IN THE HIGH COURT OF SOLOMON ISLANDS
Civil Jurisdiction

(Maina J)

Civil Case No. 199 of 2015

BETWEEN:

PT MEGA BINTANG BORNEO LIMITED
1st Applicant/Defendant

AND:

THE SHIP "MV CHANG HANG JIN HAI"
2nd Applicant/Defendant

AND:

THE ATTORNEY GENERAL
(Representing the Minister of Mines, Energy and Rural Electrification)
3rd Defendant

AND:

THE ATTORNEY GENERAL
(Representing the Director of Mines)
4th Defendant

AND:

ASIA PACIFIC INVESTMENT DEVELOPMENT LIMITED
1st Respondent/Claimant

AND:

BINTAN MINING SI LIMITED
2nd Respondent/Claimant

Date of Hearing: 3rd July 2015
Date of Judgment: 31st August 2015

Ramo L for the 1st and 2nd Applicants/Defendants
Muria J for the 3rd and 4th Defendants

Ivanisevic J )
Klapper M ) for 1st and 2nd Respondent/Claimant
Zama J )
Togamae )

RULING

Maina J:

This is an application under Rule 12.11 of the Solomon Islands Civil Procedure Rules 2007_by the PT MEGA BINTANG BORNEO LIMITED 1st Applicant/Defendant and THE SHIP "MV CHANG HANG JIN HAI" 2nd Applicant/Defendant to determine the Preliminary issues in Law. The application was filed on 29th June 2015 as follows:

1.	Whether or not the Export permit issued to the Claimant dated 23rd March 2015 is still valid and enforceable in law despite the cancellation of the Claimant's PL03/14 and ML 02/04[sic].

2.	Whether or not the Claimant is permitted by law pursuant to section 6 (f) (ii) and 71 (4) of the Mines and Mineral Act (Cap 42) to stockpile of bauxite mineral that are still on the site in spite of the cancellation of the claimant's PL 03/14 and ML 02/04[sic].

3.	In the event that the question set out in paragraph 1 and 2 hereof are answered in the affirmative, an order permitting the Claimant to the remaining stockpile of bauxite mineral dug from the tenement area affected by ML 02/04[sic] which lease had already been cancelled by the Minister.

4.	Consequence upon order [3] hereof, an order further varying order [5] of the orders made on 11th June 2015 by permitting the export of the remaining stockpile of bauxite mineral extracted from the tenement area affected by the now ML 02/04

5.	Cost of and incidental to this application

6.	Such further order the court deems just in the circumstances

The certificate of urgency filed by Counsel Marahare D for the application states that the urgency of this application is necessitated by the Attorney General's advice that the first Defendant was granted and has a valid permit to export raw bauxite extracted from the Central Rennell & East Rennell Bauxite mines, in spite the cancellation of First Defendant's PL 03/14 and ML 02/04[sic]. It is also of public interest in view of the allegation of illegality and fraudulent dealing attributed to the mining sector and the First Defendant continues to incur loss on a daily basis in terms of the delay associated with the export of the remaining stockpile currently at the site. 

At this juncture it needs to be noted that there is a Cross-claim by the Defendant filed on 22nd June 2015 seeking declaratory orders on the cancellation of the Minister of Mines, Energy and Rural Electrification (MERE) of Defendant's PL 03/14 and ML 02/04[sic]. In Cross-claim documents, the Defendant's party is named as Claimant. 

Mistakes or errors

The documents and applications filed by both parties in this case has caused confusions and in particular on part of the PT Mega Bintang Borneo Limited (PTMBB) – First Defendant and The Ship "MV Chang Hang Jin hai" Second Defendant.

Mr Ivanisevic J for the Asia Pacific Investment Development (APID) - First Claimant and Bintan Mining SI Limited (BMSI) - Second Claimant submits that or unfortunately, this application is both confused and confusing in its term. And the issues sought to be determined when considered, are all to be answered in the negative. 

Mr Ivanisevic J submits that the application ought to be dismissed, with cost indemnity basis for the reasons in their submission. 

The confusion relates to that APID and BMSI are the Claimants in this case and they were not issued with such export permit dated 23rd May 2015 No. 2/15 as appeared in the application filed in court on 29th June 2015. But this application was filed by PT Mega Bintang Borneo Limited (PTMBB) – First Defendant and The Ship "MV Chang Hang Jin Hai" Second Defendant.

The errors is on part of the Defendants who is the applicant in the application filed on 29th June 2015 when they refer to the Defendants as claimants with the export permit dated 23rd May 2015 No. 2/15. 

That mistake on part of the Defendants/Applicant would then make no issue for the court to determine in this case. From that mistake there is no attempt by the Defendants/Applicant to seek amendment to the application. 

Ms Ramo in the submission refers to Defendants/Applicant with export permit dated 23rd May 2015 No. 2/15. 

It is noted from the counsel's submissions for the parties that the Defendant's PL 03/14 and ML 02/14 is subject of matters relate or concern in this application with an export permit dated 23rd May 2015 No. 2/15. They are matters issued to the First Defendants although being mentioned in the application was filed on 29th June 2015 as claimant's PL03/14 and ML 02/04. 

I will refer to PTMBB and the "Ship" as the First Defendant and Second Defendant and claimant who is the Respondent in the application as Claimant. 

And an order to correct this mistake or error is hereby made. 

Standing

Mr Ivanisevic J for the Claimant also raised a similar matter that relates to the standing of the Second Defendant the "Ship. 

Counsel submits that it appears to be a misconceived in terms of the standing by the Second Defendant on part of the defendant's Counsel. The ship has no interest whatsoever in the determination of these issues as the interest is purely contractual between First and Second Defendants. It is nothing more than an observer and bystander at best as described. 

With the standing of the Second Defendant in the case, it is also clear from the documents the claimant did or has named the "Ship" as Second Defendant in the ex parte application and the claim filed 20th May 2015. 

It may be so but the honest is also on the Counsels for the Claimants who named the "Ship" as Second Defendant in the ex parte application and the substantive claim. On their part they should apply to withdraw or delete the "Ship" as Second Defendant than making submission to strike out in this application while they are still or remain as Second Defendant in their substantive claim. 

To strike out the Second Defendant in this application but still remains as Second Defendant in the substantive claim, to my view is not proper otherwise it is a matter to be determined at the trail or when dealing with the claim. 

No order is made on the standing and be dealt with in the substantive claim. 

Brief Background

On 20th May 2015 the claimant filed a cause of action filed under claim in category A and on 26th May 2015 I granted an ex-parte interim injunction orders. On 3rd June 2015 an application to set aside and or vary the ex-parte orders was filed by the 1st Defendant/1st Applicant & 2nd Defendant/Applicant. The application was heard inter parte and among the varying orders are orders 4, 5 and 6. They are briefly as follows:

4. The First Applicant (Defendant) was permitted to ship and or export on board MV CHANG HANG JIN HAI the total of 56,000 wet metric tons of raw bauxite extracted and or mined by the First Applicant from the Central and East Rennell Bauxite Mines under Mining Lease No. ML02/14;

5. An order to exports of the total of 400,000 dry metric tons of bauxite stockpiled by the First Applicant at the Central and East Rennell Bauxite Mines was refused.

6.	Proceeds of the sales or export of the 56,000 wet metric tons of raw bauxite, less government tax and operational cost of the first Defendant/Applicant, be paid into a joint solicitors trust account pending further orders or trial.

From the essence of the submission by counsel for the Defendant and document filed in court it is by the refusal of the court to grant the export the 400,000 dry metric tons of bauxite stockpiled and the Attorney General's advice in the certificate of urgency thus prompt these preliminary questions in law. 

Issues

The issues on the questions of law in this application are relatively similar in nature and relates to the interpretation of the provisions in the Mines and Mineral Act and Regulations.
 
1.	With the Question 1, the issue is whether the Export Permit issued to PTMBB dated 23rd March 2015 issued to the defendant is valid in law or enforceable in law. 

2.	And with the Question 2, the issue is whether the defendant is permitted by law to export the stockpile of bauxite mineral when the defendant's PL 03/14 and ML 02/04 has been cancelled.

Issue 1

Ms Ramo L for the Defendants uses or relies on the materials as the application for determination of preliminary issue of law and the three sworn statements of Setya Graha filed on 27/05/15, 01/06/15 and 03/07/15. 

She submits the following as material facts for the application:

1.	The Defendant is a company incorporated in Solomon Islands

2.	Defendant mined bauxite under Mining lease no. ML02/14 granted by the Minister on 9th September 2014

3.	ML02/14 was derived from Prospecting Licence PL03/14 granted by the Minister on 12th June 2014

4.	PL03/14 and ML02/14 were cancelled by the Minister by letter dated 23rd December 2014 and confirmed by the Minister by letter of 7th May 2015

5.	On 23rd March 2015 the Minister issued an export permit to the First Defendant pursuant to section 70 (1) of the Mines and Mineral Regulation 1996 (as amend) to export bauxite mineral from the tenement area affected ML02/14 

6.	The export permit is valid for 3 years.

7.	The export permit has not been cancelled.

Ms Ramo L said that the underlying principles or rationale behind the export permit is to preserve or to prevent waste of the materials that have been extracted and stock piled. 

With this brief submission Ms Ramo L seeks that the Question 1 be answered in affirmative.

On this issue Mr Muria submits that the Attorney-General's position is that the stockpile of bauxite mineral be exported and the proceeds to be paid into an account that has already created for the purposes as in a logging situation while we settle the remaining issues. And with the machines it is only after all stockpiles are cleared before they can be removed. 

But responding to Attorney General's position, Mr Ivanisevic J for the claimant submits that position of the Attorney General is with the greatest of respect striking. This is so by the submissions on proceeds or funds and on the premise that the mining lease itself was only cancelled on the 7th of May 2015. 

He said that Mr Muria appears in his capacity as representing the Minister of MERE and Director of Mines and their position for which he represented is being clearly stated in the correspondence which was referred to, that position is not that export licence was cancelled on the 7th of May.

The counsel for the claimant said the position articulated by the persons for whom the Attorney General appears was that it was null and void consequent upon the prospecting license being cancelled because it ought never to have been granted. 

He said Mr Muria's submission with respect is also very striking as rather than focusing on as one would expect, the proper construction of the Act for the purposes of assisting in determining the issue for future references, the Attorney General's interests have focused on pragmatic issues. 

Mr Ivanisevic J said while pragmatism is an important part of the law the function here is to make decisions based on the proper construction of the Act and the Regulations for the benefit of future reference. This position will have precedence for others if one proceeds on pragmatism only disregarding the Act and Regulations that will have little value and indeed will more likely lead to more proceedings and indeed civil disobedience. As he understood from the Attorney General's submission that the machines and equipment should remain in Rennell until the export has occurred. 

Counsel submits with respect that is extremely that the first Law officer would say to this Court while this court has ordered that machines and equipment be remove by the first Defendant. That with respect is simply wrong and flies in the face of the orders made by this very Court. 

Counsel for the claimant submits that submission by Mr Muria should be rejected outright. 

The Law

The Minister's power to the grant or issue of export permit is provided in section 70 (i) of the Mines and Mineral Regulation (Amendment):

"S 70 (1) "The Minister acting on the advice of the Board has the power to issue an export permit to a mining company, in a Form No. 18A with or without conditions and subjected to payment of export permit fees set out in the schedule".

The provisions (1) to (9) of this provision and Regulation 71 are to enable or the process for the purpose of the minister to exercise his power on such application.

This application is on the purported Export Permit issued to PTMBB dated 23rd March 2015 but the three sworn statement of Setya Graha relied on by the Defendant do not disclose any reference or evidence directly refer to the export permit. There is also no copy of FORM 18A that contains the grant of the export permit attached to the sworn statement of Setya Graha, not even tendered to the court at the hearing. The attached documents are the correspondences related to prospecting, mining licences and consignment permit. 

The mining license issued to the Defendant was cancelled on 23rd December 2014. It is also acknowledged by Defendant that the PL03/04 and 02/04 has been cancelled when the Defendant refer in the question 1 as "Export permit issued to the Defendant (PTMBB) dated 23rd March 2015 is still valid and enforceable in law despite the cancellation of the Defendant's PL03/14 and ML 02/04".

As noted earlier the Defendant did not disclosed a copy of purported Export Permit issued to PTMBB dated 23rd March 2015 for the court to examine but the sworn statement by Fred Tang, General Manager of the Claimant filed on 20th May 2015 discloses the purported Export Permit. 

According to the sworn statement of Fred Tang and the documents, a mining licence was issued by the Minister to the PTMBB on 14th September 2014 but on advice of the Mining Board, the Minister of Mine, Energy and Rural Electrification (MERE) on the 23rd December 2014 cancelled the mining licence. 

Notwithstanding the cancellation of the mining licence and according to Claimant, the Defendant applied for an export permit and Minister of MERE issued an Export Permit – No 2/15 to the Defendant on 23rd March 2015. 

The following matters are noted from the copy of purported Export Permit – No 2/15:
 
1.	It does not bear the date the Board provide the advice to the Minister of MERE.
 
2.	The date of the issue of the purported Export Permit – No 2/15 is 23rd March 2015 and contained in FORM No. 18A.
 
3.	The Minister acted on the Defendant's application of 04th November 2014. 

4.	It made reference to Mining Licence No. 2/14 which had already been cancelled on 23rd December 2014.

FORM No. 18A is prescribed forms for the purpose under the schedule of the Regulation and date of advice by the board is a mandatory requirement. At the time of issuing of the purported export permit the Defendant's PL03/14 and ML 02/04 has been cancelled.

Regulation 70 requires the Minister to act on the advice of the Board "Mining Board" and such export permit to be issued to a mining company. The Mines and Mineral Act section 3 defines "mining company" as a company authorised to carry out mining under a mining leases. And the mining leases is or for the carrying out of mining operations in any area of Solomon Islands. This means that the company must have a mining lease and must be a valid mining lease. If it is not or cancelled then the Minister does not have such power to issue an export permit to the applicant. 

In this case, the First Defendant's PL 03/14 and ML 02/04 [sic] have been cancelled as adviced to them by the letter or on 23rd December 2014. 

The scheme of Regulation 70 has a feature of check balance. It features in the way a system operates that an act of person or authority is to be made or executed upon act or the circumstance of another person or authority. It prevents any one person or group from having too much power or influence. I would say that this is the beauty of the provision or scheme of the Mines and Mineral Act and Regulations. 

With this case, the mining lease of PTBMM was cancelled on 23rd December 2014. With the absence of a mining lease make the granting of export permit to the Defendant not according to the section 70 (i) of the Mines and Mineral Regulation (Amendment). There was no advice from the Mining board to the Minister and the PTBMM did not possess a valid mining lease for mining of bauxite mineral at Central and West Rennell, Rennell and Bellona Province.

The issue in 1 or Question 1 is determined in the Negative. 

Issue 2

With the Question 2, the issue is whether the defendant is permitted by law to stockpile of bauxite mineral when the Defendant's PL 03/14 and ML 02/04 [sic] has been cancelled.

The First Defendant claim that it had extracted about 400,000 dry metric tons of bauxite and currently stockpiled at Central Rennell & East Rennell Bauxites mines when it was issued with Mining Licence they need to export it. 

Ms Ramo for the Defendant contended that since the licence was issued under section 6 (f) (ii) of the Mines and Mineral Act (Cap 42) and in spite of the cancellation of the claimant's PL 03/14 and ML 02/14 it has the right to remove or has an obligation under section 71 (4) of the Mines and Mineral Act.

Counsel submits that even if the First Defendant's export permit is cancelled (which she said not), the first Defendant is obliged under the permit to export the minerals lying in stockpile in the subject area so as to restore the area subject to the permit.

And on this issue Mr Muria submits the export permits issued to the Defendant is still valid and enforceable in law by section 71 (4) Mines and Mineral Act. The First Defendant is to ensure that the materials and extracts are exported and that should also answer the question 2.

The Law 

Section 6 (f) (ii) of the Mines and Mineral Act states:

6. The Minister may at any time, on the advice of the Board - .................

(f) take whatever measures as may be necessary-...............;

(ii) for conservation purposes with a view to preventing waste"

This provision requires the Minister to act on advice of the board on issues relates to conservation purposes with a view to preventing waste and does not provides an as right for the first defendant to export mineral. If it does not relates or for conservation purposes, the Minister cannot enliven the discretion vested in him by section 6 (f) of the Mines and Mineral Act. 

In other words, the Minister's discretion relates only for conservation purposes and importantly that it is exercise on the advice of the Board and in respect of the matter that requires action for conservation. 

For the purpose of the First Defendant's case there is no evidence to show that the Board had provided any advice to the Minister after the cancellation of the First Defendant's PL 03/04 and Ml 02/04 [sic]. That also did not occur before the purported grant of the export permit and the purported consignment permits. 

On those facts the discretion vested in the Minister to act for the conservation purposes with a view to prevent waste was not so available to enable him exercise the discretion under Section 6 (f) (ii) of the Mines and Mineral Act.

Section 71 (4) of the Mines and Mineral Act states:

"(4) The cancellation of a permit, licence or mining lease by the Minister shall not affect the liabilities of the holder incurred prior to the date of cancellation, or the obligations to remove any improvements and to make safe and restore the area subject to the permit, licence or mining lease, as the case may be".

The First Defendant has accepted that the purported mining licence has been cancelled and as such S 71 (4) of the Act cannot be contended to be alternative arguments. It is so because this provision does not preserve any entitlement to the First Defendant but makes or would impose liabilities of the holder as incurred prior to the date of cancellation of the tenement area. 
The First Defendant's intention as clearly by the application and documents filed to support this application with the previous court orders is to export the 400,000 dry metric tons of bauxite stockpiled at Central and West Rennell, Renbel Province. And that to my view does not qualify the requirement of section 71 (4) of the Mines and Mineral Act or to remove any improvements and to make safe and restore the area. It may be for the First Defendant business interest. 

With relates to the submission on granting the export of logs and proceeds are held in the deposited in solicitor's accounts it is on reasons generally known or of common knowledge that logs get to rot or decompose and would loses its values. For bauxite as in this case there is no evidence to proof the assumption of the waste of bauxite that have been extracted and stockpiled.

There is an obligation under the Mines and Mineral Act for the holders of prospecting and mining lease to export or remove the minerals extracted under the lease. It is not automatic but to acquire the export permit under the requirement of section 70 (i) of the Mines and Mineral Regulation (Amendment) as noted earlier in Issue 1. 

For the First Defendant there is no evidence to proof that such export permit for defendant's PL 03/14 and ML 02/14 had been issued to them except as I have already ruled in Question 1.

I am not satisfied and therefore the application and Issue 2 or Question 2 is also determined in the Negative.

ORDERS
1.	The answers to Questions 1 and 2 are determined in the Negatives.
2.	The application is dismissed.
3.	Cost for the Claimant on the indemnity basis.

The Court

Justice Leonard R Maina
Puisne Judge