TREATY ON DEVELOPMENT CO-OPERATION BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF PAPUA NEW GUINEA 

(Port Moresby: 7 October 1999)

ENTRY INTO FORCE: 31 JULY 2000 

PREAMBLE
THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF PAPUA NEW GUINEA, 
IN ACCORDANCE with the Joint Declaration of Principles Guiding Relations between Australia and Papua New Guinea, signed on 9 December 1987, as amended, 
COMMITTED to maintaining and strengthening close and friendly relations between Australia and Papua New Guinea, 
RECALLING the mutual benefits from previous arrangements between the two countries which had contributed to the economic and social development of Papua New Guinea, 
RECOGNISING the changing nature of relations between Australia and Papua New Guinea and 
ACKNOWLEDGING their mutual interest in formalising arrangements for the continuing conduct of development co-operation between the two countries, 
BUILDING on achievements to date, 
HAVE AGREED AS FOLLOWS: 
Article 1 
Definition
For the purposes of this Treaty: 
"Parties" means, unless the text otherwise indicates, Parties to this Treaty 
Article 2 
Objectives and Principles
1. The objective of this Treaty is to set out arrangements relating to development co-operation between Australia and Papua New Guinea in accordance with the 1987 Joint Declaration of Principles Guiding Relations between Australia and Papua New Guinea, as amended. 
2. Co-operation and exchanges between the two Parties shall be mutually beneficial and based on full participation by both countries having regard to the capacity and resources of both Governments, and on mutual respect. 
3. Development co-operation between the Parties shall comprise a wide-ranging combination of agreed measures designed to contribute to development and self-reliance, including capacity building in Papua New Guinea. 
4. Development co-operation shall be consistent with both Governments' policies and practices. 
5. The Parties shall endeavour to co-ordinate their activities under this Treaty with the activities of other donor governments and international development assistance institutions, including through participation in the Consultative Group on Papua New Guinea. 
Article 3 
Development Assistance
1. Development assistance shall be provided as part of an agreed program of co-operation which contributes to development and self-reliance in Papua New Guinea, allows for forward planning and implementation in accordance with policies and priorities set by the Government of Papua New Guinea, and takes due account of the Government of Papua New Guinea and the Government of Australia's policies on development co-operation. 
2. The Government of Australia reaffirms its commitment to provide development assistance to Papua New Guinea consistent with the Government of Papua New Guinea's Medium Term Development Strategy (MTDS). The Program will give priority to education, health, infrastructure, rural development, law and justice, provinces and governance.
3. All expenditure by the Parties to this Treaty under the provisions of this Treaty shall be subject to the normal annual approval of appropriations by their respective Parliaments.
4. Indicative commitments of jointly programmed aid shall be set out in a separate Administrative Arrangement between the Parties. This will include emergency and humanitarian assistance where feasible, unless both governments agree that it will be additional. 
Article 4 
Jointly Programmed Aid
1. The Government of Australia shall provide jointly programmed aid to the Government of Papua New Guinea consistent with both Governments' policies and practices.
2. In order to improve the impact and effectiveness of the development co-operation program the Parties agree that aid should promote: priority development outcomes as detailed in the MTDS and any other priorities determined by the Government of Papua New Guinea from time to time; high levels of accountability and transparency; the commitment and participation of both Governments and the Papua New Guinea community; and innovative and efficient aid delivery.
3. Jointly programmed aid shall be made available by the Government of Australia to the Government of Papua New Guinea in any of the forms available under prevailing Australian aid policy. 
4. A five (5) year planning program will jointly be drawn up by both Governments to form the basis for indicative sectoral allocations. 
Article 5 
Co-Operation, Facilitation and Consultation
1. The Parties agree to develop a co-operative approach to the management of jointly programmed aid provided to Papua New Guinea. 
2. The Government of Papua New Guinea shall use its best endeavours to facilitate at national, provincial, district and local level government levels the implementation of all development assistance activities under this Treaty. 
3. The Parties shall hold program consultations at least annually, normally alternating between the two countries. The consultations shall consider and review general program policies, objectives and outcomes, future years' activities and specific project progress. 
4. Details of the procedures applying to jointly programmed aid are set out in the Annex. 
Article 6 
Levels of Assistance
1. Levels of assistance shall be determined in Australian currency, except as jointly determined by the Governments of Australia and Papua New Guinea, on an indicative basis for a five (5) year period and reviewed every three (3) years.
2. Annual forward planning figures shall be set out in Administrative Arrangements.
3. The actual amount provided by the Government of Australia each year shall be determined by the Government of Australia, and shall also be subject to the program meeting agreed performance targets, including benchmarks.
4. The parties agree that the Government of Papua New Guinea shall be eligible to access a facility to enable the carry-over of a proportion of unexpended program or project funds from one Australian financial year to the succeeding year, in the event that such a facility is introduced by the Government of Australia in its overall development assistance program. Should such a facility be introduced guidelines shall be developed as to how it will operate. 
Article 7 
Incentive Fund
1. The Parties agree to the establishment of a new form of jointly programmed assistance to be known as the Incentive Fund. This will allow all levels of Papua New Guinea Government and community organisations to receive direct funding for the delivery of development co-operation and will support those groups with a demonstrated performance record and innovative development co-operation proposals within agreed priority areas. 
2. Details of the responsibilities of the Parties in relation to the implementation of the Incentive Fund shall be set out in a separate Administrative Arrangement. 
Article 8 
Benchmarks
1. The Governments of Australia and Papua New Guinea recognise the importance of performance benchmarks for the development co-operation program. The Parties agree that performance against agreed targets, including benchmarks, shall influence the level and allocation of funding of the development co-operation program.
2. The Parties agree to develop a co-operative approach to the development and monitoring of performance benchmarks. The Parties recognise the importance of generic benchmarks relating to the whole development co-operation program. These benchmarks shall cover the Government of Papua New Guinea's responsibilities to provide counterpart funding and the Government of Australia's responsibility to increase levels of Papua New Guinean participation in the program, particularly in relation to procurement and management contracts for PNG organisations as well as the participation of PNG officials in tender processes where appropriate.
3. Details of the responsibilities of the Parties in relation to the implementation of the benchmarks shall be set out in a separate Administrative Arrangement. 
Article 9 
Consultation and Review
1. The Parties shall hold annual high level consultations which shall normally be held alternately in the two countries. These consultations shall consider and assess the contribution of development co-operation to the bilateral relationship. The Parties shall normally discuss jointly programmed aid and other forms of assistance in the development of Papua New Guinea. 
2. The Parties may undertake periodic development reviews to ensure the effective implementation of development co-operation arrangements, jointly or separately. 
Article 10 
Amendment and Implementation
1. The Parties shall consult upon request of either Government regarding any matter relating to the interpretation or implementation of this Treaty and shall endeavour jointly in a spirit of co-operation and mutual trust to resolve any difficulties or misunderstanding which may arise. 
2. The Parties may conclude arrangements relating to implementation of particular activities provided for under this Treaty. Such arrangements shall take full account of the principles underlying the commitment of the Parties to development co-operation as set out in this Treaty and the 1987 Joint Declaration of Principles Guiding Relations between Australia and Papua New Guinea, as amended. 
3. This Treaty may be amended at any time in accordance with the Parties' respective constitutional requirements. 
Article 11 
Entry into Force and Duration
1. This Treaty shall enter into force on the date nominated by the Parties when they exchange notes notifying each other that their respective constitutional and other requirements necessary to give effect to the Treaty have been complied with.[1] 
2. On entry into force this Treaty will replace the Treaty on Development Co-operation between the Government of Australia and the Government of Papua New Guinea, and Exchange of Letters, done at Canberra on 24 May 1989, as amended.[2] All activities incomplete at the date when this Treaty comes into force shall be governed by the terms of this Treaty.
3. Either Party may terminate this Treaty by notifying the other Party through the diplomatic channel of its intention to do so. Such notice shall take effect six months from the date of its receipt by the other Party.
4. Notwithstanding paragraph 3 of this Article, activities undertaken pursuant to this Treaty shall continue to be governed by its terms until their completion. 
DONE at Port Moresby, in duplicate, this 7th day of October 1999. 

FOR THE GOVENRNMENT OF AUSTRALIA

[Signed]
(John Howard)
PRIME MINISTER	FOR THE GOVERNMENT OF PAPUA NEW 
GUINEA
[Signed]
(Mekere Morauta))
PRIME MINISTER	

ANNEX
PROCEDURES APPLYING TO JOINTLY PROGRAMMED AID
1. DEFINITIONS
In this Annex: 
1. "Australian institutions" includes companies, partnerships, associations, statutory authorities, government bodies, non-government organisations and other organisations which are engaged in an activity in Papua New Guinea to which this Annex applies; 
2. "Australian personnel" means persons who are not nationals or permanent residents of Papua New Guinea who are working in Papua New Guinea on an activity to which this Annex applies and whose salaries or other costs are funded from the Australian contribution to that activity; 
3. "dependant" means the spouse or child of Australian personnel or any other person recognized by the Parties as a dependant of a member of Australian personnel; 
4. "personal, professional and technical material" means equipment and other goods imported by Australian personnel or Australian institutions for their professional use while engaged by the Government of Australia in an activity to which this Annex applies; 
5. "activity" includes programs and projects arranged pursuant to the Treaty on Development Co-operation, and all other development co-operation activities arranged between the Parties; and 
6. "activity supplies" means equipment, material and other goods supplied for a project to which this Annex applies, the cost of which is funded from the Australian contribution to the project. 
2. APPLICATION
The provision of this Annex shall apply to all development co-operation activities arranged between the Parties, unless they mutually decide otherwise. 
3. CONTRIBUTIONS OF THE GOVERNMENT OF AUSTRALIA
The contributions of the Government of Australia for development activities shall include, but not be limited to the following: 
1. the cost of professional and other services required for development activities; 
2. the cost of providing activity supplies and the cost of transportation of activity supplies to the port of entry in Papua New Guinea; 
3. the cost of travel, living allowances, fees and other associated costs in relation to student scholarships and training awards. 
4. CONTRIBUTIONS OF THE GOVERNMENT OF PAPUA NEW GUINEA
The contributions of the Government of Papua New Guinea shall include, but not be limited to, the following: 
1. provision of agreed levels of counterpart funding including land and crop compensation costs for all jointly agreed activities; 
2. transportation within Papua New Guinea in accordance with the requirements of development activities arranged between the Parties; 
3. facilitation of travel within Papua New Guinea by Australian personnel in the performance of their duties; 
4. grant of permission to use means of communications in Papua New Guinea appropriate to the needs of the development activities involved; 
5. provision of furnished office premises and office services on the sites of development activities where such premises and services are needed by Australian firms and Australian personnel to carry out their duties; and 
6. provision of reports, records, maps, statistics and other information related to development activities and likely to assist Australian personnel in carrying out their duties. 
5. Both Parties are committed to open, accountable and transparent tender processes. 
6. CO-ORDINATING AUTHORITIES
1. Each Party shall co-ordinate aid activities through its co-ordinating authority. 
2. Unless the Party concerned designates another co-ordinating authority: 
(a) the Australian Agency for International Development of the Department of Foreign Affairs and Trade shall be the Australian co-ordinating authority; and 
(b) the Department of Treasury and Planning shall be the co-ordinating authority of Papua New Guinea. 
7. RESPONSIBILITY
1. Final responsibility for the implementation of agreed activities rests with the Government of Papua New Guinea. 
2. Responsibility for development and direction of an activity, where it is deemed appropriate, shall be vested in an Activity Co-ordinating Group. The Chairman of the Activity Co-ordinating Group shall be the Secretary of the Co-ordinating Authority of Papua New Guinea. The Activity Co-ordinating Group shall include the head of the body or authority designated by the Government of Papua New Guinea as the implementing agency; the Australian team leader, who is to be appointed by the Government of Australia in consultation with the Government of Papua New Guinea; and a person nominated by the Australian High Commission in Port Moresby. The Activity Co-ordinating Group shall meet not less than twice per year. The Activity Co-ordinating Group shall: 
(a) advise on co-ordination and disposition of activity personnel; 
(b) advise on the co-ordination of the operation of the activity team; 
(c) review and report on progress to the Parties; and 
(d) recommend to the parties changes in the activity budget and future development. 
3. Responsibility for efficient management of an activity shall be vested in the head of the implementing agency, who shall prepare regular reports to the Parties on progress of the activity. 
8. DUTIES, LEVIES AND TAXES ON AUSTRALIAN INSTITUTIONS
The Government of Papua New Guinea shall exempt Australian institutions from income taxes or other similar taxes on income or profits, and other remuneration derived from activities performed in Papua New Guinea to which this Annex applies. Furthermore, Australian institutions shall be exempted from those taxes on income derived from activities performed outside Papua New Guinea from which income is not transferred into Papua New Guinea 
9. REMITTANCE OF FUNDS
The Government of Papua New Guinea, in accordance with its laws, shall assist Australian personnel and Australian institutions and organisations in the repatriation of their funds. 
10. ACTIVITY SUPPLIES AND PERSONAL PROFESSIONAL AND TECHNICAL MATERIAL
1. Unless otherwise agreed by the Parties, activity supplies will become the property of the Government of Papua New Guinea upon completion of the activity. 
2. In respect of activity supplies and personal, professional and technical material, whether to be imported from outside or procured within Papua New Guinea, the Government of Papua New Guinea shall: 
(a) zero rate for value added tax and exempt from payment of customs duties, excise duties, sales tax, other duties, taxes, levies and other charges of a similar nature upon these items; 
(b) facilitate the movement of activity supplies by providing appropriate customs and wharfage facilities in the port closest to the project site and shall be responsible for the expeditious transport of such supplies to the site; 
(c) unless provided otherwise by mutual arrangement between the Parties, provide expeditious transport to the site of the activity ; and 
(d) exempt from or be responsible for inspection fees and storage charges and all other levies, duties, fees or charges on activity supplies purchased in or imported into Papua New Guinea. 
3. Activity supplies provided for a specific activity to which this Annex applies shall be available only for the purpose of that specific activity and shall not be withdrawn from that use without the mutual agreement of the co-ordinating authorities. The Australian co-ordinating authority shall exercise administrative control over such supplies for the duration of the project or until both authorities agree that they may be released from the activity. 
11. INTELLECTUAL PROPERTY
1. Recognising that it is desirable to use or exploit advances or discoveries which may be made in the course of an activity under this Annex, the co-ordinating authorities shall discuss: 
(a) the equitable allocation of ownership of all intellectual property arising directly or indirectly from an activity ; 
(b) the equitable licensing of such intellectual property; and 
(c) where it is within their power, the equitable licensing of such other intellectual property as is necessary for the utilisation of the results of the activity . 
2. In fulfilling their obligations under 11.1 the co-ordinating authorities shall have regard to relevant considerations, including: 
(a) the intellectual contributions of each country; 
(b) the financial contributions of each country; 
(c) the contribution of intellectual property, materials, research effort and preparatory work of each country; 
(d) the facilities provided by each country; and 
(e) such other relevant considerations as the co-ordinating authorities may mutually determine. 
3. "Intellectual Property" shall include the rights relating to: 
(a) literary, artistic and scientific works, usually referred to as copyright; 
(b) inventions in all fields of human endeavour, usually referred to as patents; 
(c) scientific discoveries; 
(d) industrial designs; 
(e) trademarks, service marks, and commercial names and designations; 
(f) protection against unfair competition; and 
(g) all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields including any rights in computer software and mask works, and intellectual activity arising solely or partly by the restraint of confidence. 
12. DUTIES, LEVIES AND TAXES FOR AUSTRALIAN PERSONNEL
1. The Government of Papua New Guinea shall facilitate the recruitment and employment by the Government of Australia or its contractors, of personnel required for the activities to which this Annex applies, by: 
(a) granting exemption from income or other taxes on salaries and allowances; 
(b) granting exemption from import duties and any other charges on personal and household effects imported at the time of first taking up duty in Papua New Guinea or during a period of six months after that date; 
(c) granting to Australian personnel all rights and entitlements accorded to the aid personnel of any other donor country; 
(d) expediting the issue of all documentation required for entry of and performance of work by, Australian personnel; 
(e) granting exemption from import duty or any charge levied on one motor vehicle per person if that vehicle is imported or purchased within six months of taking up duty in Papua New Guinea. 
(i) If that motor vehicle is imported or purchased before 1 July 2000 and sold to a person without similar privileges before the expiration of a period of two years after the date of importation or purchase of the vehicle, the person shall pay an amount equivalent to the import duty and import levy that was payable on the vehicle at the date on which it was imported or purchased, reduced to make allowance on a pro rata basis for the period for which the vehicle has been used. 
(ii) If that motor vehicle is imported or purchased after 30 June 2000 and sold to a person without similar privileges before the expiration of a period of two years after the date of importation or purchase of the vehicle, the person shall pay an amount equivalent to the full import duty and import levy that was payable on the vehicle at the date on which it was imported or purchased. 
2. Australian personnel shall not engage in any form of employment in Papua New Guinea other than that provided for by the terms of their contracts. 
13. EXPORT OF PERSONAL PROFESSIONAL AND TECHNICAL MATERIAL AND PERSONAL AND HOUSEHOLD EFFECTS
In respect of the export from Papua New Guinea of personal, professional and technical material and personal and household effects at the end of the assignment of Australian personnel, the Government of Papua New Guinea shall: 
1. exempt them from export duty or any charge levied; and 
2. expedite their clearance through customs. 
14. FACILITATION OF DEVELOPMENT ACTIVITIES
1. The Government of Papua New Guinea shall facilitate the implementation of the activities to which this Annex applies by taking all necessary measures, including the prompt and timely issue of visas, work permits, licenses and other necessary documents to Australian institutions, organisations and personnel and the prompt and timely issue of visas and other documents for members of the families of Australian personnel. 
2. The Government of Papua New Guinea shall issue to Australian personnel multiple exit and re-entry visas which shall be valid for one year or for the duration of their assignment to an activity in Papua New Guinea, whichever is the lesser. 
3. The Government of Papua New Guinea shall accord Australian personnel and Australian institutions any benefits not specifically provided for in this Annex, which are granted by the Government of Papua New Guinea to personnel and institutions from countries other than Australia. 
4. The Government of Papua New Guinea shall make available to Australian firms and Australian personnel details of local laws and regulations which may affect them in the performance of their duties. 
15. CLAIMS RELATING TO ACTIVITIES
1. The Government of Papua New Guinea shall release the Government of Australia and Australian personnel from all actions, suits, proceedings, claims and demands which the Government of Papua New Guinea may now have or may in future have against them or any of them in relation to loss or damage resulting from, or consequent upon, activities. 
2. The Government of Papua New Guinea shall indemnify and at all times hereafter shall keep indemnified the Government of Australia and Australian personnel against: 
(a) all actions, suits, proceedings, claims and demands which any other party may now have or may in future have against them or any of them in relation to loss or damage resulting from, or consequent upon, activities; and 
(b) any claim for contributions which any party may now have or may in future have against any of them in respect of any such actions, suits, proceedings, claims and demands. 
3. The release and indemnity referred to in sub-paragraphs 15.2(a) and (b) of this Treaty shall not apply where it has been mutually decided by both Governments that a claim arises from a criminal act, gross negligence or wilful misconduct. 
16. SECURITY
The Government of Papua New Guinea shall extend security arrangements to Australian personnel and their dependants similar to those that are available to all persons and property in Papua New Guinea, including to other foreign aid activities, personnel attached to those activities and their dependants. 
17. SUBSIDIARY ARRANGEMENTS
In relation to activities under this Annex, the co-ordinating authorities may enter into specific arrangements for their implementation. 

[1]. Notes to this effect, nominating 31 July 2000 as the date of entry into force of the Treaty, were exchanged at Port Moresby 12 and 28 July and 28 September 2000. The Treaty entered into force on the date so nominated. 
[2] Amended 18 March-29 May 1992 and 30 April-23 May 1994.