PRIME Minister Jeremiah Manele has blamed the Lilo-led government of 2014 for the current issues surrounding the Rennell bauxite mining operation.
PM Manele made these comments while moving the sine die motion in Parliament on Wednesday.
He revealed that the mining license granted to Asia Pacific Investment Development (APID) was signed after Parliament had been dissolved, but it was backdated to Friday 5 September 2014, which was three days before the Ninth Parliament dissolved on Monday 8 September 2014.
“The mining license was signed by the Minister for Mines, Energy, and Rural Electrification, the current member for West Guadalcanal (Moses Garu), while Gordon Darcy Lilo, the Member for Central Honiara, was the Prime Minister at the time.
“This license was granted for a 25-year period, but it was issued during a caretaker government period, even though the official date made it appear as though it was signed before Parliament dissolved in 2014.”
PM Manele said the timing of the mining license’s signing was suspicious.
He said the subsequent head agreement between APID and Bintang Mining Solomon Islands Limited was signed in 2014, within the framework of the mining agreement.
“The initial export tax rate was set at zero in 2014, a decision made under Section 7 of the Customs Excise Act by the then Minister of Finance and Treasury, Rick Hou.”
PM Manele said the first export was made on 22 December 2014 but the mining agreement was signed in 2016 by then Minister for Mines and Energy, David Dei Pacha.
“It is important for this Honourable House to know that the government, under the leadership of the current MP for Small Malaita, received complaints from community and provincial leaders from Rennell and Bellona.
“They expressed their disappointment with APID for not paying royalties and the significant environmental damage caused by the mining operation. These leaders urged the government to take strong action against APID,” he said.
PM Manele further revealed that the operation continued without revenue generation or royalty payments, the people of Rennell would have received nothing for their resources and the government, too, would have lost out and Rennell would have lost all its raw material over the course of the 25-year lease.
“This would have been the legacy of the mining lease and agreement granted by the Lilo-led government,” he added.
PM Manele acknowledged that the current Minister for Mines, Energy and Rural Electrification, Bradley Tovosia took the important step of canceling the mining lease in 2021 due to APID’s non-payment of royalties.
“I believe we should recognise the Minister for Mines for taking action and canceling APID’s license,” he added.
PM Manele explained the potential consequences if APID had continued under its 25-year mining lease.
He also revealed that APID had taken the government to court over the cancellation of its mining lease by the Minister.
“Honourable Speaker, the Rennell bauxite mining agreement, entered into by the Lilo-led government, was poorly thought out. There were no safeguards for the resource owners, the government, or the people of Rennell. They were the collective losers in this situation,” the PM said.
PM Manele pointed out that the key lesson from this situation is the need for thorough due diligence before entering into such agreements.
He stressed that the current government is fully committed to cleaning up the mess created by previous actions.
“The Inland Revenue Division has been collecting taxes from this mining operation. Since the company is in liquidation, the Inland Revenue Division is working closely with the liquidators of Bintang to recover unpaid taxes identified after the final tax assessment of the company.”
PM Manele also shared that their most recent discussions with the liquidators took place in September this year, with positive feedback from the liquidators.
“As for the unpaid royalties, the Attorney-General has been instructed to pursue recovery from APID. The Attorney-General is also working on a compensation claim for the oil spill caused by Pacific Trader,” he added.
The Solomon Star understands that the current Finance and Treasury Minister Manasseh Sogavare was the Prime Minister in 2016 when the agreement was signed.
By EDDIE OSIFELO
Solomon Star, Honiara
