From PNGexposed blog

SABL Commission of Inquiry Report 1: Pages 198-206

“We found serious flaws and irregularities in the granting of the SABL… Not all the landowners gave their consent to lease out their land… the whole SABL [is] defective and therefore, null and void” [p204]

“The consider the conduct of the developer – VPL to be unethical, improper and wrong. The developer has taken over a role that clearly belongs to the State. Moreso [sic], the whole arrangement gives rise to a conflict of interest situation.” [p203]

“It is obvious from the terms of the MOA that VPL was more interested in logging rather than getting into a long term sustainable agro-forestry business…” [p205]

The sub-lease drafted by Gadens lawyers “is unreasonable and simply inadequate” and contains “defective” clauses [p204]

“The SABL is tainted with so many defects that it cannot lawfully stand as a legitimate SABL” [p206]

“We recommend that the SABL .. is to be REVOKED“ [p206 emphasis in the original] 

This case study covers the Special Agriculture and Business Lease over Portion 146C in Northern (Oro) Province.

The SABL covers 28,100 hectares of customary land in the lower Musa area of Tufi in Northern Province.

The SABL was granted to Oken Goto Karato Development Corporation (OGKD) for a term of 99 years in March 2007 by Pepi Kimas as Secretary of the Department of Lands and Physical Planning (DLPP). The SABL was granted for an unspecified  “Tree Farming” project.

OGKD is a landowner company incorporated under the Land Groups Incorporation Act “and purports to represent the landowners in and around the project area” [p200]. The company has 14 shareholders (each with 1 share) and 10 Directors.

OGKD nominated Victory Plantation Limited (VPL) as the preferred developer. Both OGKD and VPL share the same registered address in Defence Haus in Port Moresby.

VPL is owned by an Australian, Edward Studdy, and has two Directors, Edward Studdy and Nicholas Studdy. The company has declared assets of K100,000. [Edward and Nick Studdy are the Managing Director and General Manager respectively for Capital Steel, an Australian company with offices in Sydney, Melbourne, Adelaide and Port Moresby].

Records indicate the land investigations were conducted by Hubert Murray Yaga from the Deprtment of Oro and Simon Malu from DLPP. They also prepared the Land Investigation Report (LIR). But Mr Yaga denied any involvement and told the inquiry VPL had engaged Simon Malu to do the work without his knowledge and he simply signed the completed documents when they were presented to him.

“It is clear from the evidence that the lands Officers in the department of Oro had little or no role at all in the land investigation process (LIP) and the preparation of the Land Investigation Report (LIR). We found that the whole process were been [sic] ‘high jacked’ by DLPP and were done without the knowledge of the Provincial Authorities. This is in breach of the established practice and protocols…” [p202/203]

There were no public hearings, officers talked only to a small number of landowners, they did not get the consent of the majority of people in the area and they did not walk the boundary (a pre requisite requirement for issuing an SABL).

“The developer – Victory Plantation Limited (VPL) played a major role is assisting the facilitation of the entire land acquisition process and collaborated with Simon Malu and Alois from DLPP…” [p203]

“We doubt if the land investigations was ever carried out at all and the LIR completed freely, fairly and independently without any undue influence from VPL…” [p203]

The LIR was incomplete and lacked vital information important to obtaining an SABL lease.

“Many names on the Agenct Agreement form appear to be signed by the same person which suggests fraud” [p203]

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

“Without the CoA, customary land cannot be alienated”. [p206]

There is a Memorandum of Agreement (MoA) signed in January 2007 between OGKDC and VPL for VPL to develop an agriculture project under a sub-lease. The sub-lease provides for an annual rental of K14,000 at the rate of 50 toea per hectare payable to OGKD.

The sub lease was drawn up by Gadens Lawyers of Port Moresby on the instructions of VPL.

“The annual rent payment of K14,000 (at the rate of 50 toea per hectare) payable to the landowners … is unreasonable and simply inadequate”. There are no mention of other benefits. [p204]

The MoA requires VPL to sublease land back to the landowners to build their homes and make gardens which may attract rental payments from the landowners to VPL.

“This provision is simply outrageous as the customary landowners are entitled to some ‘residual or reserve rights’… the landowners cannot be totally excluded from having access to their land”. [p204/5]

“It is obvious from the terms of the MOA that VPL was more interested in logging rather than getting into a long term sustainable agro-forestry business… Generally, the MoA simply does not promote the objectives and purpose of the SABL.” [p205]

There is no Agriculture Development Plan (ADP). Without an ADP no Forest Clearance Authority (FCA) can be issued. There is no Environment Impact Assessment (EIA). There is no Forest Working Plan or Annual Clear Felling Plan.

“VPL has failed on its obligations to provide the Plans”. [p205]

No Forest Clearance Authority (FCA) has been issued, but evidence suggests VPL has already carried out some clear felling logging operations.

“VPL is using tree farming as a ‘front’ to go into a full scale logging operation… the inquiry has also found similar situations in other SABLs” [p205]

The SABL is stated to be for 99 years. In the Lease-Leaseback Agreement the landowners gave their consent of a 60 year lease. In the LIR a term of 33 years is stated. This is a “serious inconsistency and anomaly. A fundamental error or oversight has occurred regarding the term of the lease that could render the whole SABL defective” [p206]

“We recommend that the SABL .. is to be REVOKED. The SABL is tainted with so many defects that it cannot lawfully stand as a legitimate SABL. This effectively means any sublease … with … Victory Plantation Limited (VPL) is void and is of no effect.” [p206emphasis in the original]