The process into subleasing a state land by Hosea Nevu, the former Minister of Agriculture, Livestock, Forestry, Fisheries and Biosecurity (MALFFB) to a Chinese investor based in Santo, failed to eventuate after the current Minister, Matai Seremaiah stepped in to cancel it.
The land concerned is the Industrial Forest Plantation (IFP) Lease at Shark Bay on East Santo which was retrieved by the Government through Minister Seremaiah in 2017.
The Vanuatu Investment Promotion Authority (VIPA) confirmed to Daily Post that Mr. Francis Fongsau Leong is the Chinese Investor and he is a naturalised citizen. Mr. Francis is operating the company, the Vanuatu Forest Industries Limited in joint venture with another Chinese national, Mr. Hongqu Li.
Former Senior Daily Post Journalist Len Garae detailed the background of the IFP when he covered the settlement in 2017: “IFP was established in 1989 as a nucleus forestry plantation and aimed at supplying timber for domestic consumption as well as for export.
”IFP was established using Commonwealth Fund from 1989 to 1994, during which around 250 hectares of forests were planted, three permanent staff houses, temporary staff houses, Forestry Research Office, a permanent forestry nursery, station electricity and water system were established and operated.
”The government took over the management of IFP in 1995 to further develop the plantation specifically for the establishment of research trials.
”Due to limited funding to develop the land, the Government’s interest in the late 1990s was to enter into a joint-venture with a company to further develop the land.
”Several companies were interested but no agreement was reached until 2006/2007, when the land was subleased to TRP.”
Without making a single development on the land, TRP mortgaged the property together with others properties and got substantial amount of money from Westpac.
Initially there was no agreement between the landowners and the Government while creating the Head Lease on August 4 of 1989, under Lease Title 041743/001, between representatives of custom landowners and the Government. Somehow the Government subleased the property to Tropical Rainforest Plantation II Limited.
Tropical Rainforest Plantation II Limited (according to documents at hand) made a loan through Westpac for Vt92 million.
The amount was spread through IFP and other properties owned by the company.
The Government, under the leadership of Seremaiah settled a deed of sale with the Bank of the South Pacific (BSP) for Vt53 million to reacquire the land.
At the time, Mr. Seremaiah acknowledged that the reconstruction works can begin.
However, in November 2018, Matai was terminated as minister for Agriculture and was replaced by Mr Nevu.
According to information gathered by Daily Post, MP Nevu entered the deal with the Chinese investor under the Agri-Public Private Partnership (Agri-PPP), a draft policy introduced under Nevu, and discussions were done “outside” without the knowledge of the MALFFB Executive.
”The Executive was informed of a company interested in investing in forestry in producing wood chips, with relevant permits issued by VIPA and licenses issued by Forestry Department,” Director General of MALFFB, Moses Amos said.
He added, “The Executive was not privy nor had an opportunity to comment on an Agreement pertaining to the Company’s operations.”
”The agreement was for the government to sublease 1,000 hectares of land to a part of the Industrial Forest Plantation (IFP) Land to Vanuatu Forest Industries Limited for the company to develop the land for herding and/or grazing of cattle and other livestock and planting of trees of eucalyptus species, whitewood and other local species,” Amos further stated.
Last month, another reshuffle occurred within Government and MP Nevu was removed and MP Seremaiah regained the ministerial position to the MALFFB.
No concrete agreement has been done as it was in the process to go before the Development Committee of Officials (DCO) when it was brought to the attention of the current Minister, who then deferred it as he instructed the discontinuation of all the processes.
Mr. Seremaiah has confirmed that he has instructed to the Director of Forestry that he wanted to see a full strategy of the IFP.
VIPA confirmed the company received its approval from VIPA in January, 29 2019. In March 8 2019, they received another variation approval from VIPA to include additional activities to be undertaken by the company.