TUMBY BAY - On the face of it, the current process for distributing LNG project royalties seems simple enough – identify the right landowners and pay them the money.
Unfortunately, it is this kind of naïve simplicity that informs current resource legislation in Papua New Guinea.
That such a straightforward approach doesn’t work has been starkly highlighted by the debacle surrounding the payment of royalties from the Exxon – Oil Search LNG project.
Heavy-handiness from a multinational developer used to having its own way, illegal political interference and greed and corruption among landowners has clearly demonstrated the need for change.
Maybe it’s time to turn the system on its head and shift the responsibility for the disbursement of royalties directly to the landowners.
You might think this is a recipe for disaster but there are several reasons why it might work a lot better than the current system.
The present system relies heavily on outsiders, generally anthropologists, coming in and conducting land owner identification studies prior to a development going ahead.
In most cases, to do this properly requires a great deal of time. Even a seasoned anthropologist with established links to an area needs time to sort out individual and clan relationships to particular areas of land.
This can be difficult even when the anthropologist knows the way land is traditionally inherited and used, but it becomes much more difficult when modern influences and interventions, such as marriages outside tribal areas and other influxes and aberrations, are taken into account.
For a large project like PNG LNG, where a very large area and many thousands of potential landowners are involved, I would guess that a reasonable timeline would be 3-4 years at least.
To do the job properly the anthropologist would virtually have to consider the claims of many potential landowners individually. If you consider that each one would take up two to three days you can see why a properly done job would take so long.
It would be far easier for landowners to sort all this out themselves at clan level. After all, they know the rules and they know how to negotiate and compromise.
Clans are essentially large extended families. In most cases, membership of a clan can be traced back to a common ancestor, sometimes referred to as an apical ancestor. Common ancestors are usually male but in some societies are female.
In very large clans there are also sub-clans. These are offshoots that often go on to form new clans based on the leader who takes them away.
The point here is that clans have their own internal structures. These structures determine how a clan deals with issues, be it the allocation of gardening land, marriage arrangements and, if allowed, the disbursement of clan wealth.
There is no reason why a clan, rather than individuals within the clan, couldn’t receive royalty payments.
Among other things, this would make life a lot easier for resource developers. All they would need to do is identify the clans affected by their project, rather than hundreds, if not thousands, of individual landowners.
And it so happens that legislation already exists to enable clans to arbitrate the boundaries of their land and register it.
When a potential resource development is slated for a particular area, the affected clans could be encouraged and assisted to sort out their current boundaries and register them. They would then be in a position to receive any royalties that might come to them.
Without the need for painstaking anthropological research the project might even proceed a lot quicker.
This wouldn’t negate the need for comprehensive social mapping. Proportionalities and special clan assets would need to be understood and, very importantly, the developer would still need to understand how the society into which it has intruded operates.
This is only a basic outline of how a different system could work. It would require refinement.
There is no doubt that corruption would occur at clan level but that wouldn’t be the developer’s problem; it might not even be the government’s problem if its snout could be levered out of the trough.
It might be that developers could pay the royalties directly to clans, thus avoiding the government as middleman with all the misappropriation and corruption that involves.
It might also be that the clans could be made to hold their royalties in trust rather than distributing money to individuals. Such trusts could be applied to the general welfare of clan members.
In any event, now might be a good time to be looking at such alternative systems – before Hela erupts.
The legal framework is there. All it requires is government willpower.