zhong Heng and to Mr. Li Zhong Heng only.

There was no legitimate basis for the concessions to be granted to Mr. Zhong Heng. Mr. Andeng justified his actions with the explanation that Mr. Zhong Heng was providing employment through his business. Mr. Andeng did not explain and no explanation is apparent for why any business person should automatically be entitled to a discount on government services and why Mr. Li Zhong Heng alone should have been granted government concessions. Mr. Li Zhong Heng is not the only business person providing employment to Ni-Vanuatu people.

6.2	Finding 2:	The conduct of Mr. Amos Andeng was contrary to proper administrative practice.

6.2.1	The PWD workshop had established rental charges by a fair and reasonable administrative procedure which took relevant factors into account. Mr. Andeng ordered a decrease of the rental rates the workshop was to charge Mr. Li Zhong Heng. In so doing, Mr. Andeng appears to have acted arbitrary and to in accordance with the established administrative practice. There is no apparent justification for the former Minister to have set the rental cost for a milling machine and a lather (given their attendant costs) at the same level of the charge for a trades person working alone.

7.	RECOMMENDATIONS

	RECOMMENDATION 1

7.1	The Ministry responsible for Public Works should develop an internal policy guidelines to regulate the use of any government property for private purposes. These policy guidelines should include the rental rates that should be applied for such property.

RECOMMENDATION 2

7.2	Likewise, the Public Service Commission (PSC) should develop a set of policy guidelines for the protection of officials such as the foreman Mr. Wesley Simon and the former foreman Mr. Jimmy Ngwero, who, despite the letters from the former Minister responsible for Public Works requesting them to reduce the price of the rental of the machinery. These two persons defied the improper instruction because that is was their feeling that it was not fair and proper. This investigation supports their judgement.

The proposed policy guidelines should protect from any reprimand/harm, public servants who may refuse to obey any political instruction that does not comply with existing administrative practice.

RECOMMENDATION 3

7.3	The accountable officer for the Public Works Department and any other departments which may in future find themselves in a similar situations, should follow the steps set out in Financial Regulations 66 to 68 in order to recover the money owned (by 
Mr. Li Zhong Heng).

Dated the 25th day of February 2000.

Hannington G ALATOA
OMBUDSMAN OF THE REPUBLIC OF VANUATU

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8.	INDEX OF APPENDICES

A	List of some unit prices

B	The details of the first invoice

C	The first invoice

D	The details of the second invoice

E	Letter from Amos Andeng (former Minister of PWD) to the Foreman of Public Works Workshop, dated 12th April 1996.

F	Letter from Benoît Saint Omer (former Director of PWD) to Amos Andeng, dated 15 May 1996.

G	The second letter from Amos Andeng to the Foreman of Public Works Workshop dated 23rd May 1996.

H	The second invoice sent to Mr. Li Zhong Heng

I	The invoice for the rent of the lathe machine

J	The first reminder for the outstanding amount of 165 000 VT

K	The first reminder for the outstanding amount of 255 000 VT & 1 500 VT

L	The third letter from Amos Andeng to the Foreman of Public Work Workshop dated 7th June 1996

M	The constitutional and statutory provisions and financial regulations relevant to the issues of this report:
-	Constitution, Articles 66 and 67
-	Financial Regulations 66, 67 and 68

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