Understanding Customary Land Access in Papua New Guinea: Key Considerations and Challenges

By Angela Ipara and Aminah Salmang

In PNG, customary land is owned and managed by indigenous communities, according to their traditional customs. The Constitution of the Independent State of PNG (1975) (PNG Constitution) recognises and protects customary land, ensuring landowners are not unfairly deprived of their land [1].

The PNG Constitution does not allow customary land from being acquired except under specific, stringent conditions. In PNG the two established ways of acquiring customary land are: 

1.      by agreement with landowners; or

2.      by compulsory acquisition by the State. [2]

Outlined below are the ways businesses can acquire land through agreements with customary landowners, with a focus on the practical steps and key considerations involved in negotiating access to and use of customary land for commercial purposes.

In PNG, the Department of Lands and Physical Planning (DLPP) is the main authority responsible for land management. The Minister of DLPP has the power, under the Land Act 1996 (Land Act), to acquire customary land whether by agreement with landowners or compulsory on behalf of the State. The Land Act also established the Land Board which is the instrumentality vested with the power to hear all applications for state leases except where the Minister for Lands is empowered by a law to make a direct grant of a state lease.

Ministers of other government departments are also instrumentally vested with the power to grant leases and licenses for specific purposes over customary land. For example:

• The Minister for Forestry is responsible for granting licenses for forestry activities.

• The Minister for Mining grants special mining leases, mining leases etc.

• The Minister for Petroleum and Energy issues licenses for oil and gas exploration and production.

How can land be acquired by agreement?

Section 10 of the Land Act outlines the process for the Minister of DLPP to acquire customary land by agreement with landowners. The key prerequisites are:

1. The Minister must conduct a reasonable inquiry to ensure the land is not required by the landowners or their successors.

   
   

2. If the land is not needed immediately but may be required in the future, the Minister may opt to lease it from the customary landowners for the necessary period.

Other legislative instruments permit the leasing of customary land for specific purposes and periods. Typically, these leases require compensation agreements with landowners. Examples of such leases/licenses include:

• the Land Act  which makes provisions for the Special Agricultural and Business Leases (SABL), which are granted for agricultural and business purposes to facilitate large-scale agricultural projects;

  
  

•  the Forestry Act 1991 allows the government to acquire land for forestry purposes, such as establishing forest plantations or conservation areas, provided that fair compensation is given to the landowners;

• the Mining Act 1992 allows the government to issue licences like a special mining lease over customary land for the purposes of conducting mining related activities on customary land for a period of up to 30 years;

• the Oil and Gas Act 1998 allows the government to issue licenses over customary land for the purposes of oil and gas exploration and production, such as the petroleum prospecting licence for a period of 6 years;

• the Environment Act 2000 allows for the leasing of land for environmental conservation and management projects.

What are the steps for businesses to occupy customary land?

To obtain the necessary licenses or leases for its operations, a business must engage with multiple stakeholders including the State, relevant regulatory authorities, provincial and local governments, the appropriate Minister and critically, the customary landowners, to secure the required approvals. Part of this process involves entering into compensation agreements with landowners for the use and occupation of their land. The steps to obtain approval from landowners for the specified period and purpose may differ, but the process generally includes:

1. (Landowner identification): identify and verify the rightful landowners through local records and community knowledge, often conducted through a land investigation study.

   
   

2. (Documentation): ensure all landowners are documented and their consent is recorded.

   
   

3. (Engagement with landowners): meet with local chiefs or clan leaders to discuss your intentions and seek initial consent. The Land Titles Commission can appoint agents, often clan leaders, to act on behalf of landowners. These agents can:

(a) execute all necessary documents and actions to effect the acquisition and vest the land in the State; and

(b) accept and distribute any rent, purchase money, compensation, or other payments to the entitled persons;

Their actions are as valid as if done by all the customary landowners themselves. [3]

Since the introduction of the Incorporated Land Group (ILG) by the Land Groups Incorporation Act 1974, and its amendment in 2009, landowners can register their customary land as an ILG. This gives them a formal and legal right to negotiate on behalf of the landowners regarding their customary land. However, not all land in PNG is regulated under the ILG system. In cases where the customary land is under ILG, the executives have the authority to perform the same actions as agents.

4. (Community consultation): clan leaders or agents are to conduct community meetings to inform its clan members of the activities a business may wish to conduct on their land and about the period the business intends to occupy the customary land. Separate to that, legislative instruments require Ministers to convene development forums and consultative sessions to allow for fair hearing of landowner’s views.

   
   

5.  (Compensation Agreement): negotiate fair compensation terms with the landowners, considering both monetary and non-monetary benefits, such as royalties, occupation fees etc.

   
   

6.  (Occupation of land): once compensation agreements are finalised signed, business can enter or occupy the land to conduct the business activity it has obtained approval to conduct for the specified period.

   
   

7.  (Implementation and monitoring) The government through the appropriate department and regulatory bodies must regularly monitor compliance with the agreement and address any issues that arise.

What are the challenges with managing customary land?

While the process can be outlined in a series of steps, managing customary land in Papua New Guinea remains complex due to a range of challenges, including:

• Identifying legitimate landowners and obtaining consent from all customary landowners can be difficult. There is no comprehensive property record-keeping system, making it hard to verify land ownership.[4]

• Participants from commercial banks in a recent study noted the difficulty in identifying which landowner groups are the genuine groups of legitimate custodians of the land they claim, and which are not. Participants representing developers or investors on customary land shared the same sentiments. [5]

• Lack of maps and proper records to check land boundaries. In some parts of PNG, there is little to no accurate mapping system for customary land boundaries. [6]

• Ongoing landowner conflicts. These conflicts often arise from disputes over land ownership, boundaries, and resource allocation. [7]

• Not all customary land in PNG is under ILG, making it challenging to identify legitimate landowner agents or clan leaders for compensation agreements. This issue has led to an increase in litigation between landowner groups and investors or developers over the legitimacy of these agreements.

How can businesses address some of these challenges?

Businesses can address these issues by:

• Conducting due diligence searches to ensure they are dealing with legitimate landowners. Since customary land is communally owned, disputes often arise over ownership.

• Ensuring agreements with ILG’s are made with legitimate executives, not just anyone claiming to represent the ILG.

• Checking the national court registry to determine if the customary land is not the subject of ongoing litigation.

To understand more about customary land access in across Melanesia, specifically Fiji and Solomon Islands, see our here.

[1] PNG Constitution, s 153.

[2] Land Act 1996 (PNG), s 7.

[3] Land Act 1996 (PNG), s 9.

[4] Nao, L., Kabiu, J., Awayang, S., & Kutan, L. P. (2023). Bankability of Customary Land in Papua New Guinea: Challenges and Prospects. The National Research Institute.

[5] Ibid

[6] Ibid.

[7] Ibid.