PNG draws the line

By Sam Vulum

PAPUA New Guinea’s infa mous Sandline crisis that brought the nation to its knees in March 1998 may be over, however, the legal battle has just begun. One year and two months after the crisis, the stage - for the PNG Government and Sandline International to settle a business deal that had gone very wrong, sets. At the time of writing, the PNG Government was preparing to fight a payment of US$lB million to Sandline, the UK-based mercenary company, in an Arbitration Tribunal in Caims, Australia in June. It is being fought because the state’s considers the contract, with the former PNG government of Sir Julius Chan, to crush the Bougainville secessionist rebel

lion, was constitutionally illegal.

The tribunal, agreed to by the PNG government and Sandline, will rule on whether to pay the remainder of the con tract. Although Sandline took legal action against the PNG government immediately after the crisis in a London court, the pro ceedings had never taken off in any signif icant way, especially since government felt it was on the losing end of the battle.

However, it suddenly became confident after receiving fresh legal advice in its favour in May - a new high-spirited approach that came with a bang. The gov ernment, which claimed being taken for a ride by its legal advisors over the constitu tionality and legality of the contract, uncer emoniously dumped its advisors. This led to a week-long heated media debate among a cross-section of Papua New Guineans, also attracting stinging attacks on the gov ernment from former PM Chan. The inde pendent advice, from an Australian barris ter Roger Gyles QC, and Sydney barrister OJ Hammerschlag, was that the contract was illegal under section 200 of the PNG Constitution. Prime Minister Skate imme diately stopped the services of the govern ment’s counsel, Australian barrister Marshal Cook QC, his assistant, Brisbane barrister Mai Varitimos and its chief legal advisor and former Attorney General Sao Gabi. He replaced them with Harold Werksman of Redlich Lawyers and Consultants to represent the state in the

arbitration tribunal. While announcing the government’s decision, Skate said the

independent advisors question the legality

and constitutionality of the hire. He said the Constitution prohibits the establish ment of another defence body other than the ones provided for by the Constitution.

“Section 200 (1) of the Constitution pro vides that it is forbidden to establish, organise, equip, train or take part in or associate with a military or para-military force,” Skate quotes the advice.

“Or to organise or take part in military or para-military training, except such as is provided for by the Constitution, or to plan, prepare for or assist in the raising or training of such a force or in such train ing.” The PM said the new Justice Department secretary and Attorney General Michael Gene, who took over from Gabi early this year, had briefed him on the status of the tribunal.

However Gabi, as the Chan govern ment’s chief legal advisor in the whole Sandline affair, firmly defended his advice - and those of the sacked QC and his assis tant. He described Skate’s comments as confused and misleading. He alleged that the termination of the State’s legal counsel will seriously affect its ability to effective ly defend the Sandline claim. With time quickly drawing in, Gabi said it would be almost impossible for any counsel coming into the matter to familiarise themselves with the case. “Stopping the retainer of Cook and Varitimos at this late stage will seriously prejudice the State’s ability to effectively defend the claim,” he said. Gabi also argued the Attorney General’s depart ment had questioned the illegality of the contract at least three times in 1998.

“It was the collective view of the offi cers of the department, after careful and full discussion with senior overseas coun sel, that the point was not legally tenable,”

Gabi said. He said the opinion of the Australian barrister, which Skate relied on, had overlooked the terms of the contract and misread section 200 of the Constitution. “At no time was Sandline intended to operate as a separate or inde pendent military force. They were under the direct command and control of the PNGDF - as provided for by the contract,” he said. When clarifying the facts on the

arbitration process, Gabi said: “When Sandline took proceedings against the state for the balance of SUSIB million plus expenses, the Attorney General’s depart ment advised the former and current gov ernments that they should not pay as the contract had been rendered impossible by the crisis and subsequent events over which the government had no control”.

“It is my advice that in those circum stances, Sandline was only entitled to be paid for actual expenses that they had incurred, not the balance of US$lB mil lion.” “If the expenses proved to be less than the million already paid, the State would be entitled to a refund,” he said.

Gabi’s comments sent the government reeling with rage, forcing Justice Minister Jacob Wama to take out full page adver tisements in three of the country’s newspa pers defending the government’s position.

Wama expressed great comfort with the level of professionalism the barrister and QC have displayed in preparing the defence for the state. He said the new bar rister and QC were fully versed with the facts and the documentation on the matters and issues for arbitration in Caims. Wama also refuted Gabi’s claims of considering the issue of illegality on three separate occasions. He said an investigation, con ducted by the Attorney General Gene, revealed no written advice on the issue of illegality from Gabi nor the senior coun sels. He said senior officers of the depart ment, including the State Solicitor Zachery Gelu and the former Solicitor General Francis Damen, have denied being consult ed nor expressing any views on the point.

However, former PM Chan has strongly condemned the government over Gabi’s sacking. He said that the decision by PM Skate to reject the advice of his (Chan’s) government last year and penalising Gabi

by ending his contract was unprecedented

action of the worst kind, crucifying public servants who gave their best services to the government of the day. “Gabi has rendered loyal and distinguished services to several former prime ministers on legal and consti tutional matters of the most intricate vari ety and on major reforms, particularly in the last two years,” he said. Three eminent Commonwealth judges make up the tri bunal: retired New Zealand High Court judge Sir Edward Somers; retired Australian High Court judge Sir Daryl Dawson; and Sir Michael Kerr from the Essex Court Chambers. ■