05th January 2023


By Charlie Clye Tikaro

What a turn of events between a landowner group vs ExxonMobil & State. It was all in favour of the landowners until it reaches Supreme Court. And sadly, the landowners will now meet the entire legal costs for the State and ExxonMobil.
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Lawsuits by landowners relating to the 2009 Kokopo Umbrella Benefit Sharing Agreement (UBSA) and License-Based Benefit Sharing Agreement (LBBSA) derived from the PNG LNG project were now statutorily time barred.
This means any cases filed against the State where the cause of action is based on the UBSA and LBBSA would not be entertained by the courts since the issue was now statutorily time barred pursuant to s.16 of the Frauds and Limitation Act, which stipulates that an action that is founded on simple contract or on tort shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.
This is part of a decision handed down by the Supreme Court recently in favour of an appeal by the State against a decision of the lower court in a case pursued by a landowner group from the Hides PDL 7 project area led by one Erick Hawai Ako and three others versus ExxonMobil and the State.
The landowners instituted the proceeding in the National Court in March 2021 against the State and ExxonMobil seeking to declare the entire PNG LNG project a fiasco or failure, alleging among other things, the non-compliance of statutory requirements under the Oil and Gas Act (OGA) 1998 by the developer (ExxonMobil) in 2008.
The landowners sought a number of declaratory reliefs, among them a declaration that no proper social mapping and land identification (SMLI) was conducted by the developer as required under s.47 of the OGA and therefore rendering the entire PNG LNG project null and void.
They also argued that the UBSA and LBBSA that were signed in a development forum in Kokopo in 2009 were done outside of the OGA since the landowners were not presented with or given a fair opportunity to view the SMLI report presented by the developer to the State at the time.
The State through the Office of the Solicitor General, Tauvasa Tanuvasa, filed an application to dismiss that National Court proceeding on the basis that the plaintiffs’ claims were statutory time barred pursuant to s.16 of the Frauds and Limitations Act and also an abuse of court process.
However the National Court dismissed the State’s application and ruled in favour of the landowners.
Aggrieved by that decision, the State appealed to the Supreme Court on several grounds, including a breach of natural justice arising out of excessive judicial questioning and pejorative comments by the trial judge.
The Supreme Court bench comprising Justices Les-Gavara Nanu and George Manuhu on behalf of their late colleague judge and bench member Danajo Koiget, upheld all the grounds of appeal by the State and granted the appeal.
The Supreme Court clarified that the decision as to whether the finalised report of the SMLI of the project area was satisfactory and compliant with the OGA, was for the Minister for Petroleum and Energy to make and not landowners.
Thus, it was wrong under the OGA, for any emphasis to be made that the landowners had to be satisfied first before the SMLI report could be considered valid and have legal effect.
The Supreme Court also dismissed the National Court proceeding and issued specific orders for the landowners to pay State and ExxonMobil the costs of the proceedings.