N7381
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

O.S (JR) No. 439 of 2014

Between:
HARI JOHN AKIPE
First Plaintiff

And:
COUNCILLOR TAMBIAWI TANGILAPE
Second Plaintiff

And:
COUNCILLOR PETER H. WAKIMA
Third Plaintiff

And:
ANGORE GASFIELD COMMUNITY ASSOCIATION INC.
Fourth Plaintiff

And:
RENDLE RIMUA – Secretary, Department of Petroleum & Energy
First Defendant

And:
Hon. NIXON DUBAN – Minister for Department of Petroleum & Energy
Second Defendant

And:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Waigani:  Higgins, J
2018: 13th & 25th July

JUDICIAL REVIEW – Decision of Minister expressed as “interim” – Oil and Gas Act 1998 s.169 – Identification of beneficiaries of oil and gas production from customary land – Clan identification & vetting process – Social mapping & landowner identification report – Whether decision purportedly made is unreasonable – Application of the Wednesbury principle – Individuals or groups entitled to only one share of revenue 

Cases Cited:
Papua New Guinea Cases

Konga v Allen (2018) PCNC 199

Overseas Cases

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, 4109
Parramatta City Council v Pestell (1973) 128 CLR 305
Ziade v Randwick City Council (2001) 51 NSWLR 342

Counsel:

Ms J. Nandape, for the Plaintiffs
Mr V. Yobone, for the First & Second Defendants
(No appearance), for the 3rd Defendant	

25th July, 2018
	
1.	HIGGINS, J:    Pursuant to leave granted by Nablu J on 13 November 2014, the plaintiffs seek judicial review of a decision purportedly made by the second defendant the ‘Minister’) and notified in the National Gazette No. G192 on 19 May 2014.  A corrigendum was published on 28 May 2014 (No. G214) purporting to correct errors made in the Gazette No. G192 (RB 315).  (RB refers to the Review Book)

2.	The Gazette Notice at RB 315 describes the determination, purportedly pursuant to s.169 of the Oil and Gas Act 1998, as “Ministerial Interim Determination.”

3.	It purports to identify those within the area affected by the “Petroleum Processing Facility Licence Area (PPF L8) who are to be entitled to receive a share of royalty and equity benefits generated by the project to which the licence relates.

4.	Of the 5 Regions referred to in PPFL 8, this dispute relates only to Angore - Block 1715 referred to otherwise as Wellhead Block 1715.

5.	Gazette G214 was published “to correct minor mistakes and omissions” (see General Information document of 2 June 2014).  Hence, the Departmental notice specifies the “grace period for Judicial Review, if any, begins on 28 May 2014.”

6.	The determinations are, however, still referred to as “Interim Ministerial Determinations”.  Determinations in relation to projects, “Juha”, “Kutubu” and “Gobe” are specifically referred to as pending. 

7.	A general statement is made (RB 32):

“The Interim Determinations are subject to finalization through the second phase of CVP [ie Clan Vetting Process], which we hope [sic “to”] start off in June 2014, depending on funding from Treasury Department”.

8.	Then follows a heading “Interim Ministerial Determinations & Final PNG LNG Project License (sic) Beneficiary Clans.”

9.	The ‘Beneficiary Clans” purportedly identified for “Angore Region – PDL8” are set out (see RB 44).  There are 85 clans referred to in the list.

10.	Village Councillor, Peter Wakima (3rd plaintiff), deposes that he was not asked, nor is he aware of any other elders being asked, to identify customary land owners within Wellhead Block 1715 until about November 2013 when departmental officers came to do clan vetting.  That process he found to be satisfactory.

11.	However, no draft list was given out until National Gazette No. G192 was published.  The list as there published was not the same as the list submitted to the officers who had come to his village.

12.	That list he sets out to at RB 66.  Some clans were identified without their sub-clans being identified.  Others have that identification.

13.	That raises uncertainty, Mr. Wakima fears, as to whether the sub-clans so named will receive benefits both as members or the clan and as members of a sub-clan.  Some names used were those of individual families.

14.	Of 14 clans named as within “Angore sub-region of the outer Wellhead Area”, only one is within Block 1715.

15.	Some clans and sub-clans not within Block 1715 are named as beneficiaries as well as some clans of whom the deponent is unaware.

16.	In his Ward, he identifies 5 clans (amongst others he does not identify) who are not included.

17.	Mr. Akipe further deposes (RB 74-79), that clan vetting was undertaken and annexes documents relevant thereto.

18.	A Report was prepared, purporting to be:

	“Full-Scale Social Mapping
and
Landowner Identification Study.”

19.	It is a detailed study of Huli society and relationships (RB pp 92-238).  It does not, itself, identify clan beneficiaries though it may be useful in assessing claims by would-be beneficiaries.  Indeed that report highlights that limitation.

20.	The Clan Vetting Report (CVR) for Block 1715 appears at RB 307-313.  This report identified 23 major clans.

21.	The Gazettals (G192 and G214) followed on from these reports.  The Minister expressly states, in those publications:

“Having received and considered results of social mapping and landowner identification studies carried out under s.47 of the Oil & Gas Act 1998 (as amended), PNG LNG Project clan vetting reports, signed clan consent forms from the project license (sic) area.  PNG LNG Project Umbrella Benefits Sharing Agreement, License (sic) Based Benefits Sharing Agreement, other related submissions for the purposes of s.169; I, as the Minister ... make the following determination ...”

22.	The “Corrigendum” of 28 May 2014 purports only to correct errors.  That left 36 clans identified as “Beneficiary Clans Under Angore Region.”  The only amendment to Block 1715 was the mention of “Angore Sub-region of outer Well Head Areas.”  That title was to be omitted.

23.	The Plaintiffs seek an order by way of declaration, that, under s.168 of the Oil & Gas Act 1998, the Minister is not empowered to make an “Interim” determination.

24.	They seek orders in the nature of certiorari to bring up and quash the decision (or decisions) notified in respect of Block 1715 by either or both of G192 and G214 and, if it be different, to declare those decisions null and void.

25.	It also seeks to direct, by way of mandamus, a proper clan identification and vetting process in respect of Block 1715 followed by a declaration of beneficiary clans.

26.	Counsel for the Plaintiffs, at the hearing, made it clear that he was not, at this time, seeking that latter relief on the basis that, if the decision(s) is/are set aside, a mediation process will be undertaken.

27.	A subsidiary issue raised in the process for the identification of beneficiary clans is that the decision does not match, as noted above, the reports on which it purports to be based.  If some other material was considered, it is not identified either specifically or generally.  Thus the decision appears to be arbitrary, allegedly constituting Wednesbury unreasonableness. (see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223; Parramatta City Council v Pestell (1973) 128 CLR 305; Ziade v Randwick City Council (2001) 51 NSWLR 342 (imposing parking restrictions)). The then President of the Administrative Appeals Tribunal reviewed many of the decisions in this area in a paper entitled Reasonableness, Proportionality and Merits Review 24 September 2008 per Downes J, Federal Court of Australia.

28.	The test comes down to whether the decision is or is not one to which any reasonable authority could rationally come.  In essence, a decision maker is not empowered to make arbitrary or whimsical decisions.

29.	In the present case, that test would be satisfied if, for example, clans or sub-clans were included as beneficiaries to revenue accruing to Block 1715 although they had no connection with that area.  It would also be unreasonable to permit, if indeed the decision had this effect, an individual or group of individuals to be awarded a share of revenue twice.  It is not clear to me that naming a clan and its sub-clans would have this effect but if it was so interpreted that would be unreasonable.

30.	The defendants did not dispute the facts relied upon by the plaintiffs.  They simply asserted that the decision(s) was/were not ultra vires but made with the authority of s.169 of the Oil & Gas Act 1998.

31.	They further asserted that the decision(s) was/were not unreasonable or erroneous.

32.	The test for unreasonableness  they sought to define as stated in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, 410G per Lord Diplock:

“[a decision] which is so outrageous in its defiance of logic or accepted moral standards that no sensible person who applied his [or her] mind to the question to be determined could have arrived to it.”

33.	I note the defendants misquoted ultra vires as “ultra virus” but nothing turns on that error.  Nor on whether the decision was “quiet” unreasonable as opposed to “quite” so.

34.	Nevertheless a decision to include or exclude clans not recognized or recognized by the clan vetting exercise, as the case may be, must be irrational and ultra vires in the absence of any contrary or alternative evidence.

35.	However, if no valid decision has been made, it is open to the relevant Minister to consider the issue afresh on the evidence available to him or her.

36.	The fundamental question therefore is whether a reviewable decision has been made.  In turn that depends on the terms of the notifications in the Gazette.

37.	The decision ostensibly engages s.169 of the Oil & Gas Act:

“169. IDENTIFICATION OF LANDOWNER BENEFICIARIES

(1)  Notwithstanding any other provision of this Act, the persons (other than affected Local-Level Governments or affected Provincial Governments) who shall receive the benefits granted by Sections 167 and 168 shall be identified in accordance with the section.
(2)  Prior to convening or during a development forum under Section 48, the Minister shall determine, by instrument–
(a)  the persons (other than affected Local-level Governments or affected Provincial Governments) who shall receive the benefits granted by Sections 167 and 168; and
(b)  the incorporated land groups or, if permitted in accordance with Section 176(3)(f), any other persons or entities who shall represent and receive the benefit on behalf of the grantees of the benefit.
(3)	 An instrument under Subsection (2) shall only be valid if also signed by the Director and the Secretary of the Department of Treasury or other National Government Department responsible for financial matters.
(4)	 In making a determination under Subsection (2), the Minister shall consider any agreements by persons who are or claim to be project area landowners, the decisions of courts of Papua New Guinea as to ownership of land or rights in relation to land in the vicinity of the petroleum project in question, the results of social mapping and landowner identification studies carried out in accordance with this Act, and submissions from affected Local-level Governments or affected Provincial Governments of the petroleum project in question or from any other person claiming an interest or to be affected by the decision of the Minister.
(5) A petroleum development licensee or applicant for a petroleum development licence may, at any time after an application for the grant or variation of a petroleum development licence in respect of a petroleum project, apply to the Minister for a determination under Subsection (2).
(6) Where a licensee or an applicant for a licence applies to the Minister for a determination under Subsection (5), the Minister shall allow a period of 30 days, or such longer period as the Minister may allow, for persons referred to in Subsection (4) to make submissions or in the case of persons claiming to be project area landowners to advise him of agreements reached by them on the determination.
(7) Where a dispute exists as to which persons or incorporated land groups or other entities should be identified to receive benefits in accordance with this section, the Minister may make a determination under Subsection (2) or may direct that monies or other benefits which are the subject of the dispute shall be held in abeyance pending a resolution of that dispute by other means, and where such a direction is given by the Minister the trustee referred to in Section 176 shall hold such monies or other benefits in accordance with that direction.
(8) Where the minister directs that monies or other benefits are to be held in abeyance under Subsection (7) or where the Minister’s determination under Subsection (2) is subject to judicial review, the Minister may grant the licence or licences in respect of the petroleum project.
(9) Where the Minister has granted the licence or licences under Subsection (8) and the dispute is resolved the Minister shall make a determination under Subsection (2) and convene a development forum under Section 48.
(10) A ministerial determination made pursuant to the section shall not be reviewable before any court unless an application for review is made within 28 days of the Ministerial determination.”

38.	It should be noted that under s.169(2), the Minister is to determine the persons to receive the benefits granted by ss.167 & 168 and the representative to receive that benefit on behalf of the grantees.

39.	The Minister, in making that determination, is obliged, by virtue of sub-section (4), to consider agreements made by purported landowners and the law relevant thereto, “the results of social mapping and landowners identification studies or affected Provincial Governments of the petroleum project in question or from any other person claiming an interest or to be affected by the decision ...”

40.	The drafting of the sub-section is not entirely clear as to what is to emanate from relevant Provincial Governments or “any other person”.  The Plaintiffs’ submissions assume that would be representations.  That may well be.  It is, however, not necessary for this decision to determine that.  The only material revealed is the social mapping and landowners identification studies which are, after all, central to identifying beneficiaries.

41.	That the decisions notified in Gazette G192, as corrected by G214, were intended to be provisional and not final is emphasised by the Information Paper stating it was “subject to finalization”.  The Gazette Notice of 19 May 2014 refers to all substantive determinations referred to as, “to be determined at a later determination.”

42.	On the other hand, the Information paper advises that the 30 day period for judicial review commences from the date of the amended determination of 28 May 2014.  That suggests that the determinations are intended to have an immediate effect.

43.	A corrigendum, as Gavara-Nanu J noted in Konga v Allen (2018) PCNC 199 is an amendment made to reflect the true intent and text of the original document.

44.	To describe a decision as “interim” indicates that it is temporary, intended to be of limited duration, pending a final decision on the merits of the case.

45.	Insofar as the decision as to who is or is not a beneficiary of the royalties derived from the subject land is; an interim decision it could not include or exclude a class of beneficiaries so as to authorize payment to them.  If a final decision is to be made which then excludes some class or classes of beneficiary previously included, it would be unjust to demand return of payments made to them, if not impracticable as well.  Further, the fund to be paid to beneficiaries is finite.  To pay it to those found not to be entitled diminishes the share of those entitled.  Further, to distribute shares in the fund without including all those who are found to be entitled unfairly treats those latter persons.

46.	The only meaning that can be attributed to an “interim” decision in this context is that the decision maker is minded to decide that those named as beneficiaries will be entitled to share in the relevant fund, in this case, the revenue derived from Block 1715.  It is therefore, open to any class of named or claimant beneficiaries to object to the inclusion or exclusion of those beneficiaries.

47.	To those objections, if made, the decision-maker will be required to respond with reasons given for such decision.

48.	The uncontested evidence of the plaintiffs highlights apparent anomalies in the interim determination relating to Block 1715.  It is incumbent upon the decision-maker (ie the 2nd defendant, if he remains the relevant Minister) to make a decision as to which class or classes of persons are beneficiaries.  It is not open to him to offer as a “decision” that which is intended to be merely provisional (ie “interim”).

49.	It may well be that those parties, represented by Incorporated Land Groups or otherwise, can determine by agreement how the revenue derived from Block 1715 should be shared amongst the eligible beneficiaries eg whether per capita or per stirpes (ie each individual receiving the same amount or each family receiving shares equal to other families).

50.	Accordingly, it suffices to declare that the notices in the National Gazette G192, as amended by G214, relating to Block 1715 do not constitute a final or binding decision relating to the disposition of or entitlement to revenue derived therefrom.

51.	I will hear the parties as to costs.
_____________________________________________________________
Nandape & Associates: Lawyers for the Plaintiffs	
Greg Manda Lawyers:  Lawyers for the First & Second Defendants	
Office of the Solicitor General:  Lawyers for the Third Defendant