Leaked Letter Raises More Questions About Solomons Government Relations With Mining Company

PM responds saying letter is normal behavior, not sign of 'intimate relationship' with Bintan

By Teddy Kafo

HONIARA, Solomon Islands (Solomon Star, Oct. 13, 2017) – Prime Minister Manasseh Sogavare appears to have an “intimate relationship” with the controversial Bintan Mining (Solomon Islands) Limited, an overseas miner extracting bauxite deposits on Rennell island, Renbel Province.

This intimate relationship is further evidenced by a recently leaked letter, which the Prime Minister wrote to the general manager of the company.

In the letter dated 8th May 2017, the Prime Minister stated the following:

“I have been watching with keen interest the challenges that your mining operation had to go through in the formative period of your operations and might I add continue to face in Rennell.

“I can only admire the cool and understanding manner in which you conducted yourself in dealing with these challenges within the bounds of our laws.

“You have demonstrated good corporate citizenship in this matter.

“For this I thank you very much and would encourage you to keep up this responsible attitude which is worthy of emulation by other mining operations in the country.

“I must also commend your commitment to implement an extensive community service engagement, fully acknowledging your social responsibility to the indigenous landowning group and provision of employment to Solomon Islanders.

“This is admirable given the high risks with mining operations which require a careful balance between social responsibility and profit-making.

“You have managed this very well, which is a credit to the effective management and administration of the company.

“I believe your company has great future in Solomon Islands in the development of the mineral sector, judging from the noble aims and objectives of the company which augers well with the development objectives of the Solomon Islands Government in the mining industry.

“On behalf of the government and people of Solomon Islands, I commend the good work you are doing in this country and assure you of our closer working relationship with you.”

In a statement issued last night, the Office of the Prime Minister said it is a usual practice by the Prime Minister to issue a letter of acknowledgment to investors within the country upon receiving positive feedback from various stakeholders including landowners.

This leaked letter followed the meeting between the former Minister of Mines, Energy and Rural Electrification David Dei Pacha and the Chairman of the Asia Pacific Investment Limited (APID) Ray Set Fah Chu in the carpark of the Heritage Park Hotel at 10:40pm on 21st April this year.

Bintan is contracted by APID to mine bauxite on Rennell.

Mr Pacha, who is now the Deputy Speaker of Parliament, was removed for what the Prime Minister described as “under-performance” after a video footage of the secret meeting was leaked.

The video footage attracted bitter sentiments for the removal of the minister.

Two months earlier (January 2017), leaked text messages between Prime Minister Sogavare and an official of Bintan were exposed by the Solomon Star.

The text messages went viral on social media..

The texts dated 15th and 16th November 2016 show the Prime Minister reassuring a Bintan official that cabinet was preparing to remove all tax exports on bauxite and back-dating it.

The reassurance was made in response to a first text by the Bintan official who asked if there was any good news from cabinet on the matter.

The Prime Minister added that, “The minister (of Finance and Treasury) and all of us (Caucus) are still tied up in dealing with the current political situation coursed (caused) by the President of the UDP and had Caucus whole day.

“We are still solid as a group. I want to assure you that the matter will definitely come to cabinet this week.”

The response from the Bintan official was swift.

 “Dear Prime Minister. Thank you for your information. I hope the current political situation can be solved by your leadership. Good luck and God bless.”

Four weeks later on the 13th of December 2016, the Minister of Finance and Treasury issued a gazette validating duty exemption for bauxite exports and this was backdated to 1st August 2016.

Last night, the Prime Minister’s Office replied to concerns about the letter.

It said:

  1. It is a usual practice by the Prime Minister to issue a letter of acknowledgment to investors within the country upon receiving positive feedback from various stakeholders including landowners.
  2. The intention of the letter was to give motivation and boost confidence of investors who are providing services in the country and in the case of Bintan Mining, for their commitment demonstrated so by investing into the local community and towards improving the minimum standard of mining operations.An example of this is the 6.5% royalty payment made by Bintan Ltd to resource owners and both the national and provincial governments, which is more than double the legislated requirement of 3%.
  3. The letter has no intention to provide any depictions of preferential treatment towards certain investor(s) in this case Bintan Mining (SI) Limited.
  4. The letter carries the intention to encourage investors to ensure they comply to the law of the country.
  5. It is also the intention of the letter to encourage engagement between the investor and the people in community service obligations.
  6. Bintan Mining (SI) Limited operates under a valid mining lease held by APID.
  7. Further such a letter holds the company accountable for their actions should they fail to meet the required standard and does not indemnify the company from being held liable for non-compliance but rather raises the bar to ensure requirements are met in accordance with the acknowledgement by the Prime Minister.

“Important also to note that this is not the first time a Prime Minister has written to acknowledge the efforts of genuine Investors and moving forward neither will it be the last, as the DCCG aims to encourage genuine and legitimate investments within the country to support the development of our national economy.”

Solomon Star
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