Local Communities Failed to Compel Company to Use its Assets to Promote Sustainable Development and Advance Their Welfare Due to Lack of Nexus Needed to Impose Fiduciary Duties on the Company

In Ok Tedi Fly River Development Foundation Ltd & Ors v PNG Sustainable Development Program Limited [2022] SGCA 76, a company was incorporated in Singapore (“Company“) with the object of, among other things, applying the income from a mine (“Mine“) in the Western Province of Papua New Guinea (“PNG“) to promote sustainable development within, and advance the general welfare of the people of PNG, particularly those of the Western Province of PNG. When the Company allegedly failed to do so, representative members of certain communities in the Western Province of PNG (“Appellants“) sued the Company. The Appellants alleged that the Company had breached the fiduciary duties owed to them as they had been adversely affected by the environmental damage caused by the operations of the Mine. The Singapore Courts, at first instance as well as on appeal, rejected the Appellants’ claim. It was found that the Company gave no undertaking, contractual or otherwise, to the Appellants in respect of its assets. Therefore, no fiduciary duties were owed by the Company to the Appellants to apply its assets in accordance with its objects.