At the Royal Commission of Inquiry into the sinking of the MV Ashika the issue of due diligence was again highlighted in the evidence of the Chief Secretary and Secretary to Cabinet Busby Kautoke who adhered that Cabinet had no reason to believe that the vessel was unseaworthy. But he accepted that they took for granted that all Government processes of due diligence extending to that of the Procurement Committee would be followed.

The Chief Secretary who gave evidence on February 23 at the Royal Commission of Inquiry into the Ashika sinking stated in a three- page affidavit that, "Cabinet had no reason to believe MV Princess Ashika was unseaworthy when it authorised for its purchase." He pointed out a Memorandum to Cabinet dated April 20 which stated that the Ministry of Transport had sought technical data to complete the due diligence process.

On being questioned by the Counsel Assisting Manuel Varitimos, the Chief Secretary accepted that by April 16, Cabinet had plans to replace the Olovaha because it was not up to standard. This meeting resulted in the April 20 Memorandum to Cabinet provided by the former Transport Minister Paul Karalus and Minister of Finance and titled vessel purchase to replace the MV Olovaha.

Memorandum to Cabinet

The Memorandum to Cabinet claimed that the vessel was surveyed to carry 390 passengers and 370 tonnes of cargo, and that the vessel was older than the Olovaha but it had been very well maintained and that came out of a December 2008 survey. It also stated that an Australian engineering company was preparing the vessel for sale to ensure its full serviceability.

Cabinet then met on April 23 giving direction that the former Minister of Transport assisted by the then Attorney General and Minister of Justice was to proceed with arrangements. Authority was then given to the Minister of Finance to endorse or otherwise the transaction.

The counsel put to the witness that the Cabinet decision on April 23 does not refer to any due diligence to be conducted. The Chief Secretary agreed but pointed out to the memorandum gave the arrangement for that, and stressed that the authority was given to the Minister of Finance to endorse or "otherwise" the proposed transaction.

It was again put to him that the Acting Transport Secretary had said in evidence that she had not seen the submission relating to the April 23 Cabinet decision and so did not know of the due diligence arrangement. The Chief Secretary said that was her own shortcoming, as she should have asked her Minister for clarification.

Due Diligence

He added it accordingly assumed that the normal Government procedures as to the completion of due diligence and approval of Procurement Committee would be followed. But he agreed that due diligence should have been done by Government prior to purchase.

"Do you accept there was insufficient evidence before cabinet to make an informed decision in relation to the purchase of the vessel?" the counsel asked.

The Chief Secretary answered that he could not recall.

The counsel put to him whether he was aware that matters were only referred to the Procurement Committee in relation to the purchase of Ashika after the contract was signed. The Chief Secretary said it was submitted to the Procurement Committee on May 11.

"But the contract was signed on May 8," said the counsel.

The Chief Secretary said he was not aware of that and added that he had not come across the contract or the purchase of sale of the Ashika. A copy was then shown to him at the inquiry.

Would not have been purchased

He then agreed with the counsel's submission that they took for granted that all proper Government processes of due diligence and referral of the matter to be considered by the Procurement Committee would be completed prior to purchase.

He was also adamant in his belief that due diligence should have been completed as it was an essential part of good governance.

"Do you accept that if proper due diligence was conducted of the vessel it would not have been purchased?" counsel asked, and the Chief Secretary agreed.