Millions reportedly paid to Pacific MPs a drop in the ocean of detention expenses

The Australian Federal Police (AFP) and the Australian Transaction Reports and Analysis Centre (AUSTRAC) are investigating reports that Home Affairs’ main contractors paid millions of taxpayer dollars to powerful Pacific Island politicians, after revelations in the Nine newspapers and on 60 Minutes on Sunday.

The investigation explicitly avoids calling the payments bribes but follows a money trail of “suspect contracts” from Home Affairs to Nauru, with payments to “businesses controlled by powerful politicians and suspected kickbacks to the island’s political kingmaker, David Adeang”.

Documents obtained under freedom of information showed the Australian government was aware of bribery allegations involving Adeang, who had influence over Australia’s offshore processing regime on Nauru. Further, an Australian businessman got a $9.3 million offshore detention contract from Home Affairs even after then-minister Peter Dutton had been informed the man was also being investigated for bribing Nauru politicians.

Meanwhile, on Manus Island, a former director of contractor Paladin separately alleged that “millions of dollars” were paid to Papua New Guinean officials to obtain visas and work permits, and that executives were told by Home Affairs to avoid putting any concerns about corruption in writing.

This mostly occurred under the watch of now-Opposition Leader Dutton when he was at the head of the immigration and then home affairs portfolios (though there’s no suggestion that Dutton played a part in signing the contracts), but the allegations cover at least a decade and several governments.

During this time, it wasn’t just the money of home affairs-backed contractors flowing into Nauru and Manus Island. PNG is traditionally the biggest recipient of Australian aid, and Nauru would effectively cease to function without Australian aid — which happened to jump fivefold after it accepted its role in offshore processing in 2001.

And that’s all before you get to the costs of offshore processing.

What it cost

The figures are staggering, and accelerated as the decades went on. By 2011 Australia’s offshore detention of asylum seekers arriving by boat had cost taxpayers nearly $2.4 billion since the turn of the century. Between 2012 and 2017 it cost Australia nearly $5 billion.

Put another way, in 2015 a Senate committee hearing into conditions in the asylum seeker detention centre in Nauru found the previous 11 months had cost $645,726 for each asylum seeker, almost $2000 each a day. The costs would routinely swell beyond predictions: the 2015-16 budget predicted spending of $810.8 million on offshore detention, but the actual cost blew out to $1.1 billion.

In 2016, the Manus Island detention centre was found to be illegal by PNG’s Supreme Court, and by the end of October 2017, it was closed. Along the way, this added a trifling $70 million to the bill when the Turnbull government settled a class action for damages for the physical and psychological injury suffered by detainees. Bit by bit, the men on the island were resettled — by December 2022, 92 remained.

Even as the numbers wound down, the costs remained astonishing. Guardian Australia reported in May that the 22 refugees and asylum seekers still in the processing centre on Nauru will cost Australia $485 million this year.

What we got for our money

Running in parallel with these rivers of gold came a series of decisions from the Nauru and PNG governments that can’t have displeased the Australian government.

In August 2012, then-PM Julia Gillard announced Australia would start sending asylum seekers for processing first to Christmas Island and then the reopened Manus Island detention centre at an unspecified later date. Helpfully, PNG slapped a ban on journalists visiting the island almost immediately.

In 2014, Nauru jacked up the price of visas for visiting journalists from $200 to $8000. Even then, only two outlets were granted access.

In 2018, Nauru scrapped a treaty with Australia’s High Court that made it the highest court after Nauru’s Supreme Court, leaving the country with no court of appeal. In the previous two years, the High Court had overturned a number of decisions from the Nauru courts — largely concerning the treatment of asylum seekers. The end of this arrangement left asylum seekers on the island without an independent court to hear appeals.

At the same time, efforts by lawyers in PNG to have the asylum seekers recently found to have been held unlawfully on Manus granted compensation were consistently stymied by applications from PNG government lawyers. Asylum seekers also faced roadblocks when applying for documents that would allow them to travel to a safe third country.

As if that wasn’t incentive enough to keep on Australia’s good side, writer John Martinkus noted in 2016 that threats to Australia’s interests in the region mysteriously seemed to sync up with news of “spontaneous” demonstrations breaking out:

Now we have PNG Prime Minister Peter O’Neill, who approved the declaration of the Australian-run Manus Island detention centre as illegal just last month, being faced with demonstrations he calls over-exaggerated and illegal. He gave Australia a bloody nose with his acknowledgement of the illegality of the Manus Island detention centre.

Now Australia has given him one back by reporting and inflating the demonstrations against him. The ABC reported for more than 24 hours that four people had been killed in Port Moresby. It turned out not to be true. None were killed.

Could the money used to fund offshore processing have been better spent? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.