COMMISSION OF INQUIRY INTO SABL

Transcription

1 TRANSCRIPT OF PROCEEDINGS Commission of Inquiry into SABL Department of Prime Minister & NEC P O Box 639 WAIGANI. NCD Papua New Guinea Telephone: (675) Facsimile : (675) COMMISSION OF INQUIRY INTO SABL MR JOHN NUMAPO CHIEF COMMISSIONER & THE CHAIRMAN TOP FLOOR, MURUK HAUS, WAIGANI, WEDNESDAY 21SEPTEMBER AT 2.50 P.M. (Continued from Tuesday September 11) SABL19- NUMAPO 1

2 THE CHAIRMAN: Yes, Counsel? MR KETAN: Thank you, Chief Commissioner. This afternoon we have the seven SABLs to deal with. Those that I have marked under Changhae Tapioka (PNG) Limited they relate to the SABLs issued to the in relation to the Cassava project at Launa Kalana in the Central Province. All seven Changhae Tapioka (PNG) Limited, labeled SABLs, which the Commission of Inquiry files 13 to 19 Special Agriculture Business Leases reference portion 519C, that is; portion 444C, portion 446C, 517C, 518C, 521C and 5C. All of these will be opened, the files are in the hearing room and opening statements will be made in relation to them covering all of them as they are related. Chief Commissioner, just very briefly, the law on the issuance of SABLs has been stated many times, but for this purpose, if I can just very quickly state that again. The modes of acquisition of land by the State provided in section 7 of the Land Act under which the minister on behalf of the State acquires land by agreement or by compulsory process in accordance with the Act. Section 9 provides for the involvement of the Land Titles Commission or Land Court where customary land is acquired for a determination of ownership of the land or of interest in the land and appointment of an agent to act on behalf of the customary landowners. Section of the Land Act provides for acquisition of customary land by agreement, but the land shall not be acquired unless the minister upon reasonable inquiry satisfy that the land is not required by the landowners. An acquisition of customary land for lease-lease back purpose for Special Agriculture and Business Leases provided for by section 11 which states that, the Minister may lease customary land for the purpose of granting Special Agriculture and Business Lease of the land by the execution of an instrument of lease in the approved form between the Minister and the customary landowners. SABLs are provided for by section 2 of the Land Act under which the Minister may grant a lease for Special Agriculture Business Purpose of land that has been acquired under section 11. [2.55 pm] Section 2(2) provides that a SABL shall be granted to persons or entities SABL19- NUMAPO 2

3 to whom the customary landowners have agreed to in the instrument of customary lease under section 11(2). The period shall be as to the Minister seems proper but shall not exceed 99 years commencing from the date on which the subject land was leased by the customary landowners to the State. THE CHAIRMAN: What section was that again, did you say? What section was that? MR KETAN: Section 11(2). If I can- - - THE CHAIRMAN: Of the Land Act? MR KETAN: Of the Land Act. THE CHAIRMAN: Okay. MR KETAN: If I can restate that, Commissioner. Section 2(2) of the Land Act provides that a SABL shall be granted to persons or entities to whom the customary landowners have agreed to in the instrument of customary lease under section 11(2). This is the lease lease back instrument. The period shall be as to the Minister seems proper, but it shall not exceed 99 years commencing from the date on which the subject land was leased by the customary landowners to the State under section 11. The actual grant of the SABL is made pursuant to section 72(c) of the Land Act which provides that the Minister may grant an application or otherwise a lease granted under section The source of information that we have for the Inquiry has been key government entities and information has been received from the Department of Lands and Physical Planning, Registrar of Titles, Department of Environment and Conservation, Department of Agriculture and Livestock, Investment Promotion Authority and the Government Printer, the National Gazette, the printer of the National Gazette from which the Commission of Inquiry can make some preliminary findings as to the legality of the issuance of the Special Purpose Agriculture and Business Lease, the compliance of the terms and conditions of it and the grantees or the lease holders of the leases. I now move on to the actual files. In my opening statement I will be dealing with all the seven SABLs related to this project. The first file, Commissioner, is file SABL19- NUMAPO 3

4 number 13. This is the labeling of the Commission of Inquiry file. Changhae Tapioka (PNG) Limited. A Commission of Inquiry file has been opened on this particular matter involving portion 519C milinch Rigo fourmil Moresby Central Province volume 31 folio 217 containing an area of 1656 hectares located in Rigo Central Province, more particularly described as Saroakeina North which was issued to Vero Garo Land Group, ILG Number 952 Mounaikana, M-o-u-n-a-i K-a-i-n-a, Garegarea Land Group, ILG Number 954, Kororo Land Group, ILG Number 131 and Miserubu, M-i-s-e-r-u-b-u Land Group ILG Number 134. These have all been granted to these ILGs as tenancies in common on 21 September 07 for a period of 40 years from 1 February 07 to 31 January 47 for Special Agriculture and Business Purpose. [3.00 pm] The portion of land, portion 519C, is one of such SABLs issued to the project area villages based project area villages based ILGs in the cassava bio-fuel project site near Kwikila in the Central Province which is a joint project of the PNG Government and Changhae Tapioka (PNG) Limited, a project that is supported by the Papua New Guinea Government in line with or in preference of its National Development Program, NADP; and also in line with the developing the medium term development strategy, in short, MTDS. 40 On 4 February 04, a Memorandum of Agreement was signed between the State and Changhae Ethanol Corporation Limited, the parent company for Changhae Tapioka (PNG) Limited for the development of a cassava industry in Papua New Guinea. The purpose of the MOA was to establish an understanding to work in unison in promoting the commercial cultivation and exports of cassava and cassava based projects. This was an implementation of a NEC decision taken in the previous year for the development of the cassava industry in the country. Changhae Tapioka (PNG) Limited is the local subsidiary of Changhae Ethanol Corporation, is a leading consumer and producer of cassava in South Korea. It is a South Korean company. Commissioner, the project area covers both State land and customary land. Customary land has been acquired under the lease - lease back scheme for a period of 40 years through the use of incorporated land groups as follows, which I have referred to earlier on. Basically; Vero Garo Land Group; Mouna/Ikana Land Group; Kororo Land Group; and Misirubu Land Group, which is the same in relation to the other six SABLs. SABL19- NUMAPO 4

5 In this SABL, as in the other related SABLs sorry, Chief Commissioner, if I could hand up a copy of the document I am reading from--- THE CHAIRMAN: Yes. MR KETAN: Sorry, my apologies. THE CHAIRMAN: Yes, okay. That is all right, thank you. MR KETAN: I am sorry, it was always intended for me to do that but Commissioner, it is, the document will stick but the reason is that it covers all the seven SABLs that I am dealing with in this opening but I will take you speak on it and skip and--- THE CHAIRMAN: Counsel, can I just ask you a question? Those seven are all under the same arrangements? It is a joint venture between the government of PNG and Changhae Limited? MR KETAN: Yes, same--- THE CHAIRMAN: All involving customary land? Did you at some stage mention that certain portion of it is State land? MR KETAN: Yes. THE CHAIRMAN: And certain portion of it is customary land. So I would imagine that those that are customary land would come under the lease-lease back arrangements. MR KETAN: Yes. THE CHAIRMAN: For the purposes of the Special Agriculture and Business Leases. Is that correct? MR KETAN: Yes, that is right. That is what I am actually on at the moment, paragraph 14. [3.05 pm] In this particular lease which is portion 519C as in the other related SABLs which 40 are portion 517, 518, 5, 521, for 444C and 446C the tenancy is in common SABL19- NUMAPO 5

6 between each of the different land groups. The different ILGs are from, for example, one village, the affected villages are named in paragraph 14, Bore, Mataruka, Bigairuga, Saroakeina and Niuruka comprised of a total population of 1594 people based on the 00 National Census figures. Now, each of those villages had different number of ILGs. So when the SABLs were considered they were issued as tenancy common between each other so long as they were from the same village. The information, as this is the opening statement, the information is incomplete and inquiries and searches are still continuing, and of course the actual hearings will be conducted at a later stage. But from the examination of the files so far there are a number of things that have come up which are discussed in the preceding paragraphs. In the National Gazette, paragraph 16 of the document, the National Gazette again reveals again all of the portions of land that are referred to earlier. And they actually give the hectares of the land but all of them have in common 40 year leases and this is in accordance with the wishes of the landowners during the land investigation process. This is indicated in the Land Investigation Reports. But in paragraph 16, Commissioner, you will note that all of those portions were granted to Changae Tapioka (PNG) Limited by a direct grant from the then Minister for Lands and Physical Planning, Dr Puka Temu. But interestingly, on page 5, paragraph 17, notwithstanding that, no actual leases have been sighted on any of the files that we have received and as at date the assumption is that no actual lease exists. The leases that we have sighted are the leases to the ILGs that I have mentioned, which are the customary and village based ILGs. [3:pm] From the Lands Department file, Chief Commissioner, there is a copy of the notice of direct grant, which is referred to earlier, then there is a certification of land not being required by the customary landowners which was signed by Pepi Kimas then, Secretary or Acting Secretary as he was, dated 27 January 07, and as I have mentioned there, similar ones I have found in all of the files. And then there, in relation to the ILGs, there are notices of lodgement of application for recognition as in ILG for those particular villages, which is again a common feature running through the seven files. SABL19- NUMAPO 6

7 THE CHAIRMAN: Counsel, that the certification of land not being required by customary owners, you mean to say that it has been dispensed with the Secretary or Acting Secretary for Lands? MR KETAN: Yes. THE CHAIRMAN: Were there any notation on the file as to why the certification of land is not being required by customary owners? MR KETAN: This is the end result of the or end of the process to the land investigation reports, when they are enquiring and discussing the lease - leaseback arrangements. THE CHAIRMAN: Ok. MR KETAN: After the process, before a lease is actually granted, there has to be certification by the appropriate authority for whatever the period may be - in this case it is 40 years - the land is not required by those village people; the owners of the land, so it is available and this precedes the issue of the Certificate of Alienability. THE CHAIRMAN: Okay. MR KETAN: Yes. The lease-leaseback deed, in this particular case, in relation to portion 519 was dated December 06 for the Saroakeina North, Bouforena Land Group and it was for 40 years and the document mentions the Changhae Ethanol Corporation. But 40 years is to start from the first day of the company s physical operation of the land pursuant to the Memorandum of Agreement that I referred to you earlier. Interestingly there, in the deed, the deed provides for payment of rent of about percent of the unimproved value of the land, payable in January of each year and reviewable for every five years. And the deed, again interestingly, also provides for termination of the lease for non-payment of rent if the rent is in arrears of six months from the date it is due. SABL19- NUMAPO 7

8 This clause - I am on paragraph 6, Chief Commissioner - this clause for payment of rent is contrary to Section 2(5) of the Land Act which states that rent is not payable for a SABL and also contrary to a term of the SABL title, the instrument that rent is not payable. One of the main features, if you note these particular leases, the SABL leases, one of the conditions that is actually stated on the lease is that, rent is not payable. So this is deviation from those requirements, so that is why I stress that. Then there is Valuer General s valuation on the unimproved value dated 5 July 07 of an amount of K222,000 as at May 07. That is again a deviation from the usual practice. I skip paragraph 8. Paragraph 9 is repeating what I have stated earlier in relation to the issue of the title. There was a from the examination of the file, there was a photocopy of the owners copy of the title on the file; all of these information in the document, Chief Commissioner, is what caught my eye, as I was examining the files, and so I have put them there but I will mention some in my opening statement and I will skip others as we go along. But the documents there, it can be incorporated into the write ups later on. [3: pm] The photocopy of the owner s copy, again confirms the lease over portion 519C been granted to the landowner based ILGs as in tenancies in common. The instrument of lease was prepared but as I mentioned, submitted earlier, there was a deed deed that was prepared. What I mentioned in sub paragraph here on page 4 is that there is also on the file an instrument of lease for customary land, lease-lease back agreement pursuant section 11 of the Act for portion 51C but it is undated and unsigned. Although it has been filled out, nominating the abovementioned four ILGs as sub lessees which appears to be the approved instruments as opposed to the signed deed that I referred to earlier. Now, at the end of the paragraph there, Chief Commissioner, one of the things I have mentioned is that, as part of the Inquiry, a task that we need to perform with this one, with this finding or revelation is that we will need to verify this by calling SABL19- NUMAPO 8

9 the Department of Lands appropriate Department of Lands officers to explain why this form that was filled filled up was not signed and why they opted for a deed which stated which had clauses such as rent and normally rent payable and inserting termination clauses in the event that rent was unpaid. So that is one recommendation that I make that we will continue in relation to our enquiries. THE CHAIRMAN: Counsel, what you are saying is that there appears to be some inconsistencies with some of the SABLs processing and the issuing of the lease and all these? MR KETAN: Yes. THE CHAIRMAN: Are you able to work out in your investigation inquiry into each of the files, are you able to work out the reasons for those inconsistencies? Are you able to establish why there are these inconsistencies? It could be an oversight on part of those who are responsible for processing those leases. It could be --- MR KETAN: Whilst we can establish that through the calling of witness later on, from my reading and putting one and one together, they do not appear to be oversights. It may well be an oversight, but it was filled, right next to you is a deed that was signed and this document that was typed up nicely and ready to be signed was not signed. This particular document, the instrument, instrument of lease does not have the additional clauses of you know, provided for rent payment and termination of the lease in the event that there are rental arrears, and also the deed, in almost all the cases, provide for termination; one, termination where rents in arrears for six months; and secondly, termination where the performance of the deed obligation flowing from the deed is frustrated by circumstances beyond the control of the party, or whichever party opts to exercise right; and thirdly it provides for termination by mutual agreement. So those are features that are not normally or should not be in that sort of lease-lease back instrument because they are definitely contrary run contrary to Section 2(5) of the Land Act. [3.21 pm] THE CHAIRMAN: So it could be a deliberate attempt of someone to do that? SABL19- NUMAPO 9

10 MR KETAN: Yes, it could be. That is why I am suggesting in my submission that we will need to recall some of the Land s officers, and more particularly and I will come to that later on in my submission. The Provincial Lands Officer who did conduct the Land Investigation in almost all the in relation to all the leases. THE CHAIRMAN: Yes. MR KETAN: In paragraph 11, file reveals that the Notice of Direct Grant in this case was signed by Pepi Kimas as delegate of the Minister. Skip paragraph 12. Paragraph 13 is a minute from Oswald Tolopa, Director Policy to Acting Secretary of the Department enclosing Noticse under Section 11 for his signature for five of the portions of land 517C, 5C, 521C, 444C and 446C. I have mentioned there that a copy of this letter is in all the files the related files in all of the seven related files. I am also suggesting that we call Mr Oswald Tolopa as a witness later on in the process of the Inquiry. Now over the page at page 7, the Certificate of Alienability was issued by the then Custodian of Trust Land, the late Gei Ilagi, and towards the end of that paragraph Chief Commissioner, I state that Certificate of Alienability has been issued in most of the seven SABLs we are concerned with here. So that is a common feature. All it states in that is that the certificates have been issued under Section 34 certifying, inter-alia, that there is no dispute as to ownership and that the owners are willing to lease their land for 40 years and most of those are dated 16 April 07. Then there is a Certificate of Recognition of ILG. There was a letter from the Secretary, Provincial Affairs in the process of issuing the Certificate of Alienability. I mentioned this because he was querying the recommended annual rent. It is sub paragraph 16. This is Custodian for Trust Land. In his letter dated 27 March 07, he queried the recommended annual rent and also required survey plans for portions 517, 5 and 521. This was issued under the hand of the Deputy Secretary Monitoring and Technical Service of the Department of Provincial and Local Level Government Affairs. I need to state that that letter was querying the rent, saying that, that something was unusual. But I have not seen on the file, there is nothing from the Department of Lands going back to the Custodian of the Trust SABL19- NUMAPO

11 explaining why those clauses were inserted into the deeds - of the lease-lease back deeds. Then there is a minute from the Minister to the Acting Secretary attaching a brief of field trip based on the Longstanding Land Investigation Report. This is a report that covers again all of the related SABLs. [3.26 pm] THE CHAIRMAN: The whole seven of them? MR KETAN: Yes. The brief mentions that the this is from the special projects manager; special projects to the Acting Secretary that the land investigation which occurred from September to October 05 soon after the Memorandum of Agreement was signed on 4 February 05 - this is the Memorandum of Agreement between the Government of Papua New Guinea and Changhae Ethanol Corporation. That brief, it appears from that that due to certain disputes or queries or objections from a number of the landowners in the project area, the investigation was or the signing of the LIR forms - this is the land investigation reports - was delayed and there is a report been prepared from this. And from that report the following is noted, which are in roman numerical (i) onwards. If I can mention them very quickly; (i) (ii) (iii) (iv) (v) several villages from Mataruka, Bigairuka, Imuagolo and Saroakeina did not sign the Agency Agreement form due to a dispute. And of interest, allowances met by Changhae Ethanol Corporation and vehicle provided by the Lands Department for that trip. Then the Bouforena landowners executives comprising three signatories refused to sign the lease of land agreement and provided a petition alleging future environmental effects the cassava project will bring to their land and river system. Bigaruka landowners had a land dispute with the Rawali villages over part of the cassava project land where certain logging operations were going on. Over total of 11 ILGs, one ILG Bouforena land group executives disputed part of the project land and they state - this is their report - they state that the total area covered by the cassava project land covers land owned by five villages; Saroakeina, Matairuka, Bigairuka and Imoagolo, which are portions 444C, 446C, 517C, 518C, 519C, 5C and 521C comprising a total of,983.6 hectares in total. SABL19- NUMAPO 11

12 (vi) The report also states that 90 percent of the ILG consisting of four villages want the project to proceed whilst five percent, that is Bouforena ILG executives do not support and another five percent Bigairuka and Rawali villages due to a dispute over current logging operations. (vii) According to the LIR guys - this is my comment, this is not part of their report, Roman numeral seven is my comment or finding, if you like. According to the LIR guys or Lands officers, this was a minor problem the problems of the dispute and refusal to sign that I have mentioned above. That according to them this was a minor problem and should be sorted out by land mediation. Now, we need to there is no further evidence stating as to what the situation with that dispute is so we need to ascertain current situation with dispute and we will need to call some witnesses or enquire further and ascertain whether that dispute still exists or whether it has been resolved. (viii) These investigators they concluded that the project was supported by majority of the landowners. The minority who were not in favour of the project did not have a genuine reason to hinder the progress of the report. So obviously they formed the opinion that the majority of the people are happy with the project so they ended up reporting and recommending for the project to go ahead. [3.33 pm] (ix) The Bouforena Land Group petition was attached to the brief by these guys, but I did not note any record of whether it was dealt with or not, the petition. A copy of the petition is on the file. THE CHAIRMAN: Sorry, which petition is that? Are you referring to the land dispute? MR KETAN: This is a petition by one particular group. If you go back to page 7, Chief Commissioner, the bottom, Bouforena landowner executives comprising three signatories refused to sign the lease of land agreement and provided petition alleging environmental effects the cassava project will bring to their land and river systems. THE CHAIRMAN: Okay, so you are referring to that? MR KETAN: Yes. 40 THE CHAIRMAN: That is your submission? SABL19- NUMAPO 12

13 MR KETAN: So there was actually a handwritten petition, but there is nothing ending it on the file as to whether that was dealt with or not. A copy of that petition is still on the file. Paragraph 19, no - this is my finding - and this is, Chief Commissioner, just on this particular matter is that no proper land investigation report exists. The ILGs were used but proper linkage to clans and landownership was not carried out by adequate social mapping investigation and public hearings. THE CHAIRMAN: You are referring to these all portions of land that you have talked about? MR KETAN: Yes, the whole process. THE CHAIRMAN: In all these paragraphs? 40 MR KETAN: Yes. So that is my comment is that no proper land investigation report exists. While on this particular file portion 519C, the ILGs were used but I submit that no proper linkage to clans and landownership was carried out by adequate social mapping, investigation and public hearings. Because the project was big and a number of government agencies were involved, a lot of people moving in and out including the company, what appears to have happened was officers from both the Lands Department and the Central Provincial Government went into the villages, helped people set up, establish ILGs and no proper social mapping was carried out. That is what appears to have happened. Next is just, I am just stating what I have found on the file. I do not need to mention that. That is to do with the launching of the project by the Prime Minister on 19 April 07. The next is a copy of the MOA dated 4 February 05 is on the file. I note that the Secretary for Agriculture and Livestock, the former Secretary, Mr Mathew Koana, signed on behalf of the government, well department as a sponsoring government agency. The agreement was also signed by the former Governor General Sir Paulius Matane. Chief Commissioner, you recall that I mentioned how the MOA came into being. There was a National Executive Council decision, decision number 8 of 04 on the commercial activities and processing of cassava and cassava based projects investments proposal by the Changhae Ethanol Company which was approved in principle by NEC on 21 July 04, but with directives to stakeholders, government agencies and others for further action and resubmission of the proposal. So it is to be noted that this Memorandum of Agreement that I am referring to is not just for the Central Province. It was for the whole country. We can assume that further work was done and the proposal, a modified proposal may have been submitted to NEC SABL19- NUMAPO 13

14 which may have been approved which resulted in the project going ahead, but that is we cannot speculate. There is nothing on the files to indicate otherwise. The files on this particular matter from the Registrar of Titles, there is no record of us the Commission of Inquiry receiving any files from the and or information from the Registrar of Titles on this particular matter other than a copy of the SABL title. [3.38 pm] So I made a suggestion that we need to and process is already during the hearings and with Mr Henry Wasa, it is the process is in motion where I just need to follow that up with him for the file on this matter. But there are other evidence from which we can make some preliminary findings and some which I have made in my opening statement. From the Department of Agriculture and Livestock no files or information received from them in relation to portion 519C. So again, we will need to pursue them further and again, the process is in motion with their evidence that they gave and with our continued communication with them in relation to the inadequacy of the files that they have provided to us. So the process is continuing but I just state that we need to do that for the record, as part of my opening. National Forest Authority and Forest Service, no files or information received from them, although the project involved minimal primary forest area. That word there, Chief Commissioner, there is a typographical error there, minimal primary forest area, it is not, project. THE CHAIRMAN: Not project? MR KETAN: Not project. THE CHAIRMAN: Okay, thank you. MR KETAN: I mentioned in paragraph 18 (iv) supra. So will need to pursue them over it because there is a dispute as reported by the Lands Department and provincial lands officers in the investigation. From the Department of Environment and Conservation, the Commission of Inquiry has received an arch lever file labelled Changhae Tapioka (PNG) Cassava Bio-Fuel Project, Rigo District, file number 5. That is their labelling, not ours. SABL19- NUMAPO 14

15 Now, according to the Department of Environment and Conservation file the area proposed for the Cassava Bio-Fuel Project consists of seven SABLs which are the ones that we are concerned with here. Again, those portions are being mentioned, I have mentioned them and there is no need to mention them again. The total area of 12,900, that should be 12,900, Chief Commissioner, 900 hectares. There is an extra zero there that should be deleted - and a series of State leases. The areas are leased to Changhae Tapioka, the developer. Now, that is according to the Department of Environment and Conservation. But as I have mentioned earlier in my opening address despite the grants being advertised in the National Gazette the actual leases were granted to the village landowner based ILGs. And we have copies of the SABL titles. We have not seen any other title over these seven SABLs. Changhae Tapioka (PNG) Limited - by the way before I proceed, Chief Commissioner, the file that we have received from the Environment and Conservation Department is for the whole covers the whole seven SABLs; covers the environmental impact study and assessments and other processes on the project area as a whole, not just on one particular portion of land. So it covers the whole seven portions of land. Changhae Tapioka (PNG) Limited submitted a notice of preparatory works in 09 on 3 November 09 as required by section 48 of the Environment Act 09. And then the department after assessing the notification issued a notice to undertake Environment Impact Assessment on the November 09 under section 50 of the Act. Then the company submitted an Environment Inception Report on 11 December 09 under section 52. And Department of Environment has reviewed and approved the Environment Impact Report though, a copy of the correspondent has not been sighted. But according to them it has been approved. The company Changhae Tapioka Limited submitted its Environmental Impact Statement on 27 May under section 53 of the Environment Act 00 and the assessment and public review process commenced, although, no detailed evidence of it was sighted by us. Other, that word there, Chief Commissioner, the word, otherwise should be, other than letters to relevant government agencies; SABL19- NUMAPO 15

16 Department of Commerce and Industry, Lands, National Planning, Central Provincial Government, PNG Forest Authority and the Health Department pm] Such notice were issued under the hand of the Director Environment, Mr Michael Wau on 2 August. The Environment Impact Statement was submitted to the Environment Council in June 11 by the Director pursuant to section 57 of the Act. But the decision was deferred and the current situation on that is not known. So at this stage as far as the project which involves the seven SABLs, the Environment Impact Statement is pending before the Environment Council and we can deduce from that that the permit has not yet been issued. But again, we will ascertain that during the course of our inquiries. Paragraph 31. The Environment Department file contains documents, Gazettal Notice for the State leases and Gazettal Notice for exemption from import duty that is given to the company, notification of preparatory works, notice to undertake Environment Impact Assessment, Environment Inception Report. There is an internal memo to executive manager seeking assessment comment on the Environment Impact Report dated 11 May and then the Environment Impact Statement itself, which the department received on 27 May. And then the copies of letters to the various key stakeholders which I have mentioned regarding the inviting them for the public review and inviting them to review it dated 2 August. Internal Review of the Environment Impact Statement on 15 September and finally the referral of the Environment Impact Statement to Environment Council on 15 June with recommendations for approval, but with certain conditions. The Environment Impact Statement on the assessment from information on the file, there were other matters that the Director was not satisfied with and so in recommending in referring to the Environment Council and recommending approval, the Director set out certain conditions which should form part of the approval and condition of the Environment Impact Statement. Now, in the Environment and Conservation file, there is also a certificate of registration of overseas company of Changhae Ethanol Company of South Korea dated 18 December 07 which was issued by the Registrar of Companies, Teup Goledu and the Certificate of Incorporation of Changhae (PNG) Limited by Reynold Puss, deputy Registrar of Companies and a Certificate of Reinstatement of Company removed from the Registrar of Registered Companies of Changhae SABL19- NUMAPO 16

17 Tapioka Limited dated 22 September 06 by Teup Goledu, Registrar of Companies, and a certificate permitting a foreign enterprise to carry out business in an activity. That certificate number is granted to Changhae Tapioka (PNG) Limited dated 18 May 07 issued by Ivan Pomaleu, Managing Director of the Investment Promotion Authority. I discussed further that later on in my address, but these were found in the Department of Environment and Conservation file that we received. [3.50 pm] Now, in paragraph 3, Chief Commissioner, it is noted that the permit under section 65 of the Environment Act is yet to be granted by the Director Environment. But we are not aware of the status of the project; this is the Cassava Project. THE CHAIRMAN: Sorry, Counsel, is it section 65 or 48? MR KETAN: 65. THE CHAIRMAN: I have got 48 here. MR KETAN: Sorry, yes, I changed this. That was a mistake. It should be is the, I will change it on mine if you can change that so it is 65. That is the provision under which the Director Environment issues the permit. THE CHAIRMAN: Yes, okay, thanks. MR KETAN: So apart from that apart from knowing that the matters before the Environment Council, the current project, current status of project is not known. So we might need to inquire further into that. The current project in my submission, cannot proceed without a permit. So for that we need to ascertain the current status of the project and the status of the permit consideration by the Environment Council and eventually, the Director Environment. Now, the Investment Promotion Authority file on this particular portion contained the Certificates of Incorporation and related certificates I have referred to in sub paragraph 32 above, and also additional information as to primary documents such as returns and that. So there is a file on this matter from the IPA. Now, Changhae Ethanol Company Limited applied for registration to carry out alcohol manufacturing, feedstock wholesale and real estate. This is information SABL19- NUMAPO 17

18 from the IPA file that we have received. The application was made a Teon Ho Lim stating that Changhae Tapioka (PNG) Limited as a registered agent. So for Changhae Ethanol Company Limited, the foreign enterprise, in the application for it to carry out business in Papua New Guinea, Mr Lim, in making the application stated that Changhae Tapioka (PNG) Limited was going to be the resident agent. I stand to be corrected but usually registered agents are human beings not corporate entities. So there is a, I note the irregularity there. Again, we will ascertain that during the inquiry process, further searches and inquiries. But I state that for the record. THE CHAIRMAN: Counsel, Changhae Tapioka (PNG) Limited is a subsidiary of the Changhae Ethanol Company Limited, is that correct? MR KETAN: Yes. THE CHAIRMAN: Okay, thanks. MR KETAN: Mr Teon Ho Lim signed as Director and Secretary for Changhae Tapioka (PNG) Limited. He is a minority shareholder; he has got 0 shares and Changhae Ethanol Company Limited is a majority shareholder with 4,411,765 shares. Teon Ho Lim is the only director and his address at that time as at 27 November 06 is Section 8, Lot 3, Boroko, National Capital District. And his postal address is P.O.Box 582, Boroko, NCD. Changhae Tapioka (PNG) Limited was incorporated on 16 July 03 by Teon Ho Lim at which time his address was in Sydney, New South Wales, Australia. It is noted from [3.55 pm] It is note from - on the form, 29 September returns - sorry, I correct that, 29 September returns that shares had increased to 18,000. It looks like 18,031,858 of which 5,412,844 had been issued and the shareholders were Leong Ho Lim and Changhae Engineering Corporation of South Korea. Obviously, in my submission, by the shareholding apportionments, the company was a foreign company and required foreign enterprise certificate by IPA. It is 0 percent foreign owned, either you look at Mr Lim or the parent company, it is 0 percent foreign owned. However, there is no such certificate produced or sighted. The change in shareholding was prepared by the transfer of, and this is interesting. SABL19- NUMAPO 18

19 THE CHAIRMAN: Counsel, can I take you back, sorry about that. But can I take you back. You said it is 0 percent foreign owned but there is no certification produced or sighted to verify that. Is that --- MR KETAN: Yes. THE CHAIRMAN: Is that how you intend to complete your sentence? MR KETAN: Yes. THE CHAIRMAN: Okay, thank you. MR KETAN: Thank you, yes. THE CHAIRMAN: It is just that it is not complete. MR KETAN: Yes. THE CHAIRMAN: Without that. MR KETAN: Yes, thank you. THE CHAIRMAN: Okay. MR KETAN: The change in shareholding was prepared by the transfer of rights and liabilities under the MOA with the government and Changhae Ethanol Corporation to Changhae Engineering Corporation Limited pursuant to a deed of assignment dated November 08. And this is interesting, Chief Commissioner, the legality of which is doubtful. As the State Solicitor gave legal clearance for this and I noticed from the file for this, he may need to be called to explain. On June 05, the company was removed from the Registrar of Registered Companies due to outstanding returns but was reinstated on 22 September 06. However, as at 2 August 11, this is this year, according to the current extracts, Changhae Tapioka (PNG) Limited is a foreign company and appears to be operating illegally unless proven to the contrary. I now move on to file number two or rather, file number two of the seven files, Chief Commissioner and that file is a Commission of Inquiry file number 14. And it relates to SABL portion 44C, Karanamugana. SABL19- NUMAPO 19

20 The notice of Direct Grant, this is information from the National Gazette, the Notice of Direct Grant under section 2 of the SABL by Dr Puka Temu, the then Minister for Lands was published on 1 September 07 which is the same date in the case of all the other, all the seven SABLs. From the Lands Department file there is an old administration document, a Gazettal Notice number 97 dated 9 November 1972 declaring the land portions 445, 444 and 446, milinch of Rigo, fourmil of Moresby, Central District, as a native land and vested ownership in the clan group constituting of Makora Mora, Gari, Bole, Iepi, Navena, Giokologa, Mgureka, Sigana, Babaga, Bolei, Gwaibo, Mora and Gaita clans together with copies of other related documents. There is also on the file a notice of Application for Recognition as an ILG by one of the relevant ILGs Tubugaita Land Group incorporating members of the Bigairuka village dated 29 April 05. And a similar notice for the Igena Bao Land group covering Matairuka village dated 31 March 05. There is a Valuer General valuation of unimproved land at K19,0 as at 16 April 08 and dated 07 May 08. There is also a copy of the Memorandum of Agreement that I have been referring to on the file. [4.05 pm] There is also a copy of the lease of land agreement under section 11 on those four portions, 517C, 5C, 521C, 444C and 446C. 444C and 446C appears to cover what I have referred to in subparagraph 1 above. All of these land located at Launa Kalana and again, with the other deeds of the lease-lease back arrangement, rent was agreed at percent of unimproved value reviewable every five years with payments to be made in January of each year. And the provision of the termination of the lease if rent is outstanding for six months and for early termination by agreement, mutual agreement or as a result of frustration over performance by events beyond the control of the parties is also featured. It is a common feature throughout the SABLs. Now, all the ILG executives signed this agreement except for a few, the reasons for their not signing is not known or sketchy, at least. And this document, in my submission, runs contrary to section 2 and we make the same comments we made about the deed in relation to portion 519C, Saroakeina North. SABL19- NUMAPO

21 There is a document on the file labelled Cassava Bio-Fuel Project Development Plan 07 12, compiled by Goru Babona, crop adviser, Department of Agriculture and Livestock, southern region, November 07 and the Central Province, Cassava Development Plan [4.05 pm] It is Agriculture Department document but it was found in the Department of Lands file. That report is thick and is yet to be perused and comprehend full and comment but appears - which we will do in the process -but it appears comprehensive. It states total project area,000 the other states at 12,000. With this one the project area is,000 hectares of land, 6,000 which are State land and 14,000 customary land sourced from local villages under the ILG land mobilization process. The Investment Promotion Authority file on this particular SABL contains the same documents as mentioned in relation to portion 519C, Commission of Inquiry file 13. And if I could state at this juncture that that is the same with the Environment Promotion Authority file is the same file, just copies of the same documents in all the SABLs. The Forestry Service and PNG Forest Authority file are same status. We have not received any on this particular SABL. Department of Agriculture. No file or information received from the Department of Agriculture and Livestock. The Agriculture Plan that I referred to above in paragraph 39, subparagraph 9 was found in the Department of Lands and Physical Planning file. Now, in relation to submissions and evidence, there has been no submissions or evidence in response to the advertisement or otherwise, both in relation to portion 519C and portion 44C. And again, that is the same situation in relation to all of the seven SABLs that we are concerned with here. Commission of Inquiry file number 15, portion 446C is the third file or third SABL that I deal with this afternoon. From the Gazettal Notice, basically the information is the same, Chief Commissioner that there is a Notice of Direct Grant published in the National Gazette No 15 of 1 February 07, issued - granted by the then Minister for Lands, Dr Puka Temu. SABL19- NUMAPO 21

22 The Lands Department file contains documents which are the same or similar to those in relation to portion 44C supra. Department of Environment and Conservation file same, as in relation to portion 519C, Commission of Inquiry file 13. Investment Promotion Authority file same as above. Department of Agriculture and Livestock file same as in relation to portion 444C, Commission of Inquiry file 14. Forestry Service, National Forest Authority same as in portion 51C and portion 44C, Commission of Inquiry file 13 and 14. Commission of Inquiry file 16, portion 517C Changhae Tapioka (PNG) Limited, the Gazettal Notice, information from the Government Printer is the same in the three previous cases, that the Notice of Grant was issued by the then Minister. However, portion 517C but there is no copy of the actual title or SABL title or lease. From the Department of Lands file an examination of that reveals a letter from Olswald Tolova to the Director, Secretary, Department Provincial Affairs, which is the same letter that was issued in relation to the other two previous SABLs. So that is the same information. There is a letter from Mr Tolova to the Secretary, Department of Provincial Affairs and Local Government Affairs, Monitoring and Technical Services, setting out in tabulated form the ILGs amalgamated with the Rigo Cassava Project at Launa Kalana in Central Province, especially portion 517C, Bore, portion 518C, Saroakeina South, portion 519C, Bouforena, Saroakeina North, portion 5C, Bigairuka and portion 521C, Matairuka, consisting of 18 ILGs in total. There is a letter from Secretary, Department of Provincial and Local Level Government Affairs to Oswald Tolopa, Director, Policy division, Department of Lands dated 26 March 07, giving querying, that should be querying clause, that word giving there, Chief Commissioner, should be querying clause for land grant and requiring register survey plans for portion 517C, 5C and 521C. Same letter as in the other portion or SABL. SABL19- NUMAPO 22

23 Then there is a letter from Secretary, Department of Provincial and Local Level Government Affairs to Oswald Tolova enclosing certificate of alienability for portion 517C. [4.13 pm] Then there is a copy of Certificate of Alienability on the file dated April 07. There is a copy of an application by this Bore ILG for 12 agricultural leases dated 5 March 04, and receipt for K application fee. That is something that was not in the other files but only in relation to this SABL, there was an application by Bore ILG on the file; application for lease. Then there was a copy of owner s copy of the title with the Registrar of Title s stamp dated 26 September 07. The actual titles the lease title, as I mentioned over the pages is contrary to the gazettal of notices of direct grant. There is a copy of some application for recognition of an ILG. Then there is a Valuer General valuation of the portion of land at 270,000 as at May 07 and dated 5 July 07. There is a copy of the lease document dated December 07 which is the same as for portion 44C supra. But interestingly, this copy, as I mentioned there, has cancelled stamp on it. In this file there were two. One of the copies of the lease agreement this is the lease-lease back agreement one of them had a cancelled stamp on all of the pages. The other one did not. So it caused a bit of confusion as to whether what it was, but we will ascertain that as we go into the further inquiries and hearings. Then there is the Certificate of Satisfaction as to non-requirement of the land by the landowners issued by Pepi Kimas as Delegate of the Minister for Lands dated 7 April 03. Then there is a notice of direct grant which is the same thing we have been referring to. But, interestingly, Chief Commissioner, this one here is a notice of direct grant under section 2 of the Land Act over portion 517C to Bore ILG dated 7 April 04 by Pepi Kimas, Delegate of Minister. [4.15 pm] It is different to the other SABLs because in this case, the ones that had been issued by Pepi Kimas whereas there is also the gazettal notices on all of these seven SABLs which were under the hand of the then minister. So towards the conclusion of it, I would recommend that we need to call the former Secretary for Lands, Mr Pepi Kimas, to come and give evidence on some of these loose ends or issues that are revealed by these files. THE CHAIRMAN: Would he not be delegated, Counsel, by the minister, Pepi Kimas, in his capacity or role as the Secretary for the Department of Lands? SABL19- NUMAPO 23

24 MR KETAN: Yes. No, not - Chief Commissioner, not as to his authority to issue but this is contrary to - the grants contrary to the gazettal notice. THE CHAIRMAN: There is notice of grant in the gazette? MR KETAN: Yes. THE CHAIRMAN: It was all been done by the minister previously, did you say? MR KETAN: Yes. THE CHAIRMAN: All the SABL except for this one? MR KETAN: The minister has done one done one for each of the seven which is in the Gazette 15 of 00 the one that I have been referring to. THE CHAIRMAN: 7? MR KETAN: Yes, 07. But there is this one also exists or what I am saying is if we call Mr Pepi Kimas to come and explain this and other things that are--- THE CHAIRMAN: Yes, that is fine. He can be called at some later stage. MR KETAN: Yes. Then there is a Central Provincial Administration Land Investigation Report for Bore ILG as owners of the land and annexed to which is about 175 people who have stated to have agreed to lease the land for 25 years with review every five years signed by Raga Gulup, a Lands officer, on 13 April 04. It is noted that the lease that was actually granted was for 40 years, contrary to the landowners wish. THE CHAIRMAN: For 25 years? MR KETAN: For 25 years. THE CHAIRMAN: Okay. 40 MR KETAN: And I recommend that we will need to summon or call whichever is the appropriate means; Mr Raga Gulup, to clarify the Land Investigation Report. SABL19- NUMAPO 24

25 Next is attached to the LIR was an agency agreement by the Lubukorana Clan of about 1 people and another agency agreement by the Giokouloga Clan numbering 51 people and appointing six of their people as their agents and five people, respectively to sign and act on their behalf. This was also signed off by Gulu Raga of the Department of Central Province on 3 March 04. The Gabone clan did the same and so as the Kivabila clan. Gulu Raga also issued a Certificate in relation to boundaries on 3 March 04, so he was involved and we recommend that we call him too later in the process. Then there was a valuer document, Valuer General s requirement in the batch of documents on the file. Then there is the recommendation as to alienability by Glen Gani of the Department of Central dated 29 March 04 followed by a Certificate of Alienation issued by Gei Ulagi, then Secretary of Provincial and Local Level Government Affairs for 40 years dated April 07. In this file there was a survey map of portion 517 unlike the other files which did not contain any. We may need to call Glen Gani or summons him to verify the LIR and recommendations for alienability. The other documents on the file are common to the previous files. [4. pm] The Registrar of Titles files has a copy of the file over portion 157C issued to Bore ILG dated 26 July 07, schedules of ILGs, and there is a survey plan and totaled areas sizing hectares over portion 517, 518, 519, 5 and 521 and copy of gazettal notice of direct grant. That is the Registrar of Titles file. The Department of Environment and Conservation, the file as I mentioned earlier, is the same. There is only one file which covers all of the SABLs we are concerned with. It is the same as Commission of Inquiry file 13 over portion 519C. Then the Investment Promotion Authority file, same as in relation to files 13, 14 and 15. Department of Agriculture and Livestock, and PNG Forest Authority are the same. SABL19- NUMAPO 25