June 03, 2013

By Bill Jaynes
The Kaselehlie Press

May 27, 2013 Yap, FSM -Early this month the Yap State Legislature passed a resolution instructing the Yap State Foreign Investment Board to cancel the Foreign Investment Permit(FIP) it issued to the Exhibition and Travel Group (ETG). At press time there had been no announced response to the resolution which, if it is put into force, will essentially shut down ETG's efforts to build a massive tourism project in Yap.

The resolution was signed by Speaker Henry Falan on May 2, 2013. It calls for the cancellation of the FIP because it says that the Director of the Department of Resources and Development "violated the State Government Ethics Act and is therefore not valid to allow ETG to engage in business in the State of Yap."

The resolution quotes the laws regarding which government employees are subject to the Government Ethic Acts. It also quotes the section of the act that allows the State to void any action taken by a State employee that violates the Act, as well as its ability to hold the employee personally liable for any damages, costs, and other consequences that the State incurs as a result of voiding the employee's unethical actions.

It accuses the R&D Director of providing preferential treatment to ETG when his department granted ETG a permit. An employee is not allowed by law to grant preferential treatment to any organization or person. As evidence of its accusation, the resolution says that the Director granted the permit despite overwhelming public opposition including the adoption of resolutions by the Legislature against ETG's proposal. It accuses the Director of granting the permit even though ETG proposed to engage in illegal activities in the State of Yap, such as gambling, a proposal that was presented in the investment agreement proposal to the Governor prior to the issuance of the permit.

On the Act's prohibitions on actions that impede government efficiency or economy, the Legislature had much to say in terms of evidence to support its claim that the Director of R&D violated the act. "The Director's instructions to his staff not to release information on the status of the ETG application for a Yap State Foreign Investment permit," was one of the evidences provided.

"The Director's total disregard of the overwhelming public opposition including a petition signed by more than 1500 people and residents of Yap State against the ETG proposal," was another. "The Director's complete disregard of Resolutions adopted by the Legislature against the ETG proposal," was another.

It cited ETG's "gaming and casinos" proposal, an illegal activity, as another violation of acts that impeded government efficiency or economy.

"The Director's preferential treatment for the ETG application for a Permit resulted in the Legislature being kept in the dark while the Governor and the Council of Pilung continued to negotiate with ETG," was the Legislature last example.

"Such actions adversely affect government efficiency by causing uncertainty and confusion amongst relevant government agencies, undermining continued cooperation and unity in the State Leadership, and preventing a more efficient and a more orderly review of the documents and investment proposal by ETG by the entire Yap State Government exclusive of the Judiciary Branch, and the public," it said.

The resolution says that when the Director of R&D issued the permit to ETG it violated a provision of the Ethics Act on "adversely affecting the confidence of the public in the integrity of the government." The Yap Legislature provided similar evidence for its claims that the Director of R&D violated that legal requirement of the Ethics Act.

The resolution included an additional chronological list of evidence to support its instruction for the Director or R&D to cancel the ETG application for a Foreign Investment Permit:

May 3, 2012-The State leadership received a petition with an additional 172 signatures that were against the ETG proposal.

May 21, 2012-A meeting designated as a Town Hall meeting was held at the Colonia Community Center purportedly to educate the public about the ETG proposed project. It was limited to only two hours. During the meeting the Acting Attorney General told the people, in the presence of the R&D Director that the ETG permit had not been delivered to ETG "when in fact ETG had received the Permit April 26, 2012 as noted and initialed by ETG agent on the Permit." The resolution said that at the end of the meeting, there were questions that those in attendance still wanted to ask.

July 31, 2012-The Yap Women's Association forwarded a petition to the State by the "Bwin nu Waab" from the municipalities of Yap stating their strong opposition to the ETG proposal. August 9, 2012-"More people of Yap petitioned the State Leadership, 'NOT to permit the Exhibition and Travel Group (ETG) to invest in the whole State of Yap.'"

September 18, 2012-Yap State Resolution No. 8-53 was adopted "calling on the Governor to submit a written notice to ETG to void the Investment Agreement between the State and ETG and to disapprove any and all master plans from ETG for investment in Yap State."

October 1, 2012-Governor Anefal wrote to the Chairman of ETG suggesting that the chairman should "reconsider the proposed project, if not to dissolve the Investment Agreement and any legal documents preceding it." The Governor made reference to the letter of the Dalip Pi Nguchol that commanded the administration to "prohibit [ETG] from proceeding with its intended project for Yap State." The Governor also referred to resolution 8-53 requesting him to void the investment agreement.

"It is my belief that the attached letter and resolution, together with other attachments herewith, are indicative of a resistance to your proposed project in the State, and I feel that it is my responsibility to approach your organization before you risk any greater financial investment going forward. I fear that the prospects of ETG crafting a profitmaking enterprise in Yap may be very low. It seems that ETG, if it decides to go forward with the project, will encounter a huge amount of resistance from the public and by way of laws passed by the Legislature which will all but ensure that ETG cannot do business in the State of Yap," Governor Anefal wrote.

November 27, 2012-A group calling themselves the Yap Awareness Project (Y.A.P.) sent a petition that included 1000 signatures to Speaker Falan. It strongly opposed the ETG project.

February 5, 2013-In response to the Y.A.P. petition, the whole membership of the Yap State Leadership met with the group. During that meeting the legislature told the Y.A.P. membership that it had passed Y.S.L. Resolution 8-53 in order to support the Governor's October 1, 2012 letter to ETG. The understanding that the legislature came to with Y.A.P. was that the State leaders should stand in a "united front," apparently against the ETG proposal.

March 21, 2013-YSL (Yap State Legislature) met with the Governor to decide on the "best way forward". The resolution says that the Governor agreed that he should have the ETG permit voided, and that the Governor should get back to the Legislature by April 16, 2013. At that time Governor Anefal was off island on a medical purpose and the agreed upon meeting did not take place.

The resolution asserts that Yang Gang, the ETG agent in Yap, gave the Chief of Rumung on the Council of Pilung $3000. It asserts that the money may have been considered to have been a bribe which would be considered to be a State crime if the money was received "as consideration to influence his decision to assist ETG by influencing the people of Yap to lease their lands to ETG."

As a final argument, the YSL resolution points out that Mr. Deng Hong, Chairman and President of ETG has been in the world news as being under investigation by the government of China for graft (bribery) and other allegations.

Again, at press time there had been no action on the resolution of which the KPress was aware.