CCAC releases “Investigation report on the land exchange case related to the site of the Iec Long Firecracker Factory”

The Commission Against Corruption (CCAC) has released “Investigation report on the land exchange case related to the site of the Iec Long Firecracker Factory”. According to the report, the CCAC considers that the Commitment concerning the land exchange signed between the Macao SAR Government and the Baía de Nossa Senhora da Esperança Development Company (Baía da Nossa Senhora da Esperança Company) in 2001 does not accord with the relevant provisions under the old Land Law. Moreover, the Baía da Nossa Senhora da Esperança Company does not have any rights on the most part of the site of the Iec Long Firecracker Factory. Therefore, the agreement of land exchange is null and the Macao SAR Government does not owe the Baía da Nossa Senhora da Esperança Company or any other companies any land grant deals or promises. In other words, there have been no so-called “land debts”. On 10th August 2015, the Secretary for Transport and Public Works sent a letter to the CCAC and handed the file concerning the land exchange case of the Iec Long Firecracker Factory to the CCAC for investigation. Upon receipt of the above-mentioned documents, the Commissioner Against Corruption conducted a preliminary analysis and made an order to commence investigation of the incident in order to clarify the procedures involved and the legality and reasonableness of the decisions made. The CCAC found during the investigation that the Iec Long Firecracker Factory covering an area of 28,340 m2, of which 21,668 m2 was granted by way of lease to the two operators of the then Iec Long Firecracker Factory by the Portuguese Macao Government in 1950s, so that the two operators could utilise the land together with the 1,655 m2 private land they owned and other land for the operation of the firecracker business. In 1980s, the Iec Long Firecracker Factory was basically in a state of shutdown. Thus, in 1986, the Portuguese Macao Government declared the rescission of the aforementioned concession contract and the termination of validity of the concession. Later, the ownership of the private land within the site was transferred to other people and the Portuguese Macao Government received several applications from the right holders of the Iec Long site for construction of commercial and residential buildings or exchange for another plot of land. However, no agreement was reached. In addition, there was a dispute between the relevant right holders and the Government over the premium of the BT27 parcel in Taipa. In mid-2000, the Prosecutor General suggested solving the problem concerning the premium together with the land exchange case involving the Iec Long site, which was being processed at that time. In the same year, the DSSOPT reached an agreement regarding the land exchange with the right holders of the Iec Long site after several negotiations. On 10th January 2001, the Macao SAR Government, represented by the Director of the DSSOPT, and the Baía da Nossa Senhora da Esperança Company signed a Commitment of land exchange, under which the Government promised to grant a plot of land measuring 152,073 m2 located at Baía de Nossa Senhora da Esperança in Taipa to the company. Moreover, the Baía da Nossa Senhora da Esperança Company promised that all the parcels would be transferred to the Macao SAR Government free of burden. In March 2002, the Macao SAR Government gave approval to the Baía da Nossa Senhora da Esperança Company on dividing the land of Baía de Nossa Senhora da Esperança into two parcels with respective areas of 99,000 m2 and 53,073 m2 and the company transferred the first parcel to the Shun Tak Recreational Service Limited (Shun Tak Limited) under the price of HKD500,000,000 for the construction of a hotel. In 2006, the Shun Tak Limited declared to abandon a portion of land covering an area of 18,344 m2 in the above parcel in order to exchange with the Macao SAR Government for a concession by lease, and with exemption from public bidding, of a parcel of land covering an equivalent area, located at Outer Harbour New Land Reclamation Area for construction of a hotel and residence apartments. Based on the analysis of the CCAC, the above Commitment is the most important and core document concerning the land exchange of the Iec Long site. However, the form of signing and the content of the Commitment obviously violated the “principle of legality”. According to the old Land Law, the Director of the DSSOPT did not have the competence or was not vested with the statutory power to grant the land by lease. Thus, the Commitment did not comply with the stipulation concerning the competence for disposition of land of the Macao SAR. Since the Commitment was signed in 2001, it has never been published in the Official Gazette of Macao SAR and therefore does not comply with the stipulation concerning necessary forms for disposition of land of the Macao SAR contained in the old Land Law. The Commitment and the relevant files were not sent to the Land Commission for discussion and giving opinions. Thus, the Commitment does not comply with the stipulation concerning the necessary procedure for disposition of land of the Macao SAR. According to the cadastral map enclosed with the Commitment, a 21,668-square-metre area of the site, granted by lease by the Portuguese Macao Government for running the Iec Long Firecracker Factory, was the major and core parcel component. However, the concession was declared invalid in 1986 according to an order. In reply to the enquiries from the CCAC, the Baía da Nossa Senhora da Esperança Company said the Government did not start the land resumption procedure after the concession became invalid. Nevertheless, the CCAC found that the cadastral map in Appendix 2 of the Commitment does clearly indicate the nature of each parcel component of the Iec Long site. Furthermore, the ownership of the parcels would not change no matter whether the Government started the land resumption procedure or not. The CCAC believes that when the Commitment was signed, except for the 1655 m2 privately owned parcels, the Baía da Nossa Senhora da Esperança Company did not have the right to deal with the other parcels (totalling 26,685 m2) within the Iec Long site, let alone the right to promise to transfer all the parcels within the site to the Macao SAR Government free of burden. Therefore, the content of the Commitment is unable to be implemented and never was. It is not necessary and not possible that the Macao SAR Government has to obtain from the company the other parcels within the Iec Long site that are State property in the first place. And, from a legal point view, the Commitment is with a “subject impossible”. The CCAC discovered in the investigation that the value of the Iec Long site confirmed in the Commitment included not only that of the private land and the land on long-term leasehold but also that of the land on leasehold which has already been returned to the Government and the land without registered ownership. Moreover, the value of the relevant State-owned land was deducted from the amount of the premium. Such clause in the Commitment obviously contradicted the principle of “equal benefits” provided by the old Land Law, which jeopardises public interest. The CCAC pointed out that the “principle of legality” is the most fundamental rule that the public works department shall observe when managing the land resources of the Macao SAR. In other words, to act in accordance with the law is the most basic requirement. Therefore, the public works department cannot shirk its responsibility for the land exchange case. The Code of Administrative Procedure stipulates that the Public Administration has the “duty to state reasons” for the administrative acts it carries out. Administrative acts shall not only be “lawful” but also “substantiated”. However, in the process of the land exchange deal involving the Iec Long site, the public works department stated neither the criteria nor the reasons for making the important decisions, including adjusting the amount of the premium to be returned to the concessionaire of the BT27 parcel, modifying the method of calculating the value of the Iec Long site and increasing the usable plot ratio of the residence to be built at Baía de Nossa Senhora da Esperança. Therefore, it is inevitable that the public will have doubts about the fairness and justice of the administrative acts, thus resulting in negative effect on the prestige and public reliance of the administration of the Macao SAR Government. The CCAC also pointed out in the investigation that the Cultural Affairs Bureau (IC) borne more than MOP5,000,000 restoration and remediation costs in the conservation works of the Iec Long Firecracker Factory. However, there is not any basis for the IC to pay on the owners’ behalf and to be reimbursed later, rather than the expenses being paid by the “owner”. The CCAC also did not see the IC’s attempt to recover the expenses from the “owners”. Although the IC expressed to the CCAC that the Iec Long Firecracker Factory is not qualified to be prioritised and listed in the list of initiating evaluation process, judging from the practice of the IC funding the conservation costs, the initiation of the cultural relics evaluation process of the Iec Long Firecracker Factory is not only necessary but also pressing to a certain extent. The ownership disputes of the Iec Long Firecracker Factory should not become a hindrance to start the evaluation process since the current Cultural Heritage Protection Law has already set institutional norms on the solving of the ownership of the real estates that are under evaluation or to be evaluated. If the conservation and evaluation of the Iec Long Firecracker Factory was carried out in accordance with the provisions of the law strictly, it is believed that the result would be much more effective. The CCAC suggests that the relevant departments of the Macao SAR Government should seriously study and properly handle the subsequent questions arising from the nullity of the agreement of the land exchange of the Iec Long site, the dispute on premium payment for the BT27 parcel in Taipa and the issues concerning the land concession to the Shun Tak Limited. The CCAC has submitted the report to the Chief Executive and the full report can be downloaded from the CCAC’s website.