From PNGexposed blog

SABL Commission of Inquiry Report 1: Pages 125-143

 ”What was particularly unacceptable … is the fact that this SABL was granted to an entity which had already been sold for ‘cash’ by its original one man owner (Mr Belden Norman Namah) to another one man owner (Mr Jimmy Tse). The latter had nothing in common with the resource owners. He particularly did not have their informed approval under law to be the sole owner of the SABL title holder” [p138]

“Bewani Palm Oil Ltd, a landowner company with an asset base of a 99-year SABL containing 139,909 hectares of virgin tropical forest tract, was sold for ‘cash to a person who was not consciously approved by the landowners through Section 102 (Land Act 1996) process.” [p127]

 ”The seemingly reckless speculative behaviour without any safety legal mechanism being in place, particularly with the biggest asset that the people of Bewani have at the centre of it, is almost criminal in nature” [p128]

 ”‘Informed consent’ of the landowners … was not obtained prior to the issuing of the SABL title”. [p141]

“Mr Pepi Kimas, former Secretary of DLPP… said he was under a lot of ‘political pressure’ to issue the direct grant to Bewani Palm Oil Development Limited. He said he was pressured from the Prime Minister’s level down” [p137/8]

 ”The failure of the Provincial Administrator and the Lands Officer who advised him possibly borders on criminal negligence” [p141]

 ”The Land Investigation Process (LIP) was not properly carried out and the Land Investigation Report (LIR) was badly done. There were no reservations [of landowner rights] [p139] “That is a reckless failure” [p141]

 The Provincial administrator “was ‘forced’ by certain officers of the DLPP [Department of Lands and Physical Planning] to sign the Certificate of Alienability.. there was a lot of ‘political pressure’ to sign.” [p131]

 ”The ability by DAL, DEC and PNGFA to effectively monitor permit conditions to ensure compliance is almost non-existent” [p140]

“The COI recommends that the SABL grant over Portion 160C to Bewani Palm Oil Development Limited is to be REVOKED and REVIEWED“ [p141 emphasis in the original]

This Case Study covers the Special Agriculture and Business Lease over Portion 160C in West Sepik Province

Portion 160C is a ‘direct grant’ to Bewani Palm Oil Development Ltd of Bewani in the Sandaun (West Sepik) Province. It is a 99 year SABL covering 139,909 hectares. Prior to conversion to an SABL the entire 139,909 hectares was customary land. The grant is dated July 2008 and was issued by then Secretary Department of Lands and Physical Planning (DLPP) Pepi Kimas.

In April 2008, barely a month from the date of incorporation, Bewani Palm Oil Development Ltd (BPOD) changed ownership. It was sold for “cash” by the sole shareholder Belden Norman Namah to one Jimmy Tse. [There is no record of the size of the cash payment or what happened to the money].

All the original directors ceased to be directors and Jimmy Tse and one Hung Kai Hii (a Malaysian national) then became directors. In October 2010 Hung Kai Hii ceased to be a director leaving Jimmy Tse (who appears to be a Papua New Giuinean) as the sole director.

In November 2008 Bewani Palm Oil Development (by then fully owned by Jimmy Tse) issued 999,900 shares, bringing the total issued to one million.

“It remains unknown but … the extra share issue is unlikely to have been authorized by a Board of Directors’ resolution”.

In March 2009 Jimmy Tse transferred all the one million shares for K1.00 each; 800,000 to Million Miles Group Ltd of Singapore; 150,000 to Bewani Palms Management Ltd in trust for four landowner groups; 50,000 shares tp Bewani Palms Management Ltd.

Million Miles Group Ltd (MMG) has its registered office in the British Virgin Islands. Therefore the implications that for  time a landowner company with unrestricted control of a 99 year SABL lease containing 139,909 hectares of virgin tropical forest was effectively in foreign hands.

The CoI was not able to ascertain the motives behind the sale and resale of BPOB.

“The whole transaction remains a total mystery”. It was “dangerous speculative behaviour” [p128]

“Contrary to the law’s intent the SABL was directly granted to a non-landowner, a one-man ‘paper company’. It was then transferred to a foreign entity.

In October 2010 MMG Ltd transferred all its shares to four landowner companies that now own equal shares in BPOD – Palms 21 Limited, Momu Holdings Limited, Ossima Yalamaki Limited and Bulaulai Limited.

Bulaulai Ltd is owned by 11 ILGs. Ossima Yalamaki Ltd is owned by 13 persons who are also its directors. Momu Holdings is owned by Camillus Abu and Jacob Yani. There are 9 directors. Palms 21 is owned by 23 ILGs.

The developer is Bewani Palm Oil Plantations Ltd (BPOP). It is owned by Kim Tee TEE and Lip Hian TEE (both Malaysians). BOPP has a sub-lease of the remaining term of the SABL entered into in November 2010. There is also a Project Agreement between BPOP, BPOD and the landowner companies.

Kim Tee TEE and Lip Hian TEE also own Vanimo Forest Products Limited that is involved in other logging projects in Sundaun Province.

Bewani Forest Products is the contracted entity visible on the ground in the SABL area. It is owned by the same to people who own the sub-lease over Bewani oil Palm Plantations. Vanimo Forest Products (VFP) is the entity carrying out selective logging operations on the ground in the SABL area. There has been no formal agreement to engage VFP produced.

BPOD is a non-functional “peper” landowner company. It has no management structure and the single director has no idea how the company is faring. There has never been a board meeting.

“The sub-lease holder seems to have transferred operational functions to VFP, which is owned by the same two people who are the sub-lease holders… issues of transparency and whether the sub-leaseholder is properly discharging its contractual obligations to the landowners appear to be raised here”. [p132]

Another company, Maxland (PNG) Limited was initially involved and was to hold 85% of the Bewani oil palm development project. That arrangement was approved by DAL and a FCA was granted to Maxland. Maxland is a Malaysian company wholly owned bu Priceworth Wood Products.

“Maxland (PNG) has faded completely out of the picture. Why and how … is unclear” [p130]

Joseph Sungi, the Provincial Administrator, signed the Certificate of Alienability to authenticate the Land Investigation Report process. But whether a Lease-lease back instrument was executed is uncertain because no copy exists and there is no explanation for its absence. There was no reservation of any traditional landowners rights.

“Mr Sungi failed to carry out the necessary due diligence required of him as the head of the province before he signed of” [p131]

Department of Agriculture and Livestock (DAL)  has approved the Bewani Oil Palm Project and issued a Certificate of Compliance for large scale conversion of forest to agriculture in November 2008.

Department of Environment and Conservation (DEC) process for the project has been fully completed. Environmental Impact Report and Environmental Impact Statement were submitted in 2008 and approved.

BPOP has a current Annual Forest Clearance Plan and an approved Five Year Forest Clearance Plan and Forest Clearance Authority (FCA).

“It is extremely doubtful if the developer is keeping to the approved Development Schedule on agro-forestry activities” [p133]

Despite DAL, PNG Forest Authority and DEC approvals there is a lack of follow up monitoring for the purposes of compliance and progressive reporting and their already appear to be delays in the project implementation.

The Forestry Act requires forest clearing to be apportioned in blocks of 500 hectares (unless increased for good cause by the National Forest Board). FCA holders are being permitted to clear 5,000 hectares at any one time and this is being promoted by DAL. No technical advise to support the increase was produced to the Commission of Inquiry.

Portion 163C SABL was improperly created within the already existing Portion 160C and granted to Ossima Resources Limited. It was later cancelled by the Registrar of Titles. Portion 163C covered 31,430 hectares and was granted in January 2011 and cancelled in May 2011 because it was found to be inside the greater 160C.

“Either not all the landowners who have interests over the lands constituted in Portion 163C were consulted or they did not give their informed consent for the grant of an SABL over Portion 160C which included their customary land.” [135]

There are “huge overlaps in boundaries” between adding SABLs in Sundaun Province. Portion 160C extends into almost one-third of the area of Portion 40C – an SABL held by Ainbai-Elis Holdings Ltd.

“The LIR, to the extent that it legitimizes overlaps in SABL boundaries and conflicting interests with the people within the SABL held by Ainbai-Elis (Portion 40C) is defective”  [p136]

“Mr Pepi Kimas, former Secretary of DLPP… said he was under a lot of ‘political pressure’ to issue the direct grant to Bewani Palm Oil Development Limited. He said he was pressured from the Prime Minister’s level down” [p137/8]

The Bewani Oil Palm project has two nursery sites and it is said over a million seedlings. Planting has commenced at the nursery site, the only place properly cleared for planting. The site is not big enough for even hallf the seedlings. There appear to be no other planting sites being prepared.

There is simmering landowner discontent and dissent based on the initial lack of informed consent to be part of the project.

The SABL holder and its shareholding landowner companies are unstructured ‘paper companies’.

“The COI recommends that the SABL grant over Portion 160C to Bewani Palm Oil Development Limited is to be REVOKED and REVIEWED” [p141 emphasis in the original]