Wammy Rural Development Project FCA 10-07 [OCR]
Forest Clearing Authority - OCR version
Logging companies mentioned in this document:
Concessions mentioned in this document:
PAPUA NEW GUINEA FOREST AUTHORITY
FCA NO.: 10 - 07
PROJECT : WAMMY RURAL DEVELOPMENT PROJECT
HOLDER : GLOBAL ELITE LIMITED
LOCATION: TELEFOMIN, SANDAUN PROVINCE
DECEMBER 2013
SCHEDULE 1
INDEPENDENT STATE OF PAPUA NEW GUINEA.
Forestry Act 1991.
Act, Sec. 90B(8). Form 242
Reg. 263
FOREST CLEARING AUTHORITY TO CARRY OUT A LARGE SCALE
CONVERSION OF
FOREST TO AGRICULTURE OR OTHER LAND USE DEVELOPMENT.
Forest Clearing Authority No: FCA 10-07.
Agriculture or other land use Development Project;
WAMMY RURAL DEVELOPMENT PROJECT, TELEFOMIN DISTRICT, SANDAUN
PROVINCE.
Pursuant to Section 906(8) of the Forestry Act 1991, and all
other powers it enabling, the Board
hereby grants a Forest Clearing Authority to GLOBAL ELITE
LIMITED [FI 02435] ("the Holder")
This Authority authorises the holder to carry out a large
scale forest clearance for commercial
agriculture or other land use development within 84,500
hectares of land area described, and
outlined in red on the map in Schedule 1 ("the Project
Area") for the term specified in Schedule 2
subject to the Act and to the following terms and
conditions;
(a) the holder shall, within 21 days, lodge a performance
bond' in accordance with Section 98
of the Forestry Act 1991 for the amount specified in
Schedule 3.
(b) the holder shall comply with the terms and conditions
specified in the Schedules herein.
(c) the holder shall carry out the agriculture or other land
use project in accordance with the
approved land-use development plan and the approved
implementation schedule
contained in the holder's application for this Authority
and as agreed to and as may be
varied by the Board from time to time.
(d) the holder shall comply with the conditions of any
Permit, License or other Authority
relating to the project and with the provisions of all
Environmental and other relevant laws
of Papua New Guinea.
(e) the holder shall comply with such other conditions as
are specified in Schedule 4 hereto.
Dated this 19th day of December 2013.
For the Board.
1. If the Performance Bond is not lodged within 21 days and no
application under Section 98(6) of the Forestry Act has been made
within 21 days to the Board seeking an extension of time
within which to lodge the Performance Bond then this Forest
Clearance
Authority is deemed void under Section 98(5) of the Act and
thereby cancelled.
SCHEDULE 1 - Map and Description of Project Area.
The Wammy Rural Development Project is located within the Telefomin
District of the Sandaun
Province.
The overall project area is covered by a Special Agricultural and
Business Lease held by Wammy
Ltd for a period of Ninety-nine (99) years over the land known as
Portion 27C; Maimai (SW),
Masalaga & Yellow (SE), Town/Fourmil Aitape in the Sandaun Province.
It has subleased to
Global Elite Ltd for 60 years commencing 18th October 2010.
The gross area is approximately 105,200 hectares, of which only
84,500 hectares is approved and programmed for Agriculture and Landuse development. No clearance and timber harvesting activities shall be undertaken outside the 84,500 hectares. The Land-use development program will comprise the following activities; • Oil Palm 58,000 hectares • Rubber 26,500 hectares SCHEDULE 2 — Term and Commencement Date. i. The term of the Forest Clearing Authority is for a period of Twenty (20) years commencing on the date this Forest Clearance Authority (FCA 10-07) is issued. ii. The FCA land-use development program may be reviewed subject to satisfactory performance of the land-use development program. SCHEDULE 3 — Performance Bond. The amount of performance bond is K 1.25 Million (One Million Two hundred and fifty Thousand Kina only). The performance bond will be released on the authorization of the Managing Director of the Forest Authority after the holder has submitted a compliance report and such report has been found to be satisfactory and in accordance with the terms and conditions of the FCA. A forfeiture or release of the bond in full or partially shall be assessed against the performance and the rate of completion for each project activities. SCHEDULE 4 — Other Conditions 1. All road construction including water crossings (bridges, culverts, fords etc...) and the establishment of appropriate processing plants must be implemented in line with the implementation schedule provided in the forest clearance authority application initially lodged. All conditions and obligations as contained in the Forest Clearance Authority application lodged under Forestry Act 1991 (as amended) must be complied with. This includes the adherence to the specific plantation establishment implementation schedules and plantation
management plan.
3. Release of subsequent areas for forest clearing operations for
agricultural establishment
shall not be allowed unless previously released 500 hectares or
the areas as approved have
been planted.
4. Construction and establishment of a seedling nursery or
nurseries, buildings and a water
reticulation system is caused to be established within a 120 days
from the date of issuance of
the Authority;
5. The Holder shall keep the boundaries of the project area clearly
defined and visible.
6. The Managing Director after consultation with the Holder, may
object to and may request the
Holder to discipline any person employed by the Holder in its
operations who, in the opinion
of the Managing Director, is either incompetent or negligent, or
misconduct himself, and
where such person after having been discipline or continues to be
incompetent, negligent or
misconduct, the Managing Director shall direct the Holder to
terminate the employment of
such person.
The Holder shall not in the course of its land clearing and
development program -
i) conduct timber harvesting or clear-fell in areas over 20
degrees slopes;
ii) conduct timber harvesting or clear-felling within 50 meters of
permanent running water
course;
iii) conduct timber harvesting or clearing felling within 500
meter of any inhabited villages;
iv) obstruct, skid and haul timber across or through permanent
running water courses; and
v) pollute any streams or permanent water course with oil, fuel or
any other wastes and
pollutants;
6. Any Forest Officer may enter upon the project area for the
purpose of measuring, survey
and inspection of the Holder's operations. The Holder shall not
obstruct or hinder any Forest
Officer in the exercise of his powers under this clause and the
Forestry Act 1991.
9. Payment of a forest management Levy of K2.00/m3 of log harvest to
the Forest Authority
based on Invoice on monthly basis.
1. Interpretation.
1.1 In this Forest Clearing Authority —
"Act" means the Forestry Act 1991.
"Authority" means this Forest Clearing Authority.
"authorized harvesting area" means the area in respect of
which harvesting is
from time to time authorized under this Authbrity.
"holder" means the registered forest industry participant
named in this Authority.
"processing plants" means a processing mill or a factory
with ancillary services
for the processing or further processing of oil palm
fruits, cocoa beans, timber, or
any other raw material of agriculture or forestry in
origin, obtained or produced
from the approved land-use development program activities
prescribed in this
Authority;
"project area" means the area described in Schedule 1.
"resource owners" means the customary owners of the land,
timber and other
forest produce in the project area, and includes any
person named as owners in
the Land Leases or the Sales and Purchase Agreement.
1.2 Words and phrases have the same meaning as in the Forestry
Act 1991.
2. Condition Precedent
2.1 This Authority is subject to and conditional upon the
fulfillment of the following
conditions precedent within 90 days of the date of issuance
or such other date as the
parties may mutually agree;
(a) The holder shall draw up 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 and successive land-use
development approved in
writing by the Departmental Head of the Department for
Agriculture & Livestock
including detailed start and completion dates of all
activities associated with the
project within the 84,500 hectares, and whereas —
i) the forest clearance operation area of 84,500 hectares
shall be divided in
four (4) phases; and
ii) each phase shall represent approximately one quarter
of the total area to be
cleared under the forest clearance authority; and
iii) each quarter shall be further subdivided into blocks
for clearing of a
maximum 500 hectares unless the Board considers that
the maximum of
500 hectares is inappropriate in the circumstances in
which case it may
increase or decrease the maximum clearance figures;
and
(b) The Holder shall cause and ensure that twenty five
percent (25%) of the total
project capital investment must be held with a recognized
on-shore commercial
bank and such documents relating to this transaction shall
be provided to the
Managing Director of the Forest Authority.
2.2 The lodgment of the required Performance Bond as prescribed
in Schedule 4, within 21
days from the date of issuance of this Authority
2.3 In the event that any of the conditions precedents under sub-
clause 2.1 has not been
satisfied the Forest Authority shall immediately terminate the
Authority in writing without
notice.
3. Termination
If at any time the Holder's registration as a forest industry
participant is cancelled or where
the Holder is a foreign enterprise within the meaning of the
Investment Promotion Act and the
approvals for the activity authorized by the forest clearing
authority are cancelled, then this
Authority shall be cancelled.
4. Harvesting
4,1 Subject to the terms and conditions of this Authority, the
Forestry Act 1991 and any
agreement entered into by the holder with the resource owners,
the Holder may
exercise timber rights within the authorized harvesting area
during the term of this
Authority.
4.2 In order to ensure that the planned land use by the Holder
actually takes place, the
forest clearing operation shall be authorized in four phases.
Each phase —
(a) shall represent approximately one quarter of the total
area to be cleared under
this Authority, and
(b) shall contain such conditions as are determined by the
Board, and
(c) shall be subdivided into blocks for clearing of a maximum
500 hectares unless
the Board considers that the maximum of 500 hectares is
inappropriate in the
circumstances in which case the Board may increase or
decrease the maximum
clearance figure_
4.3 The Holder shall comply with the approved implementation
schedule determined by
the Department responsible for Agriculture and Livestock
matters or other relevant
Department, and as determined by the Board.
4.4 Any further phase under this Authority may only be granted by
the Managing Director
for the same purposes of forest clearance where all conditions
relating to the
agriculture plan or other land use implementation schedule
have been satisfied.
4.5 The rights under this Authority may be suspended where the
planned land use by the
holder is not progressing according to, or meeting the set
standards of the
Department responsible for Agriculture and Livestock matters
or other relevant
Government Department, agency or instrumentality's approved
implementation
schedule.
6. Associated Rights
5.1 In carrying out the terms and conditions of this Authority,
the Holder may exercise
rights within those parts of the project area in which
harvesting is authorized to —
(a) enter onto and pass through land (but not private
premises);
(b) make fire breaks, roads, tracks, bridges, culverts, and
similar works;
(c) prepare and construct loading and storage sites for forest
produce;
(d) extract, remove, convert and use road making materials for
the purpose of any
activities in paragraphs (a) to (c) above carried out within
the project area
subject to payment of any royalties or fees fixed under the
land lease or sub-
lease, or the Sales and Purchase Agreement or under the Act;
(e) use, keep land transport vehicles, machinery, plant and
equipment;
(f) use and maintain existing roads and waterways;
(g) conduct land and resource assessment surveys (including
aerial surveys) and
inventories.
5.2 Subject to this Authority and the laws of Papua New Guinea the
holder may export
harvested timber under this Authority.
6. Environmental and Forest Management Standards
6.1 The Holder shall comply with all environmental laws of Papua
New Guinea and in
particular, the terms and conditions prescribed in the
environment permits granted
over the project area.
6.2 Where required, the Holder shall at all times comply with and
observe all such
standards and practices as determined from time to time of the
PNG Logging Code of
Practice or any replacement document thereof.
7. Rights of Resource Owners
7.1 In carrying out its rights under this Authority the Holder
must not interfere with the
customary user rights of the resource owners to pass through
the Project Area and to
enter their customary land outside the project area to —
(a) hunt;
(b) fish;
(c) gather plant food;
(d) gather traditional materials for making clothing,
artifacts, tools, utensils, and
houses;
(e) collect firewood;
(f) plant, maintain and harvest subsistence gardens.
7.2 Nothing in this Authority shalt be taken as authorizing the
Holder or its employees to
make food gardens, hunt, or fish outside the project area.
7.3 Compensation for any breach of this clause may be determined
by agreement
between the Holder and the resource owners or fixed by the
Valuer — General if no
agreement is reached, and any such compensation shall be paid
within the period of
time specified by the Managing Director.
8. Payment for Timber
8.1 Subject to the land leases, the Holder shall pay revenue: to
the resource owners at the
rates fixed in the Land Lease Agreements, or the Sates and
Purchase Agreement or
under the Act and such revenue shall not be less than the rates
required to be paid
for timber permit operations existing at the time of harvest in
respect of all timber
felled and scaled within the project area.
8.2 In addition to payments made to the resource owners, the
Holder shall pay to the
PNG Forest Authority any levies which are agreed to between
the resource owners
and the holder, or fixed by the Board or the Minister from time
to time which are
applicable to forest clearing authorities.
9. Roads and Bridges.
9.1 The Holder shall construct all roads and bridges
required for its operations within the
project area.
9.2 The Holder shall maintain all roads and bridges to a
standard sufficient to carry
normally laden logging trucks and at all times
during the term of this Authority shall
ensure that all roads which are in use for the
logging operations are in a trafficable
condition.
9.3 Any roads constructed by the Holder which are in
trafficable condition shall be permitted
for use by the public without charge.
1O.OLand and Buildings.
10.1 The Holder shall construct and erect buildings, houses,
or any other fixtures within the
project area for the purpose of this Authority.
10,2 Subject to the terms and conditions of the land leases
or agreements any buildings,
plants, or fixtures constructed in the project
area for the purpose of this Authority are
severable and may be removed by the holder within
90 days of the expiration or
cancellation of the Authority without doing any
damage to the land.
11.0 Measurement and Recording of Forest Produce.
11.1 All forest produce harvested in the project area
shall be scaled and numbered in
accordance with directions given from time to
time by the Managing Director.
11.2 Subject to any directions which may be given under
Clause 11.1 timber harvested in
the project area shall be scaled, recorded and
declared in accordance with the PNG
Forest Authority's Directions for Scaling.
12.0 Marketing.
The Holder shall endeavor to obtain the best price for the
timber harvested under this
Authority and shall in all cases obtain arms length
prices. For the purpose of this clause, a
price is an "arms length" price if it is equal to or
greater than the price which would have
been obtained on an arms length sale on the same terms and
conditions of sale than other
price_
13.0 State Purchase Option
The Holder shall grant to the Forest Authority commencing
from Project Year 1 to purchase
up to twenty-five (25%) of the holder's annual log export
volume. The Forest Authority's
rights shall be exercised in the following manner —
i) on the first day of the third month of each quarter of
each project year the Holder shall,
in writing, offer to sell at least one- sixteenth
(1116) of that project years log export
volume to the Forest Authority for delivery within
one (1) month from the date of offer
and on payment terms substantially consistent with
those in effect with respect to the
Holders customers;
ii) the offer will include details of the size and grade
of each log, by species, with prices
differentiated by size, grade and species;
iii) the offer or part thereof may be accepted or rejected in
writing by the Forest Authority
within fifteen (15) days of its receipt, and where the offer is
rejected, the Forest
Authority will forgo the right to purchase that amount of logs
for that quarter under this
clause;
iv) logs purchase under this clause will be on a free-on-board
basis, and the price paid by
the Forest Authority shall be the price accepted pursuant to
paragraph (iii) of this clause
less any duty payable on the export of the said logs.
14.0 Force Majeure
The Holder may apply to the Managing Director giving notices of
the occurrence of force
majeure after becoming aware that such force majeure will affect
the performance of its
obligations, and the Managing Director may grant in whole or in part, or refuse any relieve of its obligations as the case may be. For purposes of this Authority, force majeure means wars, insurrections, civil disturbances, sabotage, blockades, riots, embargoes, epidemic, volcanic eruptions, earthquakes, storms, cyclones, floods, tidal waves, explosions, fires, lightning, military operations of any character, or prolonged adverse weather conditions, prolonged land disputes, prolonged depressed market conditions or any other circumstances or occurrence beyond the reasonable control of Holder or the Forest Authority as the case may be The Holder shall immediately upon the cessation of force majeure advise the Authority in writing of such cessation. 15.0 Compliance with Laws. The holder shall observe the conditions of the Authority, or license or any other approvals granted relating to the project and the provisions of the Forestry Act, 1991 (as amended), and all other laws of Papua New Guinea.
