Growing discontent within Cabinet to get the LSL/RIPEL land deal over and done with
AS the Government’s proposed land grab scheme for prime land jointly owned by Levers Solomon Ltd [LSL] and Russell Island Plantation Estates Ltd [RIPEL] continues to drag on, there is push within Cabinet to get “the matter over and done with”.
And those with in-depth knowledge of forfeiture and compulsory acquisition process, told Solomon Star that even if SIG wins the land cases…under the compulsory Acquisition Notices……SIG must still pay the $700 million unimproved value of the land on Guadalcanal.
The position is consistent with a figure provided by Prime Minister Jeremiah Manele in his Sine Die motion last year.
The MPs’ anxiety for an early settlement is based in part on certain references made by the Commissioner of Lands, Alan McNeil in his letter to Deputy Prime Minister Bradley Tovosia dated 30 August 2024.
In the letter, Commissioner McNeil revealed that “forfeiture and compulsory acquisition of Fixed Term Estates” have been the government’s position since 20 February 2024.
“Following this decision, SIG and ICSI appointed King & Wood Mallesons to undertake due diligence on the process, to ensure SIG follows the simplest, cheapest and least potential litigious and cleanest method to obtain ownership of the parent companies that own 75 per cent of LSL.”
At the time, “Cabinet directed the Ministry of Finance and Treasury to settle the LSL Estate and to work with Solomon Islands National Provident Fund and other SOEs to continue to seek forfeiture and compulsory acquisition of Fixed Term Estates.
“This has been the option taken by SIG to date, following Cabinet’s decision of 16th July 2020. In every instance where SIG acted to forfeit or compulsorily acquire LSL’s FTEs though, LSL has filed claims in the High Court against these actions,” Mr. McNeil said in the letter.
The letter dated 30 August 2024 was requested by Minister Tovosia who was leading a delegation of MPs for direct talks with the Management and Board of LSL and RIPEL in Brisbane.
In it, Mr. McNeil put forward two options, including compensations payable.
“The problems with this option is “delay in outcome,” he said of the first option, accusing LSL at the same time of continuing “to deliberately drag out these claims indefinitely”, noting the claims date back to 2020 to 2022.”
He pointed out in the next option – compensation payable – that SIG would still be required to pay compensation to LSL for this action.
“Even if SIG wins the compulsory acquisition claims in court, SIG will still be required to pay compensation to LSL for this. It is not expressly stated in the Lands and Titles Act but it may be implied that fair compensation ought to be based on the market value of the land (which is around Alligator Creek/Tenaru/Black Post area), and this might be a higher figure than the sum that could be agreed through the receivers or liquidators in those other alternative options,” Commissioner McNeil said before dropping the bombshell.
“Compensation would not however be required if SIG wins the case relating to forfeiture of different FTEs closer to Henderson and Bloody Ridge areas,” he said.
“This is what go to some MPs. They think that the government would not be liable for any compensation so their reaction was if that is the case, let’s get it over and done with,” some said.
According to published reports, the market value of LSL/RIPEL unimproved land in Russell Islands and on Guadalcanal is $200 million and $700 million respectively.
What he did not tell the Caucus is that even if the SIG wins the case, it would still have to pay for the land.
In his Sine Die speech last year, Prime Minister Jeremiah Manele, devoted 14 and a half pages of his 29-page speech to the LSL/RIPEL issue.
“By settling creditors in Australia, SIG will own and gain control of Pacific Investment Ltd (PIL) and Overseas Shipping Trading and Investment Ltd (OSTI), and in turn own 75.1per cent of LSL
“The facts have been clearly stated by the Government in press conferences and press releases. The total valuation of the unimproved value of the land in Russell and Guadalcanal is $200 million and $700 million respectively,” he said.
“The question that is being also asked here is ultimately what will happen to Lavukal Investment Company Ltd. The shares of LICL will not be affected. The end product see SIG and LICL as partners,” Prime Minister Manele told Parliament.
“Mr. Speaker, there is also the option of purchasing LICL’s shares if Government intends to pursue 100 per cent ownership of LSL.
“However, that would only be possible if LICL wishes to sell its shares but as stated above, that is not the intention of Government,” he said.
By Alfred Sasako
