Soso Tumu [Tomu] for Luhalipu Clan, Soni Kanu for Muti Clan, Nason Baripi for Isaweri Makof Clan, Nixon Aieni for Makena Clan, Danny Kapau for Musonener Clan, Paul Tima for Wafi Clan, Urupa Kemesi for Yesiki Clan and Jimmy Kinobu for Imawe Kewa Clan v Independent State of Papua New Guinea, Minister for Petroleum and Energy, Leslie Ope, Edward Kae, Members of the Imawe Bogasi Clan, Timothy Loma, Taru Watuma of Sumbulu Clan and Petroleum Resources Gobe Limited

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi J
• Judgment Date: 28 February 2002
• Court: National Court
• Citation: [2002] PNGLR 250
• Year: 2002
• Judgement Number: N2190

Full Title: Soso Tumu [Tomu] for Luhalipu Clan, Soni Kanu for Muti Clan, Nason Baripi for Isaweri Makof Clan, Nixon Aieni for Makena Clan, Danny Kapau for Musonener Clan, Paul Tima for Wafi Clan, Urupa Kemesi for Yesiki Clan and Jimmy Kinobu for Imawe Kewa Clan v Independent State of Papua New Guinea, Minister for Petroleum and Energy, Leslie Ope, Edward Kae, Members of the Imawe Bogasi Clan, Timothy Loma, Taru Watuma of Sumbulu Clan and Petroleum Resources Gobe Limited

National Court: Kandakasi J

Judgment Delivered: 28 February 2002

N2190

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

O.S. NO. 532 of 2000

SOSO TUMU FOR LUHALIPU CLAN, SONI KANU FOR MUTI CLAN, NASON BARIPI FOR ISAWERI MAKOF CLAN, NIXON AIENI FOR MAKENA CLAN, DANNY KAPAU FOR MUSONENER CLAN, PAUL TIMA FOR WAFI CLAN, URUPA KEMESI FOR YESIKI CLAN

- First Plaintiffs

AND

JIMMY KINOBU FOR IMAWE KEWA CLAN

- Second Plaintiffs

AND

INDEPENDENT STATE OF PAPUA NEW GUINEA

- First Defendant

AND

MINISTER FOR PETROLEUM & ENERGY

- Second Defendant

AND:

LESLIE OPE, EDWARD KAE, MEMBERS OF THE IMAWE BOGASI CLAN

Third Defendants

AND:

TIMOTHY LOMA, TARU WATUMA OF SUMBULU CLAN

Fourth Defendant

AND

PETROLEUM RESOURCES GOBE LIMITED

-Fifth Defendant

WAIGANI: KANDAKASI, J.

2001: 7th December

2002: 28th February

CONTRACTS – Validity of – Not all persons having interest in the subject matter signing the agreement – Until declare null and void it is still a legally binding contract.

STATUTORY INTERPRETATION – Gas and Oil Act of 1998 – Principles of statutory interpretation considered – Where two meanings are open, it is proper to adopt one that will avoid irrational or unjust consequences – A construction which interferes with existing legal rights to a lesser extent and produces lesser hardships is to be preferred.

Intend of Parliament must be upheld regardless of what principles of interpretation are being used – Intend of Parliament here was to allow for land owners to agree on both entitlement and distribution of equity and royalty benefits from any petroleum project after the coming into force of the Act – ailing any such agreement the Minister for Petroleum is given a discretion to make the necessary determinations having regard to the matters set out in the Act.

Powers of the Minster for Petroleum under ss.169 and 170 of the Act – Whether, the powers of the Minister under ss.169 and 170 of the Act subject to determinations of land ownership by the Land Titles Commission? – Powers of the Minister are subject to the determinations of the Land Titles Commission or a Local Land Court if any in the area.

Whether equity and royalty grants under ss.167 and 168 of the Act are interests in land or grants from the State? – Equity and royalty benefits are grants from the State but to project area landowners – If these benefits are grants from the State, whether land ownership disputes should prevent distribution of such grants? – Any landownership dispute has the effect of preventing any distribution of such grants until the dispute is resolved either by agreement of the parties or the proper authority – Oil and Gas Act 1998, ss.167 – 179 – Land Titles Commission Act ss.15A, 15(1) – Land Disputes Settlement Act s.66 – Land Act 1996 s.12.

WORDS & PHRASES – “Commencement date” means date of coming into operation of the Act – “notwithstanding” can only have meaning within the context of section 169 and that provision applies only the in respect of identification of beneficiaries regardless of what other provisions may say – “Landowners” owners of land on which a petroleum project is developed or is to be developed or people having interest in such land – Royalty and equity benefits are to go to such landowners or people` having an interest in the project land or will be adversely affected by the project – “By other means” in section 169(7) means person other than the minister for Petroleum and Energy – But they mean authorities such as the Land Titles Commission or a Local Land Court or agreement of the parties – “Project area landowners” means persons who have customary ownership or registered title to any part of the land taken up by a petroleum development license and any land with a buffer zone of such a project – “Grant” means a gift, present, a gratuity or an endowment.

Facts:

By Agreement of all the parties, the following issues were presented to the Court for determination:

(1) Whether the provisions of sections 167(8) and 168(6) of the Act applies to prevent the Minister for Petroleum from exercising his powers in:-

(i) determining Landowner Identifications by appropriate instrument under Section 169 of the Act, and

(ii) determining distribution of benefits under Section 170 of the Act, for purposes of the Gobe Petroleum Project?

(2) Whether the determinations by the Minister under sections 169 and 170 of the Act is subject to a determination by the LTC under section 15 of the “LTCA”?

(3) Whether the paintiffs and the other disputing parties who come from villagers located within the locality of the Gobe Project and are claiming interest in land affected by the Gobe Project are deemed to be “project area landowners” within the meaning of the Act?

(4) Whether the Minister is bound by the findings of the LTC on the question of who are the persons to receive the benefits granted by sections 167 and 168 of the Act?

(5) Whether the Equity and Royalty Benefits referred to in sections 167 and 168 of the Act are State Grants and not interests in any customary land affected by the Gobe Project?

(6) If the Equity and Royalty benefits are State Grants, should the disputes on land ownership prevent the distribution of those grants to the project area landowners?

This followed numerous on going disputes over land ownerships and entitlement to equity and royalty benefits out of the Gobe Oil & Gas Project. They did so after agreeing to submit to a mediated settlement and through that an agreement that there should be a one off payment out of the equity funds held in Trust by the MRDC in a 70 and 30% proportion between the Southern Highlands and Gulf Province landowners. They also agreed that a determination of landownership issues by the LTC should be deferred to a later time.

Held:

1. The Oil & Gas Act 1998 does not apply to the Gobe project in the absence of any provision in the Act giving the Act retrospective effect and more so in the light of expressed exclusion of its application to projects commence or developed before the coming into operation of the Act on the 5th of February 1998. Accordingly, an arrangement pre-existing the Act continues to be in force unless and until they are declared null and void or replaced by agreement of the parties.

2. The Ministers discretionary power to make determinations under sections 169 and 170 of the Act are subject to or must be exercised in accordance with any determinations of the LTC or the LLC or the agreement of the parties having regard to the provisions of section 169(4) and 170(3) of the Act and section 15(2) of the LTCA.

3. It is not within the jurisdiction of this court to determine whether the plaintiffs are persons who should be deemed to be project area landowners as it requires first a finding or determination that they are the owners of the customary land on which the project is located. The parties are at liberty to resolve that issue by agreement in terms provided for under section 167(4) and 168(2) or allow the LTC to make a decision for them.

4. The Minister is bound by the findings of the LTC on the question of who are the persons entitled to receive grants under section 167 and 168 of the Act by reason of section 15(2) of LTCA and that such grants are dependant on one being a land owner or having an interest in the project area land.

5. The equity and royalty benefits under section 167 and 168 of the Act are grants from the State and not interests in any customary land but are grants to landowners or persons having interest in land taken up or adversely affected by a petroleum project.

6. Since the equity and royalty grants are to landowners or persons having interest in a petroleum project area land, any ownership dispute over such land has the effect of preventing the distribution of such grants until the dispute has been resolved either by agreement of the parties or as may be determined by the LTC or the LLC as the case may be.

Others

Statutory Interpretation

1. Provisions of the Act must be given their fair and liberal meaning so as to give effect to the intent of Parliament.

2. Where two meanings are open in the construction of a statute, it is proper to adopt one that will avoid irrational or unjust consequences.

3. A construction which interferes with existing legal rights to a lesser extent and produces lesser hardships is to be preferred.

4. In the present case:

(a) Parliament intended to preserve all arrangements in relation to petroleum projects prior to the enactment and coming into force of the Act.

(b) Parliament also intended that the owners of a petroleum project area landowners or persons having an interest in such land should agreed on both who is entitled and the proportion in which they should receive equity and royalty benefits from petroleum projects for the security of a...