PNG landowners conned by companies cutting down forests: PNG PM Peter O'Neill

Liam Fox | ABC News

Papua New Guinea's prime minister Peter O'Neill says a controversial type of land lease has allowed foreign companies to con traditional landowners and chop down forests.

Special Agricultural Business Leases (SABLs) were supposed to allow traditional land to be converted into leasehold land for agricultural developments.

They cover more than 5 million hectares - about 11 per cent of PNG.

But a commission of inquiry that examined 42 SABLs found only four had the consent of landowners.

Mr O'Neill told parliament the leases have been used by foreign companies to con landowners, chop down forests and take the proceeds offshore.

He says he will establish a new legislative framework for customary land conversion but he did not say what would happen to the fraudulent SABLs.