MARCH 1996 · VOLUME 17 · NUMBER 3

---

I N T E R V I E W

---

Multinational Monitor: What are the traditional land tenure schemes in Papua New Guinea?

Brian Brunton: Ninety-seven percent of all the land in Papua New Guinea is owned customarily. That means it is generally owned by families, clans or larger customary groups. The precise sort of conceptual framework of that group varies: there are over 300 distinct language groups and another 300 distinct and different dialects in Papua New Guinea. So 97 percent of the land is fragmented into small landholding entities.

The actual legal situation is fairly confused in that the law tends to recognize the property or ownership rights of these landowning groups indirectly. Various statutes recognize that the land ownership does exist, but there is no overall Customary Land Act. That makes it rather difficult to specify exactly what is the nature of that land ownership in law. There are also a host of statutes that impinge on what one might call the sovereignty of that ownership, most notably mineral and petroleum legislation. These laws claim that the minerals and petroleum under the land are the property of the state. That type of rule is complete anathema as far as the customary landowners are concerned; it is quite clear from their perspective that they would follow the old common law rule of owning everything from the center of the earth up.

MM: If a mining company, say BHP, wants to begin mining operations, does it have to negotiate directly with the land owners, or can it deal solely with the government?

Brunton: Actually, they can deal solely with the government, and most of them do. They do a bit of public relations work on the side, some more, some less.

Exploration rights are guaranteed under the Mining and Petroleum Acts. What they say is, once you have got your exploration license, away you go; all you have to do is pay compensation for any damage you do in the course of your exploration. If there is a dispute over the extent of the damages, that is worked out before a special court. But the rights to actually walk onto somebody else's land is backed up by the state and is contained in the Mining and Petroleum Acts.

MM: How are the traditional rights of landowners being affected by the so-called Land Mobilization Project?

Brunton: The Land Mobilization Project is somewhat difficult to define, in part because it was pushed forward suddenly, and then pulled back when opposition arose.

Customary land rights have always been under pressure as far as modern law is concerned. Modern law -- including the Mineral Act, the Petroleum Act and the Water Resources Act, under which the state claims control over all the country's water -- hems in and ties down customary land rights, and makes it very difficult for customary landowners to enforce these rights.

Also, because custom is custom, and because it has never been written down in most cases, it is very difficult to work out in custom just what landowners' rights are.

There is a great temptation to equate customary rights with recognized common law rights. That is ludicrous, because custom and common law are two completely different systems. Common law is a legal system run by a state; customary laws are normative rules generated by communities, which are non-state in their overall social function. This poses another problem for modern law; it becomes very difficult then to administer common law rules of state, particularly the capitalist state, in a non-property-owning social grouping.

The land mobilization program came first of all out of a general need to renovate the Department of Lands, whose primary responsibility is to look after that 3 percent of land which has been alienated [that is, privately owned and subject to transfer]. In the past, and even now, the Department of Lands does that rather poorly. It is forever losing files, has difficulty locating titles and is reasonably incompetent.

Running parallel to that has been a consistent theme in much of the literature by foreign consultants and proponents of economic rationalism that customary land is anathema to modern business. You can't do modern business on customary land, because banks won't give you a mortgage over it; there is no paper title. Really what needs to be done is to register all the customary land, the consultants say.

There are a number of immediate problems there. The first is that the whole concept of customary land and the whole concept of modern, alienated freeholds are somewhat different. The second problem is that the organization which is dedicated to administering 3 percent of the land in Papua New Guinea and has done so inefficiently and bunglingly for the past 20 or 30 years, is now being asked to administer the other 97 percent.

On top of that came another problem, in the form of large-scale agricultural projects, which in short means oil palm schemes. The oil palm schemes in the past have been promoted largely by the Commonwealth Development Corporation and big companies like Harrison and Crossfield. They tended to do them more or less responsibly, in that they have been relatively well funded and relatively well organized, even though the social and environmental consequences of oil palm leave a lot to be desired. However, there is a new wave of oil palm entrepreneurs. They are really loggers in disguise, and their ultimate objective is to clear fell rainforest, and to sell the logs off at a quick profit, at the same time promoting so-called development through oil palm plantations.

The way that interfaces with land mobilization is this: to set up the plantations, the entrepreneurs need to get hold of the land for considerable periods of time. They have attempted to sign up leases over very large areas of land. These leases have somewhat dubious legal effect, because there is no real mechanism for registering, and because outside companies cannot deal, under existing statutes, with customary owners. They have to have some sort of arrangement where they get the state either to buy or to lease, and then the state leases to the project developer, or leases back to the customary owner, who can then in turn lease to the project developer.

Our concern is that these oil palm schemes are waiting in the wings. There are actually two of them. One is already started, the other is about to start. So you have this prospect of large-scale agricultural schemes invading the rainforests, and using land mobilization as a mechanism to get the leases of this land. If they can register those leases, which they cannot do at the moment, then there is a really viable option of getting claims to huge stretches of land.

Customary owners, particularly in isolated areas, have no money at all, so they are easily talked into signing bits of paper that constitute either equitable leases or equitable agreements and exchanging promises with these developers that in my view effectively tie the land up.

MM: Why has the land mobilization project been stalled?

Brunton: Around June of last year, the non-government organizations got wind of a push to register customary lands. We heard about this at the same time we were struggling with these large-scale oil palm schemes, so it became rather desperate for us.

The World Bank and the Australian government, through its foreign aid program, had in one way or another been promoting land mobilization, although now they vigorously deny this.

The prospect of land registration became a lot closer mid year, when a firm of lawyers drafted amendments to the Land Registration Act. These amendments would allow the registration under certain circumstances of customary land.

In some respects, those provisions were fairly innocuous. It appeared to be a fairly straightforward registration process, and the government claimed the process would be voluntary, that only those people who wanted to register their lands would do so.

The problem with the legislation was that it would have created modern rights over customary land, in the sense that title would have issued. The title, although it was not completely alienable, certainly could have been mortgaged, and the moment you get the ability to mortgage, the likelihood of the loss of land, to at least one generation, becomes evident.

The NGOs explained this situation to a number of other groups, including student groups. The students at the University of Papua New Guinea became very vigorous, and were determined to stop it. They went off and burned a few government cars, and organized demonstrations and rallies throughout the country. In the highlands provinces, which are the most populous provinces of Papua New Guinea, there were some very large demonstrations, and it became quite clear that the government would meet considerable opposition for land registration. So the proposal was quickly withdrawn.

Presumably they will try and sneak it back some time later this year.

MM: This all seems to be tied to large-scale logging efforts. How extensive is large-scale logging in Papua New Guinea right now?

Brunton: The logging companies and generally Asian investors are at the moment, and have been in recent years, in a feeding frenzy over access to logs in Papua New Guinea. In 1993, the price of South Sea round logs on the Japanese and South Korean markets went through the roof. Although the prices have dropped off, especially at the end of last year, they have begun to pick up.

There is a nexus between crooked customary landowners, or crooked individuals who put themselves forward as customary landowners, crooked politicians and logging companies. The landowners are prepared to persuade their kinsmen that this is the way to development, and they do the work on the ground to get the communities to consent. The politicians smooth the way legally to get the concessions, and of course their connections to the logging companies are aided by kickbacks that are meant for election purposes. In the past, we have had a lot of money changing hands from logging companies to politicians.

We have an election coming up in 1997, so the pressure on the politicians from the logging companies has really intensified in the last year. Money has been exchanged, but there hasn't been a lot of delivery on the ground, because this has been successfully opposed. Things have taken a long time to get going.

We are talking about investment largely from Malaysia, Singapore and Hong Kong. The investors are mainly ethnic Chinese, as well as some from the People's Republic of China.

MM: In the places where the logging is now underway, what sort of compensation do the local landowners receive, and what sort of "development" takes place as a result of the logging projects?

Brunton: In money terms, they receive very little. There is virtually no up-front payment at all. The only form of payment is a royalty which is a fraction of the logs' value. In an older, existing concession area I recently visited, the community said they were receiving about $1.50 per cubic meter. The average price at that time may be somewhere around $140 to $160 a cubic meter.

Concessions last year were set at about $8 a cubic meter. The government has proposed to put in a graduated royalty -- it had to do this as a result of structural adjustment program conditionality -- and there may be other premium payments in some cases. But I think the bottom line is very few Papua New Guinean landowners or landowning companies would get more than $8 or $9 a cubic meter total. This at a time when the average price in some cases has been over $160 and is now around $125 a cubic meter.

Socially, there is very mediocre, if not poor, development. In some cases, there is very poor social development. Logging is not a good way to raise rural standards. Cocoa is much better. If you want to see good development in Papua New Guinea, you go to cocoa-growing areas, where you'll see sealed roads, decent water supplies, decent electricity supplies, decent schools, decent health services and a few rural nightclubs around. But if you look at the average logging project, you'll see none of that.

MM: Why is structural adjustment being imposed on Papua New Guinea at a time when it is exporting so many resources and presumably generating a fair share of income?

Brunton: That is fairly straightforward. We are a standard, open, free-market economy. Translated into the Third World, that means that the basis of economic development is trickle down, and of course very little trickles down. What does trickle down into the national economy in Papua New Guinea is managed by a government that is not very good at managing. They have made a number of mistakes over the years, and have now put themselves into a situation where they have had to be managed by the World Bank and the International Monetary Fund.

The NGOs are in a sort of anomalous situation with the World Bank and the IMF. The International Monetary Fund, or Infantile Mentality Fund, on the one hand rips money out of the government programs and government expenditures so your health services go down the tubes, as has happened in Papua New Guinea, and your education services deteriorate, and a lot of your other social services deteriorate too. This has been going on in Papua New Guinea since the early 1980s. Papua New Guinea now has one of the worst set of health indicators in the region, if not globally.

On the other hand, the World Bank has been relatively good in the forest sector, where it has insisted on reform. The things that it has said are not bad, in the sense that it is trying to get more of the surplus into the hands of Papua New Guineans and the Papua New Guinea government, and to get some rationality and some control into the industry.

While we don't agree completely with what the World Bank says -- for example, the World Bank refuses to say we should stop exporting logs -- the economic reforms in the forestry sector which the World Bank is proposing, if implemented, would have the effect of driving out a good proportion of the unscrupulous loggers. From that point of view, we find ourselves in agreement with World Bank reforms put forward under the structural adjustment programs, and we have been able to develop a dialogue with World Bank officials on that issue.

Where we disagree with these things is with general macroeconomic policies of opening up our economy, and imposing restraints which ultimately kill people.

MM: What sort of alternative macroeconomic proposals are NGOs putting forward?

Brunton: We are only just beginning to think this through. The NGO movement in Papua New Guinea is at best three or four years old. There is now a national coalition dealing with World Bank issues. They are trying to put forward an alternative structural adjustment program, one that would look after the weaker members of society, and try to ameliorate some of the effects. One can debate the merits of doing that type of thing. It drives you into the camp of the World Bank and the IMF, and I guess that is probably their strategy, to pull some of the NGOs in with them.

The real weakness in structural adjustment has been the implementation of its amelioration programs. They have been poorly conceived and even more poorly implemented in the past. I have got an idea that the World Bank and IMF now understand this -- that if they want to fiddle in the macroeconomic areas, in order to push a country into shape in terms of its dealing with the global economy, then they are going to have to be far more vigorous with, and far more effective with, their amelioration programs.

But I tend to believe that they don't really believe in these amelioration programs. These amelioration programs are half-hearted, and half-baked, as well. That is why Third World countries go through such pain when dealing with structural adjustment.