Document content

• 3. COI Inquiry File No. 28 for Special Agricultural and Business Purpose Lease over Portion 45C Volume 31 Folio 249 Milinch: Kase, Buna, and Central Province in the name of Mekeo Hinterland Holdings Limited.

  3.1 In accordance with the powers given to the Commissioners pursuant to section 7 of the Act, the Commissioners have summoned numerous witnesses to produce documents and be further examined on oath or affirmation.

  3.2 Witnesses were called from the six (6) government agencies involved in the issuance and operation of the Mekeo Hinterlands Holdings Ltd. SABL. These were:

  3.2.1 Department of Central Province, (DCP) 3.2.2 Department of Lands and Physical Planning, (DLPP) 3.2.3 Department of Provincial Affairs and Local Level Government, (DPALLG) 3.2.4 Department of Agriculture and Livestock, (DAL) 3.2.5 Department of Environment and Conservation, (DEC) 3.2.6 PNGForest Authority (PNGFA)

  3.3. Witnesses and Summonses 3.3 1. The names of the persons who have been summoned to appear and who have in fact appeared in the public hearings (in alphabetical order), including titles, are set out in the schedule below. For ease of reference, the schedule also lists the transcript pages at which the person commenced giving evidence against the name of the witness.

  No Witness Pages Date of Hearing 1 BENJAMIN,ANTON (Secretary, DAL)

  2 IAMO, WARI (Director, DEC)

  3 KALA, MANU (Land officer, DLPP)

  4 KATAKUMB, DANIEL (Director, Lands Div. DLPP)

  24/01/12-SABL80 5

• Page 2 of 186

• KIPO, ROGER (Chairman, Uda Mekeo Farmers Cooperative Society Ltdl. 33-62 20/12/11-SABL65-WAIGANI 6 MANGABI, JOSEPH (Taure Lakekamu ILG) 62-77 20/12/11-SABL65-WAIGANI 7 POIA, MATHEW (Hon. Member for Goilala). 11-46 06/01/12-SABL69 8 POMALEU, IVAN (Managing Director, IPA)

  01/02/12-SABL 9 POURU, KANAWI (Managing Director, PNGFA)

  10 RAGA, GULU (Senior Lands Officer, DCP)

  11 TOBEA, ELIZABETH (Special Projects Manager, DLPP)

  12 YIPMARAMBA, RAPHAEL (Provincial Administrator, Central Province) 3-8 Thursday, 27 October 2011

  3.4. Parties represented by counsel

  3.4.1 Section 8 of the Act relates to the appearance of counsel before the Commission on behalf of interested parties. It provides that:

  “Subject to Section 2(5), a person who satisfies the Commission that he has a bona fide interest in the subject matter of an inquiry under this Act, and any other person by leave of the Commission, may attend the inquiry in person or may be represented by counsel.”

  3.4.2. The following were granted leave to be represented by counsel.

• Page 3 of 186

• Party Counsel Albright Saulep Lawyers

  3.5. Exhibits and documents

  3.5.1. There were 10 documents tendered as evidence before the Commission at the public hearings. A list of the Exhibits is shown below.

  No Item Interested Party Date Received Exhibit Number 1 IPA records concerning Mekeo Hinterlands Holdings Limited

  C.O.I Secretariat Register 2 Lands Department file material

  C.O.I Secretariat Register 4 Statutory Declaration Kathy Asiri 29/08/11 Register 7 COI Submission Manu Kala (DLPP) 08/08/11 C.O.I Secretariat 9 COI Submission PNGFA 21/08/11 C.O.I Secretariat 10 COI Submission DEC 06/09/11

• Page 4 of 186

• Register 6 COI Submission Albright Limited (Saulep Lawyers) 19/11/11 MHHL 1 3 COI Submission Uda Mekeo Farmers? Cooperative Society (Roger Kipo, Chairman) 29/08/11 MHHL 2 4 Instrument of Lease -Lease Back Agreement Mr Kipo 20/12/11 MHHL 2 (Kipo)

  Affidavit of Roger Kipo dated 19/12/11 Uda Mekeo Farmers? Cooperative Society (Roger Kipo, Chairman 20/12/11 MHHL 3

  Set of Documents to C.O.I by R.Kipo (Letter dated 10/8/11) Roger Kipo documents and submission 20/12/11 MHHL 4 5 COI Submission Gongopu Clan (Joseph Managabi) 20/12/11 MHHL 5 8 COI Submission Mathew Poia 06/01/12 MHHL 6

  (Chairman, MHHL)

  9 ILG Consent Mathew Poia 06/01/12 MHHL 7 10 Bound Set of Documents Under Cover Manu & Associates dated 2 July 2008

• Page 5 of 186

• Mathew Poiya 06/01/12 MHHL 8 11 Letter Inviting Developer CP SAWIT to MHHL Project dated 30/11/11 Mr Ivan Pomaleu, IPA 01/02/12 MHHL 9

  3.6. Mekeo Hinterlands Limited SABL

  3.6.1. It was noted by the COI that in light of court proceedings matter OS (JR) 400 of 2009, that the lease title has been surrendered to DLPP by MHHL on a Lands Department lease surrender form dated 1st October 2010.

  3.6.2. It was also noted by the COI that subsequently an order of the National Court dated 21st December 2010, ordered the SABL held in the name of Mekeo Hinterlands Holdings Ltd. null and void, “ab initio”.

  3.6.3. On 22nd November 2007 a Notice of Direct Grant was issued by the Secretary, Department of Lands and Physical Planning. under Section 102 of the Land Act and gazetted in the National Gazette No. G182. SABL title on Volume 31 Folio 249 dated 20th November 2007 and registered 11th December 2007 was issued by the Department of Lands and Physical Planning. The Lease covering a land area of 116,400 hectares was for a period of 99 years commencing on 21/11/2007 and expiring on 21/11/2106. The details of the SABL is shown below:

  Legal description 45C Omeri, Central Province Registered Survey Plan catalogue no. 42/381 SABL Holder Mekeo Hinterlands Holdings Limited Date of Registration of lease 11/12/2007 Period of Lease 99 years Land area of lease 116,400 hectares

  3.7 Timeline of events of note surrounding Mekeo Hinterlands Ltd. SABL Title

  3.7.1 The timeline showing important events concerning the SABL is shown below in chronological order of their happening:

  No Milestone Dated of Completion/Grant/I ssue Execution Proponent/Appli cant Respondent Entity/Respondent

• Page 6 of 186

• 1 Incorporation of MHHL 07/08/06 Peter AI, Chris Aia, Leo Ambrose, Leo Ameua, Charles Eueki,John Kala,Mathew Poia,Andrew Rudaka,Michael Uaiz. IPA 2 Execution of MOA between MHHL and CP Sawit Ltd. 08/08/06 MHHL and CP Sawit Ltd. MHHL and CP Sawit Ltd. 3 Integrated Plantation Development Plan Dec. 2006 CP Sawit Ltd. MHHL, CPG, DAL, NEC 4 NEC Policy submission for Mekeo Hinterland Integrated 10/05/2007 Minister for Agriculture and

  5 Land Investigation Report (LIR) Unsigned and undated MHHL/Landgrou ps MHHL/DLPP 6 Signing of Lease/leaseback Agreement 161/61t1h /N20o0v7ember 2007 MHHL/DLPP DLPP 7 Gazettal of Section 102 notice in National Gazette 30 November 2007 MHHL/DLPP DLPP 8 Issue and registration 30/11/2007 DLPP MHHL

  of SABL title to MHHL

  9 Sub-lease agreement between MHHL and Albright Ltd 5th May 2008

• Page 7 of 186

• MHHL Albright Limited 10 Public Review of EIS Public Hearing DAL

  11 IPA certificate permitting Albright Ltd. a foreign entity to conduct business in PNG 7th October 2008 Albright Limited Albright Limited 12 Certificate of Compliance for large scale conversion of forest to Agriculture use

  14 Issue of Environment Permit to discharge waste WD-L3(201) for 25 years. 30 January 2009 Albright Limited Albright Limited 15 Issue of Forest Clearing Authority (FCA) No. 03-01 for 15 years 21st July 2009 (lack of evidence on the project development and schedule for implementation Albright Limited Albright Limited 16 National Court Order declaring SABL title held by MHHL to be null and void “ab inito 2nd December 2010 (by consent) ILGs of Mekeo Hinterland Holdings Limited Albright Limited (Sub-lessee) 17 Voluntary surrender of SABL Title to be cancelled by DLPP (Mr Poiya?s Sworn Statement to C.O.I) 05th October 2010 MHHL MHHL

  FINDINGS

  The findings below follow the chronology of table of notable events above surrounding the SABL lease title held by Mekeo HinterlandHoldings Ltd.

  3.8. IPA

  3.8.1 The Investment Promotion Authority (IPA) is a statutory organization, established by an Act

• Page 8 of 186

• of Parliament in 1992, to promote and facilitate investment in Papua New Guinea. The IPA does this through various programs including the establishment and maintenance of a company/business registry, certification of foreign enterprise and promotion of investment opportunities in PNG.

  Findings

  3.8.2 Mekeo Hinterlands Ltd. is a limited liability company registered in the Register of Companies of the Investment Promotion Authority of PNG under the Companies Act 1997. Incorporation of the company occurred on 7th August 2006. (IPA company incorporation Exhibit). At the time of incorporation it was found that the company had nine shareholders, nine directors and one secretary.

  3.8.3 The nine shareholders holding ten shares each in their individual capacities and names were Peter Ai, Chris Aia, Leo Ambrose, Leo Ameua, Charles Eueki, John Kala, Mathew Poia, Andrew Rudaka and Michael Uaiz. These nine shareholders were also the Directors of the company. The company secretary was Chris Aia.

  3.8.4. It is noted that the shares were not held in trust for any clan or ILG as would be the case with a landowners company. It is further noted that the 19 ILG representatives who signed the land for Lease/leaseback with the State cannot be conclusively taken to be absolute owners of the entire 116,400 hectare of land under the SABL because of the absence of a LIF

  report determining ownership by custom by all other interested parties in the land.

  3.8.5 Because the shares are not held in trust for any clan or ILG it is safe to assume that MHHL is not a landowner company within the meaning of a SABL processed title, but is a purely privately owned enterprise.

  3.8.6. It is noted that a MOA for the agro-forestry project was executed between MHHL and a Malaysian company CP Sawit Ltd on 8th May 2006 which was the day after the MHHLs incorporation. From this it can be safely assumed that MHHL was simply a vehicle to facilitate the proposed agro- forestry project.

  Recommendation

  3..8.7 That in the absence of a LIR evidencing authorization for individuals to represent them on Mekeo Hinterlands Holdings Ltd., and by virtue of the shares being held privately by individuals in that company that the SABL title is not held on trust by agents for all customary landowners. The so named shareholders be instructed to obtain evidence of their being authorized to hold the shares in their individual capacities on behalf of the customary landowners.

  3.9. DEPARTMENT OF AGRICULTURE AND LIVESTOCK

  3.9.1 The National Department of Agriculture &Livestock stated role is to formulate and provide appropriate policy and technical advise, and to monitor and evaluate the implementation of the national agricultural programmes. In doing so, to achieve the national agricultural goal of

• Page 9 of 186

• improved productivity and sustainability of food and export crops and livestock, for greater food security and income for an increased national standard of living.

  3.9.2. The Department?s origin can be traced back to the then Department of Agriculture, Stock and Fisheries (DASF) under the colonial administration of the External territories before 1975. The first name change of the department from DASF to the Department of Primary Industries (DPI) was after 1975, which included the Fisheries and Forestry portfolios as well. A separate Department of the Agriculture and Livestock (DAL) was created in 1989 because of the separation of the Fisheries and forestry portfolios.

  3.9.3 With growth in sub sectors in the mid-1980s and the subsequent policy changes, the department introduced corporatisation and privatisation programs for those activities that were commercial viable. This saw the formation of: Coffee Industry Corporation (CIC), Cocoa and Coconut Extension Agency (CCEA), Copra Marketing Board (CMB), Oil Palm Industry Corporation (OPIC), National Agriculture Research Institute (NARI) and National Agriculture and Quarantine Inspection Authority (NAQIA). Thus, DAL now is left the primary role for policy formulation and coordination, development planning, and the Compliance Monitoring and Evaluation of policy implementation.

  3.9.4 Under the new legislation in the Forestry Amendment Act 2007, the Department of Agriculture and Livestock has the role of effecting a Certificate of Compliance leading up to the approval of a Forest Clearance Authority (FCA) for large scale conversion of Forest land to Agriculture or other Land Use. The Certificate of compliance is issued

  following compliance by the Developer/Operator to four main requirements furnished to DAL. These are a Sound Agriculture Project Proposal, Land Capability and Land Suitability Assessment Report, Land Use Development Plan and Project Implementation Schedule and a Public Hearing.

  3.9.5 It is found in the evidence before the Inquiry that much of the early work regarding the then Uda Mekeo Resources Project before it became the Mekeo Hinterlands Agroforestry Project was prepared by Department of Agriculture and Livestock (DAL) which also in the course of time provided procedural approvals for the project.

  3.9.6. It was found that a NEC submission for Mekeo Hinterland Integrated Agroforest project file no. 44-1-20(2) dated 10th May 2007 was jointly signed and submitted to NEC by The Minister for Agriculture and Livestock Hon. Sasa Zibe and Minister for Lands, Hon Puka Temu. It was noted on the evidence provided by Manu and Associates lawyers to the Inquiry that NEC approved the submission in Decision No. 190/2007 dated 27 June 2007 and directed all relevant line Departments and Agencies to help facilitate appropriate licenses and permits to CP Sawit Ltd. the developer and associated landowner groups and to immediately commence implementation of the project.

  3.9.7 A Certificate of Compliance from DAL dated 7th November 2008 was issued to the Developer Albright Ltd. Following this a Forest Clearance Authority (FCA) permit was issued by PNGFA dated 26th June 2009 to Albright Ltd. The issue of a Forest Clearance Authority (FCA) lies in the PNGFA subject to the approvals sought in the DAL submissions, the

  issue by DAL of a Certificate of Compliance and approval of an EIS by DEC.

  Recommendation

• Page 10 of 186

• 3.9.8 That the Secretary Mr Anton Benjamin and Mr Leka Mou of DAL be further investigated to explain why Uda Mekeo Resources Project changed design and scope to be known as the Mekeo Hinterland Agro- forestry project.

  3.9.9. That the Secretary Mr Anton Benjamin and Mr Leka Mou be instructed to explain the use of NADP funds of K3.4million earmarked for the Uda Mekeo Resources Project.

  3.10. PNG FOREST AUTHORITY

  3.10.1 The Forestry file was brought to the Inquiry as requested and presented on 24th August 2011. The file contained 13 documents, eight (8) originated from the PNGFA files submitted to C.O.I and two (2) were from DLPP and three (3) documents came from DAL.

  3.10.2 The Forestry material sighted was PNGFA Southern Region report for 2011 which contained information pertaining to the performance of Forest Clearance Authority holders in the Southern region of the country. Of interest was information on a table in the report showing that Mekeo Hinterland Integrated Agriculture Project being halted due to court injunction due to land disputes.

  3.10.3 There was also sighted a minute from the Manager Finance to the Revenue Accountant dated 29th July 2009 advising that a bank guarantee had been lodged by Albright Ltd. in relation to the recently issued FCA 03-01. Also sighted was a letter of support from the Goilala Member Hon. Mathew Poia dated 2nd May 2008, Certificate of Incorporation of Albright Ltd., Certificate of Registration as a Forestry Industry Participant of Albright Ltd., Deed of undertaking signed between MHHL and Albright Ltd. dated 5th May 2008, FCA permit no. FCA-03-01 issued to Albright Ltd. dated 26th June 2009 and PNGFA board meeting minutes dated 9th July 2009 granting FCA permit to Albright Ltd.

  3.10.4 The DLPP material on the Forestry file was a copy of the SABL title held by MHHL and copy of the sub-lease agreement between Albright Ltd. and MHHL.

  3.10.5 DAL material held on the Forestry file included a letter dated 4th July 2008 from the Secretary for DAL Mr Anton Benjamin to the Member for Goilala advising the member on the progress of the NEC submission. Also sighted was a letter dated 20th June 2008 from the Secretary to Managing Director of PNGFA Mr Kanawi Pouru advising compliance by the Agroforestry project and that Albright Ltd. should be granted FCA permit. There were also minutes of a public hearing that had been conducted at Adio village, Kubuna on 27th September 2008.

  3.10.6 The COI found no irregularities in the issuance of the permit for FCA by PNGFA.

  3.11 DEPARTMENT OF CENTRAL PROVINCE

  3.11.1. The Department of Central Province is the bureaucratic arm of the Central Provincial Government whose primary role is to facilitate government policies and directives through the work of its divisions of which the Lands Division is an important one.

  Findings

  3.11.2There was no evidence of a formal Land Investigation Report (LIR) having been conducted by

• Page 11 of 186

• the Lands Division of the Department of Central Province (DCP) to verify the huge 116,400 hectares of land being alienated for MHHLs SABL.

  3.11.3. On the CP Sawit Ltd. Integrated Plantation Development Plan of December 2008 there is a Central Provincial Government PEC attachment for meeting no. 23/04 citing “Uda Mekeo Agroforest Development Project”. This PEC document appears to the first official recognition of the project.

  3.11.4. In the evidence of Lieutenant Colonel (Retired) Roger Kipo representing Uda Mekeo Farmers Cooperative Society he presents that there was an entity provided by CPG for the project in 2004. The company was Uda Mekeo Development Corporation Pty Ltd. however in not being supported by CPG it has become `defunct?.

  3.11.5. He further states that following PECs endorsement of the Uda Mekeo Agroforest Development Project funding of K3.4million kina was applied for under a Public Investment Program (PIP) and appropriated under the National Agriculture Development Plan (NADP) in 2008. He states that at this time the project changed from Uda Mekeo Agroforest

  project to the Mekeo Hinterland Agro Forest Project and the funds have been used by Mekeo Hinterlands Holdings Ltd. (MHHL).

  3.11.6. There is also evidence on DEC file of a CPG PEC decision no. 16/05 approving funding of K18, 600 for the purposes of conducting a feasibility study for the Uda Mekeo Project.

  3.11.7 In the Lands Department file a submission by Mr Manu Kala, Manager for Projects to the COI dated 1st November 2011 discloses that four CPG officers were part of the team that set out to conduct a Land Investigation Report (LIR) for Mekeo Hinterlands Agro Forest Project. The CPG officers and their designation is provided below.

  Officer Designation Gulu Raga Customary Lands Officer Moses Kila Provincial Valuer Kila Bai Technical officer Author Unage Cartographer

  3.11.8 In the evidence of Albright submitted by their lawyer, Saulep Lawyers, a copy of an incomplete LIR was attached. The incomplete LIR showed names of individuals from only one village, Ibi village, from which the MHHL chairman comes. Of interest is the number of years agreed for by the villagers for alienation of their land, which was stated at 40 years duration. This was not followed in the SABL grant which showed 99 years. This incomplete LIR did not show a certificate in relation to boundary being signed or a recommendation as to alienability.

  3.11.9 The evidence of Mr Manu Kala states that “Land Investigation reports (LIR) of the Mekeo Hinterlands Project was conducted in each village visited. Eight villages were visited. These were

• Page 12 of 186

• Velei 1, Velei 2, Mariboi

  1, Mariboi 2, Mariboi 3, Imounga, Ioi and Maipa. He states that the LIRs were taken by Gulu Raga for endorsement by the Provincial Administrator before returning them to DLPP.

  3.11.10. On file is a letter dated 12 November 2007 signed by the Minister for Lands and Physical Planning Hon. Puka Temu to the DCP Administrator Mr Yibmaramba requesting that in light of the Lease/leaseback signing happening four days later on 16th November 2007, that the LIR be endorsed and returned immediately to DLPP.

  3.11.11 As noted earlier the LIR deals with processes leading up to the alienation of customary land after a Land Investigation Number has been issued by DLPP and the LIR has been conducted.

  3.11.12 The COI finds this as a direct and flagrant violation of due process where three important steps in the land alienation process was breached. Firstly, there was no Land Investigation Report (LIR) conducted. As highlighted earlier, the LIR is critical to determining the rightful landowners of the subject land and obtaining landowners approval for the land to be utilized for the planned project and the set number of years decided on. Also the LIR would ascertain ownership as to custom by both owners of the subject land and owners of adjacent land. The LIR would also lead to the appointment of agents by the people to act on their behalf, the agents signing Lease/leaseback documents and holding shares in the SABL holding company on behalf of clan members.

  3.11.13 Secondly, there was no recommendation as to alienability of the subject land for SABL purposes as would normally suffice if a LIR had been conducted. The recommendation as to alienability would have been

  signed by the Provincial Administrator after perusing the LIR and ascertaining that there was absence of Land dispute over the subject land. In this case it was found that the Provincial Administrator did not execute a Recommendation as to Alienation instrument.

  3.11.14 Thirdly, the recommendation as to alienability would be taken with the LIR to office of the Secretary for Provincial Affairs and Local Level Government for registration. Following registration, the Provincial Affairs Secretary as custodian of Customary Land would issue a Certificate of Alienation over the subject land which is then passed on to Department of Lands for the Lands Department to action a few more processes leading up to issuance of the SABL. It is seen from the evidence before the COI that this was not done.

  Recommendation

  3.11.15. That because of the failure to comply with procedures leading to the issue of the SABL the SABL should be revoked. That a fresh LIR be conducted by the Department of Central Province with the walking of the boundaries and certification as to ownership by custom. That only after the LIR has been completed, agent agreement signed, recommendation as to alienation instrument signed, certificate of alienation issued, Lease/lease back agreement signed can further actions be taken under the procedures to process a SABL.

  3.11.16. That Mr Gulu Raga be charged and disciplined for failing to comply with lawful direction to provide copies of the LIR to the Inquiry, thereby prolonging inquiry into the matter. That Mr Cliff Boutau, Manase Rapilla and Raphael Yibmaramba be reminded as to their respective roles

• Page 13 of 186

• regarding SABLs and to be re-educated and reinforced as necessary regarding proper conduct of LIRs.

  3.12 DEPARTMENT OF PROVINCIAL AFFAIRS AND LOCAL LEVEL GOVERNMENT

  3.12.1 It was found that the Department of Provincial Affairs and Local Level Government was omitted from processing of the Mekeo Hinterland Holdings Ltd. SABL through the failure of DCP to present LIR and Recommendation as to Alienation so that it could process the issuance of a Certificate of Alienation.

  Recommendation

  3.12.2 That the Department of Provincial Affairs and Local Level Government be encouraged to submit as a matter of urgency for the amendment of the relevant laws to ensure the integrity of the office of the Custodian of Customary Lands in so far as issuance of Certificate of alienability covering all customary lands in Papua New Guinea is concerned.

  3.13. DEPARTMENT OF LANDS AND PHYSICAL PLANNING

  3.13.1 The DLLP was found to be the lead agency out of other government agencies in producing the SABL for the Mekeo Hinterlands Agroforestry project. The COI in its inquiry found gross irregularities and breaches in DLLP complying with the set SABL procedures. At the outset the Officers of the Department of Lands and Physical Planning failed to consult the Provincial Lands Office at the Department of Central by

  issuing the Land Investigation Number authorizing the Provincial Lands Office to undertake land investigation.

  3.13.2 Because of this anomaly, there was incomplete or total omission of the conduct of a Land Investigation Report (LIR). There was none sighted on DLPP file. There was a Lease/leaseback Agreement on file that was executed by 19 ILG representatives and the State through Minister for Lands dated 16th November 2007. There was also a gazettal in the National Gazette of Section 102 Notice of Direct Grant to MHHL dated 22nd November 2007. Thecopy of the SABL were also sighted. No other documents relevant to the SABL process were sighted.

  3.13.3 Critical evidence as to landowner participation and involvement in the LIR, Certification as to ownership by custom, Recommendation as to Alienability instrument executed by the Provincial Administrator and Certificate of Alienation instrument signed by the Secretary of Provincial Affairs as the Custodian of Customary Lands, was not evident on file (or on any of the other files tendered by other COI witnesses).

  3.13.4 The evidence of Mr Manu Kala as mentioned earlier states that “Land Investigation Reports (LIR) of the Mekeo Hinterlands Project were conducted in eight villages these being Velei 1, Velei 2, Mariboi 1, Mariboi 2, Mariboi 3, Imounga, Ioi and Maipa. He states that the LIRs were taken by Gulu Raga for endorsement by the Provincial Administrator before returning them to DLPP.

  3.13.5 On file is a letter dated 12 November 2007 signed by the Minister for Lands and Physical Planning Hon. Puka Temu to the DCP Administrator Mr Yibmaramba requesting that in light of the Lease-Leaseback signing

• Page 14 of 186

• happening four days later on 16th November 2007, that the LIR be endorsed and returned immediately to DLPP.

  3.13.6 This is found to be a direct and flagrant violation of due process where three important steps in the land alienation process we find have been breached.

  (1) Firstly, there was no Land Investigation Report (LIR) conducted. As highlighted earlier, the LIR is critical to determining the rightful landowners of the subject land and obtaining landowners approval for the land to be utilized for the planned project and the set number of years decided on. Also the LIR would ascertain ownership as to custom by both owners of the subject land and owners of adjacent land. The LIR would also lead to the appointment of agents by the people to act on their behalf, the agents signing Lease/leaseback documents and holding shares in the SABL holding company on behalf of clan members.

  (2) Secondly, there was no Recommendation as to Alienability of the subject land for SABL purposes as would normally suffice if a land investigation had been conducted. The Recommendation as to Alienability would have been signed by the Provincial Administrator after perusing the LIR and ascertaining that there was absence of Land dispute over the subject land. In this case it was found that the Provincial Administrator did not execute a Recommendation as to Alienation instrument; and

  (3) Thirdly, the Recommendation as to Alienability would be taken with the LIR to office of the Secretary for Provincial Affairs and

  Local Level Government for registration. Following registration, the Provincial Affairs Secretary as custodian of Customary Land would issue a Certificate of Alienation over the subject land which is then passed on to Department of Lands for the Lands Department to action a few more processes leading up to issuance of the SABL. It is seen from the evidence before the COI that this was not done.

  3.13.7. It has been noted in the evidence of Saulep Lawyers that a voluntary surrender of the title was made effective by DLPP dated 1st October 2010 on its Surrender of State Lease Form.

  Recommendation

  3.13.8 The C.O.I recommends since the SABL Lease has been surrendered to the State, that Mekeo Hinterland Holdings Limited renew their application consistent with the SABL process including transparency in the mobilization of the land through formal registration of the ILG process.

  3.13.9 The customary land area recognised as suitable for a large scale agro- forest development should be approved by DAL and that the Developer we recommend should have the financial resources and capabilities to develop large scale agriculture commercial crops should not be a logging company in this instance, Albright Limited.

  3.14 DEPARTMENT OF ENVIRONMENT AND CONSERVATION

  3.14.1 A file was submitted to COI from DEC concerning the Mekeo Hinterlands Holdings Ltd. (YRL) application for Environment permits.

• Page 15 of 186

• 3.14.2 The table below shows the correspondences entered into between DEC and MHHL leading up to issue of the permits.

  No Date Author Sent to Subject of Correspondence 1 09/05/2008 Chairman MHHL A/Dep Secretary DEC (Mr Kelly Gawi) Inquire on approval of their EIR 2 21/05/2008 Chairman (MHHL) Director of Env. (Mr Kelly Gawi) Submission of EIS 3 04/06/2008 Chairman (MHHL) Acting Secretary DEC (Mr Kelly Gawi) Acceptance of EIS for assessment 4 17/06/2008 Secretary DEC (Dr Wari Iamo) A/Dep Secretary DEC (Mr Kelly Gawi) Public review of EIS 5 02/06/2008 Andrew Rudaka Secretary DEC Ombudsman Commission investigation into Chairman MHHL 6 20/08/2008 Secretary DEC (Dr. Wari Iamo) Chairman MHHL Environment permit approval pending 7 15/09/2008 A/Secretary (Kelly Gawi) Chairman MHHL Rejection of EIS due to non- authenticity of report 8 24/10/2008 Chairman (MHHL) Chairman Environment Council of PNG Inclusion of bio-data information and response on authenticity of report 9

• Page 16 of 186

• 07/10/2008 Director of Env. (Dr. Wari Iamo) Chairman MHHL Acceptance of amended EIS 10 10/11/2008 Secretary DEC (Dr. Wari Iamo) Chairman MHHL Rejection of EIS due to non- authenticity of report 11 17/11/2008 DEC MHHL Issue of Environment Permit to extract water WE-L3(155) for 25 years. 12 17/11/2008 DEC MHHL Issue of Environment Permit to discharge waste WD- L3(201) for 25 yrs. 13 05/08/2009 Joe Katape MHHL baseline data submission by MHHL

  4. COI Inquiry File No. 38 for Special Purpose Agricultural and Business Lease over Portion 409C Volume 32 Folio 171 Milinch: Epo, Kairuku, Central Province in the name of Abeda Agro Forests Limited.

  4.1 In accordance with the powers given to the Commissioners pursuant to section 7 of the Act, the Commissioners have summoned numerous witnesses to produce documents and be further examined on oath or affirmation.

  4.2 Witnesses were called from the six government agencies involved in the issuance of the SABL. These were:

  4.1.1 The Department of Central Province, (DCP) 4.1.2 The Department of Lands and Physical Planning, (DLPP) 4.1.3 The Department of Provincial Affairs and Local Level Government, (DPALLG) 4.1.4 The Department of Environment and Conservation, (DEC) 4.1.4 Department of Agriculture and Livestock (DAL) 4.1.5 PNG Forestry Authority (PNGFA) 4.1.6 Investment Promotion Authority (IPA)

  Witnesses and Summonses

  4.3 The names of the persons who have been summoned to appear and who have in fact appeared in the public hearings (in alphabetical order), including titles, are set out in the schedule below. For

• Page 17 of 186

• ease of reference, the schedule also lists the transcript pages at which the person commenced giving evidence against the name of the witness.

  No. Name and Position Pages Transcript of Proceedings 1 Mr Joseph Fanau, Landowner & Director of AAFL 58-70 21/12/12-SABL 66 MIROU 2 Mr Andrew Manau Landowner & Chairman, AAFL 71-78 21/12/12-SABL 66 MIROU 3 Mr LAU SIEKON Managing Director, Albright Limited 5-19 21/12/12-SABL 66 MIROU 4 BOUTAU, CLIFF Special Project Officer, DCP 48-57 21/12/12-SABL 66 MIROU 5 RAGA, GULU Senior Lands Officer, DCP 32-48 21/12/12-SABL 66 MIROU 6 Dr HOSEA GEDION, PROFESSOR, UPNG and former Environment Council Member 24-31 21/12/12-SABL 66 MIROU 7 YIPMARAMBA, RAPHAEL (Provincial Administrator, DCP) 3-8 Thursday, 27 October 2011

  4.4. Parties represented by counsel

  4.4.1 Section 8 of the Act relates to the appearance of counsel before the Commission on behalf of interested parties. It provides that: “Subject to Section 2(5), a person who satisfies the Commission that he has a bona fide interest in the subject matter of an inquiry under this Act, and any other

• Page 18 of 186

• person by leave of the Commission, may attend the inquiry in person or may be represented by counsel.”

  4.4.2 The following were granted leave to be represented by counsel.

  Party Counsel Albright Ltd Saulep Lawyers

  4.5 Exhibits and documents

  4.5.1. There were (14)fourteen documents tendered as evidence before the Commission at the public hearings. A list of the Exhibits is shown below.

  No Item Interested Party Date received Exhibit Number 1. IPA records concerning Abeda Agro Forests Limited IPA Not sighted C.O.I Secretariat Register 2 DEC file material DEC Not sighted C.O.I Secretariat Register 3 COI Submission Joseph Fanau, Deputy Chairman Abeda Agroforest Ltd. 23/09/11 C.O.I Secretariat Register 4 Statutory Declaration Peter Manene Abeda Agroforest Ltd. 27/10/11 C.O.I Secretariat Register 5 COI Submission PNGFA 10/09/11 C.O.I Secretariat Register 6

• Page 19 of 186

• COI Submission Albright Ltd. 13/09/11 C.O.I Secretariat Register 7 COI Submission Saulep Lawyers 21/09/11 C.O.I Secretariat Register 8 COI Submission Saulep Lawyers 12/12/11 C.O.I Secretariat Register 9 COI Submission DLPP

  C.O.I Secretariat Register 10 COI Submission Daniel Katakumb 13/12/2011 C.O.I Secretariat Register 11 COI Submission Andrew Manau 20/12/11 C.O.I Secretariat Register 12 COI Submission Joseph Fanau 20/12/11 C.O.I Secretariat Register 13 COI Submission Peter Manene 20/12/11 C.O.I Secretariat Register 14 COI Submission Joe Waede 20/12/11 C.O.I Secretariat Register

  Albright Documents on Part C.O.I 21/12/11 AAFL 1

• Page 20 of 186

• of the Sub-lease Agreement and additional information

  Logging and Marketing Agreement C.O.I 21/12/11 AAFL 2

  Information on Financial Assistance to Landowner in Particular Clause 4.2, 6.1 and 6.2 of the Sub- lease Agreement. C.O.I 21/12/11 AAFL 3

  Authorization for Log Pond from PNG Forest Authority C.O.I 21/12/11 AAFL4

  Land Suitability Assessment for Integrated Development Project in AAFL (Albright Limited) C.O.I 21/12/11 AAFL5

  Submission on Waste Management Plan submitted by AAFL to DEC C.O.I 21/12/11 AAFL6

  Bundle of Documents Relating to FCA and Agriculture Development Plan 2010-2014 C.O.I 21/12/11 AAFL7

  Forest Participant Certificate issued by PNGFA to Albright Limited dated 21/6/06 C.O.I 21/12/11 AAFL8

  Original Document of National Forest Service FCA03-02 Abeda Integrated Agro-forest Authority C.O.I 21/12/11 AAFL9

  Land Investigation Report C.O.I 21/12/11 AAFL10

• Page 21 of 186

• Agreement between Albright Limited and AAFL signed on 1 May 2008 C.O.I 21/12/11 AAFL11

  IPA Extract for AAFL dated 30/8/11 C.O.I 21/12/11 AAFL12

  Letter by Mathew Poiya MP in support of Abeda Agro-Forest Integrated Forest Development C.O.I 21/12/11 AAFL13

  Minutes of Meeting Environment Council EC 09 dated 10 December 2009 C.O.I 21/12/11 AAFL14

  IPA letter-Extract for AAFL 15/11/11 C.O.I 21/12/11 AAFL15

  Response by Mr Joseph Fanau to C.O.I Summons C.O.I 21/12/11 AAFL16

  Response by Mr Joseph Waede to C.O.I Summons C.O.I 21/12/11 AAFL17

  Response by Mr Andrew Manau to C.O.I Summons C.O.I 21/12/11 AAFL18

  Response by Mr Peter Manene to C.O.I Summons C.O.I 21/12/11 AAFL19

• Page 22 of 186

• Letter to Central Provincial Administration from AAFL dated 7/7/08 C.O.I 21/12/11 AAFL20

  Logging and Marketing Agreement between AAFL and Albright Limited 22/09/08 C.O.I 21/12/11 AAFL 21

  Land Investigation Report for Portion 29C (Sama Kuma Clan) C.O.I 22/12/11 AAFL 21

  4.6. Location

  4.6.1 The subject land is situated north-west of Kubuna Catholic Mission Station along the Tapini Road and east of Bereina Government Station. The land is bounded by Angabanga River on the northern end and the Kubuna Road on the Southern end. It is generally east of Bereina Government Station of Kairuku District in the Central Province. Most of the land in the Central and Northern area is covered with dense forest.

  4.7. Abeda Agro Forests Limited SABL

  4.7.1 On 1st September 2008 a Notice of Direct Grant was issued by the Secretary DLPP under Section 102 of the Land Act was gazetted in the National Gazette no. G152. SABL title on Volume 32 Folio 171 dated 5thSeptember 2008 and registered 11th September 2008 was issued by the Department of Lands and Physical Planning. The Lease covering a land area of 11,700 hectares was for a period of 99 years commencing on 25/07/2008 and expiring 24/07/2107.

  4.7.2. The detail of the SABL is shown below:

  Legal description Portion 409C, EPO & Kairuku, Central Province Registered Survey Plan Catalogue No. 42/382 SABL Holder Abeda Agro Forest Limited Date of Registration of lease 11th September 2008 Period of Lease 99 years Land area of lease 11,700 hectares

• Page 23 of 186

• 4.8. Timeline of events of note surrounding Abeda Agro Forests Ltd. SABL Title

  4.8.1 The timeline showing important events concerning the SABL is shown below in chronological order of their happening

  No Milestone Date of Completion/Grant Execution/Issue Proponent/ Applicant Responsible Entity/ Respondent 1 Incorporation of AAFL 30 April 2008 Shareholders/Directors of AAFL IPA/Albright Limited 2 Incorporation of Albright Limited 06 April 2006 Shareholders/Directors of Albright Limited IPA/Albright Limited 3 Land Investigation Report 25 July 2008 AAFL/DLPP AAFL/DLPP

  Certificate of Alienability (by Cliff Boutau, Deputy Provincial Administrator) Undated AAFL/DLPP AAFL/DLPP 4 Gazettal Notice of SABL Portion 409C to AAFL 05 September 2008 AAFL AAFL/DLPP 5 Land Title Copy of SABL Lease 05 September 2008 AAFL AAFL/DLPP 6 Agriculture Sub-Lease Agreement 22 September 2008 AAFL/Albright Limited AAFL/Albright Limited 7 Notice of Preparatory Works 29 July 2009 Albright Limited DEC

• Page 24 of 186

• 8 Notice to Undertake Environment Impact Assessment 17 August 2009 Albright Limited DEC 9 Environment Inception Report (EIR) 30 April 2009

  Approved by DEC on 06/10/2009

  10 Environment Impact Statement (EIS) 21 May 2009 Albright Limited DEC 11 Public Review 20 October 2009 Albright DAL/DEC/PNGFA

  of EIS to various Stakeholders by DAL and acceptance of EIS

  Limited/Stakeholders

  12 Minutes of EIS public hearing at Kubuna, CP 10 November 2009 Albright Limited DEC/Stakeholders 13 Minutes of Environment Council Meeting No. 15/2009 (EC09/2009) 10 November 2009 Albright Limited DEC 14 Ministers Approval In Principle 23 December 2009 Albright Limited DEC 15 Application for Environment Permit 18 January 2010 Albright Limited DEC 16 Environment Permit (25 years) 22 January 2010

• Page 25 of 186

• Albright Limited DEC 17 Waste 10 February 2010 Albright Limited DEC

  Management

  Plan

  Approval 19/02/10

  18 DAL Certificate of Compliance for large scale agro-forest conversion of forest to agriculture 10 December 2009 Albright Limited DEC 19 PNG FA Public Hearing report (overwhelming support for project) 12 April 2008 Albright Limited DEC 20 FCA Approved 27 July 2010 Albright/AAFL Albright/AAFL/PNGFA

  FINDINGS 4.8.2 The findings below follow the chronology of table of notable events above surrounding the SABL lease title held by Abeda Agro Forests Ltd.

  4.9. IPA 4.9.1 The Investment Promotion Authority (IPA) is a statutory organization, established by an Act of Parliament in 1992, to promote and facilitate investment in Papua New Guinea. The IPA does this through various programs including the establishment and maintenance of a company/business registry, certification of foreign enterprise and promotion of investment opportunities in PNG.

  4.10. Abeda Agro Forest Limited

• Page 26 of 186

• 4.10.1. The IPA file contains just the current extract of Abeda Agro Forest Limited (AAFL) dated 02 August 2011. AAFL.is a limited liability company registered in the Register of Companies of the Investment Promotion Authority of PNG under the Companies Act 1997. The information on the extract shows that AAFL was incorporated on 30 April 2008 having its registered office at Section 225 Allotment 10 Kunai Street Hohola National Capital District. Also on file is a copy of a Certificate of Incorporation dated the 06th of April 2000 Company Registration no. 1-63262 of AAFL.

  4.10.2 The C.O.I evidently confirmed with Mr Fanau (Directors of AAFL who gave evidence) on the current status of the company, that it was de- registered on 20 April 2010, basically for failure to file annual returns as required under the Companies Act. That means that company has no legal status to enter into any agreement for an on behalf of the company. Therefore any action or decision it has made as a company since 20 April 2010 has no legal effect and is null and void. It would merely have a domino effect on all the decisions it made with Albright Limited over the SABL lease.

  4.10.3 A total number of five shares have issued so far equally divided between Directors /shareholders named as follows; Joseph Fanau of Dua village, Julian Inau of Dua village, Andrew Manau of Foio village, Joe Waede of Mone village, Brendan Waide of Aumala village .

  4.10.4. No annual returns have never has been filed since the companies registration.

  4.10.5. On the face of the information on the current extract the Shareholders/Directors of AAFL hold such a position not in trust for and on behalf of their ILG?s groups or Landowner clans but the fact that they hold such position in their personal capacities.

  4.10.6 The C.O.I finds that AAFL is not a Landowner umbrella Company as shares are not held in Trust for landowner clans but are instead held in company names.

  AAFL Capacity to keep custody of Company documents

  4.10.7 It also became evident to the C.O.I that landowner company executives and especially the Secretary was not exercising full control as the custodian of records of the Company. The evidence we elicited from Mr Lau, current MD for Albright was that all the documents relating to the Lease- Lease SABL title, the Agriculture Sub-lease Agreement, the DEC approvals were not in the possession of the Company, but with a Mr Dominc Woo, who was acting as Consultant to Albright.

  4.10.8 It also became evident during the evidence of the three (3) landowner executives of AAFL that the ILG registrations were completed

  and passed on to Mr Woo who organised the ILG Certificates. In addition, the Agriculture Sub- lease Agreement signed between AAFL Executives and Mr Woo at his place of work (Waigani Village Premises Unit 9) was done without any opportunity given to the landowners to consult a lawyer or their landgroups on an important agreement that will lead to Albright taking ownership of the land through the sub-lease agreement. (Refer to the evidence of Messrs Joseph Fanau and Peter Manene)

  Recommendation

• Page 27 of 186

• 4.10.9 The Company is required to restructure its shareholding and directorship to reflect the number of ILGs represented in AAFL as an umbrella landowner company. Any resolutions concerning the project and decisions will require the assent of the appointed ILG Chairman of each ILG represented in the company.

  4.10.10 The company must comply with Company requirements to submit annual returns and ensure that it is re-registered.

  4.10.11. Albright through its agents Mr Dominic Woo must return all the ILG Certificates and SABL Title to AAFL forthwith.

  4.10.12. The Company must ensure that the Secretary is fully aware of his duties and responsibilities as required under the Company Act to keep secure all relevant company documents. This was a trend that existed with all landowning umbrella company incorporated as a vehicle to forge alliance with foreign developers to develop the land with commercial agricultural projects.

  4.11. ALBRIGHT LIMITED

  4.11.1 Although there is no evidence of Albright document on file a perusal of the NFA file reveals a Certificate of Registration of Albright Limited dated 06 April 2006 Company no 1-56187. Also on file is the Certificate of a Foreign Enterprise to carry on business in an activity Company no. 1- 56187 dated 20 October 2008.

  4.11.2 Albright Limited appears to be the same developer in the SABL for Mekeo Hinterlands Holding Limited.

  4.11.3 Albright Ltd. signed an Agriculture sublease agreement on portion 409C with AAFL. This Standard Sub-lease Agreement contains provisions that are grossly unfair to the landowners in terms of ownership of the infrastructure development, the tree crops and in event of objections and disputes arising the company can take out orders in the National Court to restrain them and be compensated for loss of revenue and other costs incurred. The C.O.I notes that this standard Sublease Agreement has been used in a number of SABL project currently under this C.O.I?s review.

  Recommendation

  4.11.4 The landowners must be assisted by the Department of Commerce and Industry in terms of finding an investor that has the financial resources, reputable in delivering on high impact agricultural project and not a logging company. We recommend that the Sub-lease Agreement be revoked immediately.

  4.12 Department of Central Province

  4.12.1 The Department of Central Province is the bureaucratic arm of the Central Provincial Government whose primary role is to facilitate government policies and directives through the

• Page 28 of 186

• work of its divisions of which the Lands Division is an important one.

  Findings

  4.12.2 Mr Raga Gulu who was the Provincial Lands Officer was involved in the Land Investigation and signed of the report. It became evident during his evidence that he conducted preliminary investigations and due to other commitments delegated the task to Mr Lazarus Malesa of DLPP to complete the rest of the investigation. When the report was completed, Mr Gulu signed it as the Investigating Officer. We find that this is unacceptable practice and we are concerned that such practice are allowed to occur at the convenience of lands officers whose task are to ensure that they have fully satisfied the requirements of the LIR process and signing it off.

  4.12.3 Mr Cliff Boutau?s evidence was that he was satisfied on the LIR conducted by Mr Raga, since he was a very senior lands officer and was quite capable and competent. He did not undertake any due diligence, whereas in fact there was evidence of lack of detail in relation to the evidence that only seven members of each ILG signed as landowners when the actual population was 1400. Mr Boutau admitted in evidence that he failed to carry out due diligence on the Report and signed the Recommendation of Alienability as Deputy Provincial Administrator.

  4.12.4 Mr Boutau failed to recommend for reservation of full customary rights on the project area and in the process also failed to include the date he signed of the Recommendation for Alienability.

  Recommendation

  4.12.5 That any future land investigation conducted, any parts of the Report must be certified by the Officer who physically conducted that part of the Report, say for example, walking the boundary. That will alleviate the situation where misleading and falsity in the actual land investigation on the part of the officer who conducted the LIR. It is not a good practice to allow another officer to relieve another officer who is on the investigation unless it is of importance that relieve arrangements are organised with specific tasks.

  4.12.6. All future Land Investigation Report must be scrutinised and due diligence undertaken by the Provincial Administrator before he signs the Recommendation for Alienability. This is one of the most abused process which has been found lacking not only in this SABL, but all the other SABL processed and evaluated by this C.O.I

  4.13. DEPARTMENT OF PROVINCIAL AFFAIRS AND LOCAL LEVEL GOVERNMENT

  4.13.1. No Certificate of Alienability was issued by the Custodian of Trust Land

  Recommendation

  4.13.2 That all future Recommendation for Alienability and the LIR be submitted to the Custodian of Trust Land for due diligence and certification for Alienability

  4.14. DEPARTMENT OF LANDS AND PHYSICAL PLANNING

• Page 29 of 186

• 4.14.1 The C.O.I perusal of the Department of Lands and Physical Planning contained the following;

  (1). A Lands Title copy of the SABL lease dated 05 September 2008 for Portion 409C Volume 32 Folio 171 Milinch: Epo and Kairuku, Foumil: Yule, Central Province.

  (2). A copy of Gazettal of the Section 102 direct grant dated the 01st of September 2008, G152 under the hand of Mr Pepi Kimas

  (3) A Draft notice of Section 11 Notice however there is no evidence of a gazettal of this Notice.

  (4) A Land Investigation Report dated 25 May 2008.

  (5) The LIR includes a Certificate in relation to boundaries dated 25 July 2008

  (6) A Certificate of Recommendation as to Alienability which is undated and executed by Mr Cliff Boutai, then Deputy Provincial Administrator

  4.15 DEPARTMENT OF ENVIRONMENT AND CONSERVATION

  4.15.1 The Department of Environment and Conservation is an important agency in terms of regulating and permitting development activities on state and customary land in terms of the Environment Act 2000. The Department of Environment and Conservation (DEC) is an important agency in terms of regulating and permitting development activities on state and customary land in terms of the Environment Act 2000. Defined by the Act (2000), the Project and its associated activities are prescribed and involve matters of national importance, or which may result in serious environmental harm. Therefore, the regulatory process requires prescribed activites of the identified level (1-3) to be put through the environment impact assessment process which would enable thorough evaluation by DEC and recommend relevant improvements to the proposal or its environment management regime before an Environment Permit is issued.

  4.15.2 A file was submitted to COI from DEC concerning the Abeda Agroforest Ltd. application for Environment permits. The table below shows the correspondences entered into between DEC and Abeda Agroforest Ltd leading up to issue of the permits.

  4.15.3 This Environment Permit amended the earlier permit issued to include Kara log pond the loading of timber for export. This particular amended permit was issued without public consultation. In a minute

  dated 02 August 2010 Michael Wau the Acting Executive Director Environment Protection Wing to the Secretary DEC which minute states the reasons for the no public consultation as follows:

  i. Kara log is an exciting site previously used as a jetty for loading of timber ; ii. As da previously disturbed site no substantial harm in re using the pond iii. Landowner consent was obtained. (evidence of such a consent not on file)

  4.15.4. A Waste Management Plan for the Kara Log Pond Wharf project dated September 2010

• Page 30 of 186

• 4.15.5. On face of the evidence on this file the Developer may have met all legal requirements under the Environment Act 2000. However, the C.O.I is concerned that for any applications for permit to occur in the high impact agricultural project, the Developer must as a matter of procedure obtain DAL Agricultural Clearance (Form 235) which will lead to FCA approval from the PNG Forest Authority.

  4.15.6 The C.O.I notes that the Notice of Preparatory Work was submitted by Albright to DEC on 29th July 2009. DAL approved compliance for agricultural project to be undertaken in forested areas of the project site on 10th December 2009. The most crucial factor is that the DEC process was commenced almost simultaneously to the DAL application under Form 235. The Ministerial Approval in Principle was issued by the then Minister on 23 December 2009. This aspect of the C.O.I concern is propounded by the lack of co-ordination between key agencies of

  government to forge collaboration and realistically deal with Developers who intend of circumventing the process and in most cases taking advantage of the current situation faced by the line agencies responsible for land use, forest clearance and agriculture component.

  4.15.7 The Commission was able to obtain reliable information from the former Council member of the DEC Council on this aspect. The Commission reproduce extract of Dr Hosea Gideon, currently an Academic and Professor attached to the School of Physical Science, UPNG evidence on the Council?s decision making process as follows

  “A: Yes, the business paper was EIS for Abeda Integrated Agriculture Project.

  Q: Could you advise us what EIS stands for? A: The Environmental Impact Statement. Q: And that is the statement that the Council looks at prior to issuing a permit?

  A: That is correct.

  Q: Dr Gedion, I will just take you to paragraph 5 of that Item 5, where it reads; “Dr Gedion expressed concern over the surrounding logging – logged-over-area which the company should consider to develop into agriculture logs, than to log out and clear a new forest.” Can you see that paragraph?

  A: Yes. Q: Are you able to explain to us what your concern was there? A: Thank you. As expert on the eco-systems and bio-diversity, my concern was that the project area is a known high- population density, and there has been a lot of developments and a lot of forest degradation in the area. I also understand that the present – that the project is going to log out some of the areas that was originally – I think TRP project area. So the concern I raised with the Council was if the project or the developer was serious with agriculture development, there is already enough degraded land around to convert to oil palm plantations. This is a concern I made for this project but it is a concern I could make and I ask Commission for permission to make a submission in general for similar projects in relation to bio- diversity concentration in this country.

  …..

• Page 31 of 186

• A: Thank you, Commissioner. I would like to do that as soon as we come back to the hearing again. But the concern was that there is quite a lot of degraded land in the area and any serious development would obviously start with already degraded land rather than clearing forest. There is already a lot of concern about high bio-diversity areas being cleared and the government has no policy at the moment on regulating land allocation for all of these projects. We lose

  a lot of bio-diversity, we lose a lot of eco-systems and as a concern as enshrined in our Constitution, we have an obligation to share the wealth that God has given us to future generations; and I think we will fail our future generations if we do not do that. Government needs to take serious steps in developing policies to address these issues.

  Q: So, Dr Gideon I take it from what you have just said that it may have been unnecessary for Albright the developer to have requested for another permit when there was already land that had been cleared previously and that they could have used that land to go into oil palm planting. Is that what you are saying?

  A: That was the position I had.

  Q: And I see from the minutes of this meeting which I have given to you that the council proceeded anyway and accepted the environment impact statement?

  A: Yes, that is correct.

  Q: And subsequent to that, based on that environment impact statement a license was issued? ….

  A: Approval in principle, that is right.

  …..

  A: By the minister, yes.

  MS KOISEN: Dr Gideon, if I can just refer you to paragraph 10 as well of item 5. You obviously made a comment also again a concern over the conservation of the environment with regard to flora and fauna which you have just covered and you asked the council to take a stand in laying a bench mark for certain percentage of that particular forest area to be excluded from logging. Are you able to advise us as to whether or not council has taken this matter any further to your knowledge?

  A: To my knowledge, the council has not further taken any serious steps in particular to the area or project area. There is a – if I may point out that there is a statement on – statement number 9 by Dr Kalinoe, if I could read that. Dr Kalinoe said; “To accept the – for Abeda Integrated Agro project on the condition that every 500 hectares logged should be developed into agriculture before the next 500 hectares is logged.”

• Page 32 of 186

• Q: To your knowledge, has that been – has Environment Department abided by that recommendation?

  A: To my knowledge, no.”

  (Refer to pages 25-26 of Transcript SABL 61-Mirou)

  4.15.8 His views on the process of DEC?s involvement in evaluating and processing application for Level 3 environment impact projects “ Q: Okay, being a member of the council and to Environment and Conservation you also look at agricultural reports that are provided because it is also relates to the soil suitability?

  projects at the moment are – the agriculture processes,

  And I think something needs to be done in coordinating the government processes. “ (Refer to page 28 of Transcript SABL 61-Mirou)

  “If I may also just – just another point I would like to mention, but I will put it in my submission. It relates to dealing with the landowners. I presume that the Government needs to take more – provide more support to the landowners. They need to be able to provide some kind of assistance so that the landowners understand documents before they sign. And I took as a nationalist where- ever I went I tell the people that if you cannot understand the documents, get somebody else to read it and explain to you

  before you sign and in particularly the two log export agreements and that kind of thing. So what the landowners hear is 6 million they are going to get, they do not know how much that company is going to get, how much the Government will get, they are only told what they are going to get. And these are some of the issues that although they may be in the document, may be, not clearly explained to them.” (Refer to page 30 of Transcript SABL 61-Mirou)

  Recommendation

  4.15.9. The Director of Environment must thoroughly assess on receipt of the Notice of Preparatory Work from Project Developers to ascertain if DAL has in fact completed its assessment process. It would be useful for all that information to be availed subject also to PNG Forest Authority approval for FCA. This also is dependent on the DLPP SABL lease back process.

  4.15.10 The C.O.I recommends that the ideal process is that DEC approval must be commenced

• Page 33 of 186

• as soon as DAL completes its assessment on all the relevant documents submitted to DAL by the Developer. The DEC Council should only act if DAL, PNG Forest Authority and DLPP complete their process. The process is that there is a land approved for that purpose under the lease back system (DLPP), agriculture component is also approved by DAL and subsequent to that PNG Forest Authority approval for FCA.

  4.15.11. The permit must also take into consideration the conservation of any areas within the project site that may affect biodiversity. It is important that serious considerations for the conservation of these areas are to preserve the flora and fauna that co-exist on that land for breeding, migratory and habitation.

  EAST SEPIK PROVINCE Protestors-ESP SABL Hearings

  Log Pond at Nagam –logging activity, ESP

  1. COI Inquiry File No. 20 for Special Purpose Agricultural and Business Lease over Portion 146C Volume 14 Folio 19 Milinch: Marienberg, East Sepik Province in the name of Brilliant Investment Limited.

  1.1 In accordance with the powers given to the Commissioners pursuant to section 7 of the Act, the Commissioners have summoned numerous witnesses to produce documents and be further examined on oath or affirmation.

  1.2 Witnesses were called from the six government agencies involved in the issuance and operation of the Brilliant InvestmentLimited SABL. These were:

  1.2.1 Department of East Sepik Province, (DESP) 1.2.2 Department of Lands and Physical Planning, (DLPP) 1.2.3 Department of Provincial Affairs and Local Level Government, (DPALLG) 1.2.4 Department of Agriculture and Livestock, (DAL) 1.2.5 Department of Environment and Conservation, (DEC) 1.2.6 PNG Forest Authority (PNGFA)

  1.3. Witnesses and Summonses

  1.3 1 The names of the persons who have been summoned to appear and who have in fact appeared in the public hearings (in alphabetical order), including titles, are set out in the schedule below. For ease of reference, the schedule also lists the transcript pages at which the person commenced giving evidence against the name of the witness.

  No

  Name and Position

• Page 34 of 186

• Pages

  Day

  Date 1 Mr Peter Yapog, Acting 5-18 2 09/02/12-SABL 2 WEWAK

  Provincial Customary Lands

  Officer, Division of Lands 3-19 4 13/02/12-SABL 4 WEWAK

  &Physical Planning, DESP

  2 Mr Richard Kali, Provincial 18-35 2 09/02/12-SABL 2 WEWAK

  Forest Officer DESP

  19-21 4 13/02/12-SABL 4 WEWAK 3 Mr Tony Hobiagu Unattached Public Servant and formerly Acting Provincial Adviser, Division of Agriculture & Livestock, DESP 36-47 2 09/02/12-SABL 2 WEWAK 4 Mr Moses Gawi, Landowner, Chairman of Marienberg Hills Resource Development Limited 52-106 2 09/02/12-SABL 2 WEWAK

• Page 35 of 186

• 5 Mr Andrew Bracamonte, Project Manager, Brilliant Investment Limited 106-131 2 09/02/12-SABL 2 WEWAK 6 Mr Francis Warren, Unattached Lands Officer (on retrenchment), DESP 21-40 4 13/02/12-SABL 4 WEWAK 7 Mr Francis Daink 12-26

  05/09/11-SABL13 (Waigani)

  2-33

  06/09/11-SABL (Waigani) 8 Mr Leka Mou 1-33 8 29/02/12-SABL8 WEWAK (Waigani)

  1.4 Parties represented by counsel 1.4.1 Section 8 of the Act relates to the appearance of counsel before the Commission on behalf of interested parties. It provides that:

  “Subject to Section 2(5), a person who satisfies the Commission that he has a bona fide interest in the subject matter of an inquiry under this Act, and any other person by leave of the Commission, may attend the inquiry in person or may be representedby counsel.”

  The following were granted leave to be represented by counsel

  1.5. Exhibits and documents

  1.5.1 There were Sixteen (16) documents tendered as evidence before the Commission at the public hearings. A list of the Exhibits is shown below.

  No Item Interested Party Date received Exhibit Number

• Page 36 of 186

• 1 Letter by Mr Tony Hobiagu, Acting Provincial Adviser, Division of Agriculture &Livestock dated 8th August, 2008 COI 09/02/12 BIL “1” 2 Letter by Mr Tony Hobiagu dated 23rd September, 2008 to Mr Moses Gawi re: Marienberg Hill Project COI/Marienberg Hills Development Limited 09/02/12 BIL”2” 3 Binding Agreement dated 1 November, 2006 signed between Mr Henry Ling, General Manager- Brilliant Investment Limited & Mr Moses Gawi, Marienberg Hills Limited COI/Marienberg Hills Investment Limited/Brilliant 09/02/12 BIL”3” 4 Submission to the COI by Mr Moses Gawi on behalf of Marienberg Hills Development Limited. Received by the COI on 6 October, 2001. COI 09/02/12 BIL”4” 5 Angoram Large Scale Integrated Agriculture Project Proposal-Cocoa Development Projects COI 09/02/12 BIL”5” 6 Angoram Large Scale Integrated Agriculture Project Agriculture Land Use Plan and Updated Implementation Schedule COI 09/02/12 BIL”6” 7 Progressive Monthly Report dated 23rd January, COI 13/02/12 BIL 7

  2012 on Angoram Large Scale Project by Mr Kali, Provincial Forest Officer, DESP

  8 Land Investigation Report for Land Fourmil Vanimo/Bogia Milinch Angoram/Marienberg-Land Reference 1419/0146C COI 14/02/12

• Page 37 of 186

• BIL”7” 9 Annexure of Valuer General?s Report on the Valuation of the Land, Part of Document 8 and Document Number 3 of the Land Investigation Report. COI 14/02/12 BIL”8” 10 Lease of Land Deed, (Unsigned)-Certificate By Officer executing Document (Unsigned) COI 14/02/12 BIL”9” 11 Draft Partnership Agreement COI 14/02/12 BIL”10” 12 Certificate of Incorporation of Land Groups COI 14/02/12 BIL”11” 13 Form 165-Landowner Consent Forms COI 14/02/12 BIL”12” 14 Petition dated 31 January 2012 to the Manager, Star Avenue by Clement Komba under Marienberg Hills Resources Development Limited letterhead Brilliant/Star Avenue/COI 14/02/12 BIL”13” 15 Petition under letterhead of Marienberg Hills Resources Development Limited to Camp Manager, Star Avenue Brilliant/Star Avenue/COI 14/02/12 BIL”14” 16 Minute dated 11 November, 2008 by Mr Leka Mou to Deputy Secretary, PAT, DAL re: Marienberg Project DAL Secretary 29/02/12 LM”1”

  1.6. Timeline of events of note surrounding Brilliant SABL Title

  1.6.1. The timeline showing important events concerning the SABL is shown below in chronological order of their happening:

• Page 38 of 186

• No Milestone Dated of Completion/G rant/Issue Execution Proponent/Applicant Respondent Entity/Respondent 1 Incorporation of Brilliant Investment Limited 06/07/2004 C.O.I C.O.I 2 Incorporation of Marienberg Hills Investment Limited 11/10/2006 C.O.I C.O.I 3 Binding Agreement between Marienberg Hills Limited and Brilliant 01/11/2006 C.O.I C.O.I 4 Land Investigation Report(s) 10/01/07 C.O.I C.O.I

  1.7. FINDINGS

  1.7.1. The findings follow the chronology of table of notable events above surrounding the SABL lease title held by BRILLIANT.

  1.8. Brilliant Investment Limited SABL A Notice of Direct Grant under Section 102 of the Land Act was made in the National Gazette no. G22 dated 25th February 2007 for Portion 146C Marienberg Land. The term of the lease was for ninety-nine (99) years. A Special Agricultural and Business Lease was registered and issued on 12th February 2007 by the Department of Lands and Physical Planning to the holder Brilliant Investment Limited (BRILLIANT). Mr Pepi S. Kimas

  signed as delegate of the Minister for Lands. The detail of the SABL is shown below:

  Legal Description Portion 146C Registered Survey Plan Catalogue No 3/605 SABL Holder Brilliant Investment Limited Date of Registration of Lease 12th February, 2007

• Page 39 of 186

• Period of Lease Ninety-nine (99) years Land area of lease 25, 600.0 hectares

  1.9. IPA

  19.1 The Investment Promotion Authority (IPA) is a statutory organization, established by an Act of Parliament in 1992, to promote and facilitate investment in Papua New Guinea. The IPA does this through various programs including the establishment and maintenance of a company/business registry, certification of foreign enterprise and promotion of investment opportunities in PNG.

  Findings

  1.9.2. The proposed developer for the SABL is Brilliant Investment Limited and is registered title holder of SABL Portion 146C Brilliant Investment Limited (Brilliant) is a limited liability company registered in the Register of Companies of the Investment Promotion Authority of PNG under the Companies Act 1997. The Company was incorporated on 6th July, 2004 and the current Principal Place of Business is Section 515 Allotment 25 & 26, Waigani, Hohola, National Capital District. As at 2nd August, 2011 IPA records confirms that it is operating. The Company number is 1- 51701.

  1.9.3. The latest IPA company extract provided to the Commission dated 2nd August, 2011 indicates 2 shareholders namely Chung Ching TING holding thirty-six (36) ordinary shares and Min Yong YU holding sixty- four (64) ordinary shares in Brilliant. This indicates that the majority shareholding by two foreign nationals of Malaysia makes the company a foreign company. The company has issued 100 ordinary shares in the company to the two foreigners.

  1.9.4 The extract discloses both Messrs Chung Ching TING and Min Yong YU also as Directors of the company. No company Secretary was appointed by the company. The Annual return for the company was made up to 30th June 2011. The principal activity of the company is the “Export of Timbers within the Forestry Sector. It commenced operations as at 5th January, 2005.

  The formation of Brilliant Investment Limited

  1.9.4. Company registry searches with the IPA and in this instance the Commission examined the status of Brilliant Investment Limited pursuant tohistorical extract obtained from the IPA on 19 September 2011. SABL grantee, BrilliantInvestment Limited was registered and incorporated by one PNG national Toripe Koava on 6 July 2004 holding 100 shares. It is currently operating. However on 25th or 26 April 2005 these 100 shares were transferred to Gohill Timber SDN BHD, a company with a Malaysian registered officer. It is unknown at the time of this report whether it was registered with IPA as a foreign company in PNG.

  1.9.5. Over the course of five years Gohill Timber SDN BHD did transfer much of its 100 shares as follows; 35 shares to one Ling Neng Lii (otherwise

• Page 40 of 186

• known as Henry Lii) a Malaysian national resident at Section 38 Allotment 29 new Hohola commercial estate Gordons NCD and the transfer was effected on 1 January 2006. Twenty (20) shares were then transferred to Ting Chung Ching (otherwise known as Douglas Ting), a Malaysian national resident at Section 38 Allotment 29 new Hohola commercial estate Gordons NCD on 1 January 2006. 45 shares were then transferred to one Yu Ming Yong a Malaysian national resident at Section 38 Allotment 29 new Hohola commercial estate Gordons NCD on 1 January 2006. On 6 July 2009 Neng Lee Ling transferred his or her shares to the other two shareholders as follows: Chung Ching Ting received 16 shares and Ming Yong Yu received 19 shares.

  1.9.6. On August 27 as confirmed by examination of the historical extract obtained from the Company?s register by order of the National Court, Brilliant Investment Limited was placed under receivership with James Kruse of Deloitte Touche Tohmatsu appointed as receiver of the company? s property. However, this was discontinued on 29 November 2007 with the agreement of all parties. Both shareholders Chung Ching Ting and Ming Yong Yu remain as current shareholders and also as company Directors at that time.

  1.9.7. There is no evidence on the IPA Extracts of any appropriate foreign enterprise certification, although the Commission acknowledges that have shareholding of the company is above 51 percent PNG nationally owned.

  Marienberg Hill Resources Development Limited

  1.9.8 Marienberg Hill Resources Development Limited (MHRDL) is a limited liability company registered in the Registrar of Companies of the

  Investment Promotion Authority of PNG under the Companies Act 1997. The Company was incorporated on 11th October, 2006 and the current principal place of business is Section 515 Allotment 4 & 5, Waigani Drive, Gordons, National Capital District. As at 19th September, 2011 IPA records confirms that it is operating. The company number is 1-7860.

  1.9.10The latest IPA company extract provided to the Commission dated 19th September, 2011 indicate 10 shareholders of MHRDL each holding 100 ordinary share in their capacities as landowner representatives of seventy- five ILGs within the Marienberg SABL Cocoa project area. The shareholders are Messrs Joe Andi, Moses Gawi, Xavier Kasia, Simon Kasimo, Simon Kuaien, Anton Kusi, Leo Makis, Melchior Mangino, Hillary Patua and Nelson Tabi and most of them reside in their village in the Angoram District. Moses Gawi is the current Chairman of the MHRDL.

  1.9.11. The extract discloses Messrs Moses Gawi, Simon Kuaien, Joe Andi, Nelson Tabi and Simon Kasimo as Directors of the Company.

  1.9.12The shareholding structure of the company does not adequately cover the majority of the 75 ILGs listed in the submission by Mr Gawi to the COI (Exhibit BIL”4”). In evidence, Mr Moses Gawi expressed overwhelming support for his chairmanship and that the majority of villagers actually supported the engagement of Brilliant as a developer for logging activity and the cocoa project. This is shown below in the listing of ILG provided to the Commission.

  No Village ILG

• Page 41 of 186

• No Land Group Chairman No Village ILG No Land Group Chairman 1 Mamber 4234 Oro Moses Gawi 39

  Waueh Henry Pokai 2

  6802 Orona Peter Krebo 40

  Amoyana Bath Yatu 3

  6801 Momuin Samson Sale 41

  Amai Alber Yari 4

  6804 Kuna Clement Kombe 42

  Sainea Peter Boga 5

• Page 42 of 186

• 6805 Daruma Leonard Mira

  6

  6803 Rongorua

  43 Suk

  Kambreto Simon Koien

  44

  Momuinua Joe Salle 7 Mansep 4247 Duangua Arnold Biari

  8

  4237 Momunua

  45 Bian

  Yuaton Cletus Bob 9

  6812

• Page 43 of 186

• Gasina Theo Parun 46

  Hukai Melchior Baipu 10

  4231 Tae Leo Wakamo 47

  Kiando Luke Apeso 11

  4243 Boana Joe Warui 48

  Sumbrum Kony Maiua 12

  4242 Yakana Yakana 49

  Kanaputo Michael Mara 13

  4246 Roamo Andrew Asipa 50

  Kaparo Danny Wasu 14

  4241 Mogit

• Page 44 of 186

• Valentine Singe

  15

  4244 Momuin Andrew Andi 51 Mabuk

  Yuaton Terrance Massange 16

  6799 Kurari Jackary Paren 52

  Ymuto Lawrence Wakia 17

  4245 Newa Joe Andi

  18

  4238 Kuina Simon Kasimo 53 Ariapa n

  Olemaneai 1 Linus Arimba

• Page 45 of 186

• 54

  Olemaneai 2 Raphael Suari 19 Gavien 4248 Yokna

  55

  Mukusinea Augustine Bogobu 20

  4239 Yona Amba Natape 56

  Wakapniel 1 Titus Auia 21

  4225 Wakap 42 Leo Wapo 57

  Wakapniel 2 David Wagiso 22

  4226 Rongumi Lawa Wanga 58

  Wakapniel 3 John Gari 23

  4221 Mania Kenuth Tun 59

• Page 46 of 186

• Atemniel Mathew Maso 24

  4222 Fremo Tatius Andi 60

  Moareniel Juth Simai 25

  4229 Gaweka Michael Yawgin

  26

  Momina Paul Kima 61 Manga n

  Mangana Xavier Gasia 27

  4223 Moarem Jack Kasemo 62

  Arena Christiengegane

  63

• Page 47 of 186

• Wena Sonny Yatu 28 Boanam 6800 Wamana Daniel Naga 64

  Mavetwa Smeky Babi 29

  4229 Matari Tatake Onol 65

  Tukna Yono Herman Bau 30

  4238 Mreana David Mandawa 66

  Gokina Paul Aipa 31

  4230 Arro Peter Paki 67

  Tavakop Luke Taria 32

  Waimuna Henry Patua 68

• Page 48 of 186

• Andaren Eddy Wino 33

  4240 Homina Joe Salle

  69 Waskur in

  Arigunial Steven Pandiku 34 Mosan 6803 Sikhamat Mathew 70

  Bugi Isaac Sapiel 35

  6809 Akunea Raymond Mapo 71

  Soboatiel Jerry Patua 36

  Frame Damban Gokiuon 72

  Solonbok

• Page 49 of 186

• Augustine Salle 37

  Momina Yakaue Hym 73

  Koanek Martin Bigso 38

  Mamariang Joe Kusi

  1.9.13. The following Instances reveal a serious lack of landowner involvement includingmajority consent on the engagement and authorization of Brilliant to be named as the grantee of the SABL Title

  and also as the Developerof the high impact cocoa project at Marienberg land,Angoram.

  * The listing of ILG registration numbers are missing for villagers numbered 26, 32, 36-73 totalling 40 villagers. There was no explanation from the Chairman as to why these villagers were not registered at the time the ILG registration was conducted in 2006 by Mr Gawi and his Directors.

  * A Mr Joe Salle appears as Chairman of ILG 4240 Homina village (Number 33) and at the same for Momuia village (Number 44). There was no explanation provided for that discrepancy.

  * The shareholding within MHRDL does not disclose the inclusion of all the individual chairman?s of each village or ILG and there is a major deviation from the majority consent and evident that there is lack of fair representation of the villagers in MDRDL.

  * Joe Andi is from Gavien village and not Mansep village. (page 83- Gawi 9/2/12)

  * Mr Gawi in evidence confirmed that Waskirin village comprising ILG numbered 69-73 was not originally named within the Marienberg project in 2006 and was added recently to the list. He states that “Waskirin Village was originally with the Sepik River Development Corporation and its village was outside the SABL held in the name of Brilliant. They are according to Mr Gawi not genuine landowners and would be considered as a ploy on the part of Mr Gawi to include ILGs

  and villagers who are not genuine landowners. (Moses Gawi-SABL2- Wewak-9/2/2012 at pages 86-87).

• Page 50 of 186

• * Despite Mr Gawi?s contention that majority of the clan leaders within the Marienberg project area had agreed to engage Brilliant relative to logging operation as well the proposed large scale cocoa project in 2006. It was revealed by documents submitted to the COI on 11th August 2011 that about 25 clan leaders within the project area raised serious concerns about their initial support and subscribed consent in Consent Form 165 on 27th July 2006 at Mansep village. The leaders in their statements dated 8th November 2008 expressed disappointment over benefits being derived from logging, the lack of awareness conducted by the Provincial Forestry Officer, one Richard Manjo when the consent forms were signed. They also rejected the view that all the leaders agreed that SABL title to be issued to the Brilliant.

  * The leaders whose statement was attached to duly filled Consent Form 156 dated 27th July 2006 at Mansep include leaders whose name appear on the ILG listings seeking withdrawal of their Timbers Authority consent which was ultimately used to legitimise the grant of SABL over Marienberg land as follows

  No Name of Leader Village Clan 1 Raphael Digi

  Momina 2 Zachary Kasi

  Kurari 3 Simon Wandio Mansep Yakana 4 Joe Andi Mansep Wena 5 Tom Tobo

  Kuina 6 Harry Wabo Mansep Momin 7 Arnold Biari Mansep Boangue 8 Bernard Warui

  Boana

• Page 51 of 186

• 9 Valentine Wapi Mansep Mogi 10 Theodore Parum Wagame Maino

  Gasina 11 Herman Asipa

  Roamo 12 Tadius Mori Gavien Preme

  13 Jack Kasemo Gavien Merena 14 Michael Nuguanie Gavien Gavenna 15 Leo Wapo Gavien No. 1 Woikap 16 Lawrence Wanga Gavien Longumi 17 Bameh Kaph Gavien Youna 18 Theo Koruma Gavien Yokna 19 Paul Kimh

  Mominah 20 Zachary Kaisi Mansep Kluari 21 Martin Wandea

• Page 52 of 186

• Gavien Mania 22 Joe Warui Mansep Boana

  * The consent form were not signed by the clan leaders and is deemed to be signed by persons having no authority to sign on their behalf

  1.10. Binding Agreement 1 November 2006 Between Mr Henry Ling, General Manager of Brilliant Investment Limited and Mr Moses Gawi of MHRDL (Exhibit BIL “3”)

  1.10.1. The C.O.I noted with interest prior to the SABL, an agreement was entered into between the Marienberg Hills Development Limited and Brilliant. This was to invite Brilliant to undertake logging within the Marienberg area under the replaced TRP concession as was understood by the C.O.I from the evidence of the Mr Gawi.

  1.10.2Mr Moses Gawi confirmed that he signed the agreement with Brilliant in Port Moresby with the MD of Brilliant on the Marienberg project. The major transaction was not agreed to by the majority of the landowners as represented by the Shareholding/Directorship of the company. This is contrary to the requirements of the Companies Act, where the Resolution of the Company is necessary over major decisions of the Company.

  We reproduce relevant parts of his evidence as follows

  “MS PEIPUL: Now that this Agreement has been tendered, we can just go through a few of those. Unfortunately, we only just have two copies of this document, so perhaps, I can give it to the witness; just a few issues within the – just a few points.

  Firstly, in clause 3 – or, perhaps, going back to clause 1, Commissioner. It is just reference to the area in which you are intending to develop or enter into agreement about. It says 26 to 30,000 hectares, but the land is essentially the same land that is now over which – because there are annexures that we do not have on this.

  about.

  Q: But as you can see, it is 26,000 to 30,000 and the SABL is 26,000 – a bit over 26,000 hectares, so that is confirmed of the same area.

  I think within clause 3 – we turn to clause 3, and you will note that there is only mentioning of logging. There is no mentioning of – there are particulars – a mention of Agriculture Development Agreement; however, the SABL as an entity over which a particular will be granted is not mentioned

• Page 53 of 186

• within this particular clause.

  that correct?

  Q: In 2006 when you initially negotiated with Brilliant, were you only negotiating over logging or was that the genuine agriculture component within the initial negotiations?

  in. So I thought my people will be happy with the

  have got cocoa. Cocoa is already established in our area,

  on the Forest PFMC and also National Forest Board.

  Q: So you are saying there was a genuine agriculture component that you intended to develop with Brilliant Investment. Is that correct?

  A: Exactly, Counsel, yes.

  Q: But you are aware now these issues are ongoing with Brilliant with respect to shut down; stopping of logging and so forth? There are issues now—

  A: That, Counsel, I would not elaborate too much on that because in this time of hearing, I cannot just jump the gun and come and tell you that, tomorrow, I am closing down the project; I am closing this and that; I cannot do that. If Forestry wants to do that, they should have done it long time, yes,” (See evidence of Moses Gawi on 9/2/12 SABL 2-Wewak at pages 68-74)

  1.10.3. The C.O.I notes from that evidence that while the Developer was already on the project site harvesting logs under the TRP concession, the Forestry Act was amended in 2007 introducing the FCA and the need to utilise the SABL process so that agriculture component is tied to the FCA.

  1.10.4. The C.O.I finds that this very transition is a common thread that was cunningly utilised in the New Ireland Province by Tutuman over the SABLs that it benefits from under the Agriculture

• Page 54 of 186

• Sub-lease Agreement. Basically Mr Gawi was also misguided in this venture because he was misled by the erroneous advice offered by the Provincial Lands Office on the appropriate way to deal with SABLs and the FCA requirement for large scale agriculture component. We find that this very same cunning was employed in this particular SABL and this was so entrenched because the Lands Officer Mr Simon Malu once again in his notoriety for

  failing to produce a full LIR conveniently short circuited the process to enhance Brilliants continued logging presence in the area, under the SABL and FCA component.

  1.11 Department of East Sepik Province 1.11.1. The C.O.I determination of the Land Investigation process is that no LIR was conducted by the Provincial Lands Officer Mr Peter Yapog. He told the Inquiry that his colleague Mr Francis Williams was responsible for the Land Investigation.

  1.11.2. Mr Francis Williams appeared before the C.O.I and his evidence basically was that Mr Gawi had approached him for advise on the need to include the Marienberg land as an SABL.

  1.11.3. Mr Francis Williams is a veteran public servant and an Unattached Officer at the time he gave evidence to the C.O.I at Wewak. He had served as a Provincial Lands Officer for up to 17 or 18 years and well acquainted with field investigation concerning land maters. He was sincere and honest to inform the Inquiry that Mr Gawi had inquired with his Office on the need to convert Marienberg land into SABL. Mr Williams told the inquiry of the sequence of events on his advice as follows;

  1) In 2006 he advised Mr Gawi , “that he is to liaise closely with the District Lands Officer-In- Charge, the Angoram District Administration of which Marienberg falls under Angoram District Administration”, with regard to the conduct of Land Investigation and ILG registration.

  2) Later on that year 2006, Mr Gawi invited Mr Williams to advice the Board Members of the Marienberg Hills Development Limited in a more informal setting at Wewak on the need to undertake Land Investigation and this time to carry out large scale cocoa project on the Land. Mr Williams advised them to see the District Lands Officer based at Angoram to assist them with their request and he also explained that the SABL process was a useful process to undertake agro-forest activity. Mr Wiliam however failed to obtain more information from DLPP as his knowledge on the SABL process and procedure was virtually minimal.

  1.11.5 The C.O.I finds that this trend of Provincial Lands Officers and even those in DLPP and other key agencies need to formalise a training module in order to enhance the officer involved in the field land investigation to be better equipped to render advice and undertake the land investigation diligently and effectively without questions been raised as to the irregular practices the C.O.I notes exists which is detrimental to the indefeasibility of title.

  Recommendation

  1.11.6 That the SABL be revoked pending a fresh LIR to be re-conducted by the Department of East Sepik Province with the walking of the boundaries and certification as to ownership by custom.

  1.11.7. He gave wrong adviseto Mr Gawi on the process. and it is this Commissions Recommendation that DLPP undertake workshops to assist the Provincial Customary Lease Officers

• Page 55 of 186

• with the basic understanding of the law and its process. Lack of proper consultation and coordination

  between DLPP and Provincial Lands Officer has resulted in serious discrepancies affecting the process.

  1.12 DEPARTMENT OF PROVINCIAL AFFAIRS AND LOCAL LEVEL GOVERNMENT (DAPLLG)

  1.12.1 The C.O.I notes that no Certificate of Alienability was issued by the Custodian of Trust Land

  Recommendation

  1.12.2 That freshly conducted LIRs be provided to the Secretary of Provincial Affairs as the Custodian of Customary Land for issue of Certificate of Alienability.

  1.13 DEPARTMENT OF LANDS AND PHYSICAL PLANNING Brief on the Land File provided to COI 1.13.1 The C.O.I was not able to sight any of the essential forms that primarily set into the motion the Land Investigation process for SABL applications. * No tender form * No Land Instruction No * No LIR, but one produced by Mr Gawi was incomplete and not signed * Consent of the landowners was an issue as evidenced by the no of objections raised by other landowners

  1.13.2. The relevant files produced to the Commission for examination and inquiry from the Department of Lands and Physical Planning and

  especially from the Registrar of Title, which is an Office which forms part of the establishment of DLPP. The Registrar of Titles Mr Henry Wasa produced to the Commission on 15 August 2011[including amongst other SABLs] other documents within the Brilliant SABL file (that was produced) on the Title document was blank therefore the Commission was unable to ascertain whether the document was a sub-lease agreement.

  1.13.3. The next document that was on file was a fax dated 15 February 2007 and it confirmed the Board of Directors at the time of Marienberg Hills Resources Development Company and that it was the chairman Moses Gawi signed that under the company seal.

  1.13.4. Another document that is on the Registrar of Titles? file was a signed Section 11 Notice of the Land Act dated 12 February 2007 and that was signed off by ministerial delegate Pepi Kimas the former past Departmental Secretary of DLPP.

  1.13.5. Notice of grant under Section 102 was also on file and that is dated 12 February 2007 and also signed by Pepi Kimas

  1.13.6. We also note on the files was a letter from the acting Surveyor General John Sireh (at the time) dated 6 December 2006 addressed to the Chairman of the Marienberg Cocoa Project, approving essentially the carrying out of a Survey under Rural Class 4 and they were advised to engage a private surveyor and further advise the GPS reading to be taken to mark out the corner points and boundaries of the land. This is one of the rare times that a letter from the Surveyor General has been sighted on the Titles file.

• Page 56 of 186

• 1.13.7. A copy of the Gazettal Notice is also on that same file.

  1.13.8. Importantly and with respect to Brilliant Investment, there was no Customary Lands Division held Native Land Dealings file produced. Although, the Customary Division Deputy Secretary, Mr Romilly Kila Pat swore in an Affidavit that it had been produced the desire expression that no file from that particular Division had been produced todate and none has been produced thus far.

  1 13.9The C.O.I notes that the Land Investigation Report was certified and signed by Mr Simon Malu on 10th January 2007. He was careless, reckless and negligent due to the evidence that there was a lot of omissions, blank and high likelihood that the agency and landowner signatures we assume could have been forged. This is evidently so because Commissioner Alois Jerewai who is a member of the landowning clan of Marienberg whose name and signature was noted on the Agency Agreement is not his signature. That assumption in reality is true because of the desperate situation to obtain the lease, Mr Gawi colluded with Mr Malu to fast track the grant and issuance of the title.

  1.13.10. We note that Mr Malu and Mr Kimas gave evidence to the Inquiry and their evidence on oath is reflected in the Transcript of Proceedings referred to in this Report.

  1.14. DEPARTMENT OF AGRICULTURE AND LIVESTOCK

  1.14.1In the file forwarded by DAL to the C.O.I, there was one Agro-Forestry Project Proposal on file including a proposal to vary the work plan for clearing timber. There also was evidence on that file of a required public

  hearing and that meeting was to have been held on 18 July 2008 at the Marienberg Catholic Mission Station, Angoram District.

  1.14.2. There is a letter on file addressed to the Department of Agriculture and Livestock Secretary dated September 2008 and that Mr Daink, Deputy Secretary appears to be urging the Secretary to sign the Certificate of Compliance for the large scale conversion of forest to agriculture to which he has attached a report that he had intended to present to the PNG Forest Authority.

  1.14.3 There is an Internal Office Minute dated November 2008 from Mr Leka Mou Southern Regional Director for Provincial Agriculture Technical Services Division (PATS) of which Mr Daink is actually the Deputy Secretary. Importantly within that minute, Mr Mou states that any approval for large scale agro-forest development (Form 235) DAL would have to ensure that the stipulations within the requirements of that Form must be strictly complied by the Developer, and that any apparent deficiencies in procedures of granting approval would not serve a useful purpose. The Commission was able to have Mr Mou appear on a summons to explain in detail the content of his letter to Mr Daink. Obviously, there was a real need to be vigilant in assessing and evaluating the volumes of proposal which at times was questionable and could not be trusted.

  1.14.4 The C.O.I notes that there was a letter dated 3 September 2009 from the Secretary of the Department to the Managing Director of Brilliant Investments where he indicated the approval of the Implementation Schedule for 4,000 hectares of forest being felled for cocoa planting in the 3rd

• Page 57 of 186

• and 4th quarter of this year 2011. The letter is copied to the PNG

  Forest Authority and states that based on the Department of Agriculture approval, appropriate Forestry Clearance approvals can now be given by the PNG Forestry Authority.

  1.14.4. In further correspondence, dated 8 November 2010, Brilliant Investments informs Department of Agriculture and Livestock that it has grown 50,000 cocoa seedlings that were ready for planting, however that it wanted to diversify its operations into oil palm and as such was seeking approval for integrated agro-industrial business on the site.

  1.14.5. In a letter in response from Mr Francis Daink, he states that, firstly the planting of the cocoa seedlings needed to happen before approval for further cutting of 500 hectares of timber would be given; that the land use assessment of the oil palm growing needed to be conducted as well, and that a further public hearing to gauge public opinion on oil palm/cocoa integration needed also to be conducted. He proposed therefore to Brilliant Investment that the cocoa remain the primary crop for five years so as to continue to operate under the current FCA. This was to avoid seeking a new FCA licences, meaning the need to submit new proposals for approvals.

  1.14.6. Mr Daink suggested the need for Brilliant to revise its Land Use Plans and Implementation Schedules. Mr Francis Daink suggested that Brilliant Investment remain with cocoa and their proposal that they diversify into oil palm should not be pursued.

  1.14.7. Mr Tony Hobiagu, then acting Provincial Advisor, Division of DAL and W, Department of East Sepik was invited by Mr Gawi to assess the proposed Angoram Integrated Agriculture Project EIS of the

  Developer and he expressed his opinion in a letter dated 8th August 2008 to the Director of Environment, copies circulated to Moses Gawi and Raphael Digi, landowners. In his evaluation, he was critical of the EIS proposal of the Developer as follows, “A sample traverse similar to sample wood volume should have been used also for flora, wildlife, fauna determination. What is given is general description, this is a rush job to blindfold ignorant,”. This was conservation of biodiversity areas which undoubtedly was not considered in the proposal. Mr Hobiagu expressed concerns over the Land Identity Demarcation Survey which was required to be completed before the FMA Certificate was issued. (Also Refer to his evidence in detail referred to in this report.) 1.14.7. C.O.I Agriculturalist Mr Wohuinangu24 who accompanied the C.O.I team evaluated the Agriculture component of the Project and reported that no detailed agriculture plan was rolled out by the Developer as was the case in point with DAL. He states as follows;

  “Agriculture development plan is usually based on the land suitability assessment for the area and matching with the agronomic requirements of the crops and in particular cocoa. The land use plan and soil suitability assessments should also be supported by a report of the independent cocoa production and processing expert to determine the potentials and constraints for cocoa production and processing in the area. A project feasibility study should also be conducted to determine the costs and returns for cocoa production, processing and marketing. Based on the outcome of the feasibility study a development plan should evolve detailing the planting schedule for the nucleus estate and the out 24 Joseph Wohuinangu, Agriculture Advisors Report COI SABL dated 15th October 2012. Mr Wohuinangu travelled with Commissioner Nicholas Mirou to East Sepik, New Ireland and Madang to evaluate all the agricultural component of the Project sites and his invaluable contribution to the Team was appreciated.

• Page 58 of 186

• for the seedlings and management of the plantations until harvest

  processing and marketing plan has not been developed and costed.

  agriculture development plan for Brilliant Investment Limited in

  and submitted to PNG Forest Board for approval. Thus the Forest

  as a requirement for the issuance of the SAB&L.”

  1.15 PNG FOREST AUTHORITY

  1.15.1. Forest Clearance Authority was granted on 26 June 2009 and it has a number FCA 11-02 to Brilliant Investment Limited and that is for the large scale integrated agriculture and cocoa development project.

  1.15.2. Pursuant to evidence given by Kanawi Pouru when he came to the Commission for an affidavit sworn on 24 August this year, he states that there is a certain documentation that needs to be provided in order for them to make their assessment which is:

  (i) the prescribed Regulation Application Form 235 of the Forestry Act Regulations;

  (ii) there is a provision of the duly completed project proposal; and

  (iii) there is a list of documents not all of them need to be provided but at least some of them need to be provided and briefly;

  (1) there is a certified boundary description from the Department of Lands and Physical Planning outlining exact are of project area,

  (2) there needs to be landowner verification and consent as evidenced by lease documentation,

  (3) there needs to be duly completed sales and purchase agreements with the customary owners, landowners and there needs to be agreement oversee or MOU?s between landowners and developers,

  (4) Feasibility studies of soil suitability for proposed agriculture use,

  (5) and there needs to be DAL report on stakeholder public hearing,

  (6) Department of Agriculture and Livestock prescribed Form 235, and

  (7) an Environmental Permit is also to be attached for the proposal to proceed.

  1.15.3. The C.O.I notes from the files provided that the documents received, C.O.I have not sighted any of these documents.

• Page 59 of 186

• 1.15.4. The C.O.I also notes on file that there is some notices and correspondences relating to the current operations by Brilliant Investment Limited. There is a stop work notice, issued by PNG Forestry Authority to Brilliant Investment on 25 August 2010 in regards to the felling of trees. 1.15.5. On 10 March correspondence Mr Kanawi Pouru wrote to the Managing Director of Brilliant Investment, a Mr Yu Ming Yong, dated 23 March, that as a result of a site visit on 10 March 2011, that there was very poor performance of the Integrated Agriculture Project. Mr Pouru pointed out to Mr Yong that;

  (i) 100 hectares of clear fell land had no cocoa plants planted and that this land was left idle with no planned use;

  (ii) Only one building had been properly constructed, all others were still – were made of bush material;

  (iii) There was no Joint Venture Agreement between the landowner company, Marienberg Hills Resource Development Limited and Brilliant Investment Limited;

  (iv) There was no clear direction for the management of the cocoa plantation; and

  (v) that 61,397.376 cubic metres of net resource had been cleared to that date. That is of an estimated total volume of 536,000 cubic metres gross for the acreage of the SABL being 25,600. It just goes towards showing how much has been cleared

  without any agricultural development, essentially agricultural work. So that figure goes towards showing that.

  1.15.6. Those assessments are confirmed by this C.O.I, during its site visit to the project site. There was a nursery set up, and we observe that there was much more logging activity in excess of 50,000 hectares. At that time a pontoon arrived to load on the Kwila at the Marienberg log pond/jetty at the time of the visit.

  1.15.7. The C.O.I gives credit to the PNG Forest Authority for their enforcing their regulatory and statutory authority to compel Developers to follow their implementation and crop planting schedule plans.

  1.15.8 This was expressed by the Provincial Forest Officer Mr Richard Kali who was called to give evidence on their monitoring activity that this was at times limited due to logistical difficulties and because of those reasons, logging activities continued unabated.

  1.16 DEPARTMENT OF ENVIRONMENT AND CONSERVATION

  1.16.1. Mr Michael Wau,who is the Director Environmental Wing, gave an account of the processes that have to be undertaken in order for Environmental Permits to be issued. In this instance, an Environmental Permit was issued to commence on 6 January 2009.

  1.16.2 In terms of the steps that were undertaken, C.O.I noted on file that there was indeed the Step 1 which is a notification of preparatory

• Page 60 of 186

• work, and that was prepared and lodged by Brilliant Investment on 2 April 2008. Then secondly, that an Environmental Inception Report needs to be submitted, and that was done so on 2 May 2008. Then there was an Environmental Impact Statement which was also lodged on 24 June 2008 and this Environmental Impact Statement needed to be accepted by the Director, after that, there was a public review and stakeholder review process that happened. The notice was put out on 24 July 2008.

  1.16.3. Interestingly, there was a letter from the East Sepik Provincial Administration dated 8 August 2008 but it was received on 4 September 2008 which actually highlights quite critically issues that the writer had with the proposed project and the true impact that it will have on the community.

  1.16.4. Interestingly In a letter dated 15 December 2008, the Environmental Impact Statement was initially rejected for two reasons; firstly, there was insufficient information on the biological component of the Environmental Impact Statement; and secondly, there was concern on the authenticity of the information provided.

  1.16.5 The suggestion was that the Environmental Impact Statement was to be reviewed and resubmitted to the Director of Environment. It appears that that must have been done, it is not quite clear on the file, the process there but we see the next step being the Counsel has made positive recommendations and that has led to the Ministerial Approval in Principle which is essentially the final step before the granting of Environment Permits. So the

  Environmental Council met and a decision in favour of granting, the appropriate approvals were made.

  1.16.6 So the approval in principal,wasgranted by the concerned Minister on 19 November 2008.

  1.16.7. The actual Environmental Permit which is two permits includes one is essentially to discharge waste and the other one is to use and take water. Those were granted on 1 December 2008 and 9 December 2009. So that is the permitting process that Brilliant Investment went through.

  1,17 The Commission makes the following findings

  1.17.1. Land Investigation Report conducted and signed by Mr Simon Malu, Customary Lands Officer was fundamentally flawed, The LIR dated 10th January 2007 (amongst other things) failed to address the following issues consistent with majority consent

  17.1.1. The Report was based on the application of Brilliant, who obviously was not a landowner company. The Shareholders and Directors of the Company were foreigners.

  17.1.2. Total alienation of the land for ninety-nine years by the landgroups is misleading, because Brilliant does not have any connection to the land at Marienberg.

  17.1.3. Mr Malu?s recommendation and Certification is baseless because of the total lack of content in the field investigation

  and the consent of the people over Brilliant?s application. The statement however genuine it is does not reflect the true feelings of the people as follows;

• Page 61 of 186

• “The Landowners have missed out on vital government services for quiet (sic) too long and they see this as a window of opportunity which they have initiated themselves to gain from and realise some potential economic benefit with their own resources can generate and which they can fully participate in the development of their area”

  17.1.4. The Schedule of Owners Status and Rights to land indicate 17 pages of names of each clan but really fails to show the connection within the whole report.

  17.1.5. The Declaration of custom in relation to land tenure consists of 10 pages of names with some signatures. These signatures required to/ be authenticated as it involves illiterate and unsophisticated individuals who seem to know how to sign. I have alluded to the observation that forgery may have occurred with the signatures sighted against the names. An example is that of Mr Alois Jerewai?s name and signature appearing in the list is undoubtedly not his signature.

  17.1.6. No land boundary walk certified over the huge land area.

  17.1.7. No Recommendation as to Alienability noted and signed by the Provincial Administrator including the reservation of

  customary rights over the land during the period of the SABL lease.

  17.1.8. Mr Moses Gawi was the main player in this SABL grant to Brilliant and we cannot single out any individuals for that matter. It is so unrealistic in the dealings he made in 2006 with Brilliant and continued on into the agro-forest cocoa project.

  17.1.9. To absolve himself from this situation, Mr Gawi in my view was ignorant of the wishes of his people, and we are mindful of the fact that development must come to Marienberg, but not in the context for logging. On 28th September 2011 he wrote to the C.O.,I and enclosed the LIR which we found is highly irregular and will only lead to nullification and new process to be followed as a matter of course. This he says in his letter, “…For the record, we the landowners, gave our consents and authority through our clan representatives for BIL to be nominated entity to which the gazettal of the lease should be issued to.”

  17.1.10. We have received evidence from the company Brilliant Investment Limited as to the operation and the costs that they have imposed on this project. We are of the view that despite those aspects and concerns, we are also mindful of the fact that the huge areas within the SABL have been logged hence question arise as to how much more will required to be cleared to undertake pure cocoa agricultural activity.

  17.1.11 The C.O.I site inspection revealed wholesale logging activity and also less on the agriculture component. There was a nursery located in the site, but the condition of the nursery, the broken down water pump to irrigate the land and the state of the housing needs of the workers leaves much to be desired. The Office complex located at the Log pond and Jetty on the Sepik River is not permanent and consist of makeshift buildings, indicating that movements within the area is normal process for the Developer, who has no capacity to develop the cocoa project at Marienberg.

• Page 62 of 186

• 1.18. RECOMMENDATION

  1.18.1. The SABL Portion 146C is recommended to be revoked forthwith.

  (a) The landowners of the Marienberg community are encouraged to mobilise their ILG groups in a more coordinated and transparent manner. The SABL process requires to be revisited and proper Land Investigation conducted to ensure that majority consent is obtained from all the members of the clan/.ILG.

  (b) The Landowners must also seek assistance of the Department of Commerce and Industry to vet and engage a reputable agriculture investor to under the large scale cocoa project at Marienberg. The developer must not be a logging operator who will then sub-contract to an agriculture company to undertake the activity, but a company that has the financial resources to develop the cocoa project.

  COI Inquiry File No. 75 for Special Purpose Agricultural and Business Lease over Portion 55C Volume 19 Folio 14 Milinch: Masalagar, East Sepik Province in the name of Nungawa Rainforest Management Alliance Limited.

  1.1 In accordance with the powers given to the Commissioners pursuant to section 7 of the Act, the Commissioners have summoned numerous witnesses to produce documents and be further examined on oath or affirmation.

  1.2 Witnesses were called from the six government agencies involved in the issuance and operation of the Nungawa Rainforest Management Alliance Limited SABL. These were:

  1.2.1 Department of East Sepik Province, (DESP) 1.2.2 Department of Lands and Physical Planning, (DLPP) 1.2.3 Department of Provincial Affairs and Local Level Government, (DPALLG) 1.2.4 Department of Agriculture and Livestock, (DAL) 1.2.5 Department of Environment and Conservation, (DEC) 1.2.6 PNG Forest Authority (PNGFA)

  1.3 The names of the persons who have been summoned to appear and who have in fact appeared in the public hearings (in alphabetical order), including titles, are set out in the schedule below. For ease of reference, the schedule also lists the transcript pages at which the person commenced giving evidence against the name of the witness.

  No

  Name and Position

  Pages

  Day

  Date

• Page 63 of 186

• 1 Mr Peter Yapog, Acting Provincial Customary Lands Officer, Division of Lands &Physical Planning, DESP 101-147 5 14/02/12-SABL 5 WEWAK 2 Mr Richard Kali, 18-35 2 09/02/12-SABL 2 WEWAK

  Provincial Forest Officer

  DESP 3-19 4 13/02/12-SABL 4 WEWAK 3 Hon. Mr Gabriel Kapris MP & Minister for Commerce & Industry, Division of Agriculture & Livestock 53-68 4 13/02/12-SABL 4 WEWAK 4 Mr Steven Mera Secretary, Department of Commerce and Industry, 69-100 4 13/02/12-SABL 4 WEWAK 5 Hon. Mr Tony W. Aimo, MP, Landowner. 101-137 4 13/02/12-SABL 4 WEWAK 6 Mr Suriya Moorthy, CEO, SPZ Ltd 51-92 5 14/02/12-SABL 5 WEWAK 7 Mr Sugunarao Subramanian, General Manager-, SPZ Ltd 92-100 5 14/02/12-SABL 5 WEWAK 8 Mr Andrew Sapuko, Landowner 149-161 5

• Page 64 of 186

• 14/02/12-SABL 5 WEWAK 9 Mr Alex Anisi, Former Premier of ESP, Businessman & Landowner 162-171 5 14/02/12-SABL 5 WEWAK 10 Mr Don Bakat, Consultant 10-42 6 15/02/12-SABL 6 WEWAK

  & Landowner 65-87 6 15/02/12-SABL 6 WEWAK 11 Mr Roy Kenba Balagawi CEO, Basse Oil Palm Ltd & Landowner, Ambunti 43-51 6 15/02/12-SABL 6 WEWAK 12 Mr Mose Joshua, Landowner 51-62 6 15/02/12-SABL 6 WEWAK 13 Mr Augustine Kaugen, Landowner 64-65 6 15/02/12-SABL 6 WEWAK 14 Mr Sam Akike, Landowner 88-100 6 15/02/12-SABL 6 WEWAK 15 Mr Michael Caypah, Landowner 116-122 6 15/02/12-SABL 6 WEWAK

  16 Mr Michael Koimo, Landowner 122-123 6 15/02/12-SABL 6 WEWAK

• Page 65 of 186

• 17 Mr Michael Marmber, Landowner 125-127 6 15/02/12-SABL 6 WEWAK 18 Mr Gabriel Dagun, Landowner 128-132 6 15/02/12-SABL 6 WEWAK 19 Mr Michael Sau, Landowner 138-158 6 15/02/12-SABL 6 WEWAK 20 Mr Francis Daink, Deputy Secretary (PATS), DAL 12-26 2-33

  05/09/11-SABL13 (Waigani) 06/09/11-SABL (Waigani) 21 Mr Leka Mou, Agriculturalist, DAL 1-33 8 29/02/12-SABL8 WEWAK (Waigani) 22 Mr Pepi Kimas, Former Secretary, DLPP

  January 2012 SABL WAIGANI 23 Mr Simon Malu, DLPP Director, Customary Leases, DLPP

  January 2012-SABL WAIGANI

  Parties represented by counsel

  Section 8 of the Act relates to the appearance of counsel before the Commission on behalf of interested parties. It provides that:

  “Subject to Section 2(5), a person who satisfies the Commission that he has a bona fide interest in the subject matter of an inquiry under this Act, and any other person by leave of the Commission,

• Page 66 of 186

• may attend the inquiry in person or may be represented by counsel.”

  The following were granted leave to be represented by counsel

  Exhibits and documents There were Twelve (12) documents tendered as evidence before the Commission at the public hearings. A list of the Exhibits is shown below.

  NO Item Interested Party Date received Exhibit Number 1 Petition to C.O.I SABL- NRMAL COI 13/02/12 NRMAL “1” 2 NEC Decision No. 8 of 2009 Nungwaia Bongos Integrated Large Scale Agricultural Projects (2 pages) COI/NRMAL/SPZ 13/02/12 NRMAL”2” 3 NEC Decision No. 288 of 2008 Nungwaia Bongos Integrated Large Scale Agricultural Projects 15 December 2008 COI/NRMAL/SPZ/Commerce & Industry 13/02/12 NRMAL”3” 4 Affidavit of Hon. Tony Aimo, MP dated 8th September, 2011 COI 13/02/12 TA “1” 5 Letter to the President- Roadline Construction dated 14 October 2011 COI 13/02/12 TWA”2” 6 Affidavit of Mr Suriya Moorthy -CEO of SPZ COI 14/02/12 Exhibit ”3” 7 Affidavit of Mr Sugunarao V. Subramanian, Plantation General Manager, SPZ

• Page 67 of 186

• COI 14/02/12 Exhibit “4” 8 Land Investigation Report prepared by Mr Yapog, Senior Customary Lands Officer, Division of Lands, ESP Administration. C.O.I. 14/02/12 NRMAL”5” 9 Instrument of Lease/Lease Back Agreement dated 3 March 2011 C.O.I 14/02/12 NRMAL “6” 10 Affidavit of Mr Don Bakat, Background to the COI 15/02/12 NRMAL”8”

  Project and his concerns over the acquisition of SABL

  11 Submission by Moses Joshua-Secretary, Wamagian Development Corporation Limited COI 15/02/12 NRMAL”9” 12 Letter by Sam Akike dated 8th February 2012 COI 15/02/12 NRMAL”10”

  Timeline of events of note surrounding Nungwaia Rainforest Management Alliance Limited SABL Title

  The timeline showing important events concerning the SABL is shown below in chronological order of their happening:

  No Milestone Dated of Completion/G rant/Issue Execution Proponent/Applican t Respondent Entity/Respondent 1 Certificate of Recognition of ILGs 22/11/2000 230 Land Group Chairman

• Page 68 of 186

• ILG 2 FMA Agreement between State and 230 ILGs 2006 230 ILGs and PNG Forest Authority ILG 3 Formalization of Project Agreement between State and SPZ Enterprise (PNG) Ltd 16th April 2009 State and SPZ Enterprises (PNG) Ltd SPZ/STATE 4 Consent of 230 ILGs to terminate NB-FMA Agreement 29th June 2009 PNG Forest Authority and 230 ILGs (Supplementary of 157 ILGs also added to the list) SPZ 5 NEC Decision 08/2009 re Proposed Project for NB- Integrated Large Scale Agricultural Project (NBILSA Project) 2009 Hon. Gabriel Kapris MP, Hon. Tony Aimo, MP STATE 6 Public Hearing on the Proposed NBILSA Project 30 October 2009 Drekikir Station, Hon. G. Kapris MP, Ronald Asik MP & T. Aimo MP, Mr Samson Torovi, Mr Daink, Mr Mera, Mr STATE/STAKEH OLDERS

  Hobiago, Mr George Gua, Mr Tom Peni, Mr Swong, Mr Failau, Mr Aulem, & Mr Buruka including Chairman of ILGs present.

  7 Certificate of Compliance for large scale conversion of Forest to Agriculture or other land use development 3rd December 2009 PNG Forest Authority/DAL/SPZ Enterprises (PNG) Ltd. SPZ 8 FMA Agreement terminated 18 November 2009 Hon, Belden Namah, Minister for Forest STATE 9

• Page 69 of 186

• Environment Impact Statement 13 May 2010 SPZ/DEC SPZ 10 Supplementary ILGs comprising 157 Landgroups added to the 230 ILGs for NB confirmed 15-16th May 2010. Hon Tony Aimo present/ All 157 ILG Chairman confirming and signing the ILG application for Registration. SPZ 11 Incorporation of Nungwaia Rainforest Management Alliance Limited 08th October 2010 NRMAL NRMAL 12 Land Investigation Report Two weeks commencing 13/11/10 and ending on 22/11/10 Mr Yapog/Mr Tony Aimo MP/Certain ILG Chairman DLPP 13 Survey of Portion 55C Masalaga, ESP 12/02/11 Completed and certified by Surveyor General DLPP 14 Instrument of Lease/Lease Back Agreement between State and NRMAL 03 April 2011 T Aimo MP and Agents of ILGs (Question as to the nomination of the Agents not recorded in LIR) DLPP/NRMAL 15 Written Protest by on Notice of Direct Grant and prior to issuance of SABL Title 04 April 2011 Protest against SABL to NRMAL for NB/DLPP not respond to protest even though they physically met with Mr Malo of DLPP. ILG 16 SABL Title issued in the name of NRMAL 19th April 2009 NRMAL-99 year lease/lease back NRMAL 17 Agriculture Sublease Agreement between NRMAL and SPZ 20 May 2011 Mr Herman Massimbor, Chairman signed at Ela Beach Hotel, NRMAL/STATE

• Page 70 of 186

• Port Moresby with Mr Peter Song, Chairman, SPZ

  18 K1million Advance Rental paid by SPZ to NRMAL 10 June 2011 Received by Interim Chairman, Mr Massimbor at Ela Beach Hotel pool Side. NRMAL 19 K1million deposited into NRMAL ANZ Operating A/C. 14 June 2011 ANZ Harbour City Branch, Konedobu NRMAL 20 Forest Clearance Authority

  Completed and registered but not issued to date SPZ

  FINDINGS

  The findings follow the chronology of table of notable events above surrounding the SABL lease title held by Nungwaia Rainforest Management Alliance Limited.

  Nungwaia Rainforest Management Alliance Limited SABL A Notice of Direct Grant under Section 102 of the Land Act was made in the National Gazette No. G86 dated 4th April 2011 for Portion 55C Masalaga Land. The term of the lease was for ninety- nine (99) years. A Special Agricultural and Business Lease was registered and issued on 4th April 2011 by the Department of Lands and Physical Planning to the holder Nungwaia Rainforest Management Alliance Limited (NRMAL). Mr Pepi S. Kimas, OL signed as delegate of the Minister for Lands. The detail of the SABL is shown below:

  Legal Description Portion 55C Registered Survey Plan Catalogue No 3/671 SABL Holder Nungwaia Rainforest Management Alliance Limited Date of Registration of Lease 4th April, 2011 Period of Lease Ninety-nine (99) years Land area of lease 109,500.0 hectares

  The Nungwaia Bongos Integrated Large Scale Agro Forest Project (NBILSAF) comprises 110,415 hectares of land within theAmbunti/Drekikier Districts of the East Sepik Province. That is referred to as SABL Portion 55C which is held in the name of NRMAL.

• Page 71 of 186

• The Commission acknowledges the efforts of the political leaders of the East Sepik Province and Sandaun Province in 1996 who promoted the concept of developing large scale agro forest projects to empower the least developed areas of the province. That concept has continued to progress with involvement of concerned landowners and ably assisted by District Administrators, Office of the Provincial Administrator, and key government agencies, Key Stakeholders and the National Government.

  However, there are matters of importance that needs to be fairly well understood when it comes to the acquisition, registration and alienation of customary land for periods of up to 99 years. The NBILSAF inquiry determines that whilst there is noble and genuine effort to progress and promote development, the majority consensus and agreement of all members of the landowning group must in principle be acquired to part with their land for one (1) year to ninety-nine (99) years. That is the compulsory statutory requirement pursuant to section 11 and 102 of the Land Act.

  C.O.I SABL INQUIRY INTO SABL PORTION 55C TO NUNGWAIA RAINFOREST MANAGEMENT ALLIANCE LTD

  The following facts arise out of the evidence and documents submitted by all concerned persons which is essential to determine if the statutory requirements for acquisition of the land known as “Masalaga” was satisfied

  1. May 2008 Daniel Katakumb on behalf of the landowners of Aplatak and Hambukan villages within the land known as Bassei advised the Hon. Tony Aimo on the establishment of the Oil Palm Development Project.

  2. The initiative for the oil palm project was initiated by the landowners and included the conducting of a feasibility study and documentation for the project at their own expense. The report was submitted to then Prime Minister, Right Honourable Grand Chief Sir Michael Somare who supported the project. The Prime Minister referred the Feasibility Study Report to Hon. Patrick Pruaitch, then Minister for Forest and Hon. Peter Hickey, then Minister for Agriculture and Livestock to provide funding and technical assistance to the Bassei Landowners.

  3. Hon Tony Aimo was asked by the landowners to support the initiative financially as it will encompass the Ambunti/Drekikier Electorate with the desire to develop the area into a major oil palm producer.

  4. At the time Mr Aimo was informed on the landowners initiative to develop the oil palm project at Bassei, there was an existing Forest Management Authority (FMA) Agreement between the 230 Incorporated Land Groups in the land known as Nungwaia-Bongos. The 230 ILGs had agreed to allow the area known as Nungwaia/Bongos to be made “available for forest management and harvesting in accordance with „sustained yield principle”25. The Agreement was executed between the 230 ILGs and the

  25Refer to RECITAL E to the FMA Agreement and Clause 19 of the Agreement defines sustained yield principle means “the management and control of forest management and harvesting in accordance with any applicable standards and/or code of practice to ensure that the net

• Page 72 of 186

• harvestable forest area contained within the minimum sustainable working area will yield a perpetual, more or less even flow of industrial wood which is harvested in a manner which does not adversely affect forest productivity, and which minimises the risk of adverse impact on environmental values.

  Papua New Guinea Forest Authority (PNG Forest Authority) on 16th August 2006 for a period of fifty years.

  5. I also note that the Provincial Forest Management Committee certified on their inquiry pursuant to section 21 of the Forestry Act that the customary landowners were willing to enter into the FMA Agreement. The resolution was certified by the then chairman Mr John Alman on 27th March 2006

  6. Mr Valentine Kambori signed as the Chairperson of the PNGFA witnessed by Mr Pouru, the MD of NFS

  7. I note from the bundle of documents provided to the C.O.I on 26th September 2011 (Exhibit) that Hon. Tony Aimo, (as the then Minister for Correctional Services), received a letter dated 3rd September 2008 from then Minister for Forest, Hon. Belden Namah MP, informing him on the progress of the submission pertaining to Mr Aimo?s electorate landowners wishes to convert the Nungwaia Bongos FMA to a large scale Agriculture Timber Authority was under consideration. Mr Namah further advised that, “…The Managing Director was personally directed by myself to facilitate the request which I now understand has been done accordingly, and the National Forest Service has furnished a positive recommendation to the National Forest Board..” to officially approve the conversion of FMA to FCA at the PNG Forest Board Meeting to be convened on 25th September 2008.

  8. Between 28th and 30th July 2009, the original 230 ILGs who executed the FMA agreement pursuant to the Forestry Act 1991, collectively consented to revoke and cancel the FMA agreement. There is no record as to how the ILGs were advised on that decision, but the records indicates of the signing

  of Consent Form pursuant to Forestry Act (as amended) to cancel FMA. The cancellation meant that any process to acquire FCA would require acquisition of land under SABL and the Agricultural component as required by the Forestry Act.

  9. On 18th May 2009, Mr Namah, MP (then Minister for Forest) terminated the FMA Agreement on 18th November 2009. Despite that termination, the FCA process would require separate submission for FCA on the part of all landowners in relation to agro-forest project at Nungwaia Bongos.

  10. I accept that Mr Aimo, MP, Landowner and life member of NRMAL conveniently commenced the process to convert the existing FMA to FCA as a precursor to the process of further converting the FMA surveyed area into a SABL. That process I consider started when the Bassei Landowners conducted the feasibility study report in 2008 and made known their intention to seek the support of their leaders. This is notable with regard to the intense objections that existed and was evident at the time the COI convened its hearing at Wewak. within the SABL Portion 55C by Bassei Landowning Group and Mapsera Development Limited the title holder to SABL Portion 54C which is located within the Portion 55C.

  NEC Decision 288/2008-11th December 2008 (Exhibit NRMAL 2-SABL 4 Wewak 13/02/12)

• Page 73 of 186

• NEC approved the process of preparing a project agreement for the Nungwaia Bongos Project subject to the guidelines for Development Project Proposals and Project Agreement. The Decision was made on 11 December 2008.

  NEC Decision 08 of 2009 11th February 2009 (Exhibit NRMAL 3-SABL 4 Wewak 13/02/12)

  11 The underlying reason for the large scale agriculture project was “…that project has been in the pipeline for …about more than 20 years, and with the intention of the landowners using the resources to allow for tangible development whether it be in forestry, logging or into agriculture. ..Intentionally the project was going to be forestry logging but because of the importance of the resource, we would like to change that into a large scale agriculture project with the government giving approval for the Forest Clearance Authority to allow land to be used for agriculture.” (Kapris at page 54 of the Transcript of Proceedings SABL 4-Wewak 13/02/12)

  The involvement of Tony Aimo, Gabriel Kapris is commendable, however the aspects of acquiring customary land for agro-forest project should be allowed to be processed independently from political manipulation and pressure, which undoubtedly came in the form of NEC Decision 08 of 2009.

  It is evident that the then Minister for Commerce and Industry and former Member of Maprik/Wosera sponsored the Statutory Business Paper on Nungwaia Bongos Integrated Large Scale Agriculture Project to NEC and the NEC approved for a project agreement to be executed between the State and the SPZ Enterprises PNG Pty Ltd (Developer) through a Foreign Direct Investment (FDI) the responsibility of the Department of Commerce and Industry compelling the key state agencies involved in SABL and related agro forest requirements to be directed including the application, registration and issuance of lease/lease back of customary land (DLPP), the issuance of Environment Permits (DEC), Certificate of compliance of large scale agro forest activity

  (DAL), Forest Clearance Authority (PNG Forest Authority) and Import and Excise Tax Exemptions (IRC)

  Under the NEC Directive, the lead agency was Department of Commerce and Industry whose sole responsibility was to facilitate the project agreement and implement the directive.

  It is not known as to how SPZ Enterprises (PNG) Ltd was chosen by Commerce and Industry to be the developer of the Project. SPZ company profile and IPA foreign registration clearly indicates that it has experience in forestry and logging activities but clearly lacks capacity to undertake large scale agro forest activity in a huge area under SABL Portion 55C. The website address was only constructed in 2011 and lacks relevant details as to its operations in Australia and elsewhere.

  Department of Commerce and Industry

  The Department through Ministerial oversight involved in ensuring that SPZ Enterprises (PNG) Limited was nominated as the Developer of the project. The Department according to the Minister was tasked with the responsibility of assisting Papua New Guineans into business, setting up on industries into downstream processing of agricultural process.

  According to Mr Mera, the Department of Commerce and Industry is responsible for industrial

• Page 74 of 186

• projects upstream, downstream, for mining projects in the past, large agricultural projects, salt and Napa Napa Oil and in recent times, sectoral agencies have gone and taken sector projects which the Department supports and complements. Amongst these portfolio, the Department is involved when investors or the government ask Commerce and Industry in

  economic corridor projects such as Nungwaia Bongos, which cuts across the southern part of East and West New Britain trying to connect and the Toriu Agro-Forestry project which cuts across the north trying to open up the northern corridor and the Drimgas Trans Papuan Highway linking Gulf, Central and NCD..

  Recommendations

  The involvement of the Department of Commerce and Industry is very important and necessary for landowner involvement in large scale agro forest project. The functions of the Department involves assistance to landowner companies in gaining access to foreign developer who have the technical, financial, equipment and resources to embark on large scale agricultural projects as partners in a joint venture agreement.

  The Department involve itself in projects that were already processed through the NEC Decision for example, Nungwaia Bongos Large Scale Integrated Agricultural Project (ESP/Sandaun), Gre Drimgas Trans Papuan Highway project (Western Province/Gulf/Central/NCD), Illi Wawas Project as economic corridor projects (ENBP/WNBP) Changhae Tapiocca (CP) and Toriu Agro- Forest projects (WNBP)

  The Departments national function is to ensure that the right Developers are engaged through a transparent tendering process. The Department must cause due diligence on the developer in respect of their financial and technical capabilities internationally. The Department must support all business ventures operated by land owner companies in respect of SABLs rather than on the basis of regional or wantok system basis. There must be dialogue with all the relevant agencies of government where the land is customary land. That the involvement

  of the Department was lacking in some of the least developed provinces where SABL existed. (Kapris @ pages 55-57 and Steven Mera at pages of Transcript SABL 4-Wewak 13/02/12 respectively)

  The Departments portfolio and responsibilities under SABL would include 1 Registrar of Cooperative Society

  2. Foreign Direct Investment (FDI)

  There is a need for transparency in the choice of developers.

  * Awareness with Landowners as to the project and the requirement to engage a developer with the necessary capacity to develop agriculture projects. * Call for international and domestic tendering process-with the involvement of the landowners and provincial administration. * Inter-agency involvement with no political involvement, even where the landowner is a politician,

• Page 75 of 186

• there is a need to refer all matters through a transparent process.

  PROJECT AGREEMENT BETWEEN THE STATE AND SPZ ENTERPRISE (PNG) PTY LTD (Document submitted to C.O.I. on 26th September 2011)

  The Project Agreement was executed on 16th April, 2009 between the State and SPZ. The Project agreement was cleared by then State Solicitor Mr George Minjihau, pursuant to NEC Decision 08/009.

  The Commission has not sighted any documentation to ascertain whether the Office of the Attorney General had undertaken due diligence and due regard in the preparation, consideration and advice to government on the legal implication of the agreement concerning a vast area of customary land, and to accept on face value the decision of the NEC.

  Grand Chief Sir Paulias Matane, Governor General signed for the State and Mr Peter Song, Chairman, SPZ signed for the developer. There is no reference made whatsoever to the landgroups and land owners of Nungwaia Bongos in respect of what was to be economic corridor project involving the Nungwaia Bongos and the Sandaun Province

  We set out some pertinent aspects of the Contract we consider in its entirety to be unfair and no doubt imposes obligations that is viewed as compelling to the State, all key government agencies directly involved in SABL process including the unsuspecting landowners whose involvement was virtually non-existent from the inception of the choice of the developer and the project agreement phase.

  a. The Agreement provides no specified period of time for parties to negotiate an option to renew agreement. The contract commenced retrospect to February 2009. (Clause 2-Commencement, Term and Project Implementation)

  b. The Agreement compels the State, the Provincial Government and the key state agencies to ensure that all necessary requirements are processed for the company to com