Check board topic "Harm & The Key" u have everything about this question answered.

If u want the shorty answer, u have to brake middle statue with spell and then the statue falls from shelf and then u exchange it for banter. U get to secret passage where is the statue by trowing the rope with hook on it above the post behind the fisherman.

"The Prism" section from chapter three is the most complex single task up to this point in the game

You can see a step-by-step spoiler-free guide for this here
chainsofsatinavwalkthrough.blogspot.com/2012/06/theprism.html

This includes getting to the statue (attaching the grappling hook to the beam and then swinging across), getting the statue (break the water pipe and remove the cupboard bolt) and learning the smugglers' banter (Jarre gives you crib notes once you give him the statue)

The walkthrough includes links back to any items you may have missed (such as the grappling hook)