Background Context

Sources of development based on natural resource exploitation

National economic development for Pacific island nations is a pressing concern. The first permanent forms of landscape-changing development involved plantation agriculture.^[893] Many Pacific nations share a history of colonial development based on the establishment of commercial plantations.

In Melanesia, forestry has also been an important resource for the economies of Papua New Guinea, Bougainville, Solomon Islands, New Caledonia and Fiji.

In Melanesia, the land mass of these nations is comprised mainly of islands of volcanic origin or of land mass that is highly prospective for the exploitation of economically valuable minerals, and in the case of Papua New Guinea, natural gas deposits. In Polynesia, mining of phosphate was established in Nauru in the early 1900s and has had a devastating ecological impact.

Impacts on traditional Indigenous land ownership patterns

In Melanesia, social organisation remains rooted in traditional relationships to land and among kinship or language groups. Arguments for development often cite the need to free-up traditional forms of land ownership to facilitate investment and growth. However, dismantling traditional patterns of resource ownership disrupts resources and traditional systems that enable communities to be self-reliant and on which traditional patterns of interdependence and social stability are based.

The “Resource Curse”

In 1993, Auty used the term “the resource curse” to describe the apparent paradox whereby nations rich in natural resources often do not enjoy economic growth, experience conflict and instability and have poor standards of governance.^[894] According to Stiglitz,^[895] poor economic and social outcomes result from the distorted distribution of resource wealth.

Conflict over natural resource development

Wilson notes that a consequence of some land-based mining is the spoiling of the land being mined and the environmental degradation of downstream lands.^[896] This affects traditional land owners for whom the land is their primary resource. It is from the land that they extract all that they require for a traditionally based lifestyle. There is very little that traditional owners may receive or expect from the State in return.

With poor levels of service delivery in these nations the traditional owners of mined land are hit doubly. They lose their land and they get very little back in the form of State provided services.^[897]

A Case Study: Solomon Islands Forestry

Commercial forestry is another form of land use with the potential to dramatically change the ecosystem and landscape. However, conflicts concerning the exploitation of forest resources generally lack a permanent site for disputation and disruption as timber cutters move from one forested area to another.

Traditional ownership is disrupted

The history of timber exploitation in Solomon Islands is documented by Judith Bennett in Pacific Forests.11 In Solomon Islands the exploitation of forest resources is regulated under the Forest Resources and Timber Utilisation Act [Cap 40]. An important aspect of this law is the disconnection of control of the timber resource from the traditional ownership of the land it grows on.

The law favours unsustainable logging

In 1994, following considerable pressure from environmental groups, Australia’s Prime Minister, Paul Keating, led a push for South Pacific Forum Governments to take action to conserve the remaining forest resources in their countries. As Bennett records, the South Pacific Forum released its Brisbane communique, which expressed concern “at the way in which forests throughout the region and the world are being harvested in a highly destructive manner”.^{[898] [899] At the same forum meeting, Prime Minister Billy Hilly of Solomon Islands announced that the logging licence of a Malaysian logging company was suspended for breaching legal requirements.}

As Bennett argues, these two events played out badly in Solomon Islands politics, with the opposition leader, Solomon Mamolomi, portraying Hilly as a “puppet” of Australia, and Australia as dictating policy to a sovereign Pacific nation. Mamolomi subsequently became Prime Minister. In the struggle for power, logging interests sought and received favour. The result was an expansion of unsustainable logging.^[901]

There were repeated attempts to place Solomon Islands forestry onto a sustainable basis in the late 1990s. Eventually the Forestry Act 1999 was passed, heralding sweeping reform.^[902] The new Forestry Act would have set out measures to ensure that forest resource extraction is carried out on a sustainable basis and that where possible despoliation of the environment be minimised. However, the forestry sector has not been affected, as this new Act was passed but was not gazetted, and as a result has no legal effect.^[903]

The law fosters or is inadequate to deal with corruption

In Solomon Islands, there are two parts of the Penal Code 1963 [Cap 26] that deal with corruption. The first is “Part X Corruption and the abuse of office”, which regulates the behaviour of those in public office. The second is “Part XXXVIII Secret commissions and corrupt practices.”

The principal provision in Part X is section 91(a), which states:

Any person who,

(a) being employed in the Public Service, and being charged with the performance of any duty by virtue of such employment, corruptly asks for, solicits, receives or obtains, or agrees or attempts to receive or obtain, any property or benefit of any kind for himself or any other person on account of anything already done or omitted to be done, or to be afterwards done or omitted to be done, by him in the discharge of the duties of his office...

In addition, there are provisions in the Leadership Code (Further Provisions) Act [Cap 86] that allow for findings of guilt for improper behaviour with minor penalties. There are 31 reported cases dealing with corruption and these are shown in Table 10-1, although this is not presented as an exhaustive list of all corruption cases in Solomon Islands.

Table 10-1 Corruption cases in Solomon Islands High Court and Court of Appeal judgments

Eight cases involved allegations of corruption by way of electoral fraud. Three cases concerned allegations of illegal police behaviour that was labelled by the court as corrupt because of the status of the defendants as police officers.

Two Ministers were prosecuted separately for corruption. In the first case the issue was the fraudulent granting of citizenship and in the second case it was the waiving of stamp duty charges. These two cases were each prosecuted under section 91(a) of the Penal Code.

One Minister was prosecuted for the abuse of Ministerial funds, which was referred to by the court as a corrupt practice.

The list of cases highlights the absence of reported corruption cases concerning either mining or forestry operations. There are, however, very many cases in the PacLII database concerning civil disputes under the relevant mining^[904] and forestry laws.^[905]

There are three separate cases from 1996-7 that indirectly involve the corrupting influence of the logging industry on politics in Solomon Islands. In these cases, three Ministers were prosecuted for alleged corruption involving the receipt of benefits to switch allegiance from the government of Francis Hilly Billy to support the formation of a new government under Solomon Mamalomi. As Nelson argues, “A basic understanding of some of the ways that Melanesian governments operate is essential to those contemplating intervention in the region. The very way that governments are created and supported establishes corruption — of the distribution of State assets and often the members themselves”.^[906]

The Penal Code provision sought to be applied in these cases was section 374 in Part XXXVIII, which relevantly states:

If— (a) any agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gift or consideration as an inducement or reward for doing or forbearing to do or for having done or forborne to do, any act in relation to his principal’s affairs or business or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business... he is guilty of a misdemeanour, and shall be liable to imprisonment for two years or to a fine of six hundred dollars.

Only Musuota was successfully prosecuted and then for the lesser charge of allowing his integrity to be called into question under the Leadership Code (Further Provisions) Act [Cap 86]. All corruption charges against the three accused were dismissed by the Court.

In each of these cases, the allegations involved the Ministers receiving a benefit from a representative of Chinese Malaysian logging interests to shift their support from Hilly Billy to Mamolomi. The loggers were facing increasing regulation and control from the Government of Hilly Billy and a proposed lack of regulation under Mamolomi.

Basically, the court in each case found that shifting support from one Prime Minister to another candidate could not be characterised as corruption for the purposes of the Penal Code, as the act of quitting removed the member of Parliament from a position in which he could perform an act or refrain from performing an act for the Crown. In Musuota’s case, the judge summed up the situation in these terms:

What Goh (representing Malaysian logging interests) did is reprehensible and in common parlance, political corruption. Is it corruption in terms of the law in section (374) of the Penal Code which requires that the benefit, in this case, the use of hired car, be a gift or consideration, for Musuota to forbear — omit to do any act in relation to the business of his principal, the Crown?

It was inducement for them to resign but certainly not to refuse to do a job which was waiting to be done or to do that office work in favour of Goh or any other person. The act that Musuota was to omit to do cannot be said to be an act in relation to the principal’s business. Musuota quit completely the business of the Crown, his principal. He was not simply forbearing or omitting to do the principal’s business. He terminated the whole relationship between him and his principal; he terminated the whole mandate. He removed himself from the post of a cabinet minister and so from the authority of the Crown, the principal, which relate to duties of a cabinet minister. Section (374) is not meant to cover that situation; it is meant to punish people who are, to use the common expression, “bought” in the performance of their duty so that they show favour in actioning the interest of the person who has offered the benefit, or so that those “bought” avoid taking action correctly, if that action affects adversely the interest of the person who has offered benefit.^[907]

These three cases from 1996-7 are the only ones that are found in the reports of Solomon Islands available on PacLII dealing with corruption associated with the forestry industry. Despite the lack of reported prosecutions, the Auditor-General for Solomon Islands makes clear in a report from 2007 that corruption is both a widespread and a long-standing problem.^[908] In particular, the Auditor-General notes that “poor management and administration” and a “lack of accountability and transparency in granting timber exemptions” led to a significant loss to national revenue consistently over many years.^[909]

The Auditor-General is referring to the impact on the national accounts from sloppy or corrupt practices that allowed round logs to be exported from Solomon Islands without paying the correct duty or any duty at all.