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ALI MOORE, PRESENSTER: In Papua New Guinea more than 10 per cent of the country has been taken out of the hands of traditional owners and given to private companies under controversial agricultural leases. Supporters believe the leases will free up land for badly needed economic development. But opponents say they're just a cover to allow logging of vast areas of native forests.



PNG correspondent Liam Fox travelled to New Britain with Greenpeace to file this report.

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LIAM FOX, REPORTER: The Pomio district on the island of New Britain is a largely pristine wilderness. Jungle-covered mountains descend to meet the turquoise waters of the Solomon Sea. It's one of the most remote and least developed areas in Papua New Guinea. But the normally quiet lives of the locals have become swept up in a bitter dispute that has national implications.



VOX POP: We don't own the land anymore, and every time I think about this I cry because land is our life.



JOHN PARULRIA, CHAIRMAN, MEMALO HOLDINGS: These people who are proposing the project was not interested in development, first. They want to conserve the forest for nothing.



LIAM FOX: At the heart of the conflict is land, an issue of immense cultural and emotional significance in PNG. Like the rest of the country, this area was largely traditionally owned. Very little was in private hands. But in 2008, three leases covering 42,000 hectares were granted for three local landowner companies. Known as Special Agricultural Business Leases or SABLs, they allowed the establishment of an oil palm plantation.



JOHN PARULRIA: This project was started by the people because they face hardship: social hardship, economic hardship.



LIAM FOX: In 2009, Gilford Limited, a subsidiary of the Malaysian logging giant Rimbunan Hijau, was granted a permit to clear the area. Several large areas of forest have been cleared. One houses an oil palm nursery with thousands of seedlings. A winding road has also been bulldozed through the jungle. In some areas, trees have been felled well beyond the roadway. At the wharf, raw logs are loaded on to a Chinese flagged ship. Greenpeace estimates 24,000 cubic metres have already been exported. The environmental organisation travelled to Pomio to support locals opposed to the plantation.



LOCAL PROTESTOR: We welcome you because we feel our concern needs to be released by the outside world.



LIAM FOX: These land owners say the leases were granted without their knowledge or consent.



PHILIP MOSI, LAND OWNER: I'm the clan leader of my clan and...



LIAM FOX: Were you consulted?



PHILIP MOSI: We were not consulted. My signature was forged to allow SABLs to be applied.



MARY BAILOENAKIA, LAND OWNER: When the company came in, most of us cried because we know they will destroy the land, our waters will be contaminated and our land will be spoiled.



LIAM FOX: Paul Pavol has been leading the protest against the plantation, announcing blockades to stop the clearing. What worries him most is that the leases are valid for 99 years.



PAUL PAVOL, ANTI-PLANTATION PROTESTER: It's a total rip-off, and that's suspension of our rights for a total of 99 years is plenty. 99 years is three generations down the line.



LIAM FOX: Government documents appear to support their claims. A land investigation report says genealogy, the identification of relevant land owners is yet to be completed. The land owners also say many of the signatures on land tenured declaration forms have been forged, and some belong to children. Pomio's top government official supports the plantation, but admits genuine land owners are yet to be identified.



POMALEU LANGISAN, DISTRICT ADMINISTRATOR: We're not sure who is the real land owner. I think this kind of thing should be done first.



LIAM FOX: But the leaseholders maintain consent was given, and most locals support the project. They say the plantation will deliver major windfalls to this neglected corner of PNG.



JOHN PARULRIA: Land rentals directly to the land owners, to the [inaudible] land groups, the levies from the woods, royalties and also a certain percentage from the end product of oil palm will also go to them.



LIAM FOX: This is not just an issue for Pomio. Across the country SABLs cover more than 5 million hectares - that's 11 per cent of the PNG landmass, and most of the leases have only be issued in the last five years. The largest covers 790,000 hectares in Western Province. A dozen others cover areas greater than 100,000 hectares.



COLIN FILER, AUSTRALIAN NATIONAL UNIVERSITY: Well the point about these very large areas is that most of them contain very significant areas of native forest that has not yet been logged, and that's what makes us think that the so called "agro-forestry projects" taking place in these areas may be basically logging projects in disguise.



LIAM FOX: Resource academic Dr Filer is one of several scientists in Australia and PNG who has scrutinised recent flurry of SABLs. He says they were meant to be a way for registered land owners to register their customary land to start businesses. But the process has been corrupted. Dr Filer says large tracts of land are now in the hands of private companies, apparently without the consent of most landowners.



COLIN FILER: There's a good deal of anecdotal evidence that some landowners certainly have consented and agreed to these things and may even welcome them, but most of that consent is conveyed through the mouths of landowner company directors who are themselves implicated in the projects and the schemes that they are advocating, and it is not clear to what extent these people represent the broader interests of a larger constituency of landowners.



LIAM FOX: The PNG Government has stopped issuing SABLs and a commission of inquiry has been established to investigate how they were granted. It's currently travelling around the country to examine individual leases, and its final report is expected next March. But back in Pomio, opponents of the controversial oil palm plantation said they can't wait that long.



PAUL PAVOL: Everyone is living in fear, and to me personally we feel like foreigners on our own land. That's not good. That's not what we want.



LIAM FOX: They want the logging stopped until the commission hands down its findings.