On 7 August 2015, PNG's Minister for Trade, Commerce and Industry, Richard Maru, gathered at Government House for the signing of a Heads of Agreement that would make KLK an equity partner in the development of a 37,000 hectare oil palm project in East Sepik's Special agriculture Economic Zone (SEZ).
Minister Maru reportedly said that the National Executive Council (NEC) took the decision to enter into the agreement with KLK after the State could not agree to terms with Wilmar International to develop the project.
The SEZ is a government driven economic development plan, wherein the Independent Public Business Corporation
(IPBC) holds the State's 30% shares in any joint venture investment in the Sepik Plains through Sepik Agro Industries Limited
On the day that KLK
and other government officials gathered in Port Moresby to sign the Heads of Agreement, it was reportedly found that the paperwork was not in order, twice.
By the end of the day, the signing was put on hold for a later date.
Photo: KLK officials waiting to sign the Heads of Agreement with Minister Maru in the Government House in Port Moresby.
Sepik Agro Industries
owned by Minister Maru
The exact reason why the signing of the Heads of Agreement was postponed remain undisclosed.
CRR believes that the hick up may be related to the conflict of interest on part of Minister Maru, who was, until January, listed as the sole shareholder of the intermediate between IPBC and KLK, Sepik Agro Industries:
The share transfer refers to Minister Maru as the company Charirman, although he is not listed as a Director.
It is not stated whether he
continues in ths role.
Wilmar International declines to confirm or deny that Maru's conflict of interest led the company to abandon its involvement in the SEZ in 2014.
A representative stated he
regretted that Wilmar had to forego the opportunity to develop vast areas of underutilized grasslands and conserving some 8,000 hectares of lowland rainforest.
Ms. Lim Poh Poh, KLK representative, when questioned about KLK's involvement said the company was not aware of Mr Maru's personal involvement and has not yet assessed the suitability of the site for oil palm:
The invitation we received was made through PNG's
Ministry for Trade, Commerce and Industry of which Mr Richard Maru
is its current Minister.
We are not aware of any personal interest of Mr Maru
in the proposed development, as the PNG Government had confirmed earlier that as at 10 April 2015, Sepik Agro Industries Limited
is wholly-owned by an entity known as Independent Public Business Corporation
, which in turn is wholly-owned by the PNG Government.
"Why is Trade Minister Richard Maru
the sole shareholder in an oil palm company and a 'multi-billion dollar' project?
PNGExposed.Blog May 19, 2014.
"Major Oil Palm Project on Hold.
EM TV News
7 August 2015.
"Sepik Plain Economic Zone.
26 January 2015.
"Sustainability Policy Progress Report.
December 2014 - June 2015.
Kuala Lumpur Kepong
"Soil Survey and Land Evaluation of Urimo Livestock Station.
East Sepik Province.
Department of Agriculture
17 January 1992.