Dr Kristian Lasslett*

“The [Paga Hill] Estate will promote a way of life not yet seen in Papua New Guinea. A secure environment will be achieved not through fencing and guards, but a sense of community that will be fostered amongst residents and visitors alike”. Paga Hill Development Company (2012) 

Image: Displaced Paga Hill residents stand by demolished homes (Source: Jeffry Freeger)

On the 12th of May 2012, Royal Papua New Guinea Constabulary officers attempted to demolish the Paga Hill settlement in Port Moresby to make way for a hotel and commercial complex being developed by the Paga Hill Development Company (PHDC) –  allegedly in partnership with Hilton Hotels (Radio Australia, 14/5/12). Bulldozers destroyed homes, while distraught residents looked on. When opposition leader Dame Carol Kidu attempted to stop the demolition, she was assaulted by heavily armed officers, and frog marched from the area (footage from the eviction can be viewed here).

According to the developer, they have followed due process in obtaining the eviction (Radio Australia, 14 May 2012). Moreover, they suggest their title to the land at Paga Hill is sound. In a press release dated 13 April 2012, PHDC observe: 

“The Paga Hill Development Company (PHDC) holds a 99 Year Lease over the 13.7 hectare site known as Paga Hill, abutting the Port Moresby central business district”.   

In the same press release PHDC also note:

“Investigations by both the Ombudsman Commission and Public Accounts Committee (PAC) have found no wrong-doing on the part of PHDC, or the associated government entities in issuing the leases over the site”.

This is an interesting interpretation of the Public Accounts Committee (PAC) investigation. In their 2009 report on the Department of Lands and Physical Planning, PAC provides detailed commentary on the Paga Hill site:

1. First, they emphasise the social, cultural and historical significance of Paga Hill: “The land is of considerable historical importance to the nation, containing as it does, Wartime Bunkers, Gun Emplacements, tunnels and, apparently, significant pre-historical sites. Further, the situation of the land in the centre of a growing city offers superior recreational facilities to the occupants of Port Moresby. It is now and will increasingly be a vital recreational area for central Port Moresby”.
2. Despite the site’s public significance PAC observe, “On the 18th December 1997 Paga Hill Land Holding Company (PNG) Pty. Ltd. was granted an Urban Development Lease (“UDL”) over Portion 1597 Granville Port Moresby. This land comprises 13.7 hectares of Paga Hill in Port Moresby – virtually all the hill ... A large number of onerous conditions attached to the UDL – none of which, the Committee concludes, have been complied with by the Lessee”.
3. As a result of this finding the Committee argues “the failure to comply with the UDL covenants, particularly the Improvement Covenant, should have resulted in the Department forfeiting the Lease – or at least, not issuing a Business Lease”. 
4. PAC then note that in 2000 a company called Paga Hill Development Co. (PNG) Ltd was formed. “On the 01/09/2000”, PAC observes,  “a Business Lease over Portion 1597 Granville was granted to Paga Hill Development (PNG) Ltd. This Lease was registered as State Volume No. 24 Folio 159. How and why this new Company, rather than the original Grantee, was able to obtain this Lease is unknown. The Lease should have been issued to the same company that held the Urban Development Lease”. According to PAC, “In a memo to the Secretary for Lands, dated 18th March 2003, the issue of the Business Lease is described as ‘dubious”. While PAC argues, “the Business Lease related to the entire area and assumed that all the land was zoned ‘Commercial’. This was not the case. There were varied zonings and the Lease was illegally issued”. 
5. Like with the UDL, PAC claims the covenants attached to the Business Lease were not complied with “The Lease contained only very basic covenants requiring payment of Land Rent and an Improvement Covenant requiring improvements to a minimum of K 10 million within five years of issue of the Lease – on the 1/09/2000. Neither covenant has been complied with. No attempt has been made to forfeit the Lease by the Department for this failure”. 
6. It is also alleged that the proper Land Rent for Portion 1597 was reduced in an improper fashion “On the 24/05/2001, the Lease was changed by handwritten notation which reduced the Land Rent from K250,000 per annum to K50,000”. However, PAC claims it was advised that “the Lessee could not pay even this reduced amount. A departmental Officer then agreed to allow the Lessee to pay the Land Rent over a period. The Officer had no power to do so”. 

As a result of these findings, PAC concludes “that the State has been deprived of Rental payments by the illegal expedient of retrospectively changing the Lease condition and by the failure of the Department to recover the land either by forfeiture or by cancellation of the Lease...Why the Lease has not been forfeited is unknown. Land Rent is in arrears and no development at all has taken place. Non-compliance with the Leasehold improvement covenant and/or non-payment of land rent for six months constitutes grounds for forfeiture”.

I will leave it up to the reader to determine whether the PAC has indeed “found no wrong-doing on the part of PHDC, or the associated government entities in issuing the leases over the site”, as the developer claims.

Of course, that is not to say that the settlers at Paga Hill necessarily have a valid title – this is a matter to be determined. Nevertheless, freelance journalist Catherine Wilson (2012), who visited the community in February 2012, reports: 

Paga Hill Settlement, home to about 3,000 people from at least nine provinces in PNG, is situated on customary, or traditional land owned by the Lohia Doriga people in a prime location adjacent to Port Moresby’s downtown business district...At Paga Hill, settlers have been given permission to reside on the land by the traditional landowners. [emphasis added] 

The article is certainly worth reading in full.

Clearly, there are a lot of complex legal issues being contested in this case. Not helping matters is the systematic corruption and mismanagement at the most senior levels in the Department of Lands and Physical Planning, documented in detail by the Auditor General and PAC. In this light, it is quite surprising to learn that a major hotel chain such as Hilton Hotels has made an agreement with the developers. They certainly must be confident that PAC’s findings are baseless. 

*Kristian Lasslett is a Lecturer in Criminology at the University of Ulster and he sits on the Executive Board of the International State Crime Initiative.