What triggered off the rapid issuance of SABLs in PNG?

By Nalau Bingeding*

Since the late 1800s the German, British and Australian colonial administrations attempted to alienate customary land for social and economic developments in what is now present-day Papua New Guinea. Large cocoa and coconut plantations in the Momase and New Guinea Island regions, large coffee and tea plantations in the Highlands region, well established church-run stations with hospitals and schools throughout the country, and colonial outposts throughout the country which were later converted to towns, cities and government and mission stations are remnants of this customary land alienation by the colonial administrations.

Despite the good intentions of the successive colonial administrations to alienate customary land for social and economic activities, the success rate of customary land alienation was minimal. The successive colonial administrations upheld annexation laws and respected native rights, and possibly due to the remoteness and rugged terrains of much of the country, very little customary land was alienated from its customary owners.

When Papua New Guinea gained Independence in 1975, the country inherited just about 3% of alienated land from the Australian colonial administration. This percentage of alienated land remained very much unchanged after Independence despite the the Papua New Guinea government’s attempts over the years to alienate more customary land for social and economic developments.

Then between the years 2003 and 2010, some 5.2 million hectares or 11% of lands in Papua New Guinea was alienated for commercial activities through what is known as Special Agriculture Business Leases (SABL). This was seen by many as being the most rapid alienation of customary lands ever in the history of the country, from colonials days to present-day Papua New Guinea.

Over a period of about 100 years three different colonial administrations managed to alienate just about 3% of customary lands in what is now present-day Papua New Guinea. But in less than 10 years, some 11% of customary land was alienated through the SABL process. Simple maths tells us that over a period of 100 years the 3 different colonial  administrations managed to alienate just about 14, 000 hectares of customary land on an annual basis, while in a period of less than 10 years the SABL process managed to alienate about 500, 000 hectares of customary land on an annual basis.

So what really triggered off this rapid alienation of customary lands between 2003 and 2010 through SABLs?. Was it for rapid expansion of the oil palm industry? Was it deliberately done to log out most of the commercially loggable areas of the country before the current land reforms puts the logging industry out of business in 2017? Or was it something else we do not know that has triggered off this rapid alienation of customary land in the last few years?

Academics, non-government organizations and journalists have argued that the SABL process was actually a mechanism in which companies circumvent the processes put in place for lawfully acquiring timber concessions for logging, especially the 29 steps that needed to be followed. This has been the main argument for the rapid issuance of SABLs in recent years, and much of the Terms of Reference for the recently concluded Commission of Inquiry into SABLs may have been based on this premise.

However, the premise that SABLs was a mechanism for circumventing the processes put in placed for the acquisition of customary land for logging purposes is partly true. Besides this premise there are 2 other issues that have been responsible for the rapid issuance of SABLs in recent years , but they are not obvious to public view and have not been discussed very much to date. These 2 issues are discussed herein.

The first issue is the sale of land on the stock exchange. On the Kuala Lumpur Stock Exhange, land is traded just like stocks and bonds. Value of land including timber on that land can be sold and bought in terms of shares on the stock exchange.

Examples of this type of arrangement include one of the SABLs in Turubu, East Sepik Province and 3 SABLs in Tufi-Wanigela, Oro Province. There may be other SABLs under similar arrangements, but they have not come to light since information on such arrangements are highly classified and are out of reach for the general public.

In the East Sepik case a genuine oil palm company in Malaysia had acquired land title from another company that claimed to have rights to suitable land for oil plantation development in the the Turubu area. However, the genuine oil palm company later  found out that the SABL was under dispute and was going to be the subject of a government Commission of Inquiry into SABLs in Papua New Guinea.

This genuine palm oil company has since sought help from the private and government sectors in Papua New Guinea, but there was little that could be done to help as all SABLs were subjected to the Commission of Inquiry into SABLs.

It is not known what the status of the Turubu SABL is and what the oil palm company would do after the Commission of Inquiry into SABLs, but the name of that genuine palm oil company has already been tarnished and it will take some time for the company to repair its damaged reputation. Moreover, the company has paid millions of dollars through the stock exchange, and if that Turubu SABL is to be outlawed by the Commission of Inquiry then the company would have lost its investment.

In the Tufi-Wanigela case in Oro Province, one genuine oil palm company in Malaysia also bought out shares in a company that was listed on the Kuala Lumpur Stock Exchange. The company that sold the shares claimed to have land titles to 3 portions of land in the Tufi-Wanigela area that were suitable for oil palm plantation developments.

It is known that this oil palm company bought shares worth some 8 million US dollars from the Kuala Lumpur Stock Exchange. However, from inside sources it was learned that the company actually paid more than 8 million dollars.

The oil palm company later found out that the portions of land that it had acquired rights to were under some kind of dispute or did not exist. One of the portions was the subject of a major court case and was thrown out by the court in 2000, but the portion somehow found its way back into the government system and a new land title was issued. One of the portions was customary land, but somehow it was owned by a foreign plantation owner whose family owned some sort of steel industry in Australia. The other portion was claimed to be state land, a but a thorough search has found that the land was customary land.

The company also found out that the chiefs of the Tufi-Wanigela area had passed a resolution some years back declaring that they would not entertain any oil palm developments in their area. Therefore the oil palm company has now brought in a Malaysian consultancy firm to gauge the views of customary landowners to find a way forward for the company. How this consultancy firm will address the issue is something that we all will be waiting to see.

OCEAN, a local NGO group in the Oro Province, took up this case and has since written to the Kuala Lumpur Stock Exchange and the Round Table on Sustainable Palm Oil (RSPO) and complained about this genuine oil palm company’s actions. Thus, this company is now the subject of some unethical dealings and will have to clear itself of any wrong doings.

Between the years 2008 and 2010, one head of a government department was reported by the media to have taken several trips overseas to advertise lands available for agriculture developments in PNG. This department head was also implicated in many of the SABL dealings, and was known to have overstepped his jurisdictions at times and had given instructions to other departmental heads to process SABL proposals or issue land titles and timber permits. The actions of that particular departmental head has now paid off  handsomely in the sale of the said portions of land on the Kuala Lumpur Stock Exchange.

The second issue in the rapid issuance of SABLs in PNG is the acquisition of land and forest resources for the lucrative REDD PLUS and carbon trade businesses under the United Nations Framework Convention on Climate Change (UNFCCC) and the Voluntary Carbon Markets. Although this issue was obvious, it was not discussed because many people were not well versed with REDD PLUS and carbon trade issues and how these were linked to SABLs.

REDD PLUS is the mechanism to which developing countries will use to reduce their greenhouse gas emissions and contribute to the global effort to address the issues of global warming and climate change. Activities that need to be implemented under REDD PLUS include Reducing Emissions from Deforestation and Forest Degradation (REDD), sustainable forest management, forest conservation; and enhancement of carbon stocks.

In order to participate in REDD PLUS and carbon trade, one has to have rights to a portion of forested land that has had some deforestation or forest degradation done to it. Then one can reduce emissions from deforestation and forest degradation, carry out forest conservation, carry out sustainable forest management, and enhance carbon stocks on that forest land in order to generate credits for sale on carbon markets.

However, participating in REDD PLUS and carbon trade is not straight forward as one may think. There are certain conditions that must be fulfilled before a project can qualify to generate credits for sale on carbon markets. One of those qualifications is called “Additionality”, of which there are several types, but the most common ones include “financial additionality” and “base year (or time) additionality”.

The base year for any carbon project under the UNFCCC is 1990, while some voluntary carbon markets use other years like 1998 or 2001 as base years for their carbon projects. These base years are cut-off points, and any project that was initiated before any of these base years would not qualify as carbon projects because they would not have “base year additionality”.

By linking the base years for REDD PLUS and carbon trade to the rapid issuance of SABLs in PNG, we can see that most of the SABLs were issued between 2003 and 2010. Therefore most of these SABLs would have qualified as REDD PLUS projects because they were all issued after the base years of 1990, 1998 and 2001.

The year 2009 was the year in which the Copenhagen Climate Change Conference was to be held and it was expected that a new agreement was to be signed to replace the Kyoto Protocol (signed in 1990) and a Regulated Carbon Market was to be established for REDD under the UNFCCC. Thus the rapid issuance of SABLs between 2003 and 2010 may have been deliberately done to coincide with the signing of the new agreement at the Copenhagen meet and the anticipated establishment of a Regulated Market for REDD under the UNFCCC.

Nevertheless, the Copenhagen meeting did not produce the results most people expected. No regulated market for REDD was established and REDD was not given any full status for trading of carbon from developing countries. Therefore, the rapid issuance of SABLs in anticipation for REDD projects may have been done on time, but what transpired from the Copenhagen Climate Change meeting may have derailed one of the most deceptive moves ever made by logging companies and con artists to financially benefit from their own evil.

The local media and one study by an Australian university reported that most of the customary lands acquired under SABLs had little potential to be developed into oil palm plantations. The SABLs issued were for logging, and oil palm developments were used as cover-ups. In fact the whole idea was to use SABLs as cover-ups to acquire customary lands for logging and then the deforested and degaded forest lands would be converted to REDD PLUS projects later.

Consequently, it can be seen from this article that the rapid issuance of SABLs between 2003 and 2010 was not only for circumventing the processes put in place to acquire timber concessions for logging. In fact the rapid issuance of SABLs was also carried out to acquire land and forest for trading on the stock exchange and to tap into what would have been a lucrative REDD PLUS and carbon trade business under the UNFCCC, had a substantive international agreement been signed and a regulated market established for REDD PLUS in 2009.

* Nalau Bingeding can be contacted on 729 12128 or