In an introductory statement made by executive board member Kristian Lasslette to the Australian Senate's Foreign Affairs, Defence and Trade committee, he said ISCI was concerned that the country's aid policy to PNG was driven by ideology and market distorting factors.
He also said many businesses had no intention on providing goods and services at a price which would have been dictated by a healthy functioning market economy, instead charging exorbitant prices.
"In contrast to the thrust of Australia's aid policy, PNG does not suffer from a lack of private sector involvement, it suffers from a surplus of private sector involvement," he said.
"This has led to a breakdown of functioning markets, massive price distortion, misallocation of resources, misappropriation on a grand scale and human rights abuses, particularly in the extractive industries" he said.
Lasslette suggested aid investment in education and capacity building at all levels, coupled with building connections with civil society organisations, higher education institutions and the media.