Pubdate: Sun, 26 Jul 2009
Source: Sunday Times (Australia)
Copyright: 2009 The Sunday Times
Contact:  http://www.news.com.au/perthnow/
Details: http://www.mapinc.org/media/438
Author: Cortlan Bennett
Photo: Last year's hemp trial in Kununurra, over which Hemp Resources 
is suing the WA Government for $255 million in lost earnings and 
damages. http://www.mapinc.org/images/KununnurraHemp.jpg
Cited: Hemp Resources http://www.hempresources.com.au/plant_kunnunura.html
Referenced: Industrial Hemp Act http://www.agric.wa.gov.au/PC_90019.html
Bookmark: http://www.mapinc.org/topic/industrial+hemp

HEMP RESOURCES SUES WA GOVERNMENT FOR $255m

HEMP Resources is suing the WA Government for $255 million in its
latest stoush with the Department of Agriculture and Food.

In 2004, shortly after lobbying the government to pass the Industrial
Hemp Act, Hemp Resources applied for an industrial hemp licence from
the registrar of hemp, Mark Holland.

The licence was denied on grounds that two of the company's directors,
Kim Hough and Luu Phoc Nguyen, had minor criminal convictions.

But the convictions were more than 10 years old and quashed under the
Spent Convictions Act. Hemp Resources received its licence in February
2006.

But the company's uphill battle to establish a hemp industry in WA -
worth a potential $1 billion a year - did not end there.

Hemp Resources has conducted a number of trial plantings with the
Agriculture Department using patented hemp seed varieties from other
countries, including China.

A successful trial in Kununurra last year yielded more than six tonnes
of seed that was to be used for commercial plantings.

The trial cost $172,000, which Hemp Resources has refused to pay. The
department is now trying to reclaim its costs through the District
Court.

But on Monday, Hemp Resources filed a counter-claim seeking $5 million
in lost earnings and $250 million in damages.

The counter-claim alleges the department engaged in "dishonest and
misleading conduct".

As part of its defence against the department, Hemp Resources stated
at a recent court hearing that the department had failed to dispose
properly of a trial crop of Canadian hemp that cross-pollinated - and
effectively contaminated - a Chinese variety growing next to it during
the Kununurra trials.

Hemp Resources told the court that the six tonnes of seed it harvested
were now useless for breeding or planting purposes.

The counter-claim accuses the department of failing to recognise Hemp
Resources' exclusive rights over the high-yielding Chinese hemp seed
variety "Yunma" and failing to refer an alleged fraud to the police.

The alleged fraud concerns the importation and trial growths of Yunma
seeds by a former Hemp Resources employee, Donald Khoo, who runs
Dharmic Pty Ltd.

Hemp Resources claims exclusive rights over the Yunma variety in
Australia and New Zealand.

The counter-claim alleges the Agriculture Department facilitated the
importation of the seeds by Dharmic and then helped it conduct trial
growths on the department's plots in Bentley without permission.

While the department refused to comment on the case, Mr Khoo claimed
his company acquired the seeds legally from Yunnan Industrial Hemp in
China.

"I got the certificate directly from Yunnan Industrial Hemp and my
imports came directly from Yunnan Industrial Hemp and I've got an
invoice from Yunnan Industrial Hemp," Mr Khoo said.

Hemp Resources' counter-claim states Yunnan Industrial Hemp "wrote
back confirming they had not supplied provided seed to Dharmic Pty
Ltd" and that "Dharmic Pty Ltd provided the document without our
formal authorisation".

Hemp Resources claims it has lost "up to 15 growing seasons" because
of the Agriculture Department's "actions".

"We've been deprived of this industry since the Industrial Hemp Act
was implemented," Mr Hough said.

"We were going to be growing it, dehulling (seed) ... and producing
hemp paper.

"We should have, and should have had several years ago now, an
operating hemp papermill here in WA.

"But because of what's been going on over so many years, we
haven't."

Mr Hough said potential investors were being sidelined by the
dispute.

"We've got investors ready to invest in the company, but we can't take
their money while there's a dispute as to whether we have the rights
in Australia and New Zealand or not to the best seed in the world," he
said.

The hearing will resume in the District Court on August 6.
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MAP posted-by: Richard Lake