Overview of the new PNG Associations Incorporation Act 2023

By Tara Vele and Andrew Kidu

This new Act was included in the package of legislation that was passed by the Marape-Russo Government, in the first sitting of Parliament on 11 January 2023. The new PNG Associations Incorporation Act 2023 completely replaces the Associations Incorporation Act 1966 – the previous principal Act that governed incorporated associations (an organisational structure reserved for not for-profit/ charitable organizations, that are formed for purposes which are considered useful to the community). This Act tightens and aligns the governance model of associations with that of companies. The Pacific Private Sector Development Initiative (PSDI) in commenting on the new Act said, “the enactment of the [Associations Incorporation Act 2023] will help bring the country into line with modern anti-money laundering standards while improving the governance and transparency of incorporated associations.” Mr Clarence Hoot Managing Director, PNG Investment Promotion Authority (IPA) was pleased with the passage of the Act and thanked PSDI for its continued support to the IPA. In echoing PSDI’s sentiments Mr Hoot said, “The [new Associations Act] will ensure associations in PNG function in the best interests of their members and abide by their intended purposes.”

This new legislation requires all currently registered associations to re-register (in some cases, rule changes will be required) with the IPA within 12 months of commencement. The new Act applies to all forms of associations, including not for-profit/ charitable organizations, sporting and social clubs.

The key changes introduced by the new Associations Act are:

Establishes two association categories - (1) Public Benefit Association and (2) Members Benefit Associations (a new definition of “charitable purpose” is included).
A more detailed application and public notice process for the incorporation of new associations.
Formularisation of the duties, powers of management and responsibilities of committee members and the public officer. The public officer performs a role similar to a company secretary.
A strengthening of provisions dealing with the maintenance of accounting records, annual reporting to the members and auditing, although the requirement for an annual report and audited financial statements can be dispensed with in certain circumstances. Contents of the annual report are similar to those under the Companies Act.
New requirement for filing of an annual return together with notices of changes in the names and details of committee members and the public officer. Filing fees and late filing penalties will apply.
A new provision allowing for the registration of foreign charities, religious organisations and NGOs that want to operate within PNG.
Insertion of penalty provisions on both the association and its committee members/public officer for breaches of the requirements have been significantly increased.