Home > Corruption, Land, Logging, Papua New Guinea > SABL Case Study No.10: Neville Harsley and the Trans Papuan Highway fraud

SABL Case Study No.10: Neville Harsley and the Trans Papuan Highway fraud

December 13, 2013 Leave a comment Go to comments

SABL Commission of Inquiry Report 2: Pages 390 – 530

There were “serious defects in the process that we observe are fraudulent and corruptible” [p505]

On the increase in the forest clearance corridor from 40m to 10,000m: “The C.O.I finds this to be erroneous, misleading and mischievous.. [it also] contradicts the statutory requirements” [p397]

It was “illegal or fraudulent” [p405]

“IT&SL manipulated the landowners companies… to acquire customary land under the SABL process, a hallmark tainted with corruption involving DLPP, Department of Western Province and the executives of the umbrella landowner companies…” [p429]

“… the technical Working Group endorsed by the NEC was only a smokescreen for the engagement of IT&SL… proper tender process was not followed” [p392/3]

A Project Agreement was executed despite an “absence of proper negotiations of the Agreement by the relevant State Agencies” [p395]

“The is evidence that all the executives of the landowner company expressed concern that they did not know what they were signing and that no copy of the agreement was provided” [p396]

“We recommend further investigation…of Messrs [Paul] Japhlom, [Neville] Harsely, [John] Malcachy to establish if an international racketeering over land acquisition has been committed by the company(s)” [p402/3]

“Mr [Michael] Titus must be referred to the PNG Law Society for his involvement with the landowner companies whilst been [sic] paid by IT&SL”  [p436]

Simon Malu, “failed in his duties as the Director – Customary Leases [DLPP] to conduct proper due diligence on the LIR we find contained gross defects and anomalies [p450]

IT&SL was “directly manipulating the SABL lease back process” this was “absolutely encouraged by the agencies of the State whose responsibilities border on gross negligence” [p402]

“The decision of the Commission [is] to revoke the SABL” [p403]

“The PNG Forest Authority should cancel the FCA” [p509]

This case study covers the four Special Agriculture and Business Leases linked to the proposed construction of the Trans Papuan Highway through Western Province.

The SABLs cover Portion 27C Awin Pari, 1C Awin Pari, 14C and 1C Aibolo – a total of 2 million hectares [p402]

The developer is International Timber and Stevedoring Limited (IT&SL). IT&SL is a foreign company registered in the USA. It has a PNG registered branch office. The current Directors are two Australian citizens, Neville Harsely and Clifford Frazer.

The company has no real presence in Kiunga and no heavy machinery or office infrastructure to carry out the project [p421 & 429] It has not complied with the terms of its IPA certificate and “may be liable for prosecution” [p421]

The proposed road is supported by the people of Awin Pari, Nomad and Wawoi Falls and the North Fly Provincial and National governments. It would link the township of Kiunga, Tabubil, Nomad, Wawoi Falls through Gulf and Central Province to Port Moresby.

Phase One of the project is the Aiambak-Kiunga-Gre-Drimgas road. The second phase connects Drimgas-Nomad-Wawoi Falls.

The idea for the road was first raised in 2002 with logs harvested along a 2km corridor to pay for the construction costs. At this stage there was no intention to create SABLs, it was simply a road project to be paid for through logging. The idea of an SABL was only raised when changes to the Forestry Act limited the length of any roadline Forest Clearance Authority to 12.5km [p413]

In March 2002 the National Executive Council (NEC) approved in principle the construction of Stage Two with Department of Works (DoW) as the lead State agency.

“… for a national project concerning a national road, proper tender process was not followed in the engagement of IT&SL” [p392]

“… the technical Working Group endorsed by the NEC was only a smokescreen for the engagement of IT&SL” [p393]

In 2008 NEC directed the Minister for Commerce and Industry to obtain the necessary Forest Clearance Authority from the PNG Forest Authority. This was “not within the ambit of that ministry” which should have been DoW.

In March 2011 NEC advised the Governor General to execute a Project Agreement between the State, IT&SL and Western Province.

The agreement was executed in May 2011, despite an “absence of proper negotiations of the Agreement by the relevant State Agencies” [p395] and “the absence of the most important stakeholders” [p398]

“The is evidence that all the executives of the landowner company expressed concern that they did not know what they were signing and that no copy of the agreement was provided” [p396]

“The Commission finds [the Project Agreement] contravenes Sections of the Fairness of Transactions Act” [p396]

The signed Project Agreement allows for the harvesting of timber for a distance of 5,000 metros on either side of the road while the draft Agreement prepared by the State Solicitor only allowed a 40m road corridor.

“The C.O.I finds this to be erroneous, misleading and mischievous” and contradicts the Forestry Act [p397}

The period of the agreement for twenty-five years “is questionable” as to “whether it takes twenty-five years to construct a 600km redline” [p397]

“The project agreement.. is not binding and enforceable because it fails to meet necessary statutory requirements” [p404]

The Land Investigation Report signed by Mr Imen Ita Papa as the Provincial Lands Officer was not done by him. Instead the LIR was complied by IT&SL [p392 & 415]

A number of existing State Leases including ones for the Runginae Rural Hospital and five rural health centers and other aid posts and mission stations were not excised from the SABL area.

The application for the SABL over Portion 27C was submitted after the title had already been issued

“This indicates the fraudulent nature by which IT&SL colluded with DLPP to fraudulently acquire the said SABLs” [p431]

THE LIR was collated by IT&SL and then given to the officers in the Department of Western Province to sign. They signed “knowing it to be false”. They signed in Port Moresby but the LIR says it was signed in Kiunga “which was false” [p431]

The Recommendation for Alienability was signed in Port Moresby but the place of signing indicates Kiunga “which is totally false and misleading” [p432]

People appointed as agents for one land group were also found to be agents in two or three other groups. This is “improper and fraudulent” [p432]

“Mr [Michael] Titus must be referred to the PNG Law Society for his involvement with the landowner companies whilst been [sic] paid by IT&SL constituting serious ethical questions over the conduct of his legal services tp competing interests” [p436]

The twenty six separate LIR contained no recommendations for reservations to be made for customary use thus extinguishing all customary rights for 99 years.

There was no evidence of a Certificate of Alienability having been issued over Portion 27C [p444]

Landowners consent to the building of the road “was manipulated by IT&SLto obtain access to all the hectares of prime pristine forest which is suspicious and fraudulent” [p448]

Simon Malu Director Land Acquisition DLPP, “failed in his duties as the Director – Customary Leases to conduct proper due diligence on the LIR we find contained gross defects and anomalies… No due diligence was conducted and it is evident that he was merely been [sic] directed by IT&SL… he had already compromised his position when he was paid allowances [by] IT&SL over the said project” [p450]

“Mr Malo should be disciplined for not doing his job and the result of that neglect of duty has led to the lack of integrity in the SABL process” [p451]

The FCA issued by the PNGFA was for a 40 metro wide corridor. [p452] IT&SL “deliberately increased” this to 5000m either side of the road in its Project Agreement with the State.

The SABL for Portion 14C was granted to Toigba Investment Limited. Tosigba is not incorporated as a company in PNG and does not exist.

In relation to the SABL over Portion 14C “There is a glaring contradiction between the term as set out in the notice of Direct Grant and the term set out in the lease entered into between the State and the landowners. In the lease, landowners are willing to give away their land for only 25 years, whilst in the Notice of Direct Grant, 99 years” [p506]

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  1. pkay
    December 13, 2013 at 9:08 am

    I am prompted to ask:

    These case studies, now up to #10, where is it all going in terms of the purpose for which the report and excerpts from the Report are being posted in this blog?
    Who exactly is reading these observations and findings; are those reading in this blog and other social media in any position to do anything about the observations, findings and recommendations; what is the extent of the influence of this blog in terms of what the government of the day and it’s relevant oversight authorities might begin to take notice and start doing something about this well orchestrated, despicable and corrupt practice that is dispossessing landowners?

    One answer to the above is, the Government isn’t going to take much notice of what the social media says. According to the PM the social media is a nuisance and whatever is published is of no value or effect (other than being of nuisance value) and the Government is not obliged or beholden to take notice, or indeed act, on anything the social media says or pushes. Most politicians here and anywhere would agree with this position or observation. The rationale would be, running a Government and the country is a busy business a government has no time to waste reading and listening to bloggers.

    May be the this blog should pay for space and time in the papers and tv and get its SABL report summations and in this way get the information and awareness out to a much larger and wider readership. And perhaps, in this way, the civil society will be made more aware, be better informed and have a reason to march to the Parliament (the People’s House) to demand action. There is not much point in white-anting a government that refuses to be affected, infected or afflicted by criticism that only those that have access to Internet and emails read in PCs, laptops and expensive and mobile smart gadgets.

    The Ombudsman Commission has the jurisdiction to pursue this in a very considered, thoughtful and elaborate way. The information has been laid out on a platter in the Report but even more so in how PNGexposed is getting the important bits out, albeit in a limited way, in bite site chunks for the Commission and other relevant oversight authorities to seize upon it and start doing some real work to earn their keep.

    ThEse are but just some thoughts to share instead of just die wondering what might come
    out of the Report or who in this the Land of the Unexpected and Unexplained might do something.

  2. Leva Raga
    December 19, 2013 at 12:45 pm

    Hi there,

    Do have anything on the shelved proposed project of Edatano as the urban city of Central Province?

    Why is the delay?

    Await your response, please.

    Thankyou.

    Leva RAGA

    • chatnawat hongsri
      January 27, 2014 at 7:44 pm

      from thailandpeople.Many thank.

  3. ToPam
    January 14, 2014 at 12:46 pm

    Maybe this SABL epidemic is continuing without governments intervention. COIs report and their subsequent recommendations clearly shows how very corrupt our society is. I have a firm believe that nothing will be done to stop the SABL and those corrupt officials, politicians and investors will not be arrested for their wrongs, and the poor landowners will be left to suffer the consequences. Most of them are already experiencing the affects of these SABLs, and mind you, they are not beneficial to them (LOs) and the whole country. The owners of the SABLs and investors are the winners in the end. When are we going to put an end to this madness. God bless PNG

  4. chatnawat hongsri
    January 27, 2014 at 7:40 pm

    Interest this project.Because developer and benifit to landowner png.

  5. John Andaki
    February 10, 2014 at 4:03 pm

    I am a landowner from Western Province and I was at the COI hearing in Kiunga and at (Muruk Haus) in Port Moresby to give sworn statements to be tendered as evidence to the COI. From the final report produced by the COI and tabled by the Chief Commissioner it is evident that my statement as well as those of other landowners were not included as part of the COI report. our statements can not be found in the transcripts. this shouws that the final report of the COI is biased and represents the views of certain people that have a vested interest in the SABL’s of the western Province. Even the statement fromt he developers registered surveyors and foresters were not accepted as evdience. Even at the Inquiry hearing Commissioner Mirou had threaten the landowners by saying if they interjected while he is talking he will have them arrested for contempt under the terms of the COI. Anyone that knows the LAW can say that Commissioner Mirou clearly had an intent to cause distress and damage to the Developer and Landowners by way of his hostile behaviour at the Inquiry towards the landowners. Everyone knows that the COI report on the Western Province is biased because we saw and witnessed first hand the COI entourage from Port Moresby all being accommodated at a certain guesthouse owned and operated by an Australian who has a competing interest over these SABL’s… where is the fairness and impartiality here that we as landowners deserve??Now there is talks that the NEC is about to cancel illegal SABL’s…if this happens everyone will go to court as the only authority to settle disputes and these can have serious implications with the Government of PNG. these lawsuits will amount o millions of Kina that might render the Government bankrupt….filim filim na yupla mekim stap….

  6. chatnawat hongsri
    May 31, 2014 at 5:26 pm

    if this project in png can move ahead it can benefit to national and the local png.

  7. Bush Kanaka Mangi
    November 3, 2014 at 1:55 am

    The SABL Inquiry especially into IT&SL was done for a purpose and it instigated by people or companies with vested interest. Some that came to mind are : RH, PNGSDPL, Warren Dutton (Former Kiap & MP) who has busness interest with PNGSDPL for Rubber plantation. OILSEARCH, INTEROIL and many more, as Politicians were linked or tied into it as ….what IT&SL was doing was different from the Business as Usual Style deployed by RH and others ……what IT&SL was doing was like breaking and setting new grounds for business partnership with the LOs …..so the whole inquiry in Kiunga was “hijacked” by the various interest groups.

    It was a total HIJACKED INQUIRY …a waste of money, whereby Multinational Oil and Gas Companies and Wealthy and Politically Aligned Individuals were playing a game of weakening, disposing, and taking over …..by playing with their money to fuel corruption and bribery within the bounds of the SABL Commission of Inquiry, something unheard of before and new ….instigated by the powerful and wealthy business sector.

  1. January 13, 2014 at 7:13 am
  2. August 5, 2014 at 12:06 pm

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