Land-lease overhaul needed: PNG Land Scandal Commissioner | Pacific Beat

Land-lease overhaul needed: PNG Land Scandal Commissioner

Land-lease overhaul needed: PNG Land Scandal Commissioner

Updated 14 February 2014, 9:57 AEDT

The Chief Commissioner of Papua New Guinea's land scandal Inquiry says a whole new system of land-leasing is needed to put traditional landowners in the driver's seat for agricultural and other development.

Hundreds of thousands of landowners are waiting for the PNG government to act on its promise to cancel flawed Special Agricultural and Business Leases, or SABLs, issued for their land.

The Commission of Inquiry found widespread abuse and fraud had resulted huge areas of forest being opened up to timber companies with no plans for development beyond clear-felling the land.

Many of the leases were issued without consent of landowners.

During two years of investigations Chief Commissioner John Numapo spent a lot of time thinking what could be done to protect landowners.

He says a new enforceable, legislative and policy framework is needed.

Presenter: Jemima Garrett

Speaker: John Numapo, Chief Commissioner, PNG Commission of Inquiry into Special Agricultural and Business Leases

NUMAPO: We have recommended in our report that the current SABL set up be done away with entirely. We have carefully considered the option of retaining the SABL set up, the current SABL set-up, and the processes involved as an optional method for availing customary land for national development, but we think that because of the inherent risks associated with the option of retaining the current SABL set-up and the processes is simply unacceptable. And we believe any reforms to the law or process may not satisfactorily remove the loopholes and some of the inadequacies or permissive ambiguities that have currently been used to abuse the SABL process. We are surely recommending that the current SABL set-up be done away with entirely, and the government should look at setting up a new process that is more user-friendly and the people are comfortable with and they are able to take charge of it.

GARRETT: One of the problems that your inquiry uncovered was the huge scale of some of these leases. Should there be a limit on the size of land that can be leased?

NUMAPO: Well at the moment as it is under the Forestry Act it is 500 hectares for agricultural development. The developer is only limited to clearing the vegetation or the forest 500 hectares, and then to commence the agriculture project. If they think they require additional land then they will have to go back to the process to apply for a Forestry Clearance Authority from the National Forest Authority and basically go back to the Department of Agriculture and all this. But we found there to be one area that has grossly been abused over the years. They are given a lease title on the land and they continue to clear even after the 500 hectares of land.

GARRETT: Under an SABL land can be let for up to 99 years. That is 3 generations of people. Should there be a shorter time limit on the leases?

NUMAPO: Yeah, it should be a shorter time and I think at some stage throughout the report we were saying that 50 years at the most would be sufficient for an SABL lease. For example, taking some cash crop into consideration, things like the oil palm. Oil palm can be in full production actively 35-40 years and there are a few other agricultural projects and activities that don't really require 99 years. So we think the best timing would be 50 years the cut-off and it could be less.

GARRETT: At the moment under the SABL system landowners are not allowed to charge rent to companies leasing land and that is because they are supposed to be full business partners in development which is for their benefit. Does that sort of rule need to change?

NUMAPO: Yes, well, as it is now they do not have any rental on the use of the land and they are supposed to be partners in the development and they receive payment in the form of a royalty or some compensation payment for the usage of their land. We found that it can be a problem because sometimes the developer would be giving excuses to say that 'Well, we have not done anything just yet and until we start selling and making profits we wouldn't be able to pay you', 'There is no schedule of payments being drawn up in the agreement', 'We pay you when the money becomes available'. So everything is somewhat on a loose basis, the agreement, particularly between the landowners and the developers, it is loosely tied, so there are a lot of things that are not clear right from the outset. So the developers are capitalising on that. They are taking advantage of that by not paying the landowners the appropriate compensation and royalties that are due to them for using their customary land.

GARRETT: Could the introduction of rent hold companies to account, in that they have to pay from the minute they have the deal?

NUMAPO: Yeah, it would be a good idea. Rental is a certain amount of money that is paid each month, or each quarter, or each year, or whatever the agreement might be and it will put pressure on the developer making sure that he is paying his due to the landowners. At the moment, as I say, sometimes landowners are not seeing the benefits.

GARRETT: PNG currently has a moratorium on the issuing of new SABLs. Does that need to stay in place until the system for issuing land leases has been overhauled?

NUMAPO: I would hope so. I would think that is probably the better way to do it because the majority of the SABLs that came before the enquiry, as we found were unlawfully issued, which means that unless and until a proper legislative and policy framework is put in place, it will cause more problem to SABL and cause more problem to the landowners if we continue to use the SABL while the recommendation and the findings of the commission of inquiry have not been implemented. So personally I would think, and I think I understand the moratorium is still in place although I have heard on the news that one or two have been issued recently and I am not too sure how that is done, but the initiative of the government to put a moratorium on the issuing of new SABLs, as far as I am concerned, is still in place.

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