Ninety-nine year SABL leases issued to logging and oil palm companies have been condemned as "oppressive" and unfair by the Supreme Court.

The comments came in a decision endorsing the findings of the National Court that the SABL lease over Portion 144C in the East Sepik Province was null and void and all logging and oil palm planting was illegal.

The SABL lease, granted to Sepik Oil Palm Plantation Ltd, covered 123,200 hectares of customary land and was for a term of 99 years. The lease made no reservation of the traditional rights of the landholders to continue to live on the land, garden or do other things necessary to sustain their subsistence lifestyle. 

The SABL also incorporated an undertaking signed between the landowner company, Limawo Holdings, that denied local people any rights to challenge the lease in the future or raise any grievance through the courts and which indemnified the State if the lease was sold or mortgaged.

The Supreme Court has said the terms were so oppressive and unfair it called into question whether the landowners could have understood what they were being asked to agree to, if, indeed, they were asked at all.

Sepik Oil Palm Plantation Ltd is a PNG registered company owned, through Wewak Agriculture Development Limited, by the Malaysian company, Sin Yew Industries.

The Supreme Court described it as “extraordinary” that the Minister, Puka Temu, had granted the SABL lease for 99 years but failed to reseve the customary rights of the traditional inhabitants.

The Supreme Court also reiterated the obligation on the State to properly inform landholders and obtain their informed consent before leasing customary land:

“[where] a substantial area of customary land is to be acquired, the consent of all the affected landowners with authority to lease the land to the State must be obtained. It must be a free and informed consent. The environmental issues must be properly explored and explained”.

The court emphasised the importance of Section 255 of the Constitution that stipulates “consultation must be meaningful and allow for a genuine interchange and consideration of views.” 

According to the Court this means it is necessary “to go to the villages in SABL areas and talk to the landowners, in their families, clans and tribes, in the languages they could understand. If they did [not] understand English, Pidgin or Motu, then use interpreters to interpret things in their own languages.” 

The Supreme Court endorsed the comments from Justice Gavara-Nanu in the National Court on the importance of PNG Ways in defining what consultation and agreement means:

“For the landowners to be sufficiently informed of the new Government policies such as introduction of SABLs which would adversely affect their traditional lifestyle; more in-depth awareness meetings should have been conducted. This could have been achieved by Government officers travelling to the SABL areas and talking to the landowners in their villages. This exercise should have been done over a period of time, say six or twelve months or even more so that the people were made aware of and understood what SABL is about, its benefits, advantages and disadvantages and so on.

To me, this is the true Papua New Guinea way of consulting with people in the villages, especially where new projects are introduced in their areas and especially where SABLs would attract other projects, such as the introduction of oil palm plantations in the SABL areas.

In introducing projects such as this which would have permanent and long term effect on their land, genuine and meaningful consultation with the landowners must be carried out among the landowners. This is emphasized by the Constitution in the Directive Principles under the fifth goal, which provides for promoting and protecting Papua New Guinean ways”. 

The Supreme Court endorsed the findings of the National Court that Ss 9,10 and 102 of the Lands Act 1996 and S.37 of the Survey Act 1969 were not complied with and that the landholders had not given their free and informed consent to the acquisition of their land; the process of consultation was inadequate and contrary to the Constitution and National Goals and Directive Principles; and the Minister had failed to ascertain whether the landholders required the land for their own purposes before granting a 99-year lease.

The Supreme Court confirmed the SABL was null and void and any other related actions or projects undertaken or done either pursuant to or in relation to the SABL, such as logging agreements and or planting of oil palm in the SABL area were also illegal and null and void.