On Our L and Modern land grabs reversing independence in papua new guinea in collaboration with Pacific Network on Globalisation (PANG) on our land Modern land grabs reversing independence in papua new guinea Acknowledgments This report was authored by Frederic Mousseau, Policy Director at the Oakland Institute. Serah Aupong of Pacific Network on Globalisation (PANG) organized and coordinated in-country research. Jettie Word provided research assistance on the global timber trade and authored the box “Illegal Timber Laundering in Papua New Guinea.” We are deeply grateful to the organizations and individuals who assisted with research on the ground, in particular Claire Kouro (ActNow! PNG); Sam Moko (Greenpeace International); Gabriel Molok (Turubu Ecoforestry Wewak); Cosmas Makamet (Forcert); Rosa Koian, Tamara Mandengat, and Bailal Songai (Bismark Ramu Group—BRG); Eddie Tanago and Damien Ase (Celcor); and Ludwig Gambi, Rose Avusi, Celine Tabali, and Francisca Gambi (Women in Oil Palm—West New Britain). We also want to thank Tony Power and Paul Barker (Institute of National Affairs), Jemima Garrett (ABC Australia), Tim Anderson (University of Sydney), and Simon Lord and his team (NBPOL) for their contribution. We also want to express our gratitude to all the Papua New Guineans who generously shared their views and experi- ence with the Oakland Institute and PANG researchers in Port Moresby, West New Britain, East Sepik, and Madang provinces. Lastly, PANG and the Oakland Institute are grateful for the valuable support of its many individual and foundation donors who make our work possible. Thank you. Design: Design Action Collective Editors: Granate Sosnoff and Melissa Moore Photo Credits: Copyright © 2013 by Eric Chebassier / the Oakland Institute Cover photo: A ship waiting to load logs in Turubu Bay, East Sepik. Publishers: The Oakland Institute (OI) is an independent policy think tank bringing fresh ideas and bold action to the most press- ing social, economic, and environmental issues. The Pacific Network on Globalisation (PANG) is a Pacific regional network promoting economic self-determination and justice in the Pacific Islands. Copyright © 2013 by The Oakland Institute The text may be used free of charge for the purposes of advocacy, campaigning, education, and research, provided that the source is acknowledged in full. The copyright holder requests that all such uses be registered with them for impact assessment purposes. For copying in any other circumstances, reuse in other publications, or translation or adapta- tion, permission must be secured. For more information: [email protected] The Oakland Institute PO Box 18978 Oakland, CA 94619 USA www.oaklandinstitute.org Contents LIST OF ACRONyMS ............................................................................... 2 ExECUTIvE SUMMARy ............................................................................. 3 INTRODUCTION .................................................................................. 5 BACKGROUND: A RICh, DIvERSE, AND UNIqUE COUNTRy ............................................. 6 A highly Diverse Country......................................................................... 6 Economy...................................................................................... 7 human Development............................................................................ 7 Agriculture and Food Security ..................................................................... 7 Unique Constitutional Protection for Land Rights ..................................................... 9 A Unique Land Tenure System .................................................................... 9 LAND ACqUISITIONS IN PNG.......................................................................11 Special Agricultural and Business Leases (SABLs).....................................................11 The SABL Mechanism .......................................................................... 12 Legal Process ................................................................................. 12 The Commission of Inquiry .......................................................................13 Lease Agreements Flawed in Favor of Foreign Investors ................................................13 Lack of Capacity, Corruption, and Incompetence: Failure of State Agencies................................ 14 Use of Local Police Forces to Curb Opposition ...................................................... 16 Freeing Up Land for Development: the Government Policy Behind Land Grabs ............................ 17 SABL: A Tree hiding the Forest ................................................................... 18 Oil Palm Development.......................................................................... 19 IMPACT: ThE DESTRUCTION OF PNG’S CRITICAL ASSETS .............................................. 22 Forests....................................................................................... 22 A Rich, Diversified, and Productive Agriculture ...................................................... 23 Peace and Social Cohesion ...................................................................... 24 CONCLUSION: NO ChANGE IN SIGhT .............................................................. 26 ENDNOTES...................................................................................... 27 www.oaklandinstitute.org 1 Acronyms $ US Dollar CEO Chief Executive Officer CO2 Carbon dioxide CoI Commission of Inquiry DOL Department of Lands EU European Union EUTR EU Timber Regulation FAO Food and Agriculture Organization of the United Nations FMA Forest Management Agreement FORCERT Forest Management and Product Certification Service FPIC Free, prior, and informed consent GDP Gross domestic product ha hectare(s) ILG Incorporated land group INA PNG Institute of National Affairs INTERPOL International Criminal Police Organization ITTO International Tropical Timber Organization IT&S Independent Timbers and Stevedoring Limited K Kina, the currency of Papua New Guinea LIP Lands investigation process LIRs Land investigation reports m Meter(s) MDG Millennium Development Goals MTDP Medium Term Development Plan MTDS Medium Term Development Strategy NBPOL New Britain Palm Oil Limited NGO Non-governmental organization OI Oakland Institute PANG Pacific Network on Globalisation PNG Papua New Guinea PNG-LNG PNG Liquefied Natural Gas Rh Rimbunan hijau RSPO Roundtable on Sustainable Palm Oil SABLs Special Agricultural and Business Leases 2 www.oaklandinstitute.org Executive Summary Papua New Guinea (PNG) is one of the most culturally Nearly one-third of the country’s 46 million diverse countries in the world, with more than 800 indige- nous languages and over 600 islands. Among its many nat- hectares are now in the hands of foreign ural treasures, a unique asset is its rainforest, the third larg- corporations, mostly for logging. est in the world and home to endangered wildlife, plants, and diverse groups of people. It has been said that PNG has the most equal distribution of cancel deceptive land deals, stop illegal logging, nor return land on earth. The country’s constitution protects custom- land to traditional owners. ary land rights and there is virtually no private ownership. Land is almost entirely controlled by clans and tribes. The Instead, the prime minister has confirmed the official policy constitution sets self-reliance, sovereignty, and the sustain- that has enabled these land deals. Freeing up land for devel- able management of natural resources as overarching prin- opment and “unlocking” it for “productive use” remains the ciples for the country. first priority of the government’s development strategy, which aims to develop agricultural plantations, primarily palm oil. yet, even with these legal protections, a massive land rush is currently taking place in the country. In recent years, 12 With this strategy, the government planned to reduce the percent of the country, 5.5 million hectares, has been leased amount of customary land from 97 percent in 2009 to out to foreign corporations. Dozens of foreign compa- 80 percent by 2030. With the SABLs, it has reached its 2020 nies have signed land deals under a government scheme goal nine years ahead of schedule. called Special Agriculture and Business Leases (SABLs). Ostensibly formed to launch agricultural projects, these The government asserts that making land available for pro- firms appear to be mostly occupied with harvesting timber ductive use is required to bring development to the country. that is then exported to overseas markets. With the SABL Offering Papua New Guinea’s natural resources to foreign scheme, foreign companies have found a new and relatively interests has made the country one of the fastest growing easy way to open new areas for logging. economies in the world. But economic growth dependent on the export of natural resources has not brought benefits As a result of the SABL framework, PNG has seen a sharp for most citizens. Commenting on the poor human devel- increase in logging and log exports. It is now the second- opment records of the country, the World Bank describes largest exporter of tropical logs in the world, after Malaysia, the situation as a “paradox of wealth without development.” and exports more than 3 million cubic meters of logs every year, primarily to China. Through extensive field research, the Oakland Institute (OI) and the Pacific Network on Globalisation (PANG) have exam- In 2011, the government established a Commission of Inquiry ined what development looks like on the island of West New (CoI) into the SABLs that confirmed dire facts about these Britain, home to the largest and oldest palm oil plantations in recent land allocations in PNG. The commission’s find- Papua New Guinea. The island is held up as a model for what ings included widespread lack of free, prior, and informed the government intends for the rest of the country. yet there consent of the local people; failure by state agencies such is no sign of development in the villages that have been culti- as the Lands Department, the Department of Agriculture vating palm oil for several decades. A lack of basic infrastruc- and Livestock, and the Forest Authority in performing their ture and services is a common feature in all villages visited duties; and fraud, misconduct, and incompetence as well in West New Britain. People have little or no access to safe as overall lack of adherence to proper procedures. In many drinking water, health facilities, nor schools. deals, landowners were blatantly misled about the size and the nature of an agribusiness project. The largest palm oil company operating in PNG is New Britain Palm Oil, a member of the Roundtable on Sustainable On September 18, 2013, Papua New Guinea’s Prime Minister Palm Oil. The company has been praised in some quarters Peter O’Neill tabled the commission’s report in Parliament for its efforts to avoid deforestation and for not grabbing and stated that it revealed a shocking trend of corruption land like most of the logging companies. Despite its efforts and mismanagement. Despite the alarming findings, the towards sustainability, the corporation has not brought any government has not taken any concrete or decisive action to lasting positive improvement in people’s lives. www.oaklandinstitute.org 3 which were already under some form of logging concession At the current rate of deforestation, the PNG in the country prior to SABLs. This massive amount of land, nearly one-third of the country’s 46 million hectares, is now Forest Authority estimates that by 2021, 83 in the hands of foreign corporations, mostly for logging. percent of accessible forest areas will be gone or severely damaged. Given the Commission of Inquiry’s findings confirming previous assessments of the forestrysector, most of the 3 million cubic meters of timber exported every year from It is clear that the government’s “free up land” policy is not the country should be considered illegal. The government bringing development nor long-term improvements. Worse, authorizes the export of logs and receives tax revenues on it has been implemented in recent years through massive log exports, while this timber is harvested in violation of and documented corruption, fraud, and the resulting theft national laws, including the constitution itself. By unques- of natural resources from local landowners. tioningly pocketing this revenue, the government helps legalize an illegal activity and participates in a massive ille- Although he acknowledged the major failure of the SABL gal timber laundering scheme. scheme, the prime minister did not question the policy that led to this debacle and was silent about the structural The logs are exported from PNG to China and then re- causes of the SABL failure. On the contrary, in September exported legally to European and North American markets 2013 he announced the establishment of a task force “to as wood products and furniture, with China listed as the develop a new legislative framework to free up customary country of origin. land for development.”1 Many foreign logging firms are involved in this highly lucra- however, what is needed is not a “new legislative frame- tive illegal trade that was denounced in a 2012 report by work,” since the country already has a constitution and laws INTERPOL. The largest logging firm in PNG is a Malaysian that are very protective of people’s rights and resources. group known as Rimbunan hijau. The other logging firms The Constitution of Papua New Guinea outlines not only the flagged by the Commission of Inquiry for their involvement rights and protections for people, their land, and resources in irregular land deals come from Malaysia, Australia, USA, but it also upholds the concept of self-reliance and people’s and other Asian countries. right to economic self-determination. The key problem is Whereas the forestry sector contributes a mere 3 percent a development agenda based on unrestrained capitalism, of PNG’s total export earnings,2 it is barely benefiting the foreign investment, and resource exploitation—operating people and driving the rapid depletion of PNG’s resources within a context of widespread corruption and a dysfunc- and destruction of the environment. At the current rate of tional administration. deforestation, the PNG Forest Authority estimates that by The Commission of Inquiry report, like previous government 2021, 83 percent of accessible forest areas will be gone or commissioned assessments consulted in the course of this severely damaged. This would be an environmental disas- research, indicates that PNG and its relevant government ter. Given the population’s heavy dependence on the forest, agencies lack the capacity to “free up land for development” the human toll is barely measurable. This loss would affect in a way that would respect people’s rights and ensure that the livelihoods of millions of rural people. investments are sustainable and productive. The jargon of “freeing up land for development” and To get a truer picture of the extent of land grabbing and “unlocking land for productive use” hides a multilayered resource extraction going on today in PNG, it is important to tragedy of daylight robbery, the betrayal of people’s consti- understand that the 5.5 million hectares leased under SABLs tutional protections, and the loss of heritage and land for in recent years are in addition to the 8.5 million hectares millions of Papua New Guineans. 4 www.oaklandinstitute.org Children in Mosa village, West New Britain Introduction Alarmed by reports about a massive land grab taking place Fieldwork took place in the capital Port Moresby, in Madang in Papua New Guinea (PNG), the Oakland Institute (OI) Province, East Sepik Province, and the island of West New and the Pacific Network on Globalisation (PANG) undertook Britain in February and March 2013. The outcome of this research on land investment deals in the country, including research is this report as well as a documentary film, On sending a research team to the country in February 2013. Our Land.3 The purpose of our work was to study and document recent land investments in PNG to inform the public and policy- The first section of the report provides background infor- makers about a situation that has received little interna- mation on the country and the unique features of its land tional attention so far compared to other countries affected tenure system. The second section analyzes the extent and by land grabbing. The goal of this work was to also give an nature of land acquisitions in the country, considering the opportunity to local people and civil society organizations effects of the most recent government land scheme called to express their views and concerns in relation to this situ- Special Agriculture and Business Leases (SABL). Beyond ation and to the development policy implemented by the SABL, section two also looks at the forestry and palm oil government of PNG. sectors and at government policies on land and develop- ment. The last section assesses the impact of these policies on PNG’s people and environment. www.oaklandinstitute.org 5 A road in Madang province Background: A Rich, Diverse, and Unique Country A HigHly DivErsE Country small communities of a few hundred villagers who maintain intimate relationships with the land and natural resources.8 PNG, a young democracy, gained independence from Though estimates vary according to experts and method- Australia in 1975. Located in the southwest region of the ologies, it is generally accepted that forests cover close to Pacific Basin, it has a total land area of 46.17 million hect- 60 percent of the country.9 PNG has a variety of forest types ares (ha), 40.53 million ha of which is the eastern part of ranging from savannah woodlands, swamps, and man- New Guinea Island. The remainder is divided between the groves to lowland rainforests, hill forests, and mountain larger islands of New Britain, New Ireland, Bougainville, and Manus, as well as over 600 small islands.4 forests. Deforestation and forest degradation have been increasing at a worrying rate over the past two decades. The country has a population of approximately 6.5 million People are highly dependent on the forests for their food people who speak a total of over 800 indigenous languages, and medicines, soil and watershed protection, and for making it one of the world’s most culturally diverse coun- materials for construction and cultural activities, customs, tries.5 With around 83 percent of the population living in and beliefs.10 The sea and rivers also provide major food rural areas,6 most people still live traditional lifestyles based resources and a majority of the people rely on rivers and on small-scale agriculture, hunting, fishing, and gathering. creeks for their freshwater needs, such as drinking, bathing, Most people’s cash income comes from the sale of garden cooking, and more. produce, food and non-food forest products, and small- The country contains more than 5 percent of the world’s scale cash cropping, such as cocoa, coconut, vanilla, betel nut, and coffee farming.7 biodiversity within some of the most biologically diverse ecosystems, with around 20,000 species of higher plants Ninety-seven percent of the land of PNG is held under cus- (about 7.5 percent of the world’s total) and more than tomary rights, meaning it is owned and controlled by the 2,000 timber species.11 Many of the plants and animals are clans and the tribes who live on the land. Most people live in endemic and are only found in PNG.12 6 www.oaklandinstitute.org