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Landowner identification in PNG is a job for government

Protesting PNG landowners (One PNG)
Protesting PNG landowners (One PNG)

PETER DWYER & MONICA MINNEGAL | DevPolicy Blog | Extracts

CANBERRA - The Papua New Guinea Liquefied Natural Gas (PNG LNG) project commenced exporting gas to China, Korea and Japan in May 2014.

Under agreements reached in 2009, landowners of eight petroleum licence areas, eight pipeline licence areas and a liquefaction plant site near Port Moresby were to receive royalties. By February 2019, payments had been made to people in only the last of these areas.

The identification of landowners has been a major difficulty, and assigning responsibility for completing the task has been a matter of debate.

At the close of 2018, social mapping and landowner identification studies carried out by consultants to petroleum companies, clan-vetting exercises carried out by officers of the Department of Petroleum and Energy, and alternative dispute resolution processes implemented by the judiciary had failed to solve the problem.

By this time too, agreements for two other LNG projects (in Western Province and Gulf Province) were under discussion.

In January 2019, Petroleum Minister Fabian Pok told parliament that the government would not repeat the mistakes of the first LNG project. He wanted the companies to be responsible for identifying landowners in the new LNG project areas and he wanted this done before those projects moved to production.

On 23 January, referring to the Gulf Province LNG project, prime minister Peter O’Neill said that the government “had tasked the developer to do the landowner identification process” and Minister Pok reported that Total – the developer – had agreed to do this.

The small print is not yet to hand so we cannot be sure just what the government has requested or what Total has agreed to do. Here, however, we argue that ceding responsibility for landowner identification to the petroleum companies is a seriously bad idea – bad for the companies, the government and for the people of Papua New Guinea.

Under the Oil & Gas Act 1998, final determination of landowner beneficiaries for a petroleum licence area is to be made by the responsible minister and gazetted as a Ministerial Determination.

Recent determinations provide a record of landowner beneficiary identification for specified licence areas or pipeline segments. Those determinations name clans (variously ‘major clans’, ‘stock clans’, ‘beneficiary clans’) but do not name individuals within those clans.

With reference to differential benefit-sharing arrangements they may subdivide clans as ‘highly impacted’, ‘least impacted’ and ‘invited’.

The concept of ‘landowner’ is used here in a broad and fluid sense. It is not used in agreement with any likely academic definition, with any detectable legal rigour or in conformity with a pan-PNG ideology of tenure because, of course, there is no pan-PNG ideology of tenure.

The Oil & Gas Act requires that a company applying for a petroleum development licence must submit a “full-scale social mapping study and landowner identification study of customary land owners” of that licence area.

Under the Act, customary landowners are persons whose relationship with the land has to do with “rights of proprietary or possessory kind”. Not all clans identified as landowner beneficiaries in ministerial determinations satisfy this definition. And the status of others, both the included and the excluded, as members of this category will be always amenable to contention.

No petroleum company can produce a list of clans that will conform to, or satisfy, the sorts of decisions that currently inform ministerial determinations. They did not do so in the past and they cannot do so in the future.

If companies now assume responsibility for producing a definitive list of landowner beneficiaries, there will no longer be any ambiguity about who to blame or who to take to court when the list is considered defective. The fault will be theirs.

On these counts, the desire to shift responsibility – or at least the perception of responsibility – to the petroleum companies might, in the short term, prove beneficial to the government in domains of financial management and public relations.

There is, however, another reason why responsibility for identifying landowners should remain with the government.

Only Papua New Guineans – the PNG government, courts, and the landowners themselves – can determine who owns the land in Papua New Guinea. This responsibility should not be ceded to outsiders.

It should not be ceded to American, Australian, Chinese or French companies. Papua New Guinea is not their country. They are guests.

Only Papua New Guineans can determine what is right for Papua New Guinea. The petroleum companies should recognise and acknowledge this and step back from this area of decision-making.

The government should also recognise and acknowledge this and step forward to ensure that the rights of all Papua New Guinean woman and men are guaranteed by Papua New Guineans.


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Philip Fitzpatrick

I haven't done any social mapping for a while now so I am a bit out of touch.

What I would note however is that the days of company paid anthropologists sitting down and preparing vast genealogies ended a long time ago in favour of simply facilitating local landowners to come up with their own versions of who owned the land.

This was made a lot easier with the legislative amendments enabling the incorporation of land groups.

As we all know there is never a discernible logic to land ownership in PNG. While land may be inherited so too are various rights to use land, some of them quite obscure and convoluted. At the other end of the scale is land or land use rights that are gifted to individuals or groups who have no previous associations with the land.

I would argue that a company that provides the means to facilitate the landowners coming to an agreement about who is entitled to land owner benefits from a resource project is actually recognising the right of those landowners to make their own decisions, just as the article argues should be done.

I'm not sure it matters who provides the facilitation, the company or the government. It's just that I can't see the government successfully doing it in a timely and transparent way. There are too many opportunities to corrupt the system and the government is more likely to take these opportunities than the company.

I must also add that the incidence of recommendations in social mapping studies being ignored is common.

It is also worth noting that much of the social mapping in PNG, whether by companies or the government, is carried out by PNG researchers. That some of these researchers have been compromised in the process, including those working on the LNG project, is a worry.

I've had no experience of the company block system and can't really comment except to say that it seems to have a peculiar smell.

I would, therefore, still advise people like Benjamin to encourage people to set up incorporated land groups.

Paul Oates

Can someone, anyone reassure me why this isn't or will not simply develop into yet another reincarnation of a PNG cargo/money cult?

All the portents are already there.

Peter Dwyer

Thanks Phil
We have both, at times, done some editing so we know that editors do not always get it right. The title we gave to our brief article was ‘Landowner identification in PNG: whose responsibility?’ ‘Whose responsibility?’ transmogrified into ‘a job for Government’ and a subtlety we intended was lost. We wrote that ‘Only Papua New Guineans – the PNG government, courts, and the landowners themselves – can determine who owns the land in Papua New Guinea’ and, reflecting upon some recent statements by government ministers, we stated that ‘this responsibility should not be ceded to outsiders’. We did not argue that government should do the job. However, as we illustrated with examples, there seems to be a serious disconnect between recommendations arising from ‘social mapping and landowner identification reports’ and the determinations that are eventually signed by the relevant minister. The process detailed in the legislation may be workable but, in practice, this is not the process that is followed. For example, an earlier intention to pay royalties into incorporated land groups appears to have been abandoned in favour of a system in which each block in a licence area establishes a company, bank accounts are opened on behalf of each company and chairmen and other officials are appointed to oversee the companies and the bank accounts. Companies will comprise multiple clans and a single clan may be represented in more than one company. We hope that it is workable but we insist that, irrespective of the practical and financial assistance provided by petroleum companies, the responsibility for success or failure must lie with Papua New Guineans. As we wrote in our article it is their country.
Peter Dwyer & Monica Minnegal

Paul Oates

At the risk of stating the obvious, the issue is is far more complex that just determining who may have a claim of some sort to whatever is the royalties earned from the extraction of natural resources.

Once the extraction has already taken place, the imperative to determine who gets what becomes even far more complex. Not only are the landowners then expecting to obtain some financial benefit but the distribution of that benefit then has to be undertaken in such a way as to ensure none of the benefits stick to those whose hands are doing the distribution.

Since the ownership of natural resources is not limited to what is on the surface of the land but extends down through the land, at what point does that ownership cease to exist? We all know that resources such as oil and gas may well lie in areas extending well beyond the original extraction point.

What happens if those nearby realise they are missing out of royalties from resources extracted underneath their own land?

The complexity of the issue could be never ending. That is why the concept of 'Crown Land' became accepted as it is in Australia.

Why not therefore look at examples where landowner claims are working as far as distribution of royalties are concerned? In the US, an owner of the land can benefit from the extraction of natural resources. But that is for individuals and not whole clans or communities.

The issue for PNG is that there has never been a written, official record of land ownership of community and clan ownership. Prior to 'Pax Australiana' arriving, the matter was always decided by endless group discussion or violence or both.

Secondly, the responsibility for community welfare is a matter that must be considered. If in the PNG context, the government is the responsible body, will that empower the government to take a proprietorial perspective over how the community benefits?

But then is it local government, Provincial or National government then responsible for the community using this aspect? Husat isave? If it is the PNG judicial process in the PNG courts, than who assembles the case and who pays?

What are your thoughts Phil?

Benjamin Hatton

Mr. Fitzpatrick. I am interested in the details you describe above. As a guest in this country I am motivated to help my citizen friends with such information so they can prepare themselves adequately if such an opportunity comes there way.

Philip Fitzpatrick

What you are suggesting here is the removal of the process from companies who have a vested interest in getting the landowner issue right to a government riddled with opportunities and the will to subvert and corrupt the process for political and personal gain.

There is a perfectly workable process detailed in the legislation that enables representative landowner groups to be set up and incorporated. This process places the responsibility of deciding the landowner membership firmly on the landowners themselves.

Companies can assist in this process by providing financial help and the government can assist by expeditiously enabling the process to occur.

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