Public Report on the Nambawan Bottle Shop Case - August 20, 1996 - Emalus Campus
In order to operate a retail shop selling liquor in Vanuatu, it is necessary to first obtain licenses to sell and to import under the Business Licenses Act. The granting of these licenses falls within the scope of the Minister of Finance’s authority. It is also necessary to obtain a liquor license which is within the scope of the Minister of Home Affair’s authority. Further it is necessary to register a business name.
In 1994, the Minister of Finance, Willie Jimmy, together with business partner, Charlie Pakoa, a public servant in the Ministry of Finance jointly decided to set up a business to sell liquor outside the normal trading hours on a 24 hour per day basis. They recruited a manager, Phillip Luankon, who had retail experience selling liquor. No existing law permitted the granting of a license to sell liquor outside the normal trading hours set out in section 18(2) of the Liquor Licensing Act and no license had previously been granted to any other business in Vanuatu to do so.
Phillip Luakon applied for a business license in the name of Port Vila Bottle Shop. The application for a business license did not disclose that the Minister of Finance and Charlie Pakoa were partners in the business. The application did not disclose that the business was to be set up on a residential lease property in a busy area in Melcoffe. The application for a business license did not include an application to import. The application was considered by the Business License Committee but before the minutes were sent to the Minister of Finance on August 26, 1994, he approved the application and authorized a license both to retail and to import.
On August 31, 1994, the Municipality of Port Vila received an application from Philippe Luankon for a liquor license. This application sought permission to sell liquor on a 24 hour basis from Melcoffe. The Municipality granted the license to operate in Melcoffe but refused the application to sell on a 24 hour basis. Notwithstanding this, a liquor license fee was accepted by the Municipality on behalf of the business before any liquor license had been granted.
The Minister of Finance, in response to the refusal of the 24 hour license application by the Municipality cancelled the Duty Exemption of the Municipality, an unprecedented move. Charlie Pakoa and Mr Luankon appealed the refusal to grant the business license. The Minister of Finance wrote to the Minister of Home Affairs appealing the decision to refuse the 24 hour license. This letter was personally presented by the Minister of Finance to Mr Nako, the Minister of Home Affairs who signed and sealed an approval of the license. The Minister of Home Affairs claimed to have acted under intense pressure.
The Nambawan Bottle Shop opened without first registering the business name as required under the Business Names Act. Following the opening of the Nambawan Bottle Shop, complaints were made about the noise and disruption it caused. The Attorney General also inquired into the matter and concluded that the license was illegal. The terms of the license were subsequently reduced for 1995 and 1996 by the Minister of Home Affairs. However, they still exceeded the legal limits set out in the Liquor Licensing Act.
The report makes 17 findings of misconduct which are summarized below.
The Minister of Finance, Charlie Pakoa and Phillipe Luankon were privy to the making of any false statement in an application for a business license and were therefore in breach of section 4(2) of the Business License Act.
The Minister of Finance and Charlie Pakoa were in breach of section 5(1) of the Business License Act in failing to register their business when the business licenses were issued.
Although the Minister of Home Affairs endorsed his approval on the appeal of the liquor license application, no liquor license was issued. The business operated in breach of section 3(1) of the Liquor Licensing Act until May 1995 when a “special hour” license was issued.
The Minister of Home Affairs acted outside his jurisdiction in approving a liquor license that was not within the ambit of the Liquor License Act.
The head lease of the land on which the business operated was for residential use and was therefore subject to forfeiture under the Land Leases Act when it was subleased for the operation of the business.
The Constitution which provides equal treatment under the law was breached in the granting of a liquor license to Nambawan Bottle Shop on favourable terms that were not available to any other citizen.
The Leadership Code was breached in a number of respects by Minister of Finance. In taking an active interest in the business, he was in a position of conflict of interest. He used his office for personal gain and/or entered into a transaction in a manner that allowed his integrity to be called into question. His actions demeaned his office and endangered or diminished respect for and confidence in the integrity of the Government of Vanuatu.
The Leadership Code was breached by Minister of Home Affairs in that he demeaned his office or position, he allowed his integrity to be called into question and diminished respect for an confidence in the integrity of the Government of Vanuatu.
The report goes on to find that the Minister of Home Affairs, the Police, the Minister of Natural Resources, Paul Telukluk and the Commissioner of the Vanuatu Financial Services Commission failed to take prompt action within the scope of their responsibilities to deal with the illegal business.
· That the former Minister of Finance, Willie Jimmy not have any leadership position.
· That the Minister of Home Affairs Charlie Nako be reprimanded by the President.
· That the business licenses of Nambawan Bottle Shop be cancelled.
· That prosecutions be initiated against Willie Jimmy and Charlie Nako for breaches of the Business Names Act and the Business License Act.
· That the lease of the land on which the Nambawan Bottle Shop is located be reviewed by the Minister of Natural Resources.
Written by Edward R. Hill
UNDP Governance and Accountability Project
© Ombudsman of Vanuatu
Published here by University of the South Pacific, School of Law Web Site - www.vanuatu.usp.ac.fj