Public Report on the Conduct of Prime Minister Serge Vohor, Hon Barak Sope and Hon Vincent Boulekone and the Volani contract – February 20, 1998 - Emalus Campus



Public Report on the Conduct of Prime Minister Serge Vohor, Hon Barak Sope and Hon Vincent Boulekone and the Volani contract – February 20, 1998

98-04

Following a meeting on August 2, 1996 of a delegation from an Italian Corporation, the President of Vanuatu and a number of Ministers of the Vanuatu Government (Prime Minister Korman, Minister of Foreign Affairs Minster Bangabiti, Minister of Tourism and Civil Aviation Ravutia and Minister of Finance Barak Sope), an agreement was reached with Knight of Labour Moriano Volani (Volani), an Italian company, headquartered in Gibraltar.  The agreement was negotiated by Mr. Sope and provided for a study to be carried out by Volani to determine the feasibility of an international airport in Santo which would accommodate 747 aircraft.  Mr. Sope had no apparent authority to negotiate this contract on behalf of Vanuatu.

During September 1996, the Government learned that Volani was a small company reputedly with a “low trust factor”, “high risk factor”, limited credit and limited liquidity.  At no time did Volani provide any evidence of expertise in relation to airports.  At no time was an independent audit of Volani requested or provided.

During October, 1997, the Council of Ministers decided to proceed with the feasibility study and authorized Mr. Vohor and Mr. Sope to sign the contract.  The undated contract with Volani was apparently signed on October 30, 1997.  The contract obliged Volani to carry out a feasibility study into the 747 airport but contained few details by which any objective measure could be made of its performance.  The contract also gave authority to Volani to proceed with the construction of the 747 airport if the study determined that it was feasible, thus creating a conflict of interest and precluding a truly independent study.  The Government of Vanuatu agreed to pay US$4 million in the form of  “full ownership” of 100 hectares of land, 500 residency permits, convertible to citizenship within one year and licenses and concessions for banks, casinos and VIP vilas.  In addition, Vanuatu was to provide accommodation for 10 engineers, free air travel (Vila- Santo) and vehicles in Port Vila and Santo.

The contract had a number of deficiencies and defects.  Mr. Vohor and Mr. Sope had no authority to enter into the contract.  The law required an expenditure of the size represented in the Government’s obligations to be approved by the Tenders Board.  This was not done.

The Citizenship Act governs the granting of citizenship.  It requires that citizenship by naturalization be preceded by residency in Vanuatu of 10 years.  Even 10 years’ residency is no guarantee as there is a discretion to refuse citizenship.  The agreement was illegal in that it purported to give to Volani the right to control citizenship of 500 people after one year’s residency.

The laws of Vanuatu prohibit the transfer of freehold title to land to non citizens.  The term of the contract that purported to do this was therefore illegal.

The contract specifically purported to place the agreement outside the reach of the laws of Vanuatu.  Thus, Mr. Sope and Mr. Vohor, in signing the contract purported to surpass the lawmaking powers of Parliament.  It was not within their authority to do this.

The work to be carried out pursuant to the contract was redundant.  At the time of the contract, an extensive feasibility study regarding airports in Vanuatu, including Santo, had just been conducted at the expense of foreign aid donors.  This study was conducted by a reputable and experienced company and concluded that a 747 airport in Santo was not feasible.  Thus, the expenditure of US$4 million for another feasibility study was unnecessary.  

Mr. Vohor, Mr. Sope, Mr. Boulekone and Mr. Bani (a political appointee who attempted, on behalf of Mr. Vohor and Mr. Sope to have 100 hectares transferred to Volani) breached the Leadership Code in that their actions diminished respect for and confidence in the integrity of the Government.
Recommendations

·       That Mr. Vohor and Mr. Sope not be appointed to any position involving public responsibility or public money.

·       That Mr. Vohor, Mr. Sope and Mr. Boulekone publicly apologize to the people of Vanuatu.

·       That the Attorney General give formal written notice that the agreement is of no legal effect.

·       The Mr. Bani not be placed in a position of public responsibility for one year.

·       That if the Government wishes to proceed with another feasibility study regarding a 747 airport in Santo, that they retain the services of an independent, professional company with relevant international experience.

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Written by Edward R. Hill
UNDP Governance and Accountability Project
January, 2001
Van/97/001
© Ombudsman of Vanuatu
Published here by University of the South Pacific, School of Law Web Site - www.vanuatu.usp.ac.fj






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