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National Court of Papua New Guinea |
N8745
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NOs 211, 217, 221, 223 & 226 OF 2019
BETWEEN
LUKE PELEGO OF PORO CLAN, PDL1 HIWA REGION & ANOLI MITUPA OF HOMANE CLAN, PDL1 HIWA REGION
First Plaintiffs
AND:
MARAGO PATE for and on behalf of himself and the TUGUBA PATE CLAN of PDL1 and 7 & JACKSON WARUNI for and on behalf of himself
and the TUGUBA MUYA CLAN of PDL 1and 7 & TELAPE PONDO for and on behalf of himself and the TUGUBA PONDO CLAN PDL 7
Second Plaintiffs
AND:
JOHN KARIUS GANE, CHIEF OF PEPE TRIBE OF TUGUBA REGION PDL 7
Third Plaintiffs
AND:
DAVID DELAGO, ANDIKI BAMA, MATHEW ANDIKI & HOWARD PAGUALI for and on behalf of themselves and members of the HIWA PORO CLAN of
Hides PDL 1, Komo-Magarima District, Hela Province
Fourth Plaintiffs
AND:
PETER HEWARA CHIEF OF PEPE TRIBE OF TUGUBA REGION PDL7
Fifth Plaintiffs
AND
DOCTOR FABIAN POK, MINISTER FOR PETROLEUM & ENERGY
First Defendant
AND
LOHIAL NUAU, SECRETARY & KEPSY PIUYE as ACTING SECRETARY FOR DEPARTMENT OF PETROLEUM & ENERGY
Second Defendants
AND
INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant
AND
LARRY ANDAKALI on behalf of Hiwa Arua Clan of Hides PDL1
Fourth Defendant
Waigani: Makail,
2019: 22nd November
2021: 8th February
JUDICIAL REVIEW – Review of Ministerial Determination – Determination of landowners entitled to royalty benefits – Identification of landowners – Social mapping study – Landowner identification study – Oil and Gas Act, 1998 – Sections 47, 167, 168, 169 & 170
JUDICIAL REVIEW – Ministerial Determination – Exercise of discretion –Oil and Gas Act, 1998 – Sections 47, 167, 168, 169 & 170
STATUTORY INTERPRETATION – Construction of statutory provision – Purposive approach rule – Purpose of – Oil and Gas Act, 1998 – Sections 47 & 169
Cases Cited:
Papua New Guinea cases
Soso Tumu & Ors v. The State & Ors (2002) N2190
Alex Bernard & P’nyang Resources Association Inc. v. Hon. Nixon Duban & Ors (2016) N6299
John Eru & Ors v. Interoil (PNG) Ltd & The State (2016) N6352
Hari John Akipe & Ors v. Rendle Rimna & The State (2018) N7381
Kanga Kawira v. Kepaya Bone (2017) N6802
Overseas cases
Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 233
Counsel:
Ms. P. Nii, for the Plaintiffs in OS (JR) No 211of 2019
Ms. E. Ngomba, for the Plaintiffs in OS (JR) No 217 of 2019
Mr. J. Kondop, for the Plaintiffs in OS (JR) No 221 OF 2019 & OS (JR) No 226 of 2019
Mr. H. Babe, for the Plaintiffs in OS (JR) No 223 of 2019
Mr. G. Lau, for the Fourth Defendants in OS (JR) No 211 of 2019 & OS (JR) No 223 of 2019
Ms. S. Tiankin, for the First, Second & Third Defendants
JUDGMENT
8th February, 2021
1. MAKAIL, J: The discovery of crude oil and liquefied natural gas or as the latter is commonly referred to, LNG, in Papua New Guinea has led to the need to carefully identify people who own land where discoveries have been made including those providing access to them. These people are entitled to some form of compensation for the occupation and use of their land. The need to identify these people has further led to one of the reasons for Parliament to pass the Oil and Gas Act, 1998 which replaced the Petroleum Act Ch 198.
2. In the context of PNG LNG Projects two of the important key features of the new Act are the requirements to undertake social mapping study and landowner identification study. These requirements are essential to the identification of landowners who are and will receive benefits from the extraction of gas including use of their land by resource developers.
3. Following that, there has been so much debate in relation to whether these requirements are condition precedent to a grant of petroleum licence for exploration, retention, or development. However, there appears to be no definitive position on this question amongst legal commentators, scholars and resource owners, though there is one view that Section 47 is a pre-condition to a grant of petroleum license and another, that it is not.
4. Added to that, judges have made observations (obita dicta) in cases coming before them but none have had the occasion to consider and rule on it as noted in Soso Tumu & Ors v. The State & Ors (2002) N2190 per Kandakasi J; Alex Bernard & P’nyang Resources Association Inc. v. Hon. Nixon Duban & Ors (2016) N6299 per Kandakasi J (as he then was); John Eru & Ors v. Interoil (PNG) Ltd & The State (2016) N6352 per Hartshorn J and Hari John Akipe & Ors v. Rendle Rimua & The State (2018) N7381 per Higgins J. I will comment on these cases later in the judgment.
Overview of Proceedings
5. For now, an occasion has arisen for the Court to give consideration to this question. These five proceedings were commenced by respective plaintiffs to seek judicial review of a determination by the first defendant (Minister for Petroleum & Energy) in which he published in a National Gazette identifying landowners within the Hides Gas Project area as being entitled to equity and royalty benefits dated 13th March 2019 (Ministerial Determination) under Sections 168 and 169 of the Oil and Gas Act. A brief overview of each proceeding is set out hereunder:
6. The plaintiffs in this case are from Poro and Homane clans in PDL 1 of the Hiwa region. They also represent four other clans, Kawine, Puyahu, Yogoya and Mone. They alleged that they are original landowners of Hides PDL 1 Hiwa Region. However, they were listed under “other beneficiary clans in Schedule II” of the Ministerial determination. Their omission from the major clans of Hiwa Tribe was based on the Land Titles Commission decision by Sir Arnold Amet in the case of Re Hides Gas Project Land [1993] PNGLR 309 which was made in relation to the Gas to Electricity Project from Hides to Porgera and has no application to the present LNG project.
7. The plaintiffs in this case are from Tuguba Pate, Tuguba Muya and Tuguba Pondo clans of PDL 1 & PDL 7 areas. They alleged that they owned land in Hides PDL 1 and PDL 7. They were either missed or placed in different groups in the Ministerial determination.
8. In this case, the plaintiffs are from Tuguba Region in the PDL1 area. They alleged that they are from Pepe major tribe who own almost 60% of the land in Tuguba Region in Hides PDL1.
10. The plaintiffs in this case are from Hiwa Poro clan of Hides PDL1 area. They alleged that they are the major clan who own land within Hides PDL1 project area.
11. In this case, the plaintiffs are from Pepe Bele tribe of Tuguba region in the Block 1712 of PDL 7 area. They claimed that they owned Block 1712 land but were completely omitted in the determination even though they made several requests and representation to the Minister for their inclusion. Their repeated requests to be included during their attendance at the LOBID exercise at Nogoli camp site on 21st January to 9th March 2019 were also unsuccessful.
Common Facts
12. The common facts in these five proceedings are as follows, there are two major tribes in the PNGLNG project area. They are Hiwa Tribe and Tuguba Tribe. The landowners from these two tribes received royalty prior to the PNGLNG project from the gas to electricity project from Porgera Gold mine. They were identified as brown field landowners based on a decision by the Special Lands Titles Commissioner Sir Arnold Amet which was further endorsed by the Hiwa Tuguba Compromise Agreement (Compromise Agreement).
13. The clan of the plaintiffs led by Luke Pelego in OS (JR) No 211 of 2019 is a sub-clan of the Wita clan. However, they have been recognised and awarded 5% of the benefits and were identified as “other Hiwas” by the Minister.
12. The Compromise Agreement outlined the benefit spilt percentage of 50-50 each and identified the well pad landowners, facility owners, water source landowners and so forth. The Hiwa tribe consists of 9 sub-clans and Tuguba tribe consist of 8 sub-clans. However, under the Landowner Benefit Sharing Agreement (LBSA) the benefit percentage spilt is Hiwa 37%, Tuguba 25%, Tugu Tapira 10.4%, JP Karai 11.8 %, Habono 12.8% and Kamia Kera 3%.
Hiwa
14. However, due to Section 17 of the Oil and Gas Act which provides for Graticulation of the Earth’s surface and Constitution of blocks, other regions were also included in PDL1. PDL1 consists of 6 regions which is the term used by the landowners interchangeably with blocks. The percentage split allocation as per the Licence Base Benefit Sharing Agreement (LBBSA) is as follows:
15. Between 21st January and 9th March 2019 a team of government officials from the Department of Petroleum and Energy travelled to Juni campsite and conducted a landowner identification programme. It was called a “Landowner Benefit Identification” exercise (LOBID). The percentage sharing consent forms were signed by representatives of each clan chosen by the clan members because it was impractical to accommodate all the members of the clan at the camp site.
16. One James Debela signed the consent form on behalf of Hiwa Poro clan. He is also a Mineral Resources Development Corporation Limited (MRDC) officer who was facilitating the LOBID exercise.
17. Six other clans were included with the Hiwa Poro clan in Schedule II of the Ministerial Determination as “Other Hiwas”. They are:
1. Puyangu led by Tai Malingi - 0.715%
2. Mone led by Oberia Pepe - 0.715%
3. Homane led by Leonard Tombena - 0.715%
4. Yogoya led by Dabila Angawai - 0.715%
5. Kawini led by Urulu Daguali - 0.715%
6. Poro led by Debela and - 0.715%
7. Ola – nil representative - 0.715%
Grounds of Review
18. There are a number of grounds relied upon by the plaintiffs but two common ones are:
18.1. Illegality.
18.2. Irrationality and Unreasonableness.
Legal Issues
19. The issues identified at the pre-trial conference hearing are as follows:
19.1. Whether there is a dispute amongst the landowners as to the identification of landowners.
19.2. If so, whether the Minister is authorised or empowered to make a determination under Sections 169 and 170 of the Oil and Gas Act.
19.3. If so, whether the dispute as to the landowner identification falls within the jurisdiction of the Land Disputes Courts under the Land Dispute Settlement Act.
Additional Issues
20. The plaintiffs in OS (JR) No 211 of 2019 raised one additional issue.
20.1. Whether the clan vetting or LOBID exercise carried out by the defendants complied with Section 47 of the Oil and Gas Act.
21. In addition, the fourth defendant in OS (JR) No 211 of 2019 and OS (JR) No 223 of 2019 raised one more additional issue. It is whether the applications for judicial review are time-barred under Section 169(10) of the Oil and Gas Act.
22. The plaintiffs in OS (JR) No 217 of 2019 raised four additional issues:
22.1 Whether the Minister made the determination was in breach of the requirements to conduct and complete social mapping study and landowner identification study under Section 47 of the Oil and Gas Act.
22.2 Whether the Minister committed an error of law in the process of making the determination under Section 169 of the Oil and Gas Act.
22.3. Whether the determination by the Minister was unreasonable in the Wednesbury sense.
22.4. Whether the plaintiffs were denied natural justice when the Minister made the determination without giving the plaintiffs an opportunity to be heard at the LOBID exercise meeting.
Breach of Section 47- Ultra vires
23. The plaintiffs in OS (JR) No 217 of 2019 submitted that in the absence of social mapping and landowner identifications studies under Section 47, the Ministerial determination is unlawful and ultra vires the Minister’s power under Section 169. This is because Section 47 is a condition precedent to the grant of a petroleum licence to the developer and its non-compliance rendered the Minister acting outside his power or ultra vires when he made the determination. They quoted a statement by Kandakasi J (as he then was) in Kanga Kawira v. Kepaya Bone (2017) N6802 that:
“41. In the oil and gas sector, the OGA makes it a condition precedent by s.47 for a developer to do just that.”
24. It is further noted that his Honour referred to the P’nyang case (supra) and quoted an excerpt from the judgment where he observed that Section 47(1), (2) & (3) (supra) stipulated in no uncertain terms that social mapping and landowner identification studies are conditions for each of the three licences, prospecting, retention and development.
25. They submitted that they are landowners in the project area and are entitled to a percentage apportionment of the benefits and they were overlooked by the Minister in his determination and he acted ultra vires his power under Section 169 when he made the determination.
Error of Law
26. The plaintiffs also submitted that Section 169(7) prohibited the Minister from making a determination because where there is a dispute amongst the landowners, the benefits must be held in abeyance pending a determination of the dispute by other means. Here there is a dispute amongst the plaintiffs and the other landowners in relation to the benefits and the Minister erred in proceeding to make a determination.
27. The dispute, according to Marogo Pate and Jackson Waruni, arose as a result of the LOBID exercise duration being too short and not all the landowners had attended to verify the claims to the LOBID team in terms of identification and ownership of land. They and other landowners who are plaintiffs in related proceedings missed out. When the Minister went ahead and made the determination, he committed an error of law or his conduct constituted an error of law such that it should not stand but be set aside as a matter of law.
Unreasonableness
28. Another ground which the plaintiffs in OS (JR) No 221 of 2019 relied upon to support their application for judicial review is that, the decision by the Minister was unreasonable in the Wednesbury sense and should not be allowed to stand. They relied on the English case of Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 233.
29. They submitted that the LOBID exercise was held at a location in no close proximity to them and that a pre-prepared list of names of landowners which did not include them was produced by the LOBID team and signed by the representatives of landowners who were present to form the basis of their agreement on the identity and benefit sharing. Under the circumstances as described, no reasonable decision-maker vested with a decision-making power would arrive at such a decision.
Breach of Natural Justice
30. The last ground relied upon by the plaintiffs in OS (JR) No 217 of 2019 is breach of natural justice principles where the Minister failed to observe the duty to act fairly under Section 59 of the Constitution. The plaintiffs submitted that this ground is based on three fundamental breaches:
State’s Response
31. The State submitted that the Minister based his decision on consent forms but none of which were produced. However, as there is no dispute and as averted to by the Acting Secretary of the Department of Petroleum Mr Lohial Nuau in his affidavit in response filed 4th October 2019 these consent forms were products of the LOBID exercise as evidence of the landowners’ agreement on final lists of beneficiary clans and apportionment of the benefits.
32. It referred to the Brownfield landowners as being the group whose land has well heads or a processing plant and water source who received higher percentages or portions while less affected landowners received lesser percentages or portions. The other group referred to as the Greenfield landowners are the ones who are impacted by road access or nearby areas.
33. The landowners in PDL 1 and PDL 7 have been identified and settled through social mapping studies and clan verification to now the LOBID exercises since 2013. The evidence of this may be found in annexure “C” to the affidavit in response of Mr Nuau. The first to third defendants submitted that the Phase 3 of the LOBID exercise was only for the landowners themselves to confirm the clans and agree to their percentage apportionment.
34. They, however, conceded that there is a dispute amongst the Tugube Tribe. This is because it is a very big tribe with many clans. Where the clans have missed out or put into another region, it is open to them to take their grievance to the Land Court for resolution.
35. For now, these clans’ ownership rights have been upheld by the Land Court and formed the Hiwa-Tugube Compromised Agreement. This agreement has not been rescinded or declared void by a Court and remains in force to date. As to its application, it covers the clans in Tugube Block in PDL 1.
36. The Minister’s discretion under Section 169(7), they submitted, does not include identification of new clans and land. Those are issues for the Land Court to resolve. This is because a dispute amongst the landowners directly connected to the land itself and if the plaintiffs want to be included, they must take their grievance to the Land Court to determine their claim of ownership rights. In other words, they submitted that, the Minister cannot identify new lands outside of what has been identified and accepted by the landowners and not rescinded or set aside.
Applicable Law
37. The relevant provisions for consideration pertaining to the issues are Sections 47, 169 and 170.
38. Section 47 states:
“47. Social mapping and landowner identification studies.
(1) It shall be a condition of every petroleum prospecting licence that the licensee undertake social mapping studies and landowner identification studies in accordance with this section.
(2) It shall be a condition of every petroleum retention licence that the licensee undertake social mapping studies and landowner identification studies in accordance with this section, to the extent that such studies have not been undertaken pursuant to a petroleum prospecting licence out of which the petroleum retention licence was granted.
(3) It shall be a condition of every petroleum development licence that the licensee undertake social mapping studies and landowner identification studies in accordance with this section, to the extent that such studies have not been undertaken pursuant to a petroleum prospecting licence or petroleum retention licence out of which the petroleum development licence was granted.
(4) Prior to first entry on to the licence area for the purposes of exploration pursuant to a petroleum prospecting licence or a petroleum retention licence, the licensee shall undertake—
(a) a preliminary social mapping study; and
(b) a preliminary landowner identification study,
of the customary land owners comprised in the licence area, with particular reference to that part of the licence area where the licensee's exploration activities are to be concentrated.
(5) If a licensee or a person makes an application for a petroleum development licence under Section 53, the licensee shall submit with that application a full-scale social mapping study and landowner identification study of customary land owners in—
(a) the licence area of that petroleum development licence; and
(b) other licence areas, including pipeline areas, which pertain to that petroleum development licence; and
(c) the land within five kilometres of any facility which would be a dedicated project facility (other than a facility which would be situated on such a petroleum development licence) of the petroleum project; and
(d) other areas which would be affected by the petroleum project if developed."; and
(5A) If a licensee makes an application for a variation of a licence under Section 58(1), to include an additional block or blocks in a petroleum development licence, the licensee shall submit with that application a full-scale social mapping study and landowner identification study of customary land owners in—
(a) the additional block or blocks that will form part of that petroleum development licence; and
(b) other licence areas, including pipeline easements, which are associated with the petroleum development licence upon variation of such licence; and
(c) the land within five kilometres of any facility which would be a dedicated project facility (other than a facility which would be situated on such a petroleum development licence) of the petroleum project; and
(d) other areas which would be affected by the development of the additional block or blocks.
(6) The Minister may by regulation prescribe the scope and method of a social mapping study or landowner identification study conducted in accordance with this section, and requirements as to reports of such studies.
(7) Copies of any social mapping or landowner identification studies undertaken in accordance with this section (excluding any information which is confidential to the licensee or to the local groups of landowners) shall be provided to the Director”.
39. Section 169 states:
“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 this 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”. (Emphasis added).
40. Section 170 states:
“170. Sharing of benefits amongst project area landowners.
(1) Any equity benefit or royalty benefit granted to project area landowners shall be shared amongst project area landowners in accordance with this section.
(2) Equity benefits and royalty benefits granted to project area landowners under this Act shall be shared among project area landowners or groups of project area landowners in proportions to be agreed by them in a development agreement, but in default of such agreement in the proportions determined by the Minister, by instrument.
(3) Where, in the opinion of the Minister, having considered the results of social mapping and landowner identification studies conducted in accordance with Section 47, some project area landowners have a greater or more substantial occupation or right of occupation of the land referred to in the definition of "project area landowners" or are more adversely impacted by the petroleum project that other project area landowners, the Minister may, by instrument, determine that the sharing amongst project area landowners of equity benefits or royalty benefits in accordance with this section shall favour, on a per capita basis, those project area landowners who have that greater or more substantial occupation or right of occupation or are more adversely impacted by the petroleum project.
(4) A trust deed implemented in accordance with Section 176(3) shall provide for the distribution of equity benefits and royalty benefits in accordance with this section”.
Whether there is a dispute amongst the landowners as to the identification of landowners
41. The plaintiffs in the five proceedings submitted that there is a dispute. The dispute is in relation to the identification of the landowners of the project area. In addition, they submitted that the defendants had a pre-prepared list of names of clans for verification. Those clans who did not have names on the list were not allowed to enter the meeting venue and the gate was manned by heavily armed members of the Defence Force.
42. I accept the plaintiffs’ submission: Based on the plaintiffs’ respective affidavits and the fourth defendant Mr Larry Andagali filed 17th June 2019 I find there is a dispute amongst the landowners as to who is entitled to receive royalty and equity benefits under Section 169 (supra). According to Mr Andagali, the Poro and Hiwa clans are part of the Wita clan which is a major beneficiary in Schedule 1 of the Ministerial Determination to receive 15% of the total allocated benefits of 95%. In addition, the “Other Hiwas” do not reside as clans of the project site but were included as beneficiaries. The converse of that is there should not be an inclusion of seven clans identified as “Other Hiwas” by the Minister in Schedule II of the Ministerial Determination. It would appear then that the cause of the dispute is in relation to competing claims of ownership of land within PDL 1 project area where each clan claimed ownership of land in the project area and should be included in the Ministerial Determination and awarded a greater percentage.
Power of Minister to make Determination- Identification of Landowners
43. The next significant question is: does the Minister have discretion to proceed to make a determination in relation to who is entitled to receive equity and royalty benefits notwithstanding a dispute? The answer to this question will also address the two additional issues raised by the plaintiffs in relation to the requirements of social mapping studies and landowner identification studies and whether failure to comply with them renders a Ministerial Determination void.
44. Section 169 talks about identification of landowner beneficiaries. According to Sub-section (1), the focus or priority is given to persons who shall receive the benefits granted by Sections 167 and 168. They must be identified in accordance with this Section and the incorporated land groups or, if permitted in accordance with Section 176 (3)(f), any persons or entities’ who shall represent and receive on behalf of the grantees of the benefit. The benefits referred to in Sections 167 and 168 are equity and royalty respectively. And according to sub-section (4) in making a determination the Minister is assisted by the following:
44.1 Agreements between landowners.
44.2 Decisions of Courts of Papua New Guinea.
44.3 Results of Social Mapping Studies.
44.4 Results of Landowners Identification Studies.
44.5 Submissions from affected Local-Level Governments or Provincial Governments.
44.6 Submissions from any other person claiming an interest or to be affected by the decision of the Minister.
45. Under Sub-section (7) where there is a dispute in relation to who has been identified to receive benefits in accordance with this Section the Minister is not prevented from making a determination as to who shall receive equity and royalty benefits. This is one option available to him. The other is for him to direct that monies or other benefits shall be held in abeyance pending the resolution of the dispute by other means.
46. What Section 169(7) means is that even if there is a dispute amongst the landowners but there is evidence of an agreement between the landowners; the decisions of the Courts of PNG, results of social mapping and landowner identification studies and submissions from affected Local Level Governments or affected Provincial Governments or any other person claiming an interest or to be affected by the decision of the Minister to assist the Minister to make a determination, he may go ahead and make a determination. The other option is for him to direct monies or other benefits to be held in abeyance pending the resolution of the dispute by some other means.
47. Section 170 talks about now much equity and royalty benefits the landowners who have been identified will receive. According to Sub-section (2), the benefits will be shared in proportions to be agreed by them in a development agreement, but in default of such agreement, the Minister will determine the proportions, by instrument. According to Sub-section (3), greater proportion of the benefits are awarded by the Minister to those who have greater or more substantial occupation or right of occupation of the land or are more adversely impacted by the petroleum project.
48. I now return to comment on the National Court decisions cited by counsel for the plaintiffs. The first comment I make is that they are not binding but are of persuasive value. Secondly, they are distinguishable.
49. For these reasons, it is open to this Court to express a view on the application of Section 47 in the context of Section 169(4). The Court’s view may be consistent with or differ from the view expressed by the learned Deputy Chief Justice. The first matter I point out is that the matters which the Minister must take into account or put it in the other way around, in order for the Minister to arrive at a determination, he is assisted by the following information set out at [44] (supra). I restate them below:
50. The use of the word “shall” in Section 169(4) connotes that it is mandatory and the Minister is duty bound to have regard to the information set out in these documents to arrive at a determination. Secondly, the use of the word “and” and “or” as conjunctions or joining words can be construed as while it is mandatory for the Minister to have regard to these information, it is not necessary that he must consider all of them.
51. There may be cases where there is no agreement between the landowners (written agreement) but the Minister has at his disposal the rest of the documents from Court decisions to submissions of the Local-level Government or Provincial Government and any other persons claiming an interest or to be affected by the decision of the Minister. In this type of case, it does not mean that the Minister is barred from making a determination and if he does make a determination, the missing or lack of agreement between landowners does not render the determination void per se.
52. In other cases if there is no social mapping study and landowner identification study, it does not prevent the Minister from making a determination. What is important is that, if the information presented to him in a landowner agreement, Court decisions etc, sufficiently identify the landowners, it is open to him to make a determination for the purpose of benefit sharing or appointment depending on the ownership, occupation or extent of the impact of the project on the land.
53. Given the way Section 169(4) is expressed, I am respectfully of the opinion that while the Minister is bound to consider the information supplied to him in these documents, in a case where one or more but not all are missing or not necessary, it is open to him to make a determination based on the available information.
54. Putting it into context of this case, it does not necessarily follow as a consequence of the absence of social mapping studies and landowner identification studies that the Minister is barred from making a determination. Moreover, it does not make the determination void. Section 169 is also not expressed to be subject to Section 47.
55. To construe Section 169 as being subject to Section 47 is, in my respectful opinion, a misconstruction of this provision. It would be seen as extending the application of Section 169 beyond its intended purpose or what the Parliament had intended in the first place. Conversely, such a statutory construction will led to restricting the discretion Parliament had conferred on the Minister when he is giving consideration to the issue of benefit sharing or apportionment amongst the customary landowners. Section 47 should be read as a stand-alone provision. When read on its own, the true purpose of its inclusion in the Act will be better understood and given its desired effect.
56. Section 47 imposes a mandatory obligation on a licensee (licence holder or developer) to undertake social mapping study and landowner identification study for the purpose of obtaining a petroleum licence. Sub-section (4) makes it quite clear that prior to first entry on to the licence area for exploration pursuant to a prospecting licence or a petroleum licence, the licensee must undertake first a preliminary social mapping study and secondly, a preliminary landowner identification study of the customary landowners of the licence area. The reference to a preliminary study for both the social mapping and landowner identification implies that they are temporary measures with final ones to follow suit on a later date. The reason is obvious. They are used by the licensee to apply for licence for exploration purposes and in a case where the exploration results in nil discoveries, it will not be necessary to rely on them again.
57. Section 47(5) envisages this scenario by making provision for a case where if an exploration proves successful and oil or gas is discovered and can be extracted for commercial production, the prospecting licence holder will need to apply for a development licence in order to extract the petroleum product. It must submit along with its application for a development licence, a full scale-scale social mapping study and landowner identification study. These studies are not only a full-scale ones but are quite broad because not only do they cover and include customary landowners of the licence area of the petroleum development licence but other licence areas including pipeline areas where the pipeline will and is to run through to the outlet, land within five kilometres of any facility which would be a dedicated project facility (other than a facility which would be situated on such a petroleum development licence) of the petroleum project and finally, other areas which would be affected by the petroleum project if developed.
58. For example, the pipeline landowners are those whose land the pipeline runs through to the outlet. They must be included in the determination based on the social mapping and landowner identification studies. Another example is the landowners within five kilometres of any facility considered to be a declared project facility like those at the pipeline outlet where the Kumul Terminal is located outside the city of Port Moresby. A further example is the landowners of the customary land where road access to the plant facility is located. They too must be identified and included in the full-scale social mapping and landowner identification studies.
59. This is not all. The licensee may apply for variation of its petroleum licence to include additional block or blocks in a petroleum development licence. By Section 47(5), it must also submit with the application, a full-scale social mapping study and landowner identification study of customary landowners of the additional block or blocks that will form part of that petroleum development licence and other licence areas, including pipeline easements, etc...
60. It is to be emphasised that a licensee who has made a discovery of oil or gas, as the case may be, and seeks to extract it must submit a full-scale social mapping study and landowner identification study with the application for petroleum development licence or variation of its petroleum licence for additional block or blocks, as the case may be. The duty is on the licensee to provide full-scale studies of social mapping and landowner identification but it will require the corporation and participation of all stakeholders including the State and customary landowners to complete these full-scale studies. Once they are done, the licensee will then submit them with the new application to get the approval to develop the resources.
61. Look at it the other way, a failure to comply with the requirements of a social mapping study and landowner identification study under Section 47 may constitute a ground to review a grant of petroleum licence to an applicant/licensee by an aggrieved party. The aggrieved party may be a rival applicant or persons who claim to be customary landowners of the subject petroleum prospecting or petroleum development area and have missed out. These two requirements must be satisfied before the licensee is given approval to develop the resource project. But it does not constitute a ground to set aside a Ministerial Determination made under Section 169.
62. For these reasons, it is my respectful opinion that a social mapping study and landowner identification study under Section 47 are not pre-conditions for the Ministerial determination. It follows that a Ministerial determination made without the benefit of a social mapping study and landowner identification study is not a ground to set aside a Ministerial Determination or forms a basis to find that the Minister acted ultra vires his power or made an error of law under Section 169. This ground is dismissed.
63. It follows that it was open to the Minister to rely on the available information including the Land Titles Commission decision by Sir Arnold Amet and the Hiwa-Tugube Compromised Agreement which has not be varied or set aside and remains in force to date to make a determination.
Whether the dispute as to the landowner identification falls within the jurisdiction of the Land Disputes Courts under the Land Disputes Settlement Act.
64. I am satisfied that disputes over ownership and occupations rights including user rights which may led to an entitlement to equity and royalty benefits under Section 169 should fall within the jurisdiction of the Land Disputes Court under the Land Disputes Settlement Act. The plaintiffs are at liberty to take their grievance there.
Jurisdiction of LOBID Team
65. For completeness sake, I will address the grounds on breach of natural justice and unreasonableness of the decision together. While I note the plaintiffs’ assertion that the LOBID exercise was held at a location in no close proximity to them, hence denying them easy access and that a pre-prepared list of names of landowners was signed by the LOBID team, thus compromising the LOBID exercise, a more fundamental issue arises in relation to the jurisdiction of the LOBID team to undertake a LOBID exercise having regard to Section 47 (supra). I am unable to find in Section 47 a reference to a LOBID team.
66. It is true as the acting Secretary of the Department of Petroleum said at para. 5 of his affidavit filed 4th October 2019 “The Landowner Beneficiary Identification (LOBID) is the Department of Petroleum administrative due diligence process” and para. 7 “The Department of Petroleum go through to ensure that Section 169 is fully satisfied before the Minister signs the instrument of Ministerial Determination which is the final outcome of the identification process referred to as LOBID” however, I have grave doubt as to the authority of a LOBID Team to undertake a LOBID exercise. As far as my reading of Section 47 is concerned, it is the “licensee” to “undertake social mapping studies and landowner identification studies in accordance with this section.”
67. In my view it is the duty of the licensee to undertake social mapping studies and landowner identification studies. It is neither the duty of the LOBID Team nor the Department of Petroleum. Section 47 has been misconstrued resulting in this multitude of proceedings challenging the Ministerial Determination. Thus, whether the LOBID Team made it difficult for the plaintiffs to have access to the LOBID exercise and further, approved a pre-prepared list of landowners without a genuine and meaningful vetting exercise are issues that are secondary to the threshold issue of whether the LOBID Team had the requisite authority to undertake a LOBID exercise.
68. My view is fortified by the absence of a reference to the LOBID Team and its report in the list of matters which the Minister may consider when giving consideration to the question of who is entitled to receive equity and royalty benefits under Section 169(4). Moreover, it is not the function of the LOBID Team or the Department of Petroleum to exclude or include persons who claim to be landowners but allow “submissions from any other person claiming an interest or to be affected by the decision of the Minister” to be considered by the Minister in accordance with Section 169(4). For these reasons, the first issue whether the LOBID Team denied the plaintiffs’ right to be heard and the second issue whether the LOBID exercise was compromised or the Minister acted on a wrong advice from the LOBID team to arrive at his decision are inconsequential. This ground is dismissed.
Time-Barred
69. Finally, the fourth defendant in OS (JR) No 211 of 2019 and OS (JR) No 223 of 2019 submitted that the applications for review were not made within 28 days from the date of Ministerial determination. They are, thus, time-barred under Section 169(10).
70. The fourth defendant submitted that while the plaintiffs have filed the applications for leave for judicial review within the prescribed time-limitation of 28 days, they did not make the application for review within 28 days. The applications were actually moved five months later, on 2nd September 2019. That is to say, the applications for leave for judicial review must be moved by or before 10th April 2019 which was the 28th day.
71. However, I accept the defendant’s submissions that Sub-section (10) of Section 169 should be given a wide interpretation to mean that an application for judicial review must be filed within 28 days of the Ministerial Determination but can be heard either within or outside 28 days. To accord Section 169(10) this meaning will also be consistent with the requirement to apply for leave for judicial review under Order 16, rule 3 of the National Court Rules. I also add that given the generally accepted position of a high case load in the Appeals and Judicial Review Track, it is not uncommon to have an application for leave and substantive application for judicial review heard outside 28 days.
72. The date of Ministerial Determination is 13th March 2019. 28 days would run after 13th March 2019 and would have expired on 10th April 2019. Except for OS (JR) No 211 of 2019 which was filed on 5th April 2019 and OS (JR) No 8th April 2019, the rest of the proceedings were filed on 10th April 2019. I am satisfied that the proceedings were filed within the time-period stipulated under Section 169(10). Thus, they are not time-barred. This ground seeking dismissal of these proceedings is dismissed.
Conclusion
73. In conclusion, one significant aspect of these multiple proceedings is the clarity in the application of Section 47 in the context of benefit sharing amongst customary landowners under Section 169. It must remain a separate issue for the licensee or project developer to take the lead to resolve, of course with the assistance from all stakeholders including the customary landowners themselves. For now, as the grounds of review have been dismissed, each application for judicial review must fail and the proceeding must be dismissed with costs, to be taxed, if not agreed.
Order
74. The formal orders of the Court are:
________________________________________________________________
Fairgo Legal Services Lawyers : Lawyers for Plaintiffs in OS (JR) 211 of 2019
Tamutai Lawyers: Lawyers for the Plaintiffs in OS (JR) 217 of 2019
Lakakit & Associates Lawyers: Lawyers for the Plaintiffs in OS (JR) 221 of
2019 & OS (JR) No 226 of 2019
Hebrew Babe Lawyers: Lawyers of the Plaintiffs in OS (JR) 223 of 2019
Niuage Lawyers: Lawyers for the Fourth Defendants in OS (JR) 211 of 2019 & OS (JR) 223 of 2019
Solicitor General: Lawyers for First, Second & Third Defendants
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