The concept of the joint venture is premised on the assumption that Native Customary Land, which is now unorganised and fragmented, can be turned into an economic asset through the creation of a Native Customary Land Bank. Once pooled, it is assumed that large-scale plantation development and optimum returns can be realised. It is also assumed that large areas of Native Customary Land are attractive and viable for private investment.

As a prerequisite, there should be contiguous blocks of land of not less than 5000 hectares, which may cover land spanning the territorial domain of several longhouse communities. To date, the SLDB and the LCDA have been appointed as managing agents. Every landowner has to sign a trust deed to assign to the government agency all their respective rights, interests, shares and estate in the land. The government agency will then enter into the joint venture with the private corporation. When an area is marked for commercial development, the Minister may declare that area of land as a Development Area under Section 11 of the Land Consolidation and Development Authority Ordinance 1981, and the land will be classified as Native Area Land under Section 9(c) of the Land Code.^[11] A perimeter survey using the global positioning system is carried out by the JVC to determine the size of the area. One title will be issued to the JVC for a period of 60 years (two plantation cycles) for an agreed value. The owners have to agree amongst themselves to determine the approximate sizes of their landholdings, and their names are then to be listed in the appendix of the trust deed. Under Section 18 of the Land Code,^[12] the Superintendent of Lands and Survey may issue a lease over any land within a Development Area^[13] for a term of not more than 60 years to a body corporate approved by the Minister. All adjoining land may be amalgamated.

In consideration for the use (or lease) of Native Customary Land, the JVC will issue to the trustee shares in the JVC credited as fully paid, equivalent to 60 per cent of the value of the said land, representing 30 per cent of the issued and paid up capital of the JVC. The value has been pegged at RM1200.00 per hectare. The JVC will pay to the trustee the equivalent balance of 40 per cent of the said land value. Out of that sum, 30 per cent will be invested in government-approved unit trusts and 10 per cent will be paid to the landowners.

In terms of equity ratio, the trustee will pay cash for 10 per cent of the issued share capital and the private company developer will pay cash for its 60 per cent share, while the landowners’ equity of 30 per cent in the JVC will be paid through the land value. The said land may only be used for agricultural purposes, and the JVC cannot deal with or charge the land as security for loans to implement the project without the prior approval of the Minister.

Upon expiry of the term of the title, the customary landowners shall decide either to renew the title in favour of the JVC or request for the land to be alienated to themselves or to another company or another entity nominated by them in writing. In the event that the customary landowners are desirous to have the land subdivided and alienated to them individually, the JVC is empowered to undertake a survey of the land and to determine the most equitable and fair manner of subdivision, having due regard to the extent of each of the landowners’ interest in the land. This is the stage at which the distribution and allotment of shares may be problematic because of uncertainty about the size of people’s shares in the land.

Two pioneer schemes have been developed as pilot projects in the Baram and Kanowit districts (Ngidang 1997: 75; Songan and Sindang 2000: 251) with varying responses from the participants. Many people participated in the projects without a full understanding of what such alien concepts as the trust, a joint venture, or shares in a company entailed.^[14] This could give rise to the question of whether there has been effective consultation and informed consent on the part of the participants.

The next section discusses traditional rules relating to trusts and trustees, considers how those principles are applied in the JVC arrangement for development of Native Customary Land, and looks at possible remedies for landowners in the event of any breach.