MPPP on compensation - Boustead Compensation Scandal

---------- Forwarded message ----------
From: Ong Eu Soon
Date: Tue, Aug 7, 2012 at 4:10 AM
Subject: Re: Fwd: [sembang-forum 664] Hill killed by development

Corrupt Networks

Social networks form when people interact. Networks are a type of social organisation that rely on relationships of trust, mutuality and reciprocity, coupled with a set of common norms established and maintained through peer pressure, social approval and sanction (stigma), to bind individuals to a collective unit. The characteristic ability of networks to be inclusive, flexible in their operation and quick to respond networks can be leveraged to benefit individuals, groups or businesses or society at large.However, as Raab and Milward (2003) have noted networks can also have a dark side, where the network achievements come at the cost of other individuals, groups or societies. It has been argued that the particularism of networks, that is, the banding together to pursue particular or common interests, is a key element of network disadvantage since it can lead to exclusivity rather than an inclusive approach (Taylor and Hoggett, 1994). Such inclusivity renders networks as essentially private rather than public entities and therefore not exposed to wider levels of scrutiny or subject to external accountability regimes. Because of this, networks can be quite secret and invisible in their operation and endeavours.This opaque nature of networks and their lack of transparency, coupled with values and norms that support clandestine actions and goals, can provide a basis for corruption. Granovetter (1992: 45) points out" networks can create their own norms at odds with the outside world to the point where they become a 'law unto themselves". In such a context, illegal activities can take on the aura of normality and members protect each other from the sanctions of the outside world.(source: Lauchs, Mark A. and Keast, Robyn L. and Yousefpour, Nina (2009) Predatory police : the roles of ethics and networks as mediating factors.)

Boustead Compenasation Scandal

Soon after taking over the helm as Chief Minister of Penang, Lim Guan Eng has unwittedly let himself embroiled in a controversy where he initially refused to abide by the height restriction of 18 metres or five storey on buildings within the core and buffer zones after Unesco regional adviser for the Asia-Pasific Dr Richard Engelhardt said George Town had no choice but to follow the guidelines approved by the WHC.  Lim Guan Eng argued that the state government would be subject to legal action by the developers if his administration now revoked the approvals which were given by the state planning committee based on MPPP guidelines prior to the inscription. Lim Guan Eng further argued that his administration could be sued for hundreds of millions if his administration demands Boustead to  scale down the firm's hotel along Weld Quay. 

Now, we're caught in a conundrum. If we allow the buildings to go ahead, we may risk the status, but if we stop the buildings, we could be sued for hundreds of millions which will definitely bankrupt the local council. (source: http://thestar.com.my/news/story.asp?file=/2008/11/20/nation/2598297&sec=nation)

Dancing to the tune of Lim Guan Eng, Boustead Holdings Bhd then made a claim of RM50 million from MPPP.  After all the hubbub , Lim Guan Eng offered a controversial proposed agreement to allow Boustead Holdings Bhd to reclaim land at Bayan Bay as compensation.  This controversial proposals immediately invited public criticisms and protests. After much public protest, the Penang State Government has no choice but to take cognisance of the views of the residents of Putra Marine, Gold Coast and Bay Garden and decided not to pursue the land reclamation at Bayan Bay to Boustead. In the end, the Penang state government agreed to give RM20m in compensation to Boustead Holdings Bhd for scaling down the height of its hotel in the George Town heritage zone from 12-storeys to five storeys.

There is one pertinent question that we should ask. Can Boustead sue the state government over it's decision to revoke or modify the planning  permission  and ask for hundreds of millions in compensation payment? 

Before we answer this question, let us take a look at the  TOWN AND COUNTRY PLANNING ACT 1976.

The following is the excerpt from TOWN AND COUNTRY PLANNING ACT 1976 :

 Revocation and modification of planning permission and approval of building plans

25. (1) If it appears to the local planning authority to be in the public interest that a planning permission granted under subsection 22(3) or an approval of a building plan given under any of the previous local government laws should be revoked or modified, the local planning authority may order the permission or approval to be revoked or modified to such extent as appears to it to be necessary. 

(2) No revocation or modification under subsection (1) shall have effect until confirmed by the Committee. 

(3) An order revoking a planning permission or an approval of a building plan shall state the period within which the person to whom the permission or approval was granted is required to demolish any building erected pursuant to the permission or approval and the maximum amount that the local planning authority is prepared to reimburse the person in respect of costs incurred by him in carrying out the demolition. 

(4) If, within the period stated in the revocation order or such longer period as the local planning authority may allow, demolition has not been carried out or completed, the local planning authority may itself and at its own expense carry out or complete the demolition. 

(5) If demolition has been completed by the person to whom the planning permission or approval of the building plan was granted, the local planning authority shall reimburse the person the costs actually and reasonably incurred by him in carrying out the demolition, but not exceeding the amount stated in the revocation order. 

(6) If demolition has been partially carried out by the person to whom the planning permission or approval of the building plan was granted, but completed by the local planning authority, the local planning authority shall assess the amount that the demolition would have cost had it been carried out entirely by the local planning authority, and determine the amount of the costs actually and reasonably incurred by it in completing the demolition, and shall pay the person by way of reimbursement of his costs the difference between the two amounts or the costs actually and reasonably incurred by the person in carrying out his part of the demolition, whichever is the lesser amount, but in no case shall the local planning authority be bound to pay any amount beyond the amount stated in the revocation order. 

(7) If a planning permission or an approval of a building plan is revoked under subsection (1) and the person to whom the permission or approval was granted claims from the local planning authority, within the time and in the manner prescribed, compensation for any expenditure incurred by him in carrying out works to implement the permission or approval prior to its revocation or modification, the local planning authority shall, after giving the person a reasonable opportunity to be heard, offer such compensation to him as the local planning authority thinks adequate. 

(8) Where a planning permission or an approval of a building plan is modified under subsection (1), the local planning authority shall reimburse the person to whom the permission or approval was granted the costs actually and reasonably incurred by him in implementing the modification, being costs that he would not have incurred had the modification not been ordered, and shall compensate him for any loss suffered as a result of the modification. 

(9) If any person is aggrieved by the amount of any reimbursement or compensation offered or paid to him under this section, he may, within the time and in the manner prescribed, appeal to the Appeal Board and the Appeal Board shall assess the amount of reimbursement or compensation to be paid.

(10) In subsection (1), "previous local government laws" means the Town Boards Enactments of the Federated Malay States [F.M.S. Cap. 137] and of the States of Johore [Johore En. No. 118] and Terengganu [Terengganu En. 12 of 1355 A.H.], the Municipal Ordinance of the Straits Settlements [S.S. Cap. 133], the Municipal Enactment of the State of Kelantan [Kelantan En. 20 of 1938], the Local Councils Ordinance 1952 [Ord. 36 of 1952], and any other written law replacing any or any part of those laws.

The subsection 25(1) stated that if it appears to the local planning authority to be in the public interest that a planning permission granted under subsection 22(3) or an approval of a building plan given under any of the previous local government laws should be revoked or modified, the local planning authority may order the permission or approval to be revoked or modified to such extent as appears to it to be necessary.

As regarding compensation, subsection 25(8) stated that where a planning permission or an approval of a building plan is modified under subsection (1), the local planning authority shall reimburse the person to whom the permission or approval was granted the costs actually and reasonably incurred by him in implementing the modification, being costs that he would not have incurred had the modification not been ordered, and shall compensate him for any loss suffered as a result of the modification. 

Subsection 25(9) state that  if any person is aggrieved by the amount of any reimbursement or compensation offered or paid to him under this section, he may, within the time and in the manner prescribed, appeal to the Appeal Board and the Appeal Board shall assess the amount of reimbursement or compensation to be paid.

Subsection 36(13) state that an order made by the Appeal Board on an appeal before it shall be final, shall not be called into question in any court, and shall be binding on all parties to the appeal or involved in the matter. 

It is clear that the planning authority can not be challenged when it decided to revoke or modify any planning permission in the  name of public interest. In the case of Boustead, the planning permission need to be modified so that the height of the hotel meet the height restriction of 18 metres or five storey in order to protect George Town's heritage listing status. This is done in the name of public interest. Therefore, Boustead has no choice but to comply. The planning authority can exercise unfettered discretion in deciding the amount of compensation to reimburse Boustead for any loss suffered as a result of the modification. If Boustead is unhappy over the amount of compensation, it can only appeal to the Appeal Board. The Board's decision is final and can not be challenged in any court of law. 

When the state government agreed to give RM20m in compensation to Boustead Holdings Bhd , Lim Guan Eng said the state has to negotiate a settlement with the developer, failing which the state risks facing lawsuits amounting to hundreds of millions of ringgit. This is totally untrue and misleading. The decisions of the planning authority and the appeal board can not be challenged in any court of law, how can there be any lawsuit?

Lim Guan Eng has since make use of this  fraudulent  claim to silent critics by imposing psychological precedence over the fear that any revocation or forced modification of planning permissions could leave the local council vulnerable to  hundreds of millions of ringgit lawsuits.  Lim Guan Eng knowingly made a false assertion of fact and  used this  false representation  to justify the payment of RM 20million to Boustead. His dishonesty in misleading the people  is a clear case where position of trust has been abused.

Lim Guan Eng should step down gracefully for his dishonesty in the form of an intentional deception or a deliberate wilful misrepresentation of a material fact in the case of Boustead compensation.

 XVI INCOSAI URUGUAY 1998 viewed fraud as a legal concept, which involves acts of deceit, trickery, concealment, or breach of confidence that are used to gain some unfair or dishonest advantage; an unlawful interaction between two entities, where one party intentionally deceives the other through the means of false representation in order to gain illicit and unjust advantage.(source:http://www.asosai.org/asosai_old/guidelines/guide_un_st_fru_corruption.htm) 

The effort to prosecute Lim Guan Eng for this alleged corrupt practice is expected to face serious obstacles to the investigation and causes pressure on law enforcement agencies particularly the MACC ,the police and the prosecutors. Certain media, political parties as well as supporters of Guan Eng may claim that it is a political conspiracy to bring down their hero and try to influence public opinion in favor of the defendant, thereby inevitably weakening the principle of impartiality.

It is therefore imperative for the government to set up an independent royal commission of inquiry to investigate into the RM20million Boustead compensation scandal.

From: Frankie Yeoh

Sent: Sunday, August 05, 2012 4:46 PM

To: sembang-forum-notification-group@googlegroups.com

Subject: Fwd: [sembang-forum 663] Hill killed by development

Some food for thought...................

This was my full statement given to the press during my PC on Hill Slope Development.

And now lots of on-goings comments in Malaysia Kini website but let the People decide, one is always entitle to his own opinion.

HILL SLOPE DEVELOPMENT : WHAT IS ' SPECIAL PROJECT ' ? - as highlighted Rancangan Struktur Negeri Pulau Pinang 2020 (RSNPP 2020)

1. I am khoo boo soon an Urban Planner, formerly I am a senior town planner with mppp from 1993 -2010 ; last position held was Acting Director for the Town Planning Dept. MPPP from .JAN.2010 to March 2010 and subsequently opted for early retirement on medical ground.

2. Lately there are lots of press coverage on hill slope development with comments coming from both sides of politically divide, mppp, the developers, NGOs and the public. Some claimed approvals were given because it is under "special project " in the Penang Island Structure Plan 2020 or the projects had been approved under Pelan Dasar Perancangan dan Kawalan Pembangunan MPPP 1996 . It lead to confusion among the general public to why "certain hill slope projects" are still being approved ? The decision makers blame each other and even MPPP came out with a list of projects approved before March 2008 and also after March 2008.

So the purpose of today briefing is :- 

a) To address the meaning of " special project " and it's objective.

b) To make the general public understand what actually is Penang Island Structural Plan 2020 and also the Pelan Dasar Perancangan Dan Kawalan Pembangunan MPPP 1996. 

c) Function of both these two plans in relation to development approvals.

3. Firstly, a Structure Plan encompass only policies and strategies of the State Authority in respect of the development and use of land in the State. It inclines towards sectorial development for whole of Penang Island ranging from housing sector, commerce, industry, agriculture etc.

The Penang Island Structure Plan 2020(RSNPP2020) was prepared by Jabatan Perancang Bandar Dan Desa Negeri Pulau Pinang and was gazetted in Jun 2007. 

In comparision with the previous Penang Island Structure Plan which was prepared by MPPP and approved in 1986, this new plan in recognising the need to protect environment went a step further to address the issue of illegal clearing of hill land and to impose control on these activities. The previous 1986 Structure Plan does not have this policy. 

RSNPP2020 states that no " Development " and agriculture activities will be allowed in :-

(i) Hill land Areas that has been gazetted under Land Conservation Act 1960

(ii) Any land that is more than 76m 

(iii) Land that is steep, gradient more than 25 degree

However there are considerations for development above 76m if it falls under the term "special projects" but there is no clear defination indicated here.


4. Defination/ Interpretation : " Special Project " falls under three categories namely :-

(i) Is meant to be to be associated with major infrastucture projects or government projects like roads /transportation purpose, security reasons like for satellite stations/telecommunications, dam or pumping stations for public use.

(ii) Land that had been coverted to residential prior to the approval and adoption of the RSNPP2020 or land that is shown as" residential Zoning" in the Pelan Dasar Perancangan Dan Kawalan Pembangunan MPPP 1996.( Pelan Dasar is only a zoning plan which only indicates what kind " land use" that is deemed compatible for development eg residential, commercial, industry etc; all together in this plan there are only 8 classes of landuse ) Under this category it was never an intention to grant automatic approval for development. It still has to adhere to stringent vetting by relevant technical departments before the approval is given in the form of Planning Permission by MPPP.

LIST OF PLANS THAT NEEDED APPROVALS FROM MPPP BEFORE ACTUAL CONSTRUCTION TAKES PLACE.

1. PLANNING PERMISSION – relevant documents includes a survey plan
2. BUILDING PLAN
3. SUB-DIVISION PLAN
4. EARTHWORKS PLAN
5. APPLICATION FOR COMMENCEMENT OF WORK (COW)

Even though one obtains planning permission under the Town and Country Planning Act 1976(Act 172), the validity is only 1 year. Without renewal a building plan cannot be approved. Local authority has every right under Act 172 to impose further conditions or even reject a renewal of planning permission.
(iii) Meant to be associated with earthworks activities like quarry, however under this category application must be made to the state authority.


5. In conclusion , it is clear :- 

i) " Special Project" as indicated in Penang Island Structure Plan 2020 and also Pelan Dasar Kawalan Perancangan Dan Kawalan Pembangunan MPPP 1996 are not meant to be use as a "pre-requisite" to grant planning permission for development above 76m or any other hill slope development for that matter. 

ii) The term " Special Project" also must not be used by State Authority as an "escape clause" to approve Rezoning of Hill Land areas under Land Conservation Act 1960 to other category of use because the Penang Island Structure Plan 2020 is already in place since June 2007.

iii) In granting Planning Permission up to Commencement of Work it goes through various approval process where Local Planning Authority is empowered by Town And Country Planning Act 1976 (Act 172) to intervene to the extend of revoking planning permission if it serves public interest.

iv) With reference to Section 22(4) Act 172 , it states " The local planning authority shall not grant planning permission if -
(a) the development in respect of which the permission is applied for would contravene any provision of the development plan;

Here in Penang Island, in the absence of Local Plan, Penang Island Structure Plan 2020 is the " Development Plan " in accordance to Act 172 so in my opinion if MPPP finds that projects that had been approved after March 2008 and between June 2007 till March 2008 that contradict to the Development Plan, then in the name of "Public Interest" for the people of Penang all these planning permission should be revoked.
MPPP had done it before.

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