Mineral Rights For PNG Landowners

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UPDATE: The Australian reports today that PNG Prime Minister Peter O’Neill has taken a step back from a plan to give landowners greater control over mineral wealth. Read more here. 

Just three weeks ago we reported on the Ramu Nickel case that placed cash before custom in Papua New Guinea. The next day, on 2 August, there was a change of government in Papua New Guinea. What also followed was an important change of policy intent by the new government regarding the mineral resource wealth of the country.

In his opening address as Minister for Mines, Byron Chan outlined four key mining industry policy issues:

1. Recognition and protection of traditional landowner’s right to mineral ownership on or under their traditional land and seabed;

2. Urgent review of the mining legal regime;

3. Urgent review of deep-sea mining; and

4. Urgent review of environmental protection.

In explaining the new policy direction, Chan said that the customary understanding of land and minerals should not be separated — for they are one and the same. The problem, he argued, is that PNG has adopted mining legislation based on the Australian experience that vests the mineral ownership in the State rather than the landowners.

The argument that follows is that this reliance on Australian law is flawed because the legal fiction of terra nullius was overthrown by the Mabo case. That is, at the time of European settlement, land in Australia was deemed to belong to no one and, therefore, the Australian states subsequently claimed ownership of crown land and the minerals.

In contrast, land in PNG has been occupied and owned by thousands of different customary landowning groups since time immemorial. Like their Melanesian neighbours, land in PNG was not alienated through colonisation with some 97 per cent still owned by customary landowners. Since Independence in 1975, however, successive governments have claimed a state right over the mineral rights of customary landowners. For the O’Neill-Namah Government, it is time to correct this moral wrong by demanding that the laws governing mining and petroleum extraction recognise what has always belonged to the people.

It is not surprising that those involved in the mining sector have reacted negatively to the news, with detractors arguing that it will have a negative impact on investment and jobs. The intended changes to mining policy concern the mining investment sector as they now have to deal direct with landowning groups. What this means is that the landowners are an integral part of the ‘deal’ — rather than simply negotiating with the government.

The response from custom landowners has understandably been positive given that they have not seen an equitable return from the damage that mining activity often does to their land. If the O’Neill-Namah Government is to succeed with these changes, it will have to ensure that landowners are properly represented when they deal with resources companies. (For further discussion of this point, see Spike Boydell’s interview with Radio National’s Pacific Beat this week.)

The changes are important for the longer-term democratic and economic health of PNG for a number of reasons.

The first is that land grabs have resulted in the loss of over 5 million hectares for timber and resource exploitation — something facilitated by the Special Agriculture and Business Lease (SABL) provisions of the 1996 Land Act. SABLs have always been controversial: proper processes of consultation and negotiations have not always been followed nor have customary landholders always given their informed consent. In fact, a key inquiry into SABLs is currently underway. It is hoped that the changes proposed by the new PNG government will move to resolve such abuse by ensuring stronger validation process, recording and registering of landowners’ interests.

The second reason is that while mining interests may be focused on providing an ever increasing return to their shareholders, customary owners will, if the new policy direction is followed, have the ability to place stewardship before cash. Some custom landowners are more interested in ensuring the long-term sustainability of subsistence food production than having their land potentially destroyed for short-term economic gain from the minerals that lie beneath.

Sure, investors may look elsewhere if they think they can plunder the mineral wealth more easily in other countries, but the long-term value of the resources owned by PNG customary landowners will not diminish with time. In fact, the opposite is likely to occur.

Yes, there will be landowning groups who are keen to exploit their resources in partnership with mining interests, and they will pay taxes so the state will still receive its return from the process. But more importantly, maybe PNG landowners have finally found a government that is prepared to put custom before cash, stewardship before GDP, and to fully support the integrity of the indigenous relationship with land.

Thirdly, it opens the door to formulate an equitable compensation model in Melanesia that meets the tensions that often arise between the traditional land-owners and the "development imperative" of the government.

In a regional land resource compensation symposium in July this year, the lack of alignment between customary and western worldviews was identified as being at the root of the concern about external demands for land. Both PNG’s wealthy neighbours and international resource interests need to respect the complex nature of customary land ownership in Melanesia and the wider South Pacific region. These policy changes allow for a marriage of interests between the landowners and the investor.

Land tenure and resource ownership regimes are dynamic. They evolve and adapt to meet the needs of a given society at a given stage of their development process. After decades of being neglected, these changes might just meet the needs of PNG society, both now and into the future.

New Matilda

New Matilda is independent journalism at its finest. The site has been publishing intelligent coverage of Australian and international politics, media and culture since 2004.

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