Singapore, 16 September 2022 – The Singapore Court of Appeal yesterday, dismissed an appeal against the High Court (General Division)’s decision in Ok Tedi Fly River Development Foundation Ltd and others v Ok Tedi Mining Ltd and others  SGHC 205 to strike out the US$1.5billion claim on behalf of some 150,000 affected by the environmental damage in Papua New Guinea’s Western Province. The claim against a Singapore public company, PNG Sustainable Development Program Ltd (the “Company”), was mounted on the basis that the Company owed fiduciary duties to the affected communities, having allegedly undertaken to act in their interest. It was also asserted that some US$1.5 billion earmarked for the sustainable development of Papua New Guinea, was held on trust for them.
This appears to be the first time that a representative action of this nature and magnitude has been brought before Singapore’s highest Court. The Court of Appeal will deliver written grounds of its decision in due course.
Mr Mark Seah, Co-Head of the firm’s Litigation Practice successfully led the Dentons Rodyk team comprising Ms Andrea Gan, Mr Martin See, Mr Alexander Choo and Mr Philip Teh. He maintained that the Company’s mission was to promote sustainable development for all of Papua New Guinea. That mission was enshrined in the finely calibrated suite of contracts that the Company had entered into with the Independent State of Papua New Guinea and BHP, and remained the exclusive preserve of the contractual counterparties.
The various stakeholders including the Papua New Guinean Government and mining company BHP, had at the end of 2001, sought to balance the significant economic and social benefits that would be brought about by the continued operation of the Ok Tedi Mine, with their environmental concerns, when BHP exited the mine in 2002. As part of the exit arrangements, BHP’s majority shareholding in the mining operator, Ok Tedi Mining Limited, was transferred to the Company. The Company embraced its mandate to use the dividend stream to advance the welfare of the Papua New Guinean people, particularly the Western Province. The Company’s governance structures stood it in good stead to fulfil its aims, notwithstanding the challenges it faced. It has persevered in its endeavour in the face of earlier litigation in which Dentons Rodyk also successfully resisted attempts by the Independent State of Papua New Guinea following changes in government, to seize control of the Company and its sizeable funds.
The spotlight was again on ESG issues when the recent claims brought on behalf of the affected communities not only sought to upset the balance struck by contracting parties, but did so without legal footing. They were accordingly struck out last year on the ground that they were frivolous and vexatious, and that decision was upheld on appeal yesterday. Mr Adrian Tan and Dr Tang Hang Wu led the team from TSMP Law Corporation that acted for the appellants.
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