(Copy - not an original document)

 

PAGANWATCH PRESS RELEASE

FOR IMMEDIATE RELEASE

Contact: F. Matthew Smith, Esq.

JG SABLAN PAGAN PERMIT VOIDED BY MPLA

As a result of its recent Open Government Act Request, PaganWatch obtained and reviewed public documents provided by MPLA regarding the mining operations of J.G. Sablan Rock Quarry, Inc. ("JG Sablan") on the island of Pagan, and discovered that the mining permit given to JG Sablan is either void or being voided. Specifically, it was discovered:

  1. That, on September 8, 1995, JG Sablan received a Commercial Permit (Mining) and Revocation of Earlier Permit (File No. 95-2275) from MPLA giving them permission to conduct pozzolan extraction and other related activities on Pagan in an area that was supposed to be described in an Appendix A attached to the permit.
  2. That, an Appendix A describing the area in which JG Sablan could operate on Pagan was never attached to the permit, and that such area is currently the matter of dispute between MPLA and JG Sablan. It appears from the documents produced that JG Sablan has been attempting to claim it has exclusive rights to all of the pozzolan areas on Pagan, but several maps produced do not support this claim and it is disputed by MPLA which claims JG Sablan had rights to mine only the northern most portion of Pagan.
  3. That, on February 15, 1996, the term of the JG Sablan permit (Article 3) was amended to state that the permit "shall terminate automatically should [JG Sablan] fail to generate and/or report any revenue to the Government from its activities on the premises for two consecutive years." See First Amendment to Commercial Permit (File No. 96-654).
  4. That, on February 15, 1996, the default and termination section of the JG Sablan permit (Article 9) was also amended to state that if JG Sablan violates any term or condition of the permit, MPLA could declare the permit void by: (1) giving 60 days notice to JG Sablan that it is declaring the permit void; (2) giving JG Sablan 60 days to request a hearing on the alleged violations; and (3) thereafter MPLA may use whatever remedies are available as a result of the breach by JG Sablan. See First Amendment to Commercial Permit (File No. 96-654).
  5. That, on February 19, 2004, MPLA issued a NOTICE OF VIOLATION letter to JG Sablan. Although the NOTICE OF VIOLATION was not itself produced by MPLA, both MPLA and JG Sablan in produced correspondence indicate that the violation was issued because JG Sablan: failed to pay MPLA at least $483,637.56 in rental and royalties due by JG Sablan for Pagan mining; failed to submit required reports to MPLA showing the amount of materials removed from Pagan by JG Sablan; failed to obtain MPLA permission to erect structures on Pagan; failed to submit a proposal indicating how JG Sablan intended to develop pozzolan and basalt on Pagan; and failed to secure public liability insurance for its Pagan activities.
  6. That, according to a July 18, 2004, letter from MPLA counsel to JG Sablan counsel, JG Sablan failed to cure the violations or request a hearing within 60 days of receiving the NOTICE OF VIOLATION from MPLA; and the JG Sablan permit, therefore, stands to be affirmatively terminated.
  7. That, on June 22, 2004, the MPLA Chairwoman Ana Demapan Castro, herself, confirmed that the permit of JG Sablan had been terminated when she stated in a letter to counsel for JG Sablan that: "The decision whether to reinstate JG Sablan's Pagan Quarry with conditions remains a decision of the full Board." Obviously, something can only be "reinstated" if it has first been revoked or terminated. The conclusion being that JG Sablan's permit was, in fact, terminated.
  8. That, from the documents produced, it appears that MPLA and JG Sablan have attempted to settle this matter and have even drafted settlement agreements, which have yet to be executed because there appear to be disagreements over area, rentals, royalties and other terms of the permit.

    9. It is and remains the position of PaganWatch that the permit issued to JG Sablan has either been affirmatively terminated by MPLA, automatically terminated under its own terms and conditions or should be terminated for the noticed breaches of JG Sablan and the fact that the permit lacks a critical Appendix A without which no mining activities can be or should ever have been conducted. What is lacking is for MPLA to make this information public in order to clarify the status of the JG Sablan permit once and for all, and to take appropriate action to evict JG Sablan from Pagan. This action should include notifying Coastal Resources Management (CRM) to ensure that the work sites on Pagan are cleaned up and any environmental damage is properly dealt with and mitigated.

    On December 5, 2004, MPLA agreed to form a community Task Force made up of the various government agencies with jurisdiction over the land and waters of Pagan, as well as other stakeholders including PaganWatch. The purpose of the Task Force is to determine the actual quantity and quality of pozzolanic ash available on Pagan, to find a suitable investor who can extract and market the material, and to support the project by defining all requirements in advance so that investors can enjoy the full support of all stakeholders, know and meet all requirements, and find few or no obstacles to a successful project. MPLA Board Member Nicolas Nekai, who was designated to head the Task Force, announced that the first meeting would take place in March of 2005. To date, MPLA has not moved forward with the Task Force.

    The termination of JG Sablan's permit and their eviction from Pagan presents the citizens of the CNMI with the opportunity to finally look at the resources of Pagan and, with the participation of all stakeholders, to determine a development strategy that will bring the best possible returns to the CNMI. It is an opportunity to "do it right" so that the CNMI gets a fair share of revenues and protect Pagan's rich cultural and natural resources as well.

    PaganWatch calls on MPLA to immediately announce the termination of JG Sablan's permit and to start the Task Force.

    All of the documents on which PaganWatch basis this report are public documents produced by MPLA following an Open Government Act request. Copies of the same are available upon request.

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