A hostage is a "a person held by one party in a conflict as a pledge that promises will be kept or terms met by the other party; a person taken by force to secure the taker's demands; one that is involuntarily controlled by an outside influence".

Webster's Dictionary

Hostage-taking is defined under international law (United Nations International Convention Against the Taking of Hostages, adopted December 17, 1979) as the seizing or detaining and threatening to kill, injure, or continue to detain a person in order to compel a third party to do or abstain from doing any act as an explicit or implicit condition for the release of the seized or detained person.

United Nations International Convention Against the Taking of Hostages
Signed at New York on 18 December 1979

On 19th January 2001, the Lao Government committed itself to 'hostage-taking' when a leading Laotian official leading their case told the ABCs reporter [Geoff Thompson] in Vientiane that the Government could free the Danes if another couple, the founders of Gem Mining Laos, who fled the country, made themselves available.

Bounmaly Vilayvong
Laos PDR Government Spokesperson

[ABC Transcripts 19/1/2001 Australians deny Laos sapphire heist, Family of jailed couple in Laos slams government action. Further reading click here

In September 2001, the Australian Government acknowledged to the Danes, in the presence of the Australian Embassy and Lao PDR Immigration officers, that the Danes were in fact, being held hostage! This consideration was reiterated in numerous media statements and in private comments to both the Danes and their family.

In a statement to the ABC, "It's very difficult for the Lao authorities to accept that there's anything much wrong with a situation where people may take the rap for something that they didn't do. As they said to us on a number of occasions, if the Danes had been released, where does that leave us? How can we get the compensation for all the damage that has been done to the Lao people over the years by Gem Mining Lao? Don't be too fussed about the connection between the Danes and Gem Mining Lao. The Danes are all we've got left".

His Excellency Jonathan Thwaites
Australian Ambassador to Laos

INTRODUCTION

Hong Kong-based Jardine Securicor hired Kerry Danes on 4 January 1999 as Managing Director to its subsidiary, Lao Securicor Company Limited [Lao Securicor], a joint venture partnership between Jardine Securicor [70%] and the Lao PDR Ministry of Interior [30%].

Lao Securicor Company was established to provide security services for private enterprise, foreign investors, non-government, and other organizations. The subsidiary experienced a number of problems within only weeks of commencing operations in October 1998. Many key expatriates employed by the company had fallen foul of the Lao PDR authorities at some point including the then manager who departed the Lao PDR claiming in a letter dated 28 October 1998 terminating the lease of the house he rented "due to difficulties with the Lao Government".

On 18 January 1999, Kerry Danes and the General Manager of Securicor in Hong Kong arrived in the Lao PDR to conduct a handover from the outgoing Managing Director to Kerry Danes. They met in the law offices of Dirksen, Flipse, Doran and Le [DFDL], the company engaged by Jardine Securicor to provide legal services to its subsidiary, Lao Securicor. Kerry Danes was told there were no problems with the Joint Venture and that if there were any difficulties in the future, he would have the full support of Securicor.

In March 1999, Kay Danes and the Danes three children arrived in Laos.

In May 1999, Kerry Danes discovered a letter in his office from the Lao PDR Ministry of Interior [Joint Venture Partners of Laos Securicor], ordering the closure of the Laos Securicor operation and directing Securicor to cease seeking future business. Kerry Danes consulted with DFDL lawyers and his superiors in Securicor Hong Kong. He was advised to disregard the letter and to grow the company stating that the differences with the Joint Venture Partners had been resolved.

In June 1999, Kay Danes was formally employed by Lao Securicor in the dual roles of Administrative Manager/ Contracts Manager. In accordance with her work permit 10% tax was paid on all income derived from within the Lao PDR.

Kay Danes continued to provide professional consulting services outside Laos for clients requiring 'Close Protection Services'. This did not in any way conflict with her employment contract with Lao Securicor. On occasion, her services were engaged by Securicor [Hong Kong] in countries external to Laos. According to the Lao Law, there was no tax payable in the Lao PDR by Kay Danes in respect of the business that she conducted entirely outside the jurisdiction of the Lao PDR.

Within the first two years of operation, Lao Securicor became one of the country's leading service providers, training over 1400 Laotians in the field of 'Security' based on International Standards. It's client base grew to over 75+ prestigious clients including, the World Bank, International Monetary Fund, Asia Development Bank, International and Domestic Airports, Embassies, Non-Government organizations, United Nations Projects and leading foreign investors, businesses and private residences.

On 28 May 2000 the Directors of Gem Mining Lao [GML], a client of Lao Securicor, left the Lao PDR to obtain urgent medical treatment. They did not return out of concern for their safety. As this report shows, GML was in the process of what later resulted in an illegal expropriation by the Lao PDR government. Unbeknown to Kerry Danes, GML faxed a letter to DFDL lawyers appointing Kerry Danes as their representative in their absence.

In a meeting on 31 May 2000, Kerry Danes and Deserek Tesco [DFDL] attended a meeting at the Lao PDR Mines Department with the Ad Hoc Committee of the Foreign Investment Management Cabinet [FIMC]. The Ad Hoc committee refused to accept Kerry Danes appointment as the GML representative. Subsequently, GML Director Julie Bruns emailed her signature to DFDL lawyers and enabled GML to administer their own affairs from Thailand.

Seven months after the departure of the GML Directors, on December 1, 2000 the members of the Ad Hoc Committee, the Village Chief of Haisok Village, the Director of the Department of Geology and Mines and the Deputy Public Prosecutor of the Vientiane Municipality conducted a search and inspection of Gem Mining Lao [GML]. Also present were Dirksen, Flipse, Doran & Le [DFDL] lawyers and Mr. Kerry Danes representing Lao Securicor. During the course of the inspection, a written record of GML's inventory was prepared which showed gemstones held in the office strong room weighed 1.7065 tonne. Owing to the fact that no one present could open the office safe, the Ad Hoc Committee arranged to have it cut open.

The Laos authorities twice asked Kerry Danes to sign a document stating that he would accept full responsibility for "what happens to Gem Mining". Kerry Danes refused to sign such a document.

According to a Memorandum dated 1 December 2000 and signed by, amongst others, representatives of the Lao PDR authorities and Mr. Kerry Danes, the responsibility of the jewelry kept in the safe fell on Ms. Julie Bruns and Mr. Bjarne Jeppeson. There was nothing in the safe other than some papers.

The Gem Mining Directors continually refused to return to Laos amidst numerous death threats by members of the Lao PDR authority. They remained under 24 hour protection in Thailand where they hoped they could resolve their issues with the Lao PDR Government.

The Thai SWAT were engaged by Kay Danes as subcontractors to her 'consulting services' external to the Lao PDR and in this case, provided 24 hour protection to the GML Directors.

The Thai SWAT was informed by members of the Royal Thai Navy that a reward of US$500,000 was available for anyone who returned the GML Directors to the Lao PDR authorities. The Thai SWAT warned the Royal Thai Navy that they would use whatever force necessary to ensure the protection of the GML Directors.

Three weeks following the inspection of the GML office by Lao PDR authorities, on December 23, 2000, Kerry Danes was secretly abducted from his Lao Securicor office and taken to the office of the Lao Immigration in Vientiane. He was confined in an interrogation room where he was told to write a statement that would implicate his client, GML in alleged criminal activity. The Lao PDR authorities had accused GML of stealing their own assets but they did not provide any evidence to support their claim. GML Directors however were able to provide detailed evidence that supported the Lao PDR Government's destruction of their assets and move to illegally expropriate their assets.

Kerry Danes refused to bear witness against the Securicor client and because of this he was handcuffed by four policemen who then proceeded to slap, punch and kick him for an hour. He suffered a bruised face, cuts inside his mouth, a bleeding nose, abdominal pain, temporary hearing loss and pain in his ear, and pain in the rib cage. As a result of his unwillingness to sign a false confession that might have resulted in legal liability against his employer, Jardine Securicor, Kerry Danes was secretly transferred to Phonthong prison [the foreigner's jail]. He was held in a cell with one other prisoner, and was kept in wooden leg stocks for 48 hours and not given any food or water for three days.

Kerry Danes was subjected to a further six interrogations at the prison, all of which involved physical violence. During these interrogations, there was no attempt to provide Kerry Danes with medical assistance or access to a lawyer or to Australian consular officials.

Kay Danes was detained in the presence of the Australian Embassy at the Lao-Thai Friendship Bridge following the abduction of her husband. DFDL lawyers, upon hearing of Kerry Danes abduction advised Kay Danes to depart Laos without delay. She gathered her two small children and made her way to the Lao-Thai border but was detained. The Lao PDR police accused Kay Danes of stealing sapphires from GML but found nothing when Kay Danes insisted they search her luggage.

The Australian Embassy officials arrived at the Friendship Bridge where Kay Danes was detained having been informed of Kerry Danes abduction and having told Kay Danes via mobile telephone that they would accompany her across the border. The Lao PDR police insisted on detaining Kay Danes for questioning.

Kay Danes revealed to the Australian Embassy that she was concerned that the Lao PDR authorities would seize her Thai company's payroll that she was carrying in her bag not yet searched by Lao PDR authorities. The Australian Embassy officials informed the Lao PDR authorities of this and the money was immediately confiscated. Kay Danes was taken to the same office of the Immigration Department where Kerry Danes had previously been interrogated.

Fearing for the safety of her two young children, Kay Danes arranged for the Australian Embassy to secretly evacuate them from Laos on the morning of December, 25, 2000. By the afternoon of that same day, Kay Danes was secretly transferred to Phonthong Prison and despite the fact that Kerry Danes was also being held in Phonthong Prison, neither was allowed to communicate with the other throughout their detainment. During several interrogations, Kay Danes was threatened with mock execution and pistol whipping, and told her husband would be executed on the charge of spying if she did not sign statements given to her by Lao authorities [Members from the office of H.E. Kham Ouane Boupha, Minister of Justice, Lao P.D.R.]. Kay Danes feared for her life but refused to sign false confessions. The false statements sought by Lao PDR authorities were for the Danes to;

a) Sign a statement that Gem Mining Lao are criminals;
b) Sign a statement that Kay Danes and Kerry Danes stole GML assets;
c) Sign a statement that Kay Danes and Kerry Danes sold sapphires to Anthony Norman, Manager of Ferrier Hodgson [Thailand].

THAI INTERFERRENCE

From Mid-1999, Ferrier Hodgson [Thailand] was providing advice to a Creditor Steering Committee representing 148 creditors of Thai Petrochemical Industries Public Company Limited [TPI], owed approximately US$3.4 Billion dollars. Ferrier Hodgson then proceeded to advise the Creditor Steering Committee in its negotiations with the principles and management of TPI for a debt-restructuring agreement.

The debt-restructuring agreement of 17 January 2000 provided for Mr. Prachai Leophairatana, TPI's Chief Executive Officer and principal shareholder, to be the Plan Preparer, conditional upon Mr. Prachai undertaking not to challenge the Creditor Steering Committee's claim that TPI was insolvent and not to deviate from the agreed debt-restructuring plan. On 8 February 2000 Mr. Prachai breached these undertakings. Accordingly, on 9 February 2000 the Petitioners [members of the Creditor Steering Committee] amended their petition in the TPI matter filed in the Thai Bankruptcy Court and sought to substitute the subsidiary Effective Planners Limited [EPL] of Ferrier Hodgson, as the Plan preparer in place of Mr. Prachai.

By 21 March 2000, hostilities were directed from TPI to EPL. The Manager of Ferrier Hodgson, Mr. Anthony Norman, set out in detail the terms of a revised agreement to engage security services including close protection services, and proposed that those services be provided by Kay Danes and her subcontractors, the Thai SWAT. The close protection team was to be comprised of specially trained SWAT members of the Thai Police during their off-duty hours, which would be coordinated by Kay Danes. The relationship between EPL and Kay Danes was at all times a proper and genuine commercial relationship. On several occasions there had been a number of false and improper allegations of wrongdoing made by Mr. Prachai against EPL and Mr. Anthony Norman. Such allegations included that the commercial relationship between Kay Danes and EPL was fraudulent and did not involve a genuine provision of security services for which TPI payments were made to Kay Danes. As evidence provided for in the KPMG Chartered Accountants report 19 April 2001, it was proven that the commercial relationship was proper and in particular there was no avoidance or evasion of withholding tax, nor was there any evidence of fraud, tax fraud, embezzlement or other nefarious activity. It was made clear to the Danes during their interrogations that the Lao PDR authorities were working in cooperation with the Chairman of TPI in Thailand to destroy both the reputations of Gem Mining Laos, Ferrier Hodgson [Thailand], Kerry and Kay Danes.

LAO GOVERNMENT FAILS TO OBSERVE THE LAW

Legal safeguards contained in the Lao Law Concerning Criminal Case Proceedings (1989), which details safeguards for arrest and detention procedures, are not applied in practice, and individuals are often left at the mercy of prison officials. According to Amnesty International, there is no record of cases where these rights have been upheld in their entirety, or of any of these rights being routinely guaranteed. In particular, the process by which a case reaches the court appears to be wholly haphazard; individual cases simply do not get heard, and detainees have no access to lawyers, and often remain ignorant of the charges against them.

The 2003 US State Department Report on Human Rights Practices states, that detainees are often subjected to "beatings, long-term solitary confinement in completely darkened rooms, and burning from cigarettes". In some cases detainees are held in leg chains or wooden stocks for part of their confinement.

LAO LAW CONCERNING CRIMINAL CASE PROCEEDINGS (1989)

The arrest and detainment of Kerry and Kay Danes proved contrary to writings of the Lao Law Concerning Criminal Case Proceedings (1989) whereby; The accused or defendants have the right to:

1. Be informed of the charges against them.

Breech: Kerry and Kay Danes were not informed of the charges against them. They were tortured as interrogators attempted to extract false confessions. They were denied legal support and Embassy contact and were held arbitrarily for a further six months in a prison, without charge.

2. Present evidence

Breech: No evidence was presented by the Lao PDR authorities to support the allegations of wrongdoing by the Danes. Certainly no cross-examination of witnesses or allegations was permitted in the Lao PDR court.

3. Submit requests

Breech: Repeated requests were submitted by both the Danes legal counsel and the Australian Government to obtain information from the Lao PDR Ministry of Justice, Foreign Affairs and Lao PDR Government as to the nature of the charges against the Danes, their treatment, access and various other requests in accordance with their basic legal and human rights but in most all requests submitted, most were denied, ignored or delayed unnecessarily.

4. Review all documents contained in case files after all investigations have been closed.

Breech: Despite numerous requests from the Danes legal counsel and Australian government, no documents were made available for review even after charges were laid and trial pending.

5. Have a legal representative to aid in their defense

Breech: Legal representation was provided for the Danes but the Lao PDR court advised that the law did not provide for adversarial proceedings. The legal representative merely acted as an interpreter at the court since no interpreter was provided. The Danes were separated during the entire court proceedings and therefore, the Lao lawyer could interpret for one but not simultaneously.

6. Participate in courtroom case inquiries at primary level

Breech: The Danes legal representation was not permitted active participation in any court proceedings. He was in fact, told by the court to be silent.

7. Voice personal objections against judges, people's arbiters, people's prosecutors, investigative officials and law officers, experts and translators

Breech: Again as stated by the Lao PDR court and Ministry of Foreign Affairs, the Lao PDR law and court does not provide for adversarial proceedings and the Danes Lao Lawyer was told to be silent during proceedings.

8. File complaints concerning the improper conduct of, or orders given by investigative official and law officers, the prosecutor or the court

Breech: It is not practical to file complaints of this nature since the Lao judicial system considers that persons are automatically guilty and the action of going to court is a process of formalization of wrongdoing.

9. Be the final party to present their opinion in the court room

Breech: The final party presenting their opinion in court is the Lao Public Prosecutor.

10. Appeal for a rescission of orders of investigative officials and law officers, or the prosecutor, or an overturning of orders, decisions and judgments of the court.

Breech: The Danes appeal to the Supreme Court was rejected outright. The Danes Defense were merely informed of this rejection and not given any opportunity to have the matter heard.

Further, the Lao law Concerning Criminal Case Proceedings (1989) states that when the whereabouts of a suspect has been discovered and when it is deemed necessary, investigative officials or law officers may detain a suspect for three days in order to conduct investigations, but a report must be made to a prosecutor within 24 hours from the time that person was detained.

Upon receiving a request for an order to initiate temporary custody from an investigative official or law officer, the prosecutor must make a determination whether to release or to initiate temporary custody within 24 hours [see article 46 of the Lao Law Concerning Criminal Case Proceedings (1989)] Before an arrest warrant is issued, the prosecutor or the court must be able to establish that the act in question is a criminal offence for which the law prescribes punishment by imprisonment and that the evidence in the case must be convincing.

In the Danes case, there was no warrant for arrest and imprisonment of Kerry Danes.

The warrant for his detainment stated that he was only to be detained under house arrest for questioning pending the investigation of his client - Gem Mining Lao.

The arrest of Kay Danes was illegal since there was never any warrant of arrest issued and no legal grounds that would support her detainment. Evidence provided within the first 24 hours by DFDL Lawyers confirmed that Kay Danes had not broken any Laws of the Lao PDR.

It was concluded that her arrest was staged to bring pressure on her husband.

The Australian Government began calling on the Lao PDR Government to declare the charges against the Danes. When the Lao PDR Government failed to acknowledge any charges the Australian Government strengthened their requests.

The Lao PDR authorities brought the charge of spying against Kerry Danes. The Australian Government and Australian Army quickly refuted this allegation, confirming that Kerry Danes was in fact, a current serving soldier but had taken a leave of absence from the military as approved by the Chief of the Australian Defence Force.

The Lao PDR Government dropped the charge of spying which carried a penalty of capital punishment.

Australian Government determine Danes are being held hostage

According to the Webster's Dictionary the definition of a hostage is: "a person held by one party in a conflict as a pledge that promises will be kept or terms met by the other party; a person taken by force to secure the taker's demands; one that is involuntarily controlled by an outside influence.

In September 2001, the Australian Government admitted to the Danes, in the presence of the Australian Embassy and Lao PDR Immigration officers, that the Danes were in fact, being held hostage! Further, the Australian Ambassador made the following public statement on Australian national television; "It's very difficult for the Lao authorities to accept that there's anything much wrong with a situation where people may take the rap for something that they didn't do. As they said to us on a number of occasions, if the Danes had been released, where does that leave us? How can we get the compensation for all the [alleged] damage that has been done to the Lao people over the years by Gem Mining Lao? Don't be too fussed about the connection between the Danes and Gem Mining Lao. The Danes are all we've got left." Ref: ABC Television story "On Their Honor" by HE. Jonathan Thwaites, Ambassador to Laos.

On 27 March 2001 the Lao PDR Government continued on the line to the Australian government that if the Danes confess to crimes and pay compensation then the matter can be resolved.

According to Australian Department of Foreign Affairs correspondence to the Australian Government, on 28 March 2001, the Lao lawyer acting for the Danes concluded that at penal law, detainees shall be released within 48 hours if their case is 'consumed by doubts'. This is said to be a "fundamental international principle applied by all jurisdiction systems in any civilized nation". Reference: Department of Foreign Affairs and Trade [DFAT] Freedom of Information [FOI] FILES 104/2 - Point (A).

All these indicators and those mentioned in the beginning of this report, confirm the Australian Government's belief, the Australian People's opinion and that of the Danes family themselves, that the Danes were being held hostage.

Furthermore, during Mr. Prasith's visit [the Danes Lawyer] with the Danes he claimed the following; -"During this visit I can see penal suffering of these people because of their long detention. This visible suffering is due to their innocence, because a guilty person will not be suffering. Every day in the detention they suffer irreparable psychological damage".

Prasith stated that he was particularly concerned by Kay's suffering as a woman. He said that "if the detention is dragged on their health will be increasingly jeopardized. A long tradition of Lao-Australian relation will be consequently affected." Reference: DFAT FOI FILES 104/2 - Point (B)

Article 47 of the Law Concerning Criminal Case Proceedings states "Arrests are to be conducted using techniques and methods which are suitable to the nature of the offence and the person to be arrested. Battery or torture of arrested persons is prohibited."

Both Kerry and Kay Danes were ill-treated and tortured repeatedly but despite this treatment they refused to sign false confessions which would otherwise have had disastrous implications for their respective clients and for the Danes personally. Police interrogators and prison officials constantly badgered the Danes over six months to "Confess and sign" and "Pay the money and go home". Clearly, this type of harassment and prolonged detainment without charge also supports the Australian Government's belief in that the Danes were being held hostage.

The Standard Minimum Rules for the Treatment of Prisoners require that: Instruments of restraint, such as handcuffs, chain, irons and straitjackets, shall never be applied as a punishment.(14) The use of arcane instruments of restraint, such as these wooden stocks, is also prohibited. Their use for extended periods of time, leading to such humiliation, pain and ill-health, is clearly a form of torture.

Kerry Danes was handcuffed throughout interrogations and placed in wooden leg blocks (4-5 kilograms), which is the standard procedure during interrogations in Phonthong Prison Lao PDR.

As a result of her own traumatic experience of unlawful detainment, torture and ill-treatment, Kay Danes, now suffers the effects of post-traumatic stress disorder and chronic depression as diagnosed by Australian medical practitioners.

CAN DIPLOMACY PROVIDE GUARANTEES?

In an inward cable between the Australian Embassy in Laos and the Australian Government, it is clear that diplomacy does not guarantee results according to expectation and to those rights that should be automatically afforded in these circumstances. On 12 April 2001, four months following the Danes unlawful arrest and detainment in squalled conditions of a Lao PDR prison, the Australian Ambassador reports that despite persistent representations to the Lao authorities, consular visits have not been granted as requested. Reference: DFAT FOI INWARD CABLE - 92/1.

Diplomatic negotiations can be effective in some cases, but inevitably slow. In the Danes case, the processes were excruciatingly slow but did eventually yield results if only, as a result of an Ambassador, his Embassy and the Australian Government, media and people who supported the Danes throughout their hostage ordeal.

Australian Ambassador met with Lao PDR Official Vichit Xindavong to discuss a possible framework for a negotiated resolution to the case. Vichit said that he would ask the judicial authorities to postpone further legal proceedings until the Australian and Lao PDR Governments had consulted further in search of a "Diplomatic Resolution".

Secondly, the Lao PDR People's court would prepare an executive paper which would draw on the prosecutions formal case against the Danes without providing the actual judicial documents. Thirdly, on the basis of this paper, the two governments would enter into confidential consultations, but if the Australian side disagreed with the propositions or factual basis of the Laos executive's position it could draw on information assembled by the Defence team. Reference: DFAT FOI INWARD CABLE CVT3334 - 92/2.

The Lao Ministry of Foreign Affairs demanded that the Danes legal representation accept any decision arrived at between two governments. Reference: DFAT FOI CVT3334 - 92/3 Point (7).

Vichit Xindavong asked the Australian Ambassador that even the fact that this morning's meeting had occurred it must be kept confidential. If a "Diplomatic Resolution" were to be arrived at, it could only be done without any publicity. Reference: DFAT FOI INWARD CABLE - 92/3 Point (10)

The Danes case drew much attention to the lack of rule of law and no statement epitomizes that more than the statement made on 14 April 2001, the Australian Ambassador determines that the Danes won't get a fair trial… "the credibility of Lao judicial system is more on trial than the Danes". Reference: DFAT FOI FILES - 95/1.

Leading up to the trial of the Danes, their Lao lawyer explained to the Australian Embassy that the Lao PDR Prosecution had concluded that if the Danes sought to defend themselves against the charges that would be laid, then the Prosecution would have to introduce additional allegations which would make the Australian government shameful. The Australian Ambassador commented that he had no idea what this rash statement meant. Reference: DFAT FOI FILES 6/2, 6/3, 6/4 Points 6, 7, 8 & 9

DANES LAWYERS PREPARE LEGAL SUBMISSION

The Danes lawyers' submitted evidence without knowing exactly what charges would be brought against their client. It was rumored the charges related to tax evasion, embezzlement and destruction of property. Two days prior to the scheduled trial of the Danes, their Lao lawyer, Mr. Prasith made a request to submit a statement at the court in support of his client's innocence.
The President of the Vientiane court asked why such a statement was needed and advised Mr. Prasith Phommarack that on the day of the court hearing he would simply be asked if the charges against his client should be dropped. He would respond by answering either "YES" or "NO".

It is unprecedented for a Defence statement arguing that the accused are not guilty to be delivered to the court. The normal function of the Defence lawyer is to plead mitigating circumstances and ask for clemency. Reference: DFAT FOI FILES 31/2 point (2).

Lao PDR lawyers are not allowed to request or demand anything from the court as the Danes case proved. Furthermore, on 27 July 2001, the Australian Foreign Affairs Minister met with the Lao Deputy Prime Minister and Foreign Minister Somsavat Lengsavad who proposed that the Danes' appeal to the Supreme Court be withdrawn as the quickest way of finalizing the legal process. This suggests that the law can be easily manipulated by Lao PDR officials.

As the Danes case progressed and the pressure mounted on the Lao PDR Government with the Australian Foreign Minister calling "charge them or release them," the Danes were finally charged six months following their unlawful detainment. The only words provided by way of charges, with no further particulars, were "embezzlement, tax evasion, destruction of evidence".

Substantial evidence to rebut all charges - was presented to the Lao PDR court but the Danes defense was not permitted to present this evidence during court proceedings. Instead, the Lao judges submitted a letter containing a forgery of Kerry Danes signature. They attempted to get his confirmation of its legitimacy despite his repeated denials that it was indeed his signature.

When Kay Danes was called to stand before the three Lao PDR judges for interrogation, she was called to bear witness against Kerry Danes. After examining the so-called evidence, Kay Danes confirmed to the Lao PDR court that the letter was an obvious forgery. In her professional capacity as an Administration Manager of Lao Securicor and Chief Executive Officer of a Thai Security Company, Kay Danes identified the document as a forgery.

The signature on the bottom of the document was pixilated, meaning it had been scanned onto a page. The black markings around the signature were evidence that the paper containing the signature had been photocopied onto the letter which was written in Lao language.

Furthermore, according to Lao Securicor standard operational procedures, Kerry Danes in his capacity as Managing Director implemented a safeguard to protect the company against such illegal attempts to defraud the company. All correspondence, instructions and official directives were written in English text with a cross-reference code to the Lao version and vice versa attached, clearly stating that the English version shall take precedence over the Lao Version. This was done to ensure the integrity of Lao Securicor and its staff.

The standard format Lao Securicor adopted for all correspondence was in accordance with Australian Military writing, that being left hand justified.

The document presented by the Lao PDR court did not contain any cross-reference codes, did not show any reference to the existence of an English version and was written with the signature block right hand justified which contradicted the administration procedures adopted by Lao Securicor.

The company seal was affixed to the page which the Lao PDR Government had seized prior to the trial. It was not affixed in the usual position in accordance with standard administration procedures adopted by Lao Securicor. All of these factors were pointed out to the Lao PDR court but the judges dismissed these facts and proceeded to the next stage.

The trial of Kerry and Kay Danes was conducted in a 'closed court' which lasted five hours. The couple were sentenced seven years imprisonment. Their Lao lawyer was not permitted to cross-examine the 'so-called' evidence and when Kerry Danes insisted upon raising his own defense, the Lao PDR court instructed the Danes Lao Lawyer to tell his client to remain silent. When reading his closing statement, the Lao Lawyer for the Danes was visibly shaken. This bold action by the Danes Lao Lawyer was unprecedented in the history of Lao PDR legal proceedings.

A trial such as that in Australia would take at least four weeks. The judgment was delivered within 25 minutes after the court went to recess. It was pre-typed and stamped with the official seal of the Lao PDR.

Under the Lao legal system no-one has ever been acquitted once charged.

DEFINING THE CHARGES

1. Embezzlement of state assets represented the Laos Government's case against Kerry Danes relating to jewelry allegedly stolen from the office of Gem Mining Lao.

2. Tax evasion represented the Laos Government's case against Kay Danes on the false premises that Kay was required to register in Laos, business she was performing as a sole trader in Thailand.

3. Destruction of computer records represents the Laos Government's case against both Kerry and Kay Danes for allegedly damaging the information on the computers belonging to Gem Mining Laos.

Reference: DFAT FOI FILES Point (6) - 6/2. File 2 Document 83

The Lawyers for the Danes established the innocence of their clients in a 317 page legal submission based on affidavits, forensic accounting, witness testimony, Lao law and other comprehensive documentation that was also provided to the Australian Government for extensive scrutiny. The submission was prepared in duplicate in both English and Lao Language to the Lao PDR court in advance of the court case that took place six months after the Danes detainment. The legal submission was never referred to in the Lao PDR court nor was the evidence submitted officially to the court by the Judges who received the submission. The evidence was submitted to H.E. Kham Ouane Boupha, Minister of Justice, Lao P.D.R. who did not so much as even raise issue with the 317 page legal summary.

1. Embezzlement of state assets [265 pieces of jewelry] - Contrary to the court findings it was proven that Kerry Danes did not have the key or combination to the GML safe. The provisions of security for the contents of the GML safe did not form part of the services provided by Securicor as stated in the Memorandum of 1 December 2000 signed by the Laos government. A signed affidavit also stated on 29 May 2000, Gem Mining Directors telephoned their Lao Manager Mr. Sommay Bounnaphol and asked him to pack up the jewelry and take it to them in Thailand. The Ad Hoc Committee of the Laos Government acknowledged in its Memorandum of 1 December 2000, "that the responsibility for the missing jewelry fell on Ms. Julie Bruns and Mr. Bjarne Jeppeson". The jewelry which was actually 152 pieces and not 265 as declared by the Lao PDR authorities was not the property of Gem Mining Laos. It had been annexed from the GML Assets register prior to the company being listed on the stock exchange years prior to this incident. It should have no bearing on the case against the Danes. [Reference: legal submission to the Lao PDR 30 May 2001]. Furthermore, as in evidence submitted to the Lao PDR court Julie Bruns had presented the 152 pieces of jewelry to the New Zealand Embassy on the 24 January 2001 for verification of ownership. [Reference: legal submission to the Lao PDR 30 May 2001].

2. Tax Evasion: The Laos government alleged that Kay Danes was guilty of tax evasion for money she received from her client in Thailand where she provided consultancy services. There was no tax payable in the Lao PDR by Kay Danes in respect of the business that she conducted entirely outside the jurisdiction of the Lao PDR. Further, payments made by her client were net of tax payable in Thailand. Kay's client undertook to pay all taxes including withholding tax and VAT on the fees payable to Kay Danes. A comprehensive forensic accounting report by KPMG [Accountants] concluded that because the contract was executed in Thailand, any stamp duty that might have resulted, would have been payable to Thai authorities rather than the Lao PDR. This was further supported by the articles of the foreign investment laws of both Laos and Thailand. Evidence later submitted to the Thai Court through the Lao PDR Foreign Minister Somsavat Lengsavad, following the Danes return to Australia, established the genuine and commercial nature of Kay Danes' relationship with her client in Thailand. The Thai court determined that the evidence submitted to them by the Laos Foreign Minister Somsavat Lengsavad did not support any wrongdoing by Kay Danes as alleged. The matter was thrown out of the Thai court. Furthermore, the Australian Ambassador being present at the Lao PDR court and in his own right a Legal Attorney was visibly concerned when the Lao PDR Minister for Taxation testified in the Lao PDR court against Kay Danes and in doing so, committed perjury. He falsely represented the Lao Law when he submitted that Kay Danes had breeched the law in accordance with the Instruction on the Implementation of the Decree of the Council of Ministers No. 370/BOL/94, dated 23/10/90, regarding the Management of Foreign Currency and Precious metals. This instruction relates to the restriction of those who reside in Laos to take out foreign currency from the Lao PDR not exceeding US$2,000. What the Lao PDR minister failed to mention to the Lao PDR court was that the Governor of the Bank of the Lao PDR had agreed to amend the instructions and so passed a resolution on 28 April 1994 of the agreement that authorized persons to take foreign currency out of the Lao PDR "without any limit as to the amount and without requesting approval from the Bank of the Laos PDR". This resolution was expressly implemented "to reduce certain restrictions and to open wide the right of those who reside in the Lao PDR to take foreign currency abroad, with the aim of increasing the confidence of residents and foreigners, including foreign investors, regarding the management of foreign currency system in Lao PDR". Thereby, the accusations against Kay Danes were false.

3. Destruction of computer records - The Lao authorities alleged that Kerry Danes had misappropriated various items of office furniture, computers and other equipment by removing them from the Gem Mining main office. This was done in late October/early November 2000 prior to the seizure of Gem Mining by the Lao PDR Government and with the expressed written permission from Gem Mining Directors to transfer specific items of office furniture to Lao Securicor in payment of outstanding security service fees owing by Gem Mining Lao to Lao Securicor. In any event, the items were secured at the Lao Securicor office and could have been returned at any time to the Laos authorities upon request, and in fact, were returned undamaged. The Danes were not employees of Gem Mining Laos and no involvement with its daily operation, equipment or affairs. The computer records and documentation relating to the operation of Gem Mining Laos were under the exclusive control of their own employees. The so-called evidence that the Danes were accused of destroying was the so-called evidence that the Laos court used against the Directors of Gem Mining Lao in order to sentence them on 8 February 2001 in their absence, to 20 years imprisonment. In addition the Gem Mining Directors were ordered to pay US$31 million dollars and 10.1 million kip in damages to the Laos Government for their alleged role in destroying their own investment, amongst other things, stealing their own assets. The Lao PDR Government convicted the GML Directors in their absence and in doing so, did not provide any opportunity for a fair and transparent trial. Nor did they provide an opportunity to resolve this dispute under the rules of UNCITRAL as stipulated in their concession agreement.

DANES RECEIVE RETURN OF FUNDS FROM LAOS COURT

The Danes personal funds and Thai Company payroll [US$150,000] that were previously seized by order of the Lao authorities were returned to the Danes by the Lao Court. Kay Danes had been accused of breeching the Lao law whilst, at the time of her detainment, she had been carrying her Thai Company's payroll.

Substantial evidence was presented to the Lao PDR Public Prosecutor within the first 24 hours of Kay Danes' detainment that proved she did not breech any Lao laws as supported by documentary evidence in a resolution by the Governor of the Bank of Laos dated 28 April 1994 authorizing persons to take foreign currency out of the Lao PDR "without any limit as to the amount and without requesting approval from the Bank of the Laos PDR". This resolution was expressly implemented "to reduce certain restrictions and to open wide the right of those who reside in the Lao PDR to take foreign currency abroad, with the aim of increasing the confidence of residents and foreigners, including foreign investors, regarding the management of foreign currency system in Lao PDR". Consistent with the Resolution, declaration forms for 1999 and 2000 and current as 23 December 2000 for travelers departing from the Lao PDR did not require the person departing to declare any amounts of currency. It followed that Kay Danes had committed no wrong by proceeding to take funds from the Lao PDR into Thailand. She was acting in accordance with the Lao law. The Australian Government supported the Legal Brief prepared that the Danes had no case to answer.

NO RIGHT TO JUSTICE

On December 7, 2000 the Laos Government signed the International Covenant for Civil and Political Rights [ICCPR]. In doing so, it embraced the principles espoused in the ICCPR and signaled to the international community its willingness and intention to implement the philosophy articulated in the ICCPR. The observance of Article 9 is an important step in that process. In addition, it is submitted that Articles 9 and 10 of the Universal Declaration of Human Rights and Article 9 of the ICCPR form part of international customary law. The rights prescribed in those articles are fundamental human rights. States recognize those rights as obligatory by reason of their fundamental nature: see Federal Republic of Germany v Denmark; FRG v the Netherlands ICJ Rep 1969 3 at paragraph 77 and per Judge Lachs.

Kerry and Kay Danes were arrested and detained in breach of Articles 9 and 10 of the Universal Declaration of Human Rights and article 9 of the ICCPR.

The evidence submitted by the Danes Legal counsel, established their innocence.

At no time were they given a fair trial nor were their lawyers allowed to access information relating to their case. This is a clear violation of their legal rights according to the Lao Law Concerning Criminal Case Proceedings (1989), the UN Universal Declaration of Human Rights [1948] article 9 states "no-one shall be subjected to arbitrary arrest, detention or exile", article 10 of the Universal Declaration states: "Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in determination of his rights and obligations and of any criminal charge against them", and the International Covenant on Civil and Political Rights [ICCPR] 1976, article 9 which states; "Everyone has the right to liberty and security of person. No one shall be subjected to arbitrary arrest or detention. No one shall be deprived of his liberty except on such grounds and in accordance with such procedure as are established by law. Anyone who is arrested shall be informed, at the time of the arrest, of the reason for his arrest and shall be promptly informed of any charges against him."

DANES RECEIVE PRESIDENTIAL PARDON

Australian Foreign Affairs Minister Alexander Downer met in Hanoi on the 27 July 2001, with his counterpart the Laos Deputy Prime Minister and Foreign Minister Somsavat Lengsavad. It was proposed by Mr. Somsavat that the Danes withdraw their legal appeal to the Laos Supreme court as the quickest way of finalizing the legal process. The Lao Minister noted that the civil matter of compensation was the sticking point and recognized that the Danes could not afford to pay the compensation being requested. He concluded that in those circumstances some sort of guarantee from the Australian Government would suffice. The Australian government alleges to have made it clear that they could not guarantee payment. Mr. Downer proposed that this aspect of the matter might be resolved through negotiation, and said that a senior delegation from Australia would travel to Laos immediately to conduct such a negotiation. Mr. Downer asked that Ambassador Thwaites convey Mr. Somsavat's proposal to the Danes and their lawyer as a matter of urgency. Mr. Downer "strongly encouraged" the Danes to take the offer presented by the Lao PDR Government. It was made known to the Danes through the Australian Foreign Affairs officials that if the Danes rejected the offer, "the Australian Government cannot guarantee your safety" and that "your situation may in fact, deteriorate" or words to that effect.

Almost two months later on 14 September 2001, the Australian Ambassador met with Mr. Somsavat who advised the Supreme Court's ruling (details separately conveyed to Embassy that same day) that the Danes' appeal had no basis and was rejected. This came as no surprise since no appeal of this magnitude has ever been won in the history of the Lao PDR.

The Australian Ambassador advised Lao PDR Foreign Minister Somsavat Lengsavad that the Australian Government wished to commence negotiations immediately in accordance with the Hanoi agreement.

On 04 October 2001, the Danes agreed to a four-point deal as negotiated by the Australian Government which secured their release. The final terms of the agreement were;