‘Vexatious Litigation’ and ‘Lateral Thinking’ in PNG

In light of the legal slugging matches going on with Arthur Somare lately, I thought this post by Paul Oates seemed quite relevant. It was written before Peter O’Neill’s government got in to power.

——————————————————————–

By Paul Oates

https://i1.wp.com/www.abc.net.au/reslib/201107/r794583_6942209.jpgA legal action which is brought, regardless of its merits, solely to harass or subdue an adversary. (1)

During the life of this current PNG Parliament [the Somare Government], a number of high profile leaders have been referred to the Leadership Tribunal by the Ombudsman Commission. Continual legal argument has however delayed any court from determining an outcome on many occasions. Often it seems like there is a never ending stream of legal obstacles raised by highly paid legal representatives that continually delay proceedings.

In the case put to the Leadership Tribunal about PM Somare, eventually the facts were finally revealed in court and the case proven.

However, could the precedence in the PM’s case give rise to speculation that all the previous legal actions to defer, delay or overturn the Ombudsman’s referral all seemed rather pointless. Given that if it were not an open and shut case in the first place, it be unlikely that the Ombudsman Commission would refer the case to the Public Prosecutor if the facts were not already established.

Further speculation might also arise that a similar situation exists with other cases of the same nature currently being continually deferred on various legal conjecture.

There could also be questions asked about who pays for all the high priced legal experts that are initiating the blocking action aimed at delaying, deferring or dismissing the current referrals? Where has the funding for all this legal assistance come from?

Surely, the PNG taxpayers haven’t funded this ‘personal and private’ legal defence? Public health, education, and all the other essential government services shouldn’t go without, in order to pay for a defence against what appears to be officially a ‘fait accompli’?

The PNG people would probably be very interested to know where the funds to pay for any of this legal assistance originated? If this personal legal assistance was funded from government funds, who decided the public’s health and education was a lower priority than the funding of an entirely ‘private’ legal case of this nature? Was there a clear conflict of interest over who controlled the funding and who it helped support?

Lateral Thinking

On a totally different subject, it is interesting for some to note that in America in the 1930’s the only way Special Investigator Elliot Ness was finally able to ‘nail’ big time criminal Al Capone (2) was to charge him with tax evasion. Capone’s other criminal activities were fully ‘protected’ using the money he gained from the sale of illegal alcohol.

Elliot Ness and his small team realised that until they were able to remove Capone’s official ‘protection’, they would never be able to gain a conviction. So they first reduced the source of income the Capone criminals continued to acquire, by shutting down his alcohol production. When Capone’s alcohol production was closed down, Capone had no money to pay the government people who protected him from being convicted. By removing this source of revenue, Ness decided to go after Capone’s ‘Achilles Heel’ (3) and Al Capone’s criminal empire collapsed.

In essence, after discovering that any legal action amounted to nothing due to Capone effectively buying his way out of any court case raised against him, Ness finally succeeded by ‘lateral thinking’. (4)

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(1) Vexation Litigation – Wikipedia definition

(2) Al_Capone – Notwithstanding his involvement in organised crime, Capone was convicted on federal charges of tax evasion, and sentenced to federal prison.

(https://secure.wikimedia.org/wikipedia/en/wiki/)

(3) An Achilles’ heel is a deadly weakness in spite of overall strength, can actually or potentially lead to downfall. While the mythological origin refers to a physical vulnerability, metaphorical references to other attributes or qualities that can lead to downfall are common.

(Wikipedia)

(4) Lateral thinking is solving problems through an indirect and creative approach, using reasoning that is not immediately obvious and involving ideas that may not be obtainable by using only traditional step-by-step logic. The term lateral thinking was coined by Edward de Bono in the book New Think: The Use of Lateral Thinking published in 1967.

(Wikipedia)

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5 thoughts on “‘Vexatious Litigation’ and ‘Lateral Thinking’ in PNG

  1. Paul in his letter asked where the money forked out for litigation bills originated. A simple PNGean knows that the Somares have a lot of money given the number of years they have been in Parliament collectively. It may be proven wrong unless the new Govt investigates the actual source of money. (Otherwise, who knows what business and shares they own, not to mention how much they are paid).

    For goodness sake, why don’t they allow the normal court preceedings to take its course. Is there something that they are trying to hide? It is commonly said that justice delayed is justice denied. This is obviously a case of delay tactic employed to withhold the normal judicial protocol.

    Common, man-up and face the law and let the laws take its course.

    1. Hi Emmanuel,

      I’m curious what you are going to blog on the following proposals, although I acknowledge that people in PNG believe subsurface minerals and oil rightfully belong to customary landowners.

      I’m primarily concerned about how/whether the landowners of the ore body, let’s the Min people living beside the ore body of the Frieda project for example, will protect the rights of the people living downstream, i.e.
      potentially everybody on the Sepik if the developers fail to keep
      their word about protecting the river.

      Also, if we look at the logging industry, we see that landowners haven’t
      always made the right decisions for themselves, their clans, the
      enviornment, etc.

      So will this proposal help to improve things?

      papua new guinea

      25 Aug 2011

      Mineral Rights For PNG Landowners

      By James Arvanitakis and Spike Boydell

      The new PNG government has announced big changes to the way negotiations with resources companies will take place – and it’s customary landowners who look set to benefit

      Just three weeks ago we reported on the Ramu Nickel case that placed cash before custom in Papua New Guinea. The next day, on 2 August, there was a change of government in Papua New Guinea. What also followed was an important change of policy intent by the new government regarding the mineral resource wealth of the country.

      In his opening address as Minister for Mines, Byron Chan outlined four key mining industry policy issues
      :

      1. Recognition and protection of traditional landowner’s right to mineral
      ownership on or under their traditional land and seabed;

      2. Urgent review of the mining legal regime;

      3. Urgent review of deep-sea mining; and

      4. Urgent review of environmental protection.

      In explaining
      the new policy direction, Chan said that the customary understanding of land and minerals should not be separated – for they are one and the same. The problem, he argued, is that PNG has adopted mining legislation based on the Australian experience that vests the mineral ownership in the State rather than the landowners.

      The argument that follows is that this reliance on Australian law is flawed
      because the legal fiction of terra nullius was overthrown by the Mabo case.That is, at the time of European settlement, land in Australia was deemed to belong to no one and, therefore, the Australian states subsequently claimed ownership of crown land and the minerals.

      In contrast, land in PNG has been occupied and owned by thousands of
      different customary landowning groups since time immemorial. Like their
      Melanesian neighbours, land in PNG was not alienated through colonisation with some 97 per cent still owned by customary landowners. Since Independence in 1975, however, successive governments have claimed a state right over the mineral rights of customary landowners. For the O’Neill-Namah Government, it is time to correct this moral wrong by demanding that the laws governing mining and petroleum extraction recognise what has always belonged to the people.

      It is not surprising that those involved in the mining sector have reacted
      negatively
      to the news, with detractors arguing
      that it will have a negative impact on investment and jobs. The intended changes to mining policy concern the mining investment sector as they now have to deal direct with landowning groups. What this means is that the landowners are an integral part of the ‘deal’ – rather than simply negotiating with the government.

      The response
      from custom landowners has understandably been positive given that they have not seen an equitable return from the damage that mining activity often does to their land. If the O’Neill-Namah Government is to succeed with these changes, it will have to ensure that landowners are properly represented when they deal with resources companies. (For further discussion of this point, see Spike Boydell’s interview
      with Radio National’s Pacific Beat this week.)

      The changes are important for the longer-term democratic and economic health of PNG for a number of reasons.

      The first is that land grabs have resulted in the loss of over 5 million
      hectares for timber and resource exploitation – something facilitated by the
      Special Agriculture and Business Lease
      (SABL) provisions of the 1996 Land Act. SABLs have always been controversial: proper processes of consultation and negotiations have not always been followed nor have customary landholders always given their informed consent. In fact, a key inquiry
      into SABLs is currently underway. It is
      hoped that the changes proposed by the new PNG government will move to resolve such abuse by ensuring stronger validation process, recording and registering of landowners’ interests.

      The second reason is that while mining interests may be focused on providing an ever increasing return to their shareholders, customary owners will, if the new policy direction is followed, have the ability to place stewardship before cash. Some custom landowners are more interested in ensuring the long-term sustainability of subsistence food production than having their land potentially destroyed for short-term economic gain from the minerals that lie beneath.

      Sure, investors may look elsewhere if they think they can plunder the
      mineral wealth more easily in other countries, but the long-term value of
      the resources owned by PNG customary landowners will not diminish with time.In fact, the opposite is likely to occur.

      Yes, there will be landowning groups who are keen to exploit their resources in partnership with mining interests, and they will pay taxes so the state will still receive its return from the process. But more importantly, maybe PNG landowners have finally found a government that is prepared to put custom before cash, stewardship before GDP, and to fully support the integrity of the indigenous relationship with land.

      Thirdly, it opens the door to formulate an equitable compensation model in
      Melanesia that meets the tensions that often arise between the traditional
      land-owners and the “development imperative” of the government.

      In a regional land resource compensation symposium
      in July this year, the lack of alignment
      between customary and western worldviews was identified as being at the root of the concern about external demands for land. Both PNG’s wealthy neighbours and international resource interests need to respect the complex nature of customary land ownership in Melanesia and the wider South Pacific region. These policy changes allow for a marriage of interests between the landowners and the investor.

      Land tenure and resource ownership regimes are dynamic. They evolve and adapt to meet the needs of a given society at a given stage of their
      development process. After decades of being neglected, these changes might just meet the needs of PNG society, both now and into the future.

      http://newmatilda.com/2011/08/25/mineral-rights-png-landowners

      1. Hi Derianga, I’ve been writing here and there on the Sharp Talk FB Group about the mining issue.

        Each week brings out new developments like O’Neill softening the governments intended approach. But I’ll be writing something hopefully this weekend.

        In the meantime here are some of my preliminary thoughts on it:

        Following from my first question on what landowners should do with their money etc, I think I have to first qualify that the majority of PNG’eans are landowners. My specific focus here is when someone or a group of people become “Resource Owners”.

        Over the years we’ve seen thousands of clans all across PNG become resource owners from Pogera to Misima, from Tari to Lihir. So as I think about it, these clans should ideally be financially wealthier than the average PNG’ean. This has not necessarily been the case.

        There have obviously been huge problems with wealth management with the first generation of resource owners and the lack of development is clearly an indicator of this. So now that we are now entering a next round of resource owners boom, I see 3 key challenges:

        1) The State: In more ways than one the government while having good intentions in the past with bodies like MRDC to manage landowner investments have become a huge problem in the equation when mining companies and landowners are in discussions to work out each others rights and benefits. The laws on this have to be amended and the State needs to be removed as an equity partner in resource projects. The States role should only be as a referee and tax collector.

        2) Resource Owner Investments: The general trend in the past has been that so much mismanagement has taken place with royalty payments that the resource owners have been unable to develop financially sustainable investments which would carry them beyond the mine life. Resource Owners than become so dependent on royalty payments that they cannot see that they wouldn’t have to worry so much about it after a few years if all their investments were intact. In other words if they managed their money well they would be making money from two vehicles royalties and dividend from their investments.

        3) Resource Owner Cooperation: Some of the holding companies of our Resource Owners are now worth over a K1billion. Petroleum Resources Kutubu (PRK) is one of them. And you have several others being run extremely well like IPI and Anitua. So why have these resource owners not gotten together to see what they could do collectively with their financial resources. Imagine for example if the resources owners setup their own banks, insurance companies and so on to give their own people better rates for financing. What if they all contributed to a private think tank or research entity that studied or audited how all their investments were being run and making suggestions on how they could improve themselves. What if they setup an agency specifically geared towards helping other resource owner groups get up to their same levels of development.

        I know that we all love talking about politics and the power involved and how its being wielded etc, but we have allot more resources at our disposal than we have ever asked from it. If you are a resource owner who is sitting comfortably out there, let us know your thoughts? Or maybe there is no such thing as a well of Resource Owner in PNG?

  2. Hi Emanuel,

    The state would still have to claim its share of revenues through taxes. Would PNG landowners be willing to accept a 40% tax on resource extraction?

    And the state would still be dependent on multinational resource companies, albeit through taxation alone rather than royalties and taxes. So the proposal might solve some problems but leave others unresolved.

    Anyway, as you say, O’Neill is already walking back from the proposal. It just shows how powerful the Chamber of Commerce for Petroleum and Mining in PNG has become. I don’t know of any other country in the world where this is the case — it is almost like a shadow colonial government.

    yawo,

    Derianga

    p.s. not on facebook

    1. Yes absolutely the State is still and will always be an important part of the resource deals. Its just a case of where they place themselves to be the most help to resource owners and to minimise corruption.

      So the State can benefit in two ways:

      1. through Taxes and
      2. through its own direct investment in a resource project with its company Petromin. In this instance Petromin would act like any commercial entity by seeking its own financing to be a part of the project. (Read also here on how Petronas made it work for Malaysia).

      I think as Oil Search Peter Botton said at the end of the day with so much at stake and with so much history with these sort of project, common sense will prevail.

      But my thoughts are that overall it is more a question of how we can manage what we get out of it, regardless if a resource owner gets a 2.5% share or a 50% share. So the Government can work on those details but the resource owners need management help now.

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