Approximately 95% of land in Papua New Guinea is known as customary land. Section 132 of the Land Act 1996 (Act) provides that, subject to Sections 10 and 11, a customary landowner has no power to sell, lease, charge or otherwise dispose of customary land or customary rights other than to citizens in accordance with custom. A contract or agreement made by a customary landowner that is not in accordance with custom is void. Section 10 of the Act allows the Minister for Land and Physical Planning to acquire customary land on terms agreed between the minister and the customary landowners. However, the minister cannot acquire customary land unless he or she is satisfied, after reasonable enquiry, that the land is not required or likely to be required by the customary landowners or by persons to whom the land will or may devolve by custom.
Section 11 of the Act provides that the minister may lease customary land from the customary owner for the purpose of granting a special agricultural and business lease (SABL). Section 11 (2) provides that where the minister leases customary land under Section 11 (1), an instrument of lease in the approved form, executed by or on behalf of customary landowners, is conclusive evidence that the state has good title to the lease and that all customary rights in the land, except those which are specifically reserved in the lease, are suspended for the period of the lease to the state. No rent or other compensation is payable by the state for a lease of customary land under Section 11(1).
The Act generally provides for the grant of various types of leases. These include state, agricultural, pastoral, business and residence, mission, special purpose and urban development leases, and SABLs.
Division 9 of the Act specifies that the minister may grant a lease for special agricultural and business purposes of land acquired under Section 11. A SABL must only be granted to a person or to a land group, business group or other incorporated body to whom the customary landowners have agreed that such a lease shall be granted. The main purpose of the inclusion of Division 9 was to allow customary landowners to mobilise their land and overcome the limitations referred to in Section 132 specified above. However, there has been significant public controversy as to the granting of SABLs. There have been allegations of misuse of SABLs to allow destructive logging of virgin natural forest under the guise of agricultural development.
As a result, in 2013 the government established a special Commission of Enquiry (Commission) comprising three lawyers to examine the circumstances of the granting of about 95 SABLs and to make recommendations to the government. Although those reports have not been publicly released and one of the reports has not yet been completed, we understand that recommendations have been made by the Commission to revoke and terminate a large number of previously granted SABLs as an abuse of process. The government is considering this issue and has established a task force to review the Commission’s recommendations.
Prior to that date, and due to the need or desire of landowners to mobilise their land, the Constitutional Law Reform Commission has reviewed the Land Groups Incorporation Act and the Land Registration Act and recommended the passing of the Land Registration (Amendment) Act 2009 and the Land Groups Incorporation (Amendment) Act 2009.
The amendments, which went into effect in 2012, were designed to improve the methods of incorporation of land groups, and to include accountability mechanisms and more streamlined processes for dealing with disputes between customary landowners as to whether they are entitled to become members of incorporated land groups, which is the chosen vehicle for dealing with mobilisation and ownership of customary land. The primary objective of the acts is to empower customary landowners to utilise their customary land for development in a fair, equitable and convenient manner. They are designed to ensure that customary landowners continue to have control of their land through the registration of the incorporated land group.
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