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Improper Conduct by Government Officials in Dealing with Mondragon's Proposed Free Trade Zone in Big Bay, Santo [2001] VUOM 3; 2001.06 (6 September 2001)

REPUBLIC OF VANUATU

OFFICE OF THE OMBUDSMAN

PUBLIC REPORT

ON THE

IMPROPER CONDUCT

by
GOVERNMENT OFFICIALS
IN DEALING WITH
MONDRAGON'S PROPOSED
FREE TRADE ZONE
IN
BIG BAY, SANOT

06.09.2001

0205/2001/06

-----------------------------------

PUBLIC REPORT

ON THE
IMPROPER CONDUCT
OF
GOVERNMENT OFFICIALS
IN DEALING WITH
MONDRAGON'S PROPOSED FREE TRADE ZONE
IN
BIG BAY, SANTO

TABLE OF CONTENTS

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SUMMARY

This report depicts a legend of connections between interested parties on the island of Espiritu Santo dating back to the colonial era of Vanuatu. These parties have over the last 20 years of Independence, been in contact with the political leaders of the Union of Moderate Parties (UMP). Their aim is to set up an autonomous jurisdiction exempt from all duties and taxes on the island of Santo called a free trade zone. While technically not illegal, this may result in attracting unscrupulous investors to settle in the country.

The Office of the Ombudsman found that a US citizen, Mr. Michael Oliver initiated the proposal for a free trade zone in Santo. Mr. Oliver has had a long history in connection with land in Santo prior to Vanuatu's Independence on 30 July 1980. Mr. Oliver's investment plans were unsuccessful then but he subsequently joined alliances with Bramad Pty Ltd, Cody Investments Ltd and Israel Mondragon Group to return to Vanuatu to fulfil the plans for a free trade zone. A more recent attempt has been crafted by Mr. Stefan Mandel, a close business associate of Mr. Oliver and who is a member of the Israeli Mondragon Co-operative Society. Mr. Mandel is the Managing Director of the Cody Investments Ltd.

Mr. Mandel has been appointed by Mondragon to facilitate their proposed free trade zone project with the Vanuatu Government.