Amanab 56 Timber v PNGFA 2019
National Court challenge to the granting of a Forest Clearance Authority
Logging companies mentioned in this document:
N9313
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NO. 838 OF 2019
BETWEEN:
AMANAB 56 TIMBER INVESTMENTS LIMITED
Plaintiff
V
PAUL SAI’I, CHAIRMAN NATIONAL FOREST BOARD.
First Defendant
AND:
PAPUA NEW GUINEA FOREST AUTHORITY
Second Defendant
AND:
KINMAS INVESTMENT LIMITED
Third Defendant
AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant
AND:
HON. SOLAN MIRISIM MINISTER FOR FORESTRY
Fifth Defendant
Waigani: Miviri J
2021: 18th & 25th November
PRACTICE & PROCEDURE – Judicial Review & appeals – Order 16 Rule 5
NCR – Third Defendant Granted FCA – Powers of First & Second Defendants
To – Existing & Prior FMA to Plaintiff – Section 90A & 90B Forestry Act –
Excision Whether by Law – Administrative Powers of Fifth Defendant – No
Consent by Plaintiff – Error of Law – Unreasonableness – Ultra Vires – Judicial
Review granted – Remedies granted – cost follow event.
Cases cited:
Simakade Holdings Ltd v National Forest Board [2019] PGNC 18; N7703
National Airline Commission v Lysenko [1990] PNGLR 226
Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122
Ombudsman Commission v Yama [2004] PGSC 30; SC747
Enei v Rimbunan Hijau Ltd [2011] PGNC 142; N4402
Tzen Pacific Ltd v Pouru [2013] PGNC 307; N5156
Counsel:
I. Shepperd, for the Plaintiff
S. Mitige, for First & Second Defendants
D. Dusava, for Third Defendant
RULING
25th November, 2021
1. MIVIRI, J: This is the Ruling on the Plaintiff’s Amended Notice of Motion
pursuant to Order 16 Rule 3 (2) (a) of the National Court Rules filed of the 22nd
February 2021, seeking certiorari to remove into Court and quash the decision of
the First Defendant of the 28th May 2019, to grant a Forest Clearing Authority
FCA 10-15 to the third Defendant.
2. Secondly declaration that the decision by the First Defendant on the 28th
May 2019 to grant an FCA to Kinmas Investment Limited is in breach of Section
90A (2) of the Forestry Act and its illegal, null and void.
3. Thirdly an order in the nature of certiorari to remove into this Court and
quash the decision of the Fifth Defendant dated 08th October 2019 to approve the
excision of 6.557 hectares of the Project Area.
4. Fourthly declaration that the FCA 10-15 dated 18th October 2019 was
issued in breach of the Forestry Act 1991 (the Act) and therefore is null and void.
5. Any other orders as discretion by the Court, costs of the proceedings. And
time be abridged to the date of settlement by the Registrar which shall take place
forthwith.
6. He has filed and relies on the following affidavits in his cause of action:
(a) Affidavit verifying Statement sworn by Sii Hoe Lu of the 20th
November 2019;
(b) Affidavit in support sworn by Sii Hoe Lu of the 20th November 2019;
(c) Supplementary Affidavit sworn by Sii Hoe filed 20th November 2019;
(d) Affidavit in Support sworn by Sii Hoe Lu filed 20th February 2020;
(e) Affidavit in response of Sii Hoe Lu filed 03rd March 2020;
(f) Affidavit of Sii Hoe Lu filed 04th February 2021;
(g) Affidavit of Sii Hoe Lu filed 18th June 2021.
7. In the case of the First and Second Defendants and Third Defendants they
rely on the following affidavits:
(a) Affidavit of Lau Mang Koud sworn of the 24th February 2020;
(b) Affidavit of Clement Siri sworn of the 11th March and filed 13th
March 2020;
(c ) Affidavit of Clement Epi Siri sworn of the 28th May 2021 and filed 1st
June 2021;
8. From all these evidence comes the Statement of Agreed and Disputed Facts
and Issues for Trial contained at page 736 of the Review Book. Where it is agreed
fact, that the Plaintiff Amanab 56 is a Forestry Industry Participant (FIP) and
currently carrying out logging operations in Amanab Blocks 5 & 6 in Vanimo,
Sandaun Province. It is the holder of the Timber Permit PNGFA TP 10-02 (Timber
Permit) granted by the Minister for Forests on 29th June 2007. It has Forest
Development Project Agreement (Project Agreement) relating to the Amanab
Blocks 5 & 6 Forest Management Agreement (FMA) area in Sandaun Province
signed on 16th May 2007 which is for 35 years the duration of the timber permit
expiring in 2042.
9. Following review, the FMA was varied to incorporate Waramaiyu, Killfas
and Aiambai logging areas within Amanab blocks 5 & 6 in Sandaun Province. The
total area was approximately 137, 718 hectares.
10. On the 06th April 2018 the Plaintiff obtained approval for the 2019-2020
Annual Logging Plan from the PNG Forest Authority (PNGFA) and currently
carrying out logging activities within the Project Area. On the 18th March 2018 he
received a letter from Mon Agro Forest Limited to stop their logging Operations in
and around Sanemi Clan Land in Sandaun Province. This is within the FMA area
covered by TP 10-02. And also, on that day he wrote to the Managing Director of
the PNG Forest Authority (PNGFA) expressing his resentment. However, there
was no response received from that office. He sent similar letters on the 10th July
2018 and the 24th June 2019 but no response was forthcoming.
11. This prompted the discovery before suit pursuant to Order 3 of the National
Court Rules filed on the 28th June 2019 by him to obtain information pertaining to
the name of the person, or company to whom the FCA was granted amongst
others. On the 18th July 2019 the National Court presided by Justice Thompson
made orders directing the PNGFA to give discovery of the relevant documents
within 10 days. On the 08th August 2019 PNGFA advised him that an FCA
application dated the March 2018 was submitted by one Kinmas Investment
Limited but no decision has been made by the Board. Based on that information by
PNGFA, he filed an originating summons on the 13th August 2019 seeking to
declare amongst others that the FCA application was null and void for breaching
the Act.
12. On the 13th November 2019 PNGFA produced three (3) vital documents to
the Court upon a Summons to produce namely:
(a) FCA dated 18th October 2019;
(b) Board Resolution of the 28th May 2019 granting the FCA, and;
(c) Application for FCA dated March 2018 by Kinmas Investment
Limited.
13. From these documents it became clear that the PNG Forest Board had
decided on the 28th May 2019 to grant an FCA to Kinmas Investment Limited. Which the Fifth Defendant purported to approve the excision of 6, 557 hectares from the Project Area on a recommendation from the First Defendant on the 10th September 2019. The FCA was issued on the 18th October 2019 in relation to about 6, 557.2 hectares of land within TP 10-02 covered by the Amanab 5 & 6 Forest Management Area (FMA) in which the Plaintiff is the permit holder. And to which the third defendant did not obtain approval or consent of the plaintiff prior to considering and approving the FCA. Although a Board decision was made on the 28th May 2019 for the approval of an FCA, that decision was not communicated to the Plaintiff despite an order for discovery made against the First and Second Defendants on the 18th July 2019. 14. The Customary Landowners of the land under the FCA have been registered under three (3) ILGs. And on the 28th February 2018 the Customary Landowners under their landowner company Mon Agro Forest Development Limited signed a Project Agreement with the Third Defendant which is the basis for the issuance of the FCA to the third Defendant. And the customary Landowners have raised objections to the PNGFA against the timber operations of the Plaintiff within the area now covered by the FCA 10-15. These objections have also been forwarded to the Plaintiff who is aware of the views of the landowners. And the Plaintiff has refused to permit the removal of the land now under the FCA from its FMA and Timber Permit area. 15. As to facts that are disputed, the Customary landowners of the land under which the FCA has been issued were signatories to the Plaintiff’s FMA. And the Plaintiff is not aware of any facts that are in dispute. 16. This gives rise to the issue whether the plaintiff is entitled to the substantive relief sought in its amended Notice of Motion filed of the 22nd February 2021. 17. The relevant law applicable is the Forestry Act 1991 and here section 90A of is relevant which is as follows; A LARGE-SCALE CONVERSION OF FOREST TO AGRICULTURAL OR OTHER LAND USE. (1) A person may make application in the prescribed form and accompanied by the prescribed application fee for an authority to carry out any agricultural or other land use development (other than roadline clearing on an existing forested area) where the amount of proposed clearance of natural forest for the project is
greater than 50 hectares in total.
(2) An application under Subsection (1) shall not be made where the proposed
project is within a Forest Management Agreement Area, Timber Rights Purchase
Agreement Area or Local Forest Area except with the approval of the Board and,
where applicable, the holder of any relevant Timber Permit.
(3) An application under Subsection (1) shall contain–
(a) a detailed development plan, evaluation report and certificate of
approval from the Secretary of the Department responsible for agriculture
and livestock matters or the Secretary of any relevant Government
Department or such other evaluation reports and certificates as the Board
considers necessary; and
(b) a copy of the relevant State Lease or other documentation relating to
other type of land tenure appropriate for the project; and
(c) an implementation schedule for the complete agricultural or other land
use project showing the precise areas and proposed rate of harvesting to be
carried out by an independent contractor appointed by the Forest Authority
and successive land use development approved in writing by the
Departmental Head of the Department responsible for agriculture and
livestock matters or the Secretary of the relevant Government Department
or, where relevant, the Provincial Government including detailed start and
completion dates of all activities associated with the project; and
(d) details of costs of the agricultural or other land use project and a
certificate from a bank or financial institution which is satisfactory to the
Managing Director certifying that the full costs of funding the project will
be available to the applicant; and
(e) a map and description of the project area in respect of which the
application is made showing any areas of slope in excess of 30° or any other
areas which are unsuitable for agricultural or other land use development
and any areas important for conservation; and
(f) a verification of ownership and the consent of each resource owning clan
agent (or incorporated Land Groups if they have been formed) within the
project area, which has been signed in the presence of a Village Court
Magistrate or land mediator in the prescribed form; and
(g) supporting letters from any other relevant Department authorities or
relevant industry body regarding the appropriateness of the design and
implementation of the proposed project; and
(h) an approval in writing from the office or Department responsible for
environment and conservation matters of the environment impact statement
submitted by the applicant to that office or Department; and
(i) details of equipment and manpower suitable for the development of the
proposed project and evidence of past experience in such developments; and
(j) such other particulars as are prescribed.”
18. The procedure set out by section 90A when carefully read is very ominous,
intricate and delicate process that is set in place, initially when the application is
made and lodged together with what material accompanies it for the applicant in
an application for the conversion of Forest to Agricultural or other land use. It is a very detailed and tedious process that must be satisfied by the applicant. It sets a very high standard for the applicant to qualify as an FCA holder of land. No doubt the Legislature considered the importance of land in the lives of every ordinary Papua New Guinean and balanced that out with development of Natural resources that was imminent to bring the Country to the world stage. It was not just an exercise off the cuff, but a very demanding detailed material dominated, independently corroborated confirmed exercise, that was the basis upon which, land usually of the State and its People taken off them in law, for the functioning of large Agricultural, and Forestry, and other like projects, that drew revenue for it. Development of the land benefitting the Country and the State, but not stifling out the life of its People, who were intimately depended and dominated by its land. 19. Here the person who has applied is Kinmas Investment Limited who has produced only after a court ordered discovery and then a summons to produce following by the Court. It begs why such fundamental evidence came out with a court proceeding and order demanding. Only the application has been produced not the material that went accompanying it. The Board resolution granting has been produced also because of the summons. These are very important and fundamental evidence on the part of the case of the third defendant to produce. Because they would be material upon which the Court will see what the Board saw in the resolution it made in favour of the applicant Kinmas Investment Limited. In other words, it was not granted for the sake of being granted, but that it was based on material that warranted and justified as process by the Section 90A set out above. Even the evidence of the witnesses relied on by the defendants set out above do not bring this out. It is evidence that is heart to the case for the third defendant, as the consequence that flows is that the FCA is without any basis in the way it has led into the hands of the third defendant Kinmas Investment Limited. The process of law by section 90A in its totality, has not been complied with in favour of Kinmas Investment Limited. Because the evidence of compliance has not been produced by the defendants one and all. 20. The facts here establish that an FMA granted to the Plaintiff upon land described as Amanab Blocks 5 & 6 Forest Management Agreement (FMA) area in Sandaun Province. Part of that land about 6, 557.2 hectares within TP 10-02 covered by the Amanab 5 & 6 Forest Management Area (FMA) in which the Plaintiff is the permit holder was granted in defiance of Section 90A (2) (3) of the Forestry Act 1991 to the third Defendant, Kinmas Investment Limited. There is no evidence that the plaintiff was no longer the permit holder, or that the FMA he held had expired, because it was initially signed on 16th May 2007 and was for 35 years the duration of the timber permit expiring in 2042. The 28th May 2019 to grant an FCA to Kinmas Investment Limited was within that period and could not stand in law by section 90A (2) of the Act. And the discretion made on the approval of the Fifth Defendant purportedly to approve the excision of 6, 557 hectares from the Project Area on a recommendation from the First Defendant on
the 10th September 2019 was breaching section 90A (2) of the Act. It was in aggregate a very bad breach of Section 90A in total by the defendants. 21. Their argument is without any basis in law. The land area is approximately 137, 718 hectares. And out of it came excision of the 6, 557.2 hectares within TP 10-02 covered by the Amanab 5 & 6 FMA so that it could be granted to the third Defendant. And was granted by that FCA to it. It defied and breached section 90A (2) which was mandatory and imposing that an application by subsection (1) could not be made for FCA on land already “within a Forest Management Agreement Area, Timber Rights Purchase Agreement Area or Local Forest Area.”Here it was against land already held out by the Plaintiff by its FMA set out above. Rights in law were not imposed on an existing and did not supersede an existing right without compliance and adherence to law. It failed if it did not accede or comply as was the case here for the defendants. 22. The argument for the third defendant was reliance upon the board resolution granting it, but that goes back to the application that was lodged which does not detail out upon what material required by section 90A accompanying was it lodged with so as to sustain the FCA. The exception that it was with the approval of the board cannot sustain where there is no material produced here accompanying the application to the board. The resolution came into existence allowing for the FCA to the third Defendant. There is no material by section 90A (3) (a) to (j) and Section 90B warranting and justifying the invoking of the exception in favour of the third defendant. It has not been produced here and only evidence will draw the exception in favour of the third defendant. It is seriously lacking here against the case of the third defendant. There is not even a consent of the Plaintiff in the matter allowing by section 90A (2) of the Act. The third defendant is hinging a case without merit in law. 23. It is as if the FMA an agreement binding in law between the parties, here the plaintiff and the State enforceable at law is dragged into the cobweb to accommodate the third defendant. That is clearly very serious breach of procedure set out by the section mandatory upon the parties to it: Simakade Holdings Ltd v National Forest Board [2019] PGNC 18; N7703 (22 February 2019). The excision of the subject land is also not sanctioned by the Forestry Act in any way. It is part and parcel, primary to the FMA and cannot with the breach of that Agreement be dealt with in the way that the defendants have dealt with it here. It is a very serious breach enforceable at law by the Agreement that is binding since 16th May 2007 for a duration of 35 years the duration of the timber permit expiring in 2042. 24. What is evident against the defendants severely and individually are very
serious breaches of the law, if viewed as a Contract would be a very serious breach of contract entitling the plaintiff to damages for breach of contract: National Airline Commission v Lysenko [1990] PNGLR 226. Here also in the light of section 90B the evidence relied on does not par out that, that section has been discharged. Here particulars are deposed to at page 351 of the Review Book, which is a form stemming from section 88, and not section 90A of the Act. Because the Forestry Regulations 1998 that set the form is regulation 287. FOREST CLEARING AUTHORITY. It reads; “A forest clearing authority under Section 90(D)(22) of the Act shall be in Form 249 of Schedule 1. And verification of ownership and Consent of Landowners is by regulation 288 which is as follows; “A verification of ownership and consent of landowners under Section 90(A)(3)(f) and 90(D)(3)(g) of the Act shall be in Form 267 of Schedule 1and shall contain those particulars as set out in that Form. The wrong forms are used here, there is no FCA accorded the third defendant here given. Further it does not comply that the witness is a village court magistrate or land mediator. Procedure has not been followed here: Simakade Holdings Ltd (supra). 25. In Judicial review a very serious breach of procedure parallel and hand in hand with the law in Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122, that the Court has very wide discretion to correct errors in the decision-making process. And underlying is the want or excess of power or jurisdiction which is evident here upon the actions of the defendants. Section 90A did not extend to the evidence here in favour of the defendants. Because they had erred in law, it was evident on the face of the record relied here. And there was failure to adhere to the principles of natural justice. There is no evidence from the plaintiff he was given an opportunity as to whether or not he consented to the excision of his FMA land to the third defendant at the behest of the first and second defendants: Ombudsman Commission v Yama [2004] PGSC 30; SC747 (2 June 2004). 26. This is a decision by the First and Second defendants that has ignored the dictate of section 90A of the Forestry Act 1991 in its totality. Which evidences bad faith and dishonesty because the ambit and operation of section 90A is very clear. There is no heed to its dictate and the actions by both are not reasonableness within the Wednesbury sense. Because this Court has stated, “The overall scheme of the Forestry Act 1991 is also aimed at safeguarding such rights and interests of the resource owners,”: Enei v Rimbunan Hijau Ltd [2011] PGNC 142; N4402 (28 September 2011). Here if the resource owners have come to a meeting of the minds in the FMA concluded in operation with the Plaintiff, that will supersede the intentions Clement Epi Siri and their landowner company Mon Agro Forest Development Limited. Because the signing of the agreement between the two has come into existence on the FMA of the Plaintiff. The subject land is enveloped by that earlier relationship in law and does not open, nor does it become lax to accommodate the relationship now between the third defendant and landowner company Mon Agro Forest Development Limited. The raising of complaints against it by the latter does not derail the setting in law. It remains as it is set of the
16th May 2007 expiring after lapse of 35 years in 2042. Because it is an
Agreement that is implemented and is drawing generating benefits either way of
the it.
27. The aggregate is summed in Tzen Pacific Ltd v Pouru [2013] PGNC 307;
N5156 (25 April 2013), “An application for Judicial review proceeds in two
stages. First, the Plaintiff must establish good grounds of judicial review.
Secondly, if one or more of the grounds are established the Plaintiff must make a
case for a remedy, which is a matter of discretion (Mision Asiki v Manasupe
Zurenuoc (2005) SC 797, Dale Christopher Smith v Minister for Lands (2009) SC
973.” In my view the discussion set out above discharge the balance beyond
preponderance, that the review grounds contended here, error of law, Wednesbury
principles of unreasonableness, ultra vires, and denial of natural justice, have all
being made out to the required balance by the Plaintiff. He discharges the first
element of Judicial review.
28. In respect of the second element, the remedies the observations set out
above warrant the remedies pleaded by the plaintiff. And in the circumstances
here, this is illuminated by the intricacies canvased by section 54 to 60 and the
allocation process from section 61 to 77 of the Act, which must be completed even
before the issuance of FMAs and Timber permits. And in the case of the Plaintiff
that is borne out by some of the features of the Forest Management Agreement
referred to in the affidavit of the Plaintiff in particular pages 684 to 685 of
Document 49. Which is self-explained and imposing compliance with the law and
warrants beyond the balance of preponderance, read with the discussion set out
above the remedies sought here. Accordingly, the plaintiff is granted the remedies
that he seeks in accordance with the Substantive Notice of Motion filed of the
22nd February 2021.
29. Therefore it is hereby ordered that:
(1) Judicial Review lies and is granted to the plaintiff forthwith.
(2) Certiorari lies and is granted forthwith to remove into Court
and quash the decision of the First Defendant dated the 28th
May 2019 to grant a Forest Clearing Authority FCA 10-15 to the
third defendant.
(3) Declaration lies and is granted forthwith that the decision by
the First Defendant on the 28th May 2019 to grant an FCA to
Kinmas Investment Limited is in breach of Section 90A (2) of
the Forestry Act and is illegal, null and void.
(4) Certiorari lies and is granted forthwith to remove into Court
and quash the decision of the Fifth Defendant dated 08th
October 2019 to approve the excision of 6,557 hectares from the
Project Area.
(5) Declaration lies and is granted forthwith that the FCA 10-15
dated 18th October 2019 was issued in breach of the Forestry
Act 1991 (the Act) and therefore is null and void.
(6) Costs follow the event forthwith.
Orders Accordingly.
__________________________________________________________________
Ashurst Lawyers : Lawyer for the Plaintiff.
B. S. Lai Lawyers : Lawyer for the Third Defendants
Legal Section PNGFA : Lawyer for State
