Palau: Newspaper sued for tax leak report

Publisher Leilani Reklai of the Island Times newspaper has been accused of publishing 'harmful misinformation' in a civil lawsuit registered by Palau's largest corporation, the Surangel & Sons Company, on October 31. The International Federation of Journalists (IFJ) condemns the company's registration legal action for reporting in the public interest, and calls on the company and the Palau government to ensure press freedom is upheld.

Palau newspaper Island Times and its publisher Leilane Reklai were named in a October 31 lawsuit by the Pacific Island nation's largest corporation. Credit: X

On October 31, Palau's largest private corporation, Surangel and Sons Company, announced it had lodged a defamation lawsuit against leading newspaper Island Times and its publisher, Leilani Reklai. The business claims the outlet had published "false and unsubstantiated allegations" and had failed to uphold journalistic standards in an October 29 article.

On October 29, the newspaper published the article, 'Surangel & Sons Condemns Tax Report Leak as Privacy Violation', reporting on the company's condemnation of the leak as well as the tax reports widely circulated on social media. The corporation has sought punitive and compensatory damages, for the article. Reklai has vowed that although the lawsuit could bankrupt the outlet, she is determined to fight it in court.

As quoted in the newspaper, Reklai has said publicly that the lawsuit felt intimidatory and was an attempt to control the media. Following the filing of the lawsuit, the company announced its decision to cease the distribution Island Times from stores owned by the company nationally.

The lawsuit coincides with final preparations for Palau's national presidential election, set to commence from November 5. Incumbent Surangel Whipps Jr, whose father founded Surangel & Sons Co., has repeatedly claimed that larger companies contributed a higher share of taxes under the new Palau Goods and Services Tax (PGST), in a point of contention with leading opposition candidate and Surangel's brother-in-law Tommy Remengesau Jr. According to information revealed in the leak, the company paid approximately USD 1,700,000 less under the GPST than under the Gross Revenue Tax system.

In a statement, the Pacific Freedom Forum (PFF) stated that the lawsuit jeopardises public trust om media, as well as citizens' access to public information and press freedom. The Palau Media Council has also voiced solidarity with the Island Times, re-iterating Reklai's right to report on publicly circulated documents.

Surangel and Sons Co., the islands' largest company, operates a wide array of businesses across multiple sectors, including retail, hospitality, construction, transit, and logistics.

The IFJ said: "IFJ stands in solidarity with Leilani Reklai and the Island Times in the face of unprecedented, intimidatory, and unwarranted legal action. Palau authorities must ensure that the electorate have access to information in the public interest, and that journalists are able to conduct their duties without fear of retribution. Surangel and Sons Co. must withdraw this lawsuit immediately."