Will Land Reform in PNG Lead to Foreign Direct ‘Invasion’?

The Markham Valley - Land Galore

Land – there’s something sacred about land. There’s something powerful about owning land. In classical economics land is considered one the four factors of production (along with capital, entrepreneurship and labour) and land used to be defined as the “original and indestructible powers of the soil“.

In Papua New Guinea, legitimate land ownership and the right to exploit most natural resources is vested with the people of Papua New Guinea. Ownership is mainly governed by traditional law. About three per cent of the land in Papua New Guinea, or about 600,000 hectares, is outside of this system and this is almost entirely owned by the National Government. It is generally referred to as alienated land. Most alienated land is in urban areas but some plantations in rural areas occupy alienated land. Only 30,000 hectares of alienated land is freehold and 60,000 hectares is used for public purposes. About 200,000 hectares is leased to the private sector.

For those of you who understand PNG , you will know that has been successive attempts from previous (including the present Government) to introduce “land reform” programmes which are designed to redistribute possession of that 97% customary-owned land into leased land to made available for “development”. Ultimately, the goal of these “land reforms” deal with the same issue – how to get land off the customary land-owners so it can be earmarked for foreign investment.

In Chapter 5: Building the Economy through Sustained Reform of the PNG Government’s 2009 Budget, the Government notes:

Clear ownership and effective management of land is central to economic development. In Papua New Guinea, the complexity involved in accessing customary land for development and the ineffective land administration system have been the major impediments to economic growth.

The Government is committed to the implementation of the recommendations of the National Land Development Taskforce on land reform, particularly improving the process for conversion of unregistered customary land to registered customary title and then to urban development leases.

The PNG Government Wants to Put all Productive Land to Economic UseSir Michael Somare stated at the launch of his Governments’ National Lands Development Programme (NLDP) in 2007 that, “Landowners should consider registering their land to be leased to the Government to make more land available for development“. There is no doubt over what the intention of the Somare-Temu led Government is regarding “land reforms” in PNG.

The reason why I’m talking about this issue is because of the increasingly worrying trend of rich governments and particularly corporations who are legally buying rights to millions of hectares of agricultural land in developing countries in an effort to secure their own long-term food supplies.

Now I know some of your more familiar with PNG will point out that under the Under the Land (Ownership of Freeholds) Act 1976, no foreign investor or non- citizen is allowed to own freehold land. However – simply by adhering to the rules outlined in the Business Groups Incorporation Act 1974, one can work around that issue.

Julian Borger of The Guardian wrote an interesting aricle in November 2008 addressing the issue of rich countries and corporations targeting developing nations and their land. In that article Borger provides a number of examples of controversial land deals that could create a form of neo-colonialism – with poor states producing food for the rich at the expense of their own hungry people. Borger writes:

Rising food prices have already set off a second “scramble for Africa”. The South Korean firm Daewoo Logistics announced plans to buy a 99-year lease on a million hectares in Madagascar. Its aim is to grow 5m tonnes of corn a year by 2023, and produce palm oil from a further lease of 120,000 hectares (296,000 acres), relying on a largely South African workforce. Production would be mainly earmarked for South Korea, which wants to lessen dependence on imports.

And:

According to diplomats, the Saudi Binladin Group is planning an investment in Indonesia to grow basmati rice, while tens of thousands of hectares in Pakistan have been sold to Abu Dhabi investors.

Arab investors, including the Abu Dhabi Fund for Development, have also bought direct stakes in Sudanese agriculture. The president of the UAE, Khalifa bin Zayed, has said his country was considering large-scale agricultural projects in Kazakhstan to ensure a stable food supply.

Even China, which has plenty of land but is now getting short of water as it pursues breakneck industrialisation, has begun to explore land deals in south-east Asia. Laos, meanwhile, has signed away between 2m-3m hectares, or 15% of its viable farmland. Libya has secured 250,000 hectares of Ukrainian farmland, and Egypt is believed to want similar access. Kuwait and Qatar have been chasing deals for prime tracts of Cambodia rice fields.

PNG Land Reforms - Politically Motivated for Economic Growth, but what are the Opportunity Costs?It is understandable that the current PNG Government wants to meet its target of 5% per annum of economic growth as outlined in its Long and Medium Term Development Strategy (MTDS) 2005-2010. It is also understandable that land registration is a key aspect of meeting that target as it ultimately attracts foreign investment – however, herein lies the problem.

How is the Government going to ensure that the customary land registration process used adequately takes into account customary land-owners especially when the the reasoning behind land registration is foreign direct investment?

This issue is further highlighted by Borger’s article in The Guardian. Registering portions of the 97% customary-owned land in PNG opens up the door for foreign states and corporations to use our land to feed their people – and what of the traditional land-owners and the people of PNG?

NOTE:

After I wrote this post I came across two articles that provide more reading into customary land registration in PNG. A must read is Aid Watch’s NGO Submission to the National Lands Development Taskforce which was submitted in November 2008. Find that here.

The other is Part 1 of the National Land Summit Report held in Lae in 2005. Find that here.

~ by Tavurvur on April 8, 2009.

7 Responses to “Will Land Reform in PNG Lead to Foreign Direct ‘Invasion’?”

  1. The foreign invasion you mention has already started. A Land Reform in PNG – will just enable the process of invasion to proceed quicker and give government the power to override the interests and decisions of local landowners.

    Papua New Guineans have become slaves within their own country. What are the chiefs doing about this? Where have the true visionaries of PNG politics disappeared to?

    R

  2. Rob,

    Personally, I think there needs to be an agreement reached between the National Government and specific urban local land-owners. There’s always going to be a balancing act but the deal must always be in favour of the landowners.

    Understandably, we can not accommodate PNG’s economic growth if we do not have the land available to encourage investment. FDI is not the only issue here – what about land for suitable local housing? POM is by far the worst example. The increasing PNG middle class are not able to be home-owners because there isn’t enough houses to go around. The rich buy the limited land, build houses, and charge ridiculous rental rates.

    Leasing the land is an option – what about outright purchasing urban land-owner land at better than current premium market prices?

    T

  3. T,

    Your statement : “there can not be economic growth if there is no land” – is very true but scares me at the same time.

    PNG has experienced so called economic growth in the past 6 years but what benefits if any have actually flowed on to the rural folks.

    If I was a PNG landowner right now and I was asked to sell (give up) my land for the sake of economic growth – I would tell them to shove it!!

    Land is the absolute last item that rural PNG have to bring to the bargaining table. I suggest that they think twice before they decide to give it up in the name of progress or economic growth or whatever you want to call it.

    Western civilisation (the so called developed world) is in a process of collapse – last October is just the tip of the ice-berg. It has always amazed me why it is that PNG willingly rushes at 160 miles/hour towards something that is destined to fail anyway.

    R

  4. Rob,

    I think there’s always going to be some landowners – whether they’re making un-educated decisions or whether they are being influenced heavily internally, who will give their land up. The old and the new are clashing and sometimes today the new win – with drastic consequences.

    Rural PNG should undoubtedly hold on fast to their land, however, urban PNG is where the decisions of today will affect those of tomorrow.

    T

  5. T,

    Point taken re urban PNG. Perhaps a lease arrangements can be entered into with appropriate considerations given to infrastructure and basic services.

    R

  6. Great Article!

  7. All true, however, without development and foreign investment PNG will be reliant on Aid forever. If Papuans want health care, schooling, Universities roads and electricity the government and the people need tax dollars from somewhere. Without secure title to land nobody is going to invest the money in infrastructure needed to produce agricultural products. Without this investment there are no jobs in rural areas and no taxes for the government to provide services for millions of rural people. If you don’t want these things thats fine but please don’t accept the tax I pay as Aid when the PNG Government cannot provide these things for you. I’d rather see that money go back into the Australian economy, where I will see some of the benefit.
    If the West does melt down and PNG has to manage without Aid things will get pretty tough. Say goodbye to the highlands Highway, schooling, police and health care, all of which is pretty rough however its better than nothing.
    There has to be a happy medium where investors can make a profit from their investment (they are not a charity) and the land owners can also get what they want. It may not benefit the present generation but their kids would at least have the choice of getting a job or living the traditional lifestyle (which seems alright till you get sick or want to send the kids to school).
    I have been to Malysian Borneo recently which is a similiar island to PNG. They sorted out the land ownership issues 80 odd years ago and it suprised me how well they live (by western standards). Most people live in modern houses and have cars, crime and unemployment is minimal and everywhere I went there were jobs available. The Oil Palm and Tourism industries are huge, which pays for the modern schools and universities even in rural areas.
    Due to this they are free of outside interferance from donor countries and can meet outside investors on equal terms. They don’t need to sell out in order to attract investors as they can provide the capital themselves. They are truly kings in there own country.

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