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Bewani Oil Palm Plantations Ltd v Dotaona [2019] PGNC 51; N7761 (22 February 2019)

N7761


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS (JR) NO. 401 OF 2017


BETWEEN
BEWANI OIL PALM PLANTATIONS LIMITED
Plaintiff


AND
DAVID DOTAONA as Chairman and on behalf of NATIONAL FOREST BOARD
First Defendant


AND
PAPUA NEW GUINEA FOREST AUTHORITY
Second Defendant


AND
INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant


AND
PACIFIC GREEN FOREST LIMITED
Fourth Defendant


AND
OSSIMA RESOURCES LIMITED
Fifth Defendant


Waigani: Nablu, J
2018: 5 April
2019: 22 February


JUDICIAL REVIEW – Decision of the National Forest Board – grant of Forest Clearance Authority – Managing Director – ss. 90A, 90B, Forestry Act – recommendation of the Provincial Forest Management Committee required – Board cannot proceed without a recommendation – breach of the mandatory statutory process – judicial review granted.


Cases Cited:

Rose Kekedo v. Burns Philip (PNG) Ltd [1988-89] PNGLR 122

Counsel:
J.Brooks, for the Plaintiff
T.Dalid, for the First and Second Defendants
P. Lowing and E.Parua, for the Fourth and Fifth Defendants


22 February, 2019

1. NABLU, J: Bewani Oil Palm Plantations Limited was granted leave to review the decision of the National Forest Board made on 9th March 2017 to grant a Forest Clearance Authority (FCA 10-08) to Pacific Green Forest Limited and/or Ossima Resources Limited. The area the subject of the Forest Clearance Authority (FCA) was granted in respect of land described as Portion 163C Milinch Bewani (NE & NW) and Oenake (NE & SE) Fourmil Aitape and Vanimo in Sandaun Province. The area size of Portion 163C was approximately 31,430 hectares.

2. The plaintiff seeks an order to quash the decision of the National Forest Board and various declaratory orders declaring the Forest Clearance Authority null and void and of no legal effect. The plaintiff also seeks damages in respect of any loss suffered by the plaintiff as a consequence of any logging or clearance of the forest that has been undertaken by the fourth and or fifth defendants within Portion 163C on the basis of the purported Forest Clearance Authority. The plaintiff also seeks costs on a solicitor/client basis to be paid by the defendant’s jointly and severally.

3. The background facts of the matter are not greatly disputed. The plaintiff was registered as a sub-lessor to Portion 160C in Bewani pursuant to a project agreement which was entered into by Bewani Palm Oil Development Limited. Bewani Palm Oil Development Limited (BPODL) is the registered proprietor of the State Lease which is comprised of various land owner companies and 124 Incorporated Land Groups who were the customary land owners of Portion 160C.

4. On 26th March 2009, a FCA 10-03 was granted by the Papua New Guinea Forest Authority for the entire area of Portion 160C which consisted of over 139, 909 hectares of land. Pursuant to the Project agreement, the plaintiff was appointed as the developer of Portion 160C. According to the terms of the Project Agreement the plaintiff was required to develop a large scale oil palm project within Portion 160C.

5. Bewani Oil Palm Development Limited then sub-leased Portion 160C to the plaintiff on 16th November 2010 in order for the project to be progressed. In January 2011, the plaintiff and its partners commenced work on the project. The plaintiff then entered into a project agreement with the State to develop the entire area of Portion 160C as a large scale oil palm plantation and associated infrastructure project. The plaintiff says they have invested over K800 million in Portion 160C. The development consists of the construction of an Oil Palm Mill, gravel roads, bridges, a pier, aid posts and houses for local land owners.

6. Unbeknown to the plaintiff and Bewani Development Oil Palm Limited, the Surveyor-General registered a sub-division survey for Portion 160C on allocated plan Cat. No.1/136. Consequently, Portion 160C was subdivided to create a new portion described as Portion 163C. Portion 163C contained approximately 31,430 hectares and was situated within Portion 160C. On 28th January 2011, a Special Agriculture and Business Lease (SABL) was then granted and registered to the fifth defendant over Portion 163C. On 18th May 2016, the plaintiff and Bewani Oil Palm Development Limited commenced proceeding OS (JR) 283 of 2016. In those proceedings, the plaintiff sought orders seeking to set aside the title issued over Portion 163C.

7. The legal proceedings related to the competing titles. The WS and judicial review proceedings were consolidated and it went to trial. Despite numerous follow-ups with the National Forest Authority to stay the decision to grant a Forest Clearance Authority over Portion 163C, the plaintiff was informed by the Managing Director for the National Forest Authority that the Board endorsed and approved FCA 10-08 which covered Portion 163C. FCA 10-08 was granted to the fourth defendant. The primary reason for granting the Forest Clearance Authority was that there was no Court Order preventing the grant of the Forest Clearance Authority.

8. The plaintiff alleged that the grant of the Forest Clearance Authority was unreasonable and contrary to the recommendation of the Sandaun Provincial Forest Management Committee. The Committee had resolved to withhold its recommendation in regard to the fourth and or fifth defendant’s application for a Forest Clearance Authority until the final determination of the legal proceedings regarding the competing titles. The plaintiff also alleged that the first defendant breached Sections 90A (3)(f) and 90B(5) of the Forestry Act 1991. The plaintiff further alleged that the defendants breached Section 130 of the Land Act. Therefore, by operation of Section 33(1)(c) of the Land Registration Act, the title of BPODL and the plaintiff’s sub-lease took priority. Any subsequent grant of a Forest Clearance Authority over Portion 163C is therefore null and void and of no effect.


9. The first and second defendants submitted that the Forest Clearance Authority was granted by the Managing Director on 23rd March 2017. The Forest Clearance Authority was not granted lawfully. The Board is the only authority that is mandated to grant a Forest Clearance Authority (FCA). Infact, it was submitted that there was no evidence that the Board granted FCA 10-08. The only evidence before this Court is the letter by the Managing Director which cannot be relied on because the Managing Director did not have the power to grant an FCA. Therefore, this application for judicial review is unnecessary and vexatious because there is no evidence of a licence granted by the NFA Board.

10. The fourth and fifth defendants argued that this action is frivolous and vexatious. The decision was made by the National Court and that decision was that the title for Portion 163C was set aside. The National Court made the decision on 17th July 2017. Therefore these proceedings are futile. Once the National Court determined the issue of the competing titles, this proceeding became futile. The Forest Clearance Authority (FCA) was deemed cancelled.

11. The process of applying for a forest clearing authority to agricultural or other land use is provided in Section 90A and 90B of the Forestry Act 1991.

12. Section 90A and 90B are in the following terms;

90A. A large scale conversion of forest to agriculture or other land use.

  1. A person may make application in the prescribed form and accompanied by the prescribed application fee for a forest clearing authority for the purpose of clearance of natural forest on areas designated for agriculture or other land use development (other than road line clearing on an existing forested area) designated by the relevant authorities where the size of the area proposed for the natural forest clearance for the project is greater than 50 hectares.
  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 –
    1. 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
    2. a copy of the relevant State Lease or other documentation relating to other type of land tenure appropriate for the project; and
    1. 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 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
    1. 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
    2. a map and description of the project area in respect of which the application is made showing any areas of slope in excess of 30o or any other areas which are unsuitable for agricultural or other land use development and any areas important for conservation; and
    3. 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 in relation to customary land, and otherwise the consent in writing of the Board, lessee or owner of the land, as the case may be; and
    4. 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
    5. 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 the office or Department; and
    6. details of equipment and manpower suitable for the development of the proposed project and evidence of past experience in such developments; and
    7. a report by the Department responsible for agriculture and livestock matters or other relevant Government Department on a public hearing conducted by it at or near as practicable to the proposed agriculture or other land use site at which government bodies landowners and the private sector were heard on the proposed project; and
    8. an agreement or agreements between the landowners and the proposed development of the agriculture or other land use project; and
    1. the prescribed form signed by the Secretary of the Department responsible for agriculture and livestock or the Secretary of the relevant Government Department certifying that the matter set out in the proceeding paragraphs are satisfactory; and
    1. the prescribed sales and purchase agreement with the customary owners in relation to customary land, and in relation to other land with the Board, lessee or owner of the land as the case may be, which agreement shall provide for the purchase, harvesting, processing or marketing of timber and other forest produce and which agreement shall be subject to the grant of a forest clearing authority by the Board; and
    2. such other particulars as are prescribed.

90B. Dealing with applications for a forest clearing authority for agriculture or other land use.

  1. If the Board determines that an application under Section 90A is in the prescribed form and contains all relevant particulars it shall prepare a report of the application and refer the application and report to the Provincial Forest Management Committee who shall consider and evaluate the application and make recommendations to the Board.
  2. An evaluation of an application for the Provincial Forest Management Committee under Subsection (1) shall be made taking into account –
    1. the National Forest Policy and National Forest Plan; and
    2. any relevant Provincial Government policies provided they are not inconsistent with National Forestry Policy; and
    1. any relevant National and Provincial Government policies relating to agriculture or the proposed land use; and
    1. the financial resources of the applicant to undertake the forest clearance, the past performance of the applicant in forest industry, analysis of the projected cash flows and the anticipated net benefit to the resource owners and the State; and
    2. any other matters that the Provincial Forest Management Committee considers relevant.
  3. In making an evaluation under Subsection (2), the Provincial Forest Management Committee shall request the assistance of the National Forest Service and of any relevant Department.
  4. Where the Provincial Forest Management Committee, after having considered and evaluated an application, is of the opinion that it is satisfactory, it shall recommend to the Board to approve the application for a forest clearing authority for agriculture or other land use.
  5. If the Provincial Forest Management Committee is not satisfied with the application, it shall inform the Board accordingly together with reasons for its decision and the application shall be rejected.
  6. The Board shall inform the applicant of the rejection of the application and the reasons thereof.
  7. If the Board is satisfied with the recommendation under Subsection (4) it shall approve the application and advise the applicant accordingly.
  8. The Board shall, on approval of the application, grant to the applicant a forest clearing authority to carry out a agriculture or other land use development which authority shall –
    1. be in the prescribed form; and
    2. require a performance bond in accordance with Section 98 for an amount specified in the authority; and
    1. specify such other conditions as are determined by the Board.
  9. A forest clearing authority shall –
    1. in order to ensure that the planned agriculture or other land use actually takes place, provide that any forest clearing operation shall be authorized in four phases, each phase –
      1. shall represent approximately one quarter of the total area to be cleared under the forest clearing authority; and
      2. contain such conditions as are determined by the Board; and
      3. shall be subdivided into blocks for clearing of a maximum 500 hectares unless the Board considers that the maximum of 500 hectares inappropriate in the circumstances in which case it may increase or decrease the maximum clearance figure; and
    2. provide that the holder of a forest clearing authority shall comply with the implementation schedule under Section 90A(3)(c); and
    1. provide that a further phase under the same forest clearing authority may only be granted for the same purposes of forest clearance for agriculture or other land use where all conditions relating to the development plan under Section 90A(3)(a) and implementation schedule under Section 90A(3)(c) have been satisfied; and
    1. provide that the rights under the forest clearing authority may be suspended –
      1. where the planned land use by the applicant for which a forest clearing authority is granted 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, or the development plan under Section 90A(3)(a) or the implementation schedule under Section 90A(3)(c); or
      2. where any conditions of the forest clearing authority or a provision of the Act is breached. (Emphasis mine)

13. A forest clearance authority is defined as a forest clearance authority granted under Section 90B (8) of the Forestry Act.
14. The approval letter from the Managing Director is in the following terms with specific emphasis that is, the underlining of which are mine. Date:30/03/17

File: 157-10-03


The General Manager – Project Relations & Compliance

Bewani Oil Palm Plantation Limited

P O Box 167

Vanimo

West Sepik Province


Dear Madam,

SUBJECT: OSSIMA CATTLE AND FORESTRY PROJECT, W.S.P

I refer to your correspondence dated 22nd March 2017 regarding your request for a formal response on matters relating to the issuance of Forest Clearance Authority (FCA) over customary land recognised as Portion 163C in West Sepik Province.

I appreciate the brief background you have enclosed in your letter, which has also provided PNG Forest Authority with vital information, which it can use when the need arises in due course. Your information has also updated the Authority on the ongoing court proceedings, which have yet to be appropriately determined.

When the application for a propose Cattle and Forestry Project was tendered by Pacific Green Forest Ltd, a brief completeness check was finalised and the application was further referred to Sandaun Provincial Forest Management Committee (SPFMC) for its determination and recommendation to the National Forest Board. Following its evaluation the SPFMC resolved to withhold its recommendation until the on-going court matters mentioned above was appropriately concluded. (Emphasis mine)

An information paper was prepared and submission by National Forest Services in the January 2017 Board Meeting, capturing the above SPFMC’s position on the application for the Board to note and deliberate further.

Apparently, the National Forest Board, in its best judgement, resolved to endorsed (sic) the application for a FCA, numbered FCA 10-08 over the above land lease Portion 163C on the 9th of March 2017; to the proponent, mentioned above, for the proposed integrated project; on the basis that there is no specific court order restraining the Board from exercising its under (sic) its powers to grant the FCA. (Emphasis mine)

The National Forest Service is yet to prepare the appropriate instrument and notifications to formally give effect to the granting of the above FCA.


Yours faithfully,


...signed......

TUNOU SABUIN

ACTING MANAGING DIRECTOR


Cc. Chairman – Board

Cc. Chairman – BPODL

Cc. Jason Brooks – Ashurst Lawyers

Cc. Seri Mitige – Senior Legal Officer


15. I am of the view that the pertinent question to be considered at the outset is whether this letter constitutes the grant of an FCA. If the Court is of the view that the letter constitutes a valid grant of the FCA then the next question to determine is whether the grant of the FCA was lawful.

16. The plaintiff contends that the letter contained evidence of a valid approval of the FCA. The instruments were to be prepared and made available to the applicant. There is no evidence of the actual Forest Clearance Authority before the Court despite numerous attempts by the plaintiff to locate and retrieve the relevant instruments.

17. The first and second defendants, in response submitted that the letter from the Managing Director does not constitute a valid grant of a Forest Clearance Authority. They argued that the correct authority to grant a FCA under the Forestry Act is the National Forest Board.

18. The law on the grant of a FCA is provided in Section 90B of the Forestry Act. Upon consideration of the recommendation of the Provincial Forest Management Committee and if the Board is satisfied with the recommendation of the Board. The Board shall approve the application and advise the applicant accordingly. The approval of a Forest Clearance Authority must be in the prescribed form, and a performance bond pursuant to Section 98 for a specific amount is required and any other conditions which are determined by the Board must be imposed in the FCA.

19. I note in Mr Dalid’s submissions for the first and second defendant that they did not question the validity of the letter per se. However, to my mind it appears his submissions are that the letter is valid but the Managing Director is not authorized to give or make such a decision, its’ the Board’s prerogative. Notwithstanding the fact that this is the law, the Managing Director is a senior officer in the National Forest Authority. The Managing Director is responsible for the management of the National Forest Services. He is also an advisor to the Board and is required to act in accordance with the policy and directives of the Board. The Managing Director is also responsible for other functions that the Minister may impose on him after receiving advice from the Board from time to time (see Section 35 of the Forestry Act). The Managing Director according to Section 10(1) of the Forestry Act is also an ex officio member of the Board.

20. Therefore, it is clear that notwithstanding, the absence of evidence of a FCA in the prescribed form, I accept the letter from the Managing Director as authentic. The letter is evidence of the purported grant of the FCA. For that reason, I am convinced that the letter is evidence of a decision made to grant FCA 10-08 and I accept the letter dated 30th March 2017 as evidence of a decision to grant the FCA 10-08.

21. Now turning to the issue of whether this proceeding is futile as submitted by the fourth and fifth defendants, I am of the view that the grant of an FCA is in itself a separate decision made by a decision-maker which leave has been sought and granted to review. Whilst I appreciate the fact that a decision was made in relation to the title, it does not render this proceeding futile, because this proceeding relates to a different administrative decision. Even though the decision in OS (JR) No. 283 of 2016 may have a bearing on this case. With respect, I am of the view that it does not render the proceeding futile. The purpose of judicial review is not to examine the subordinate authority’s decision with the view of substituting its own opinion but rather judicial review is concerned with the lawfulness of the decision-making process (see Rose Kekedo v. Burns Philip (PNG) Ltd [1988-89] PNGLR 122). For that reason, I do not accept the submissions by counsel of the fourth and fifth defendants as it is contrary to the generally accepted principles of judicial review.

22. The question for determination before this Court is whether the decision to grant an FCA was lawful and consistent with the mandatory statutory procedure. I am of the view that the decision to grant the FCA 10-08 to the fourth defendant is unlawful.

23. The plaintiff contends that the decision to grant the FCA is unlawful because it did not comply with the requirement of considering the Provincial Forest Management Committee’s recommendation.

24. According to the evidence before me, the Sandaun Provincial Forest Management Committee withheld its recommendation pending the outcome of the legal proceedings which related to the competing titles.

25. Section 90B of the Forestry Act, states that when the Committee is considering an application for an FCA it must be in the prescribed form and contain all the relevant particulars. The Board then prepares a report of the application and refers it to the Committee. The Committee evaluates the application and makes a recommendation to the Board. If the Committee is satisfied with the application then it recommends to the Board to approve the application for a forest clearance authority. If the Board is also satisfied with the application after considering the Committee’s recommendation, they then advise the applicant accordingly. On the other hand, if the Committee rejects the application. They are required by law to inform the Board of the decision to reject together with the reasons for rejection. The Board then has limited powers to consider the rejection. The Board is required by law to inform the applicant of the reasons of the decision and the application is then rejected.

26. I note in the present case, there is evidence that the Committee did not make a recommendation to the Board for the reason that the legal proceedings in relation to the validity of the title was still on foot (see the letter dated 30th March 2017 from the Managing Director).

27. Whilst I accept that the Board is not bound by the Committee’s recommendation, the Board is still required to consider the recommendation. In the present case, it is clear that there was no recommendation from the Committee. In fact, the Committee resolved to withhold its recommendation pending the outcome of the case. Therefore, I am satisfied that the Board unilaterally made a decision to grant the FCA in the absence of a valid recommendation by the Committee. This was a breach of the decision making procedure as stipulated in Section 90B of the Forestry Act.

28. The next issue is whether the Board erred in making a decision to grant a FCA to the fourth defendant when there was an existing FCA which was still valid. It is alleged that the land subject of FCA 10-08 which is also the same land subject to FCA 10-03 which was granted over Portion 160C on 26th March 2009. The plaintiff submitted that FCA 10-03 was still valid and had not been cancelled, challenged, altered or amended.

29. There is no provision in Section 90B of the Forestry Act which relates to the procedure on how an FCA is cancelled or revoked. I note there is also no provision which has a time period a FCA is valid for. If there is any provision, I have not been referred to it by counsel. So it would appear that when a FCA is granted it remains valid so long as there is still forest to clear to make way for the development our people are craving. Be that as it may, it would mean the FCA is still valid and any subsequent grant is duplicitous. By failing to revoke the existing FCA, the defendants erred in law and fact. In other words the subsequent grant of FCA 10-08 is contrary to Section 90A and 90B of the Forestry Act.

30. The final question to be determined is whether the decision is unreasonable, I am of the view that the fact that the Board made a decision unilaterally without consideration of the Committee’s recommendation is contrary to law and therefore unreasonable. Section 90A(1) of the Forestry Act states that the size of the area proposed for natural forest clearance for the project is greater than 50,000 hectares. The land area subject of FCA 10-08 is over 31,000 hectares, clearly below the prescribed area that was required for an FCA application.

31. For those reasons, I uphold the plaintiff’s application for leave for judicial review.

32. In regard to the relief, I am of the view that the relief sought in the plaintiff’s notice of motion should be granted. The decision was made contrary to Sections 90A and 90B of the Forestry Act.

33. The decision should be quashed forthwith. The plaintiff also sought damages in respect of any economic loss suffered by the plaintiff as a consequence of any logging, forest clearing, log extraction or any activity at all undertaken within Portion 163C by the fourth and /or fifth defendants. Notwithstanding the Courts’ wide and unfettered discretion to award damages in a judicial review application and the fact that the plaintiff has compiled with Order 16 Rule 7 of the National Court Rules in having the claim for damages pleaded in the Statement of support. I am inclined to exercise my discretion to refuse such orders for the reason that the defendants should be allowed to exercise their right to defend any civil claim for damages in the normal course of a civil claim.

34. The plaintiff is still within time to file a civil claim based on the judgement herein.

35. In regard to costs, they follow the event. The first and second defendants are to pay for the plaintiff’s costs of incidental to the proceedings to be agreed if not taxed. For the reason, that it is their decision which is the subject of review. Costs are discretionary. The third, fourth and fifth defendants bear their own costs.

Court Orders

36. The Court orders that:

  1. The plaintiff’s application for Judicial Review is upheld.
  2. The purported decision of the first and second defendants in the letter of the Managing Director dated 30th March 2017 is declared unlawful and made contrary to Section 90B of the Forestry Act and is quashed forthwith.
  3. For avoidance of doubt, the Forest Clearance Authority (FCA) 10-08 in respect of Portion 163C Milinch Bewani (NE & NW) and Oenake (NE & SE) Fourmil, Aitape & Vanimo in Sandaun Province containing 31, 430 hectares is null and void and of no legal effect.
  4. It is declared that any documents, permits, licences, approvals, working plans, operating plans, annual logging plans or any instrument or documents whatsoever issued or granted in furtherance of the grant of FCA 10-08 are null and void and of no legal effect.
  5. The plaintiff’s application for the relief of damages is refused.
  6. The first and second defendants to pay the plaintiff’s costs of and incidental to this proceedings to be agreed if not taxed.
  7. The third, fourth and fifth defendants to bear their own costs of this proceedings.
  8. Time for entry of these orders is abridged to the dated of settlement by the Registrar which shall take place forthwith.

Ashurst Lawyers: Lawyers for the Plaintiff
National Forest Authority – Legal Branch: Lawyers for the First and Second Defendants
Leahy Lewin Lowing Sullivan Lawyers: Lawyers for the Fourth and Fifth Defendants

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