Case 2.3 – Manumanu Land Deal

Case 2.3 – Manumanu Land Deal

On January 31, 2017 Opposition MP Ben Micah revealed details of a K46.6 million land deal involving the PNG Defence Force and a cabinet minister in the O’Neill-Dion government (Yapumi, PNG Loop, 2017). The revelations on the floor of the National Parliament triggered a series of events over a two month period, headlined by the National Executive Council’s suspension of the Ministers for Defence and State Enterprises, Dr Fabian Pok and William Duma respectively, and the start of an official investigation by the police and the Ombudsman Commission (EMTV, 2017).

Others who were suspended included the Department of Defence Secretary Vali Asi, Lands and Physical Planning Secretary Luther Sipison, Central Supplies and Tenders Board chair Philip Eludeme, Kumul Consolidated Holdings (KCH) managing director Gary Hersey, Motor Vehicle Insurance Limited (MVIL) managing director Joe Wemin, Lands Title Commissioner Kutt Paonga,   Valuer-General Gabriel Michael and the State Solicitor Daniel Rolpagarea. The investigations were to focus on a portion of land at Manumanu which was allegedly sold for  K46 million and the decision by the Department of Defence to purchase three portions of land for K15.4 million, K7.2 million and K9.2 million.

The revelation triggered an outcry by traditional landowners in the Central Province who demanded that a commission of inquiry be set up to investigate the land acquisitions (Naime, PNG Loop, 2017). Close to four months after the announcement of the investigations by the PM and the public is yet to be given a progress report.

The involvement of the Department of Lands and Physical Planning in yet another controversial land acquisition transaction should compel Mr O’Neill (or the incoming government) to consider sacking the current minister and reviewing all decisions made under his tenure in the past five years.

Update as of 2018

On 31 January 2017, Opposition MP Ben Micah revealed details of a K46.6 million land deal involving the PNG Defence Force and a cabinet minister in the O’Neill-Dion government (Yapumi, PNG Loop, 2017). The revelations on the floor of the National Parliament triggered a series of events over a two month period, headlined by the National Executive Council’s suspension of the Ministers for Defence and State Enterprises, Dr Fabian Pok and William Duma respectively, and the start of an official investigation by the police and the Ombudsman Commission (EMTV, 2017).

Others who were suspended included the Department of Defence Secretary Vali Asi, Lands and Physical Planning Secretary Luther Sipison, Central Supplies and Tenders Board chair Philip Eludeme, Kumul Consolidated Holdings (KCH) managing director Gary Hersey, Motor Vehicle Insurance Limited (MVIL) managing director Joe Wemin, Lands Title Commissioner Kutt Paonga,   Valuer-General Gabriel Michael and the State Solicitor Daniel Rolpagarea. The investigations were to focus on a portion of land at Manumanu which was allegedly sold for  K46.6 million and the decision by the Department of Defence to purchase three portions of land for K15.4 million, K7.2 million and K9.2 million.

The revelation triggered an outcry by traditional landowners in the Central Province who demanded that a commission of inquiry be set up to investigate the land acquisitions (Naime, PNG Loop, 2017). Initially, it was announced by the Prime Minister Peter O’Neill that a Commission of Inquiry would be set up to investigate the controversial Manumanu land deal; however, it was then downgraded to an Administrative Inquiry (Loop PNG, 2017).

On 11 August 2017, William Duma in a media statement said the allegations made against him pertaining to the Manumanu land deal are baseless and damaging as the land is not customary land but state land according to the records of the Department of Lands (Post Courier, 2017). He said the land was acquired through the compulsory process under Land Act 1996 where the Government is required to pay compensation (Post Courier, 2017). Hence, the Memorandum of Understanding between Kurkuram Estates Ltd (KEL) and the state entities (i.e. Kumul Consolidated Holdings Ltd (KCH) and the Department of Defence) on 19 October 2016 (Post Courier, 2017).

The MOA came into existence as a result of an agreement for settlement reached by KEL, KCH and Department of Defence on which KCH agreed to pay (and did pay) KEL K46.6 million (Kurkuramb Estates Ltd v Sipison [2017] PGSC 18; SC1595). This came about when KEL filed a proceedings in the National Court against the Secretary of Department of Lands and Physical Planning and the State on 15 August 2016 based on the deed of release when no compensation was forthcoming following the acquisition of the land by the State (Kurkuramb Estates Ltd v Sipison [2017] PGSC 18; SC1595). The parties then entered into discussion while the proceedings was still pending which resulted in the MOA (Kurkuramb Estates Ltd v Sipison [2017] PGSC 18; SC1595).

Not long after the payment was made KCH filed a proceedings in the National Court against KEL seeking return of K46.6 million (Kumul Consolidated Holdings v Kurkuramb Estates Ltd [2017] PGNC 404; N7429 ). KCH pleaded that there were express and implied terms that KEL breached; they “concerned the State Lease for the KEL Land being obtained by KEL by fraud, and the unimproved value of it being K84,400.00 and not K 46.6 million” (Kumul Consolidated Holdings v Kurkuramb Estates Ltd  [2017] PGNC 404; N7429). The National Court, on 8 May 2017 dismissed the proceedings made by KCH as the claim was untenable, frivolous and bound to fail. That is, under Clause 4 of the MOA between KEL and the state entities, all parties are barred from filing court or any other proceedings against the other party concerning the matters covered under the MOA (Kumul Consolidated Holdings v Kurkuramb Estates Ltd  [2017] PGNC 404; N7429). KCH, under the MOA, does not have a remedy against KEL and is barred from instituting the said proceedings (Kumul Consolidated Holdings v Kurkuramb Estates Ltd  [2017] PGNC 404; N7429).

After the 2017 general election, Prime Minister Peter O’Neil when forming the new government, re-appointed Mr Duma and Dr Pok as the Ministers for State Enterprise and Defence, respectively. The Prime Minister on 28 September 2017, justified his controversial decision to reappoint Mr Duma and Dr Pok to ministerial portfolios on the floor of Parliament when responding to questions by stating: “We will address the issues that may come to light at the end of the enquiry, it’s no point me pre-empt the outcomes of the enquiry under our jurisdiction, the members should know all citizens are innocent until proven guilty” (Loop PNG, 2017).

This was seen as a direct contradiction of the Prime Minister’s statement made in February 2017 in the media when he stated that the two ministers

“will step aside from their ministerial responsibilities pending the conclusion and outcomes of the Commission of Inquiry [which was reduced to an Administrative Inquiry] …[he further said] it is now clear that these agencies of Government have not worked together in a coordinated way to facilitate the implementation of the 2012 Government NEC decision. The acquisition of this land has been done in a clear violation of the Government’s decision and resulted in K78.4 million being paid.” (Loop PNG, 2017).

In reaction to the Prime Minister’s statement made on 28 September 2017, Chairman of TIPNG, Lawrence Stephens, said in a media release that: “Papua New Guineans know that if a Minister is being investigated, he or she must step down to preserve the integrity of the office they hold, the PM must follow through his earlier commitment  to integrity and revoke the appointments of Duma and Pok until the Administrative Inquiry into the Manumanu Land Deal is completed and results made public (Loop PNG, 2017). Regardless, the reappointments of the two ministers were not revoked until the inquiry was completed and tabled in the Parliament in April 2018.

In February 2018, Minister for Lands and Physical Planning Justin Tkatchenko announced that the Manumanu land file had gone missing but did not reveal where it was last seen (Patjole, Loop PNG, 2018).  When he was questioned in the Parliament by the Kairuku-Hiri MP Peter Isoaimo regarding the Manumanu land files and the Administrative inquiry, he said the file of the Manumanu land deal in question was last in the possession of the former Secretary for Lands and Physical Planning Luther Sipison, (Post Courier, 2018). This was described by TIPNG as ‘extremely shameful’, stating: “it is simply not acceptable that Prime Minister Peter O’Neill and Minister Tkatchenko are prevented from delivering on promises they have made to the nation and shamed by public servants who failed to secure documents essential to delivering of these promises” (Loop PNG, 2018). Chairman of TIPNG was reported in the media saying: “if the inquiry is deficient due to missing documentation, then it is clear that a much more robust investigation, even a Commission of Inquiry, should be established and the matter reviewed by appropriate investigators and by the judiciary” (Patjole, Loop PNG, 2018). TIPNG was concerned about the preservation of the integrity of the process of inquiry and upholding of good governance in the Manumanu case (Patjole, Loop PNG, 2018). It further stated that, “if the likely evidence of fraud can be tempered with when in the care of public officials, citizens lose trust in the Government system and can began to doubt the sincerity of promises made to them … The people need to know that government exists for them, to protect and advance their interests” (Patjole, Loop PNG, 2018).

In March 2018, it was reported in the media that the Administrative Inquiry report into the Manumanu land deal was received by the Prime Minister Peter O’Neill (Zarriga, Post Courier, 2018). He was reported saying: “I have received the administrative report from the commissioner who was appointed to investigate and will be tabled in April” (Zarriga, Post Courier, 2018). In April, the report was tabled in the Parliament, however; copies of the report were not available to the media (The National, 2018). The Prime Minister was reported stating, “[t]he administrative inquiry found evidence that processes were not followed in some cases [therefore] [t]he inquiry recommends further investigations to be [undertaken] by appropriate State agencies” (The National, 2018). He further said that:

“These processes of implementation of Government decisions to relocate the army facilities, and especially the valuation and determination of the land, and of course the operation of the Department of Lands and Physical Planning and its oversight, need to be fully investigated.

This is necessary because all the files into the land portions went missing at some stage, and at some stage it needs to be investigated further.

The Government has now received this particular report, and the only way to conclude is that this report be tabled and referred to Government agencies to deal with its recommendations.” (The National, 2018)

The Administrative Inquiry into the Manumanu land deal cost Papua New Guinean taxpayers K2 million (Loop PNG, 2018). TIPNG, in a media release, called on the Chief Secretary (as custodians of Commissions of Inquiry) and the Department of PM and NEC to make available the full Manumanu report for public scrutiny (Loop PNG, 2018). TIPNG chairman, Lawrence Stephen was reported saying: “Now that the report has been tabled in Parliament, the people of Central Province, the general public and the media outlets must have access to the findings of the Manumnau Administrative Inquiry and we must reflect on whether it meets its original Terms of Reference” (Loop PNG, 2018). TIPNG further stated that, “for the Manumanu Inquiry to be completed it must include documents pertaining to the valuation and sale of the land as well as the NEC decision resulting in the K46million purchase with funds from the implicated agencies and leaders” and “if the report is deficient in any of these aspects [,] it is difficult to see how it exonerates the two Ministers or eight Heads of Departments” (Loop PNG, 2018).

However, the Administrative inquiry manager Matthew Yuangu was reported in the media saying that the Government was not going to release to the public the Manumanu Administrative Inquiry report, which was published on 17 October 2017 and presented to the Prime Minister on 19 October 2017 by John Anthony Griffin, QC, whom led the inquiry (The National, 2018). Mr Yuangu said that there were state agencies seriously implicated in the report however, it was only an Administrative Inquiry and not a Commission of Inquiry (The National, 2018). That is, “[its] findings are currently subjected to further investigations. The report is only with the Ombudsman Commission, police and the prime minister. The Prime Minister received the report and referred it to police and the Ombudsman Commission to do further investigations.” (The National, 2018). The Commission of Inquiry’s report findings, on the other hand, are binding and available for public view, with disciplinary actions taken against those implicated through its recommendations (The National, 2018).

On 26th April 2018, media reported that Luther Sipison was reinstated following a court decision on 16 April 2017 which squashed his suspension (Patjole, Loop PNG, 2018) . In a press release he made a statement regarding the missing Manumanu file which was said to be in his possession when missing, said he had left everything when he was suspended and that he had no knowledge of it and denied any wrong doing (Patjole, Loop PNG, 2018). He said the Manumanu report at page 77 paragraph 13.21, stated that there was no material to sustain a conspiracy alleged against him (Patjole, Loop PNG, 2018). After four months of being reinstated, Mr Sipison was suspended again over 16 allegations of mismanagement in office (Tarawa, 2018).

In August 2018, in a media report, there was great concern about the Manumanu report not being released to the public after  it had been tabled in the Parliament by the Prime Minister four months ago (Kolma, 2018). The Finance Secretary Dr Ken Ngangan explained that this was because the Cabinet was yet to deliberate on the controversial report and also, the call by PM to continue the Manumanu investigations (on 13 April 2018 during the Parliament session) which he said at that time the report was incomplete and needed furnishing with respective implicated state entities (Kolma, 2018). These implicated entities, in a media report, were Department of Lands and Physical Planning, Kumul Consolidated Holdings and the Central Supply and Tenders Board who were found to have had “multiple veins of unethical conduct and corrupt practices during the Manumanu land acquisition” (Kolma, 2018). The media report revealed that one of the main issue with the land deal was that, upon acquisition, the land value was grossly exaggerated (Kolma, 2018). In addition, the report showed that “no feasibility studies were carried out on the land prior to acquisition and that there was no evidence to suggest the Defence council approved of the endeavour in the first place” (Kolma, 2018).

However, in the same month, the two ministers (William Duma and Dr Fabian Pok) alleged to be involved  into the Manumanu land deal were cleared of any wrongdoings according to a report from the Director of the National Fraud and Anti-Corruption Directorate Detective Chief Superintendent Matthew Damaru to Police Commissioner Gari Baki (Zarriga, Post Courier, 2018). It was reported that there is no evidence implicating anyone involved in the transaction to defraud the Government and Kumul Consolidated Holdings Limited thus the police will not pursue the case (Zarriga, Post Courier, 2018). Police Commissioner Gari Baki said he had sent a letter to Prime Minister Peter O’Neill and the complainant KCH chairman Paul Nerau informing them of the police fraud squad’s recommendations (The National, 2018).  He said, in addition to no evidence to substantiate the fraud allegation, the fraud squad found no merit in any complaint (The National, 2018). The report stated that:

  • The payment of K46.6 million by KCHL to KEL was in compliance with due processes and procedures and therefore was in order.
  • Payment to KEL by KCHL was in order with all the processes under the Land Act 1996 regarding the compulsory acquisition of KEL’s land were exhaustively complied with by the DL and PP and the Valuer General.
  • The investigations failed to establish any nexus in the land deal and in the involvement of Ministers William Duma and Dr Fabian Pok.
  • No decision, and or actions of both men were questionable or corrupt contrary to the Lands Act or even contrary to the Criminal Code Act chapter 262.

In light of the findings, recommendations have been made citing no merit for further criminal fraud investigations and action.

The police have now recommended that the:

  • Investigation be closed and investigation file be written off.
  • No further investigation or action is required or warranted. (Zarriga, Post Courier, 2018)

The National Judiciary when concluding the high profile cases of 2018, the Manumanu land deal was one of the most controversial cases mentioned (Arnold, Post Courier, 2018). It was not because it made it to the court but because it did not (Arnold, Post Courier, 2018).

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