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PNG not-for-profit governance act to be reviewed

With the support of the Australian government, the Papua New Guinea NFP governing act is set to be reviewed and amended

The law governing the registrations and operations of Papua New Guinea (PNG) not-for-profits is to be reviewed with the support of the Australian government.

The review of the Associations Incorporation Act will address problematic issues for the sector and bring the current act into compliance with international anti-money laundering mandates to improve transparency and accountability.

The review will be directed by the Investment Promotion Authority (IPA) and will seek feedback on proposed changes from the PNG not-for-profit sector.

IPA Acting Managing Director, Clarence Hoot, told The National changes will be in line with current business trends, adding: “Over the years, the IPA has undertaken a move to update its legislation to suit the modern corporate trends.

“This saw the updating of the Business Names Act and Companies in 2014. We are now in the process of updating the Associations Incorporation Act since it has not been updated since its passage in 1966.”

The act will be reviewed by the IPA in a joint effort with the Pacific Private Sector Development Initiative, an Asian Development Bank program undertaken in partnership with Australian and New Zealand governments.

The potential statutory amendments includes improving the process of defining what information is needed, defining what groups are eligible as an association, creating subtypes, providing higher level financial transparency and re-examining penalties.

Other amendments include clarifying the rights and responsibilities of committees, clarifying the roles and responsibilities of the public officer and giving members certain rights to obtain more information about their association.

According to the consultation memorandum, the basic duty set out in amendments will act in the interests of the sector as committee members “shall act in good faith and in what the member believes to be in the best interests of the association.

“The Act would benefit from a specific statement of the rights and duties of persons acting as a committee member, including addressing such things as: imposing a duty of loyalty upon Committee members, defining and addressing conflicts of interest and giving rise to liability for the international misuse of funds.”

The first stakeholder awareness is set for the second week of July and will be followed by several awareness programs in Lae, Kokopo and Goroka.

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