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PAPUA
NEW GUINEA RAINFOREST CAMPAIGN NEWS
Sepik
Timber Developer Not Legitimate
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Forest
Networking a Project of Ecological Enterprises
http://forests.org/
2/5/97
OVERVIEW,
SOURCE & COMMENTARY by EE
Additional
information is emerging concerned the bid to bring a $300
million
dollar Canadian industrial forestry development project into
East
and West Sepik, Papua New Guinea. This
would amount to a huge
industrial
forestry project, covering much of the Sepik region.
Though
the PNG government and the Canadian company San Kung have
already
signed preliminary trust deeds, the company has not obtained a
permit
to carry out logging operations and is not recognized as a
forest
industry participant.
Granting
of rights for huge development projects, in this case for the
whole
of the Sepik region, continue without proper procedures having
been
followed. It is ludicrous that the PNG
development process
remains
primarily focused upon huge resource give aways to multi-
national
developers with an unknown track record of social and
environmental
responsibility. Following is a report
from _The
Independent_
newspaper in PNG which details ministerial concerns over
the
secretive and mysterious plan to carve out huge timber and agro-
forestry
projects from the Sepik rainforest wilderness.
g.b.
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TEXT STARTS HERE:
Headline: K300 million developer not legitimate:
Kalinoe
Source: The Independent
Date: January 24, 1997
Author: Joe Kanekane
CONTROVERSIAL
multi-million kina Sepik developer San Kung Trading Ltd
is not
a legitimate developer and lacks the capacity to attract the
K300
million it promised to deliver according to the department of
Commerce
and Industry.
The
department has also advised that any decisions to grant tax
concessions
and other requests by the company should be withheld until
a
proper screening process be effected at bureaucratic level on the
intended
operations of the proposed Trust.
This
was the advice contained in a ministerial brief the secretary for
the
Department of Commerce and Industry Joshua Kalinoe relayed to the
minister,
Nakimus Konga, five days after the trust deeds were signed
by the
company, the state and Sepik parliamentarians.
Deputy
Prime Minister and Minister for Finance Chris Haiveta on
November
13, 1996 signed on behalf of the state while managing
director
of San Kung Christopher Wong singed on behalf of the company.
Some
Sepik parliamentarians also signed the document.
Mr
Kalinoe in a letter to the minister on November 18 last year
informed
him that the company not only lacked the capacity to live up
to what
is proposed to do, there were a lot of uncertainties relating
to the
establishment, its past records and tis overseas record of
business.
The
ministerial brief recommended that the minister:
* Take note of the background regarding the
proposed East and West
Sepik
Development Trust;
* A proper screening process be effected at
bureaucratic level on the
intended
operations of the proposed Trust before committing the
government;
and
* That the minister agree to rescind any
previous NEC decisions to
provide
tax and import duty exemptions for the Trust or its subsidiary
companies.
The
letter also informed the minister that a senior government
minister
had written to the chief executive of San Kung Trading
advising
of the government's approval of tax and duty exemption to be
given
to San Kung Ventures.
"This
is news as the Department of Commerce and Industry is not aware
of such
approvals nor was the department involved in seeking these
exemptions,"
said Mr Kalinoe.
According
to Mr Kalinoe's analysis of the company it came up with four
main
areas which he pointed out to the minister:
* San Kung Trading did not have the capability
to attract K300
million
to support the proposed East and West Sepik Development Trust;
* The terms and conditions of the Trust are
surprisingly too generous
and
unrealistic in terms of business undertakings;
* The confidential nature of the directors and
owners of San Kung
Trading
Ltd suggests that any associations with the company is
undesirable;
and
* No tax and import duty exemptions to be
given to the Trust as this
was not
a Charity Trust but a Development Trust and a development
trust
is a business entity and therefore it should be subjected to
conditons
of a private sector organisation.
San
Kung Trading Ltd is owned by Canadian citizens and investors,
according
to economic intelligence, the company was registered in
early
1996 at the Channel Islands, United Kingdom.
The
company was incorporated on February 23, 1996 under this address,
Second
Floor, National West HO, Le Trouchet, St Peter Port, Guernsey,
Channel
Islands, United Kingdom.
The
company's intentions at the time of incorporation was to conduct
business
activities as investors, wholesalers, general retailers and
manufacturers.
The
directors of the company are unknown due to the business
confidentiality
laws of the Channel Islands.
However,
according to details of a recent draft NEC submission
sponsored
by the Deputy Prime Minister and minister for Finance,t he
company
is owned by Canadian citizens and other investors.
Since
it was recently incorporated the company has no credit
worthiness
which suggests that it may have difficulty attracting major
investment
finance from world or regional capital markets.
A
company search with the Investment Promotion Authority has revealed
that
San Kung Sepik Ventures Pty Ltd (PNG) is a company registered in
July
1996 in Port Moresby to carry on business activities in any major
activities,
including investing in agro-based cultivation and
industries.
The two
directors of the company were identifed as Laho Ovasuru a
driver
of PO Box 7310, NCD and Vali Fraghi a businessman of Lot 28,
Section
146, Tokarara.
Both
directors have paid a nominal capital of K10,000 with both
directors
having one share each.
The
minister for Commerce and Industry refused to comment saying the
lawyers
were dealing with the company and he was not in a position to
comment.
The
company is a subject of controversy with different opinions from
politicians
from the East and West Sepik provinces as well the
National
Forest Authority.
West
Sepik governor John Tekwie has stated publicly that the company
was not
welcomed in the province as there were sinister motives in the
way the
company was brought in as well as the conduct of the
parliamentarians
who were pushing for the company.
The
National Forest Authority has said that the company has not
registered
as forest industries participant and was not legally
recognised
as a developer in the country.
This
was upheld by the forest minister who made a statement recently.
He said
that no foreign company will have access to deal with forest
resources
and the forest industry activities without being registered
as
forest industry participants.
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