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					                       LAYNHAPUY HOMELANDS ASSOCIATION INC.
                                     POST OFFICE BOX 1546, NHULUNBUY
                                        NORTHERN TERRITORY, 0881
                                                         Telephone            Facsimile
                       ADMINISTRATION                    (08) 8939-1800       (08) 8987 -1443
                       AVIATION                          (08) 8987-3155       (08) 8987 -1455
                       HEALTH                            (08) 8939-1821       (08) 8987 -1109

Hon. Tony Abbott, MP
Minister for Health
PO Box 6022
House of Representatives
Parliament House
Canberra ACT 2600

Dear Minister Abbott
                                   Claim for Compensation

On 25 June 2007, by administrative determination, the Australian Government banned the
Therapeutic Goods Administration from continuing to issue permits for the commercial
importation of kava for resale for other than for medical and scientific research purposes.

This ended a practice that, in relation to the commercial importation of kava for licensed
sale under the Northern Territory’s Kava Management Act, and in compliance with the
National Code of Kava Management, had been in place since early 2002.

The Australian Government’s decision was taken without consultation with the businesses
affected or advance notice of the Government’s intent or timeframe for the ‘ban’, and
despite LHAI having both a valid Import License (until 31 December 2007) issued by the
Therapeutic Goods Administration and a valid Kava Wholesale License under the NT Kava
Management Act.

Purportedly, the decision was made for reasons of the negative health and social impacts
on Indigenous communities resulting from the consumption of Kava. The Australian
Government has however provided no reliable and credible data on either the levels of
over-consumption or the adverse health impacts referred to (eg. such as hospital
admissions, health clinic presentations morbidity or mortality statistics related to kava), or
research evidence to support the causal relationship between kava use and the purported
serious adverse health or social impacts.

We believe the Australian Government’s actions were therefore precipitous, ill- informed,
and not ‘evidence based’. Consequently Laynhapuy Homelands Association Inc. is seeking
financial compensation/restitution in relation to:

 Losses to the Association arising from recent investment and contractual liabilities
 directly related to the operation of the kava wholesaling business.
 Loss of trading income to the Association that was to be utilized for the completion of
 community projects that were committed and planned for prior to the Australian
 Government’s ban.
 Loss of income to our the homelands that operated as outlets under the Laynhapuy
 Kava Retail license.

These ‘losses’ are outlined below.

Losses to the Association arising from recent investment and contractual liabilities
directly related to the operation of the kava wholesaling business (inclusive of GST)

$ 90,000     Development of a specialized internet based kava sal es and purchaser
             identification software application to support wholesaler and retailer
             compliance and reporting.Contract with Oddzon Softward Pty Ltd.

$ 20,000     Acquisition of linux based servers and PCs to support deployment of the
             software. Contract with John Oliver Rural IT / Hallmark Computers.

$115,000     Contract with NT Department of Health to undertake Kava Health Monitoring
             Project across all licensed kava using communities.

$ 36,000     Contract with Sydney Health Group, School of Public Health, University of
             Sydney, to review and assess the available medical, scientific and
             government information and research relating to kava, in order to support the
             Kava Health Monitoring Project.

$124,000     Contract with Hussein’s International in Fiji, to supply pre packaged kava to
             preparation and labeling standard required by the NT Licensing Commission.
             This kava is now stranded in Fiji as it was scheduled for shipping on 29 June

$385,000     TOTAL

Had LHAI been aware that the kava business was to be abolished on 25 June 2007, these
project and investments would not have been commenced.

Loss of trading income to the Association that was to be utilized for the completion
of community projects that were already committed and planned for prior to the
AustralianGovernment’s ban (inclusive of GST)

$399,000     Construction of six new homeland offices to provide remote homelands with
             access to telephone, fax, and internet communications, and homeland
             administrative base. Contracts with DeltaReef/Force 10, Nomikos, Cy cad

$ 43,000    Installation of Yolung language and English language public radio services in
            six homelands. Contract with ARDS.

$138,000    Renovation and extension of LHAI resource center offices to accommodate
            new programs (eg. Rangers) and improve efficiency. Contracts to Nhulunbuy
            Carpentry & Building, Morningside Electrical, Demountable Sales and Hire, D
            Crowley, NBC)

$216,000    Co-contribution commitment to ‘Early Investment Project’ under the Healthy
            Country Healthy People’s Schedule to the Bilateral Agreement, to provide staff
            accommodation to the Ranger Facilitator position on NT Parks and Wildlife
            Officer to support the Yirralka Rangers and development of the Laynhapuy
            Indigenous Protected Area .

$92,000     Co-contribution for the construction of the Yilpara Ranger Station in the
            Laynhapuy Indigenous Protected Area . Contracts with Nomikos, Irwin
            Consult, Delta Reef, Cycad Developments, Morningside Electrical.

$36,000     Basketball courts at Garrthalala and Yilpara homelands.

$15,000     Construction/co-contribution towards the Sydney Rotary Women’s Centre
            project at Yilpara homeland

$10,000     Contribution to the provision of Night Patrol Services to Yirrkala & Nhulunbuy.

$30,000     Co-contribution to Dhuruputjpi School of the Air, SRA project.

$13,000     Scoping of reticulated 240v power system for Wandawuy homeland. Contract
            to Irwin Consult.

$70,000     Mitsubishi Canter Truck to support expansion of Indigenous Building Team.
            Contract with Western Diesel.

$49,000     Initial Loan payment for Tip Truck and ‘dog -trailer’ to support expansion of
            Civil Works team and external contracting ability. Westpac Finance / Stillwell

$350,000    Co-contribution to construction of cyclone shelter/office extension at Yirrkala
            incorporating rebuilt health clinic and training room, Ranger’s IPA visitors
            permit office.

$158,400    Cost to LHAI for management and administration of the above projects.

$1,680,150 TOTAL

Loss of income to our the homelands that operated as outlets under the Laynhapuy
Kava Retaillicense.

Homeland retailers under the Laynhapuy Retail License, retained profits from kava sold in
their homeland to use for community purposes as decided by the homeland residents.
Yilpara homeland has used kava surpluses to establish and support their store and
subsidise community power costs.

The losses of future income faced by our homelands based on annual average sales are:
$14,400      Dhuruputjpi
$22,700      Gangan
$34,700      Gurrumurru
$ 9,200      Garrthalala
$13,100      Wandawuy
$55,300      Yilpara

$149,400     Total

A separate letter will be forthcoming in relation to general loss of future earnings, and the
other projects that LHAI had intended to undertake over the next year or so, such as the
installation of reticulated power system at Wandawuy, homeland infrastructure and housing
improvements and various business development project.

The Australian Government’s actions have seriously undermined the financial position of
our Association and put at risk the provision of much needed services and infrastructure.
Our members are rightly very concerned and angry and wish to see the issue of
compensation addressed immediately.

We look forward to your urgent consideration and response.

Yours sincerely

Barayuwa Mununggurr


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