The Land Groups Incorporation Act, passed by PNG’s House of Assembly in 1974,[16] was another exceptional law, like the East Sepik land legislation which followed it over a decade later. In 1998, in a review of laws for the recognition of indigenous groups published by the United Nations Food and Agriculture Organization (FAO), I described the Act as ‘one of the most innovative laws on the general subject of group recognition’ (Fingleton 1998: 11). As previously mentioned, the Commission of Inquiry into Land Matters in PNG recommended in 1973 that, for purposes of the registration of titles in customary land, landowning groups should be incorporated, with a constitution defining their membership, powers and decision-making processes. The person who drafted the legislation to give effect to these proposals was C.J. (Joe) Lynch, then PNG’s Chief Legislative Draftsman.
As it happened, Lynch had already been considering the general subject of legal recognition of customary institutions for some years. It was clearly a subject which interested him, both intellectually and professionally. From the mid-1960s until his death in the late 1980s he wrote prodigiously on subjects ranging from the recognition and enforcement of custom (including deliberations by ‘grass-roots’ courts) to the question of how legal provision could be made for traditional leadership — sometimes writing about a particular country and sometimes comparing the approaches taken to these matters across the Pacific Islands. Not only did he prepare the legislation passed by the law-making bodies of Pacific countries, he frequently produced papers debating the issues or commenting on the outcomes. He drafted PNG’s Constitution in the mid-1970s, and was engaged in the early 1980s as Legislative Counsel in both Marshall Islands and Kiribati, shortly after their Independence.
Lynch’s (1969) paper on ‘Legal Aspects of Economic Organization in the Customary Context in Papua and New Guinea and Related Matters’ dealt with four interrelated subjects, one of which was ‘Community Landholding’.[17] The paper starts with an introductory part where Lynch outlines the purpose and scope of his endeavours:
The theme of the whole paper is simply that for too long we have all acted on the theory that indigenous forms of organization are not apt for ‘Westernized’ economic development and that the latter must wait on a long period of ‘Westernizing’ economic education. In my view, it is high time that we asked ‘Why not?’ and tried to find remedies for specific deficiencies in the indigenous system. It is hoped that this paper may furnish a starting-point at least in the field of statutory requirements (Lynch 1969: 3).
In arguing for the adaptation of indigenous forms, Lynch’s approach was radical for the time — especially for a lawyer. PNG was only just emerging from what has recently been termed the ‘replacement paradigm’, where development was seen as requiring replacement of customary institutions with their Western counterparts.[18] Paul Hasluck’s influential reign as Australia’s Minister for Territories (1951–63) was not long over, and his views on land reform saw no future for customary tenures (Hasluck 1976: 126). The Derham Report of 1960 advising on the administration of justice in PNG also saw no place for a village-based system of courts applying custom (Oram 1979: 61–4). Even the then Public Solicitor, W.A. (Peter) Lalor, a champion of indigenous rights and often a thorn in the Administration’s side, was a legal conservative when it came to embracing customary institutions.
Among the sources for his own paper, Lynch mentions publications by the New Guinea Research Unit of The Australian National University dealing with indigenous business enterprises (Lynch 1969: 4). He also set out the ‘propositions’ on which he based his approach,[19] including the ‘undesirability of unnecessarily interfering with custom by forcing it into an artificial legal framework’, and the ‘need for simplicity and flexibility and for leaving alternatives open’ (ibid: 2).
In discussing the particular requirements of a land groups’ law, Lynch notes that the need for a legal form for landholding by customary groups arises from ‘external factors’.
The needs of people dealing with the land-holding group … the general (though not necessarily individual) need for overall land registration in some form, the need to have some recognized authority who can be made legally responsible in legal matters affecting the land, and so on … [the need to] interfere with the internal structure and working [of land groups] to the minimum, even allowing for the fact that the observer does influence the observed and the mere description of a custom may affect it either immediately or in relation to its development … [the need for] the utmost flexibility in our requirements as to the constitution and powers of our corporate body … [and the need to recognise] that we are not dealing with social organizations which have been worked out ad hoc, but with highly developed organizations with existing implications for many fundamental aspects of community life (Lynch 1969: 9–10).
His conclusion was that ‘we should not impose a structure, but should concentrate on describing one’ (ibid: 9, emphasis in the original), and he proposed a simple method to recognise and give corporate legal status to existing customary groups (ibid: 8), and then to regulate their external dealings — ‘and even in this to interfere as little as possible’ (ibid: 6).
Lynch recognised that what was being undertaken was ‘attempting to fit a non-English institution into the framework of English law’ (Lynch 1969: 12),[20] and he acknowledged that he was approaching the task as a lawyer, recommending that the views of anthropologists should be sought on his proposals.[21] He attached to his paper a preliminary draft bill for a ‘Group Land Ordinance’, which included the procedure for recognition of land groups and the requirements for a land group’s constitution (ibid: 58–70).[22] Apart from enabling customary groups to own and deal with land in their own right, Lynch saw that his proposed legislation would also do away with the existing provision for the use of agents in land dealings (ibid: 15), and — in what, with hindsight, might now be seen as an inopportune prediction — he saw it as providing a method for making payments under mining and forestry legislation ‘in safety’ (ibid: 15–16).
Notable features of the above views are Lynch’s regard for customary institutions, his belief that they could be adapted to meet modern needs, and his perceptions that the law’s task was to recognise the corporate nature of groups already existing under custom rather than create corporate bodies de novo. Legal recognition was mainly for the benefit of outsiders; groups did not require much internal regulation and the goal was minimum interference by the legislation in the group’s internal affairs. At the same time, he clearly understood that even such minimal interference would affect the groups, and ‘mere description of a custom may affect it either immediately or in relation to its development’ (Lynch 1969: 9).
In 1974, the task began of bringing forward recommendations of the CILM for government consideration.[23] Most pressing were the problems of claims to alienated lands, mainly foreign-owned plantations which in some areas were contributing to pressures on land and racial conflict. The Plantation Redistribution Scheme, adopted in 1974, was underpinned by a scheme of four laws, one of which was the LGIA.[24] The CILM had called for such a law to enable the vesting of land titles in customary groups, but the Act was brought in initially to allow the vesting of registered titles in redistributed plantations.
As PNG’s Chief Legislative Draftsman, Joe Lynch drafted the Act, but it was more than just a dusting-off of his 1969 preliminary draft of the Group Land Ordinance.[25] Two of the CILM’s small support staff of advisers were the anthropologist Professor Ron Crocombe, then Professor of Pacific Studies at the University of the South Pacific in Fiji, and Dr Alan Ward, then a Senior Lecturer in History at La Trobe University in Melbourne and an authority on Maori land affairs. They lent their authority to the CILM’s recommendation that landowning groups should be incorporated with a constitution defining their membership, powers and decision-making processes. Furthermore, a drafting committee of government officials and lawyers from the University of Papua New Guinea participated in the drafting of the new Act during 1974.[26] But the approach taken in the LGIA of 1974 followed the main views and proposals formulated by Joe Lynch in his 1969 paper, and he is, therefore, entitled to be regarded as the true ‘architect’ of that innovative piece of legislation.
The preamble to the LGIA states that it is a law ‘to recognize the corporate nature of customary groups and to allow them to hold, manage and deal with land in their customary names’. The following treatment will first spell out the main provisions of the Act, then list its key features.
The Act provides a simple process for the incorporation of land groups, which begins with preparation of the group’s constitution. This document must set out:
the name of the group;
the qualifications for (and any disqualifications from) membership of the group;
the title, composition and manner of appointment of the committee or other controlling body of the group;
the way in which the group acts, and its acts are evidenced;
the name of the custom under which the group acts;
details of the group’s dispute-settlement authority;
any limitations or conditions on the exercise of powers conferred on the group under the Act; and
any rules applicable to the conduct of the group’s affairs.
A group applies to the Registrar of Incorporated Land Groups for incorporation, sending in its constitution. The application is given publicity in the area concerned, and checks are carried out on the group’s suitability for incorporation. After considering comments received and any objections, the Registrar can issue a certificate of recognition, whereupon the group becomes legally incorporated, gaining legal status as a corporation with perpetual succession and the capacity to sue and be sued, and do other things a corporation can do.
Upon incorporation, the rights and liabilities of the customary group become rights and liabilities of the ILG. The powers of the ILG relate only to land, its use and management, and they must be exercised in accordance with the group’s constitution and the relevant custom as nominated in the ILG’s constitution. Subject to these requirements, an ILG may acquire, hold and dispose of customary land, enter into agreements for its use and management, and distribute any product or profits from the land. Evidentiary provisions protect persons who enter into transactions with ILGs which are in formal compliance with the provisions of its constitution.
Each ILG must have a dispute-settlement authority, for dealing with disputes between group members or between the ILG and a member, including disputes over entitlement to membership. The dispute-settlement authority may be a person or persons specified by name or position, or determined in the manner specified in the ILG’s constitution. Dispute-settlement authorities are required to do ‘substantial justice’ between all interested persons, in accordance with the Act, the ILG’s constitution and any relevant custom.
Provision is made for the dissolution of an ILG, in cases where it has ceased to function as such, or its affairs are being conducted in an oppressive or unfair manner, or for some other reason ‘it is just and equitable that the affairs be wound up’. In general, customary land belonging to an ILG which has been dissolved reverts to the persons who would be its customary owners if the ILG had never been recognised.
Key features of the Land Groups Incorporation Act are:
It is a process for the recognition of existing groups — that is, bodies which already have a corporate identity under custom.
Groups have considerable freedom in preparing their constitutions. The Act prescribes certain matters upon which rules must be made (on membership, the way the ILG acts and its acts are evidenced), but it does not dictate the content of those rules.
ILGs remain subject to custom. They are required to identify in their constitution the custom under which they operate, but this may be done by simply naming it. There is no requirement for the custom to be written down.
The powers of ILGs are confined to their land — its ownership, use and management, and the distribution of its product and profits. An ILG may place limits or conditions on the exercise of those powers in its constitution.
Upon incorporation, the assets and liabilities of a customary group are transferred to the ILG. Upon dissolution, the ILG’s customary land is vested back in its customary owners.
Protection is given to outsiders dealing with an ILG. They are entitled to rely on its constitution, and if the ILG has entered into a dealing — other than a transaction disposing of its land[27] — in accordance with the formal requirements set out in its constitution, that is generally conclusive as to its power to enter into the dealing.
Special machinery is provided for settlement of internal disputes within ILGs.
The LGIA was passed in 1974, but for many years there was virtually no action taken to use its provisions. This was partly because the Act was initially introduced as a component of the Plantation Redistribution Scheme, and when that measure started to experience delays (Fingleton 1981), the immediate need for the Act declined. A second reason was the division of responsibility for land group incorporations between the Registrar-General (responsible for incorporations) under the Ministry of Justice, and the Ministry of Lands (responsible for land administration). A capacity for carrying out the special responsibilities involved in supervising the incorporation of customary land groups was never developed.
The third and main reason, as explained above, was that the national legislation for registration of titles in customary lands did not eventuate. The main purpose of the LGIA was to enable customary groups to hold, manage and deal with their customary land in their own names. The most important legal device to facilitate the management of land — affording security of tenure for its owners and for those entering into dealings with its owners — is a registered title. It was anticipated that, once the customary land registration law was in place, ILGs would be the bodies in which the group titles would be vested.[28] That was the clear intention of the CILM.
In 1988 I was engaged as a consultant, under the UNDP-funded Urban Settlement Planning Project in PNG, to design the land tenure arrangements for provision of low- and medium-cost housing to persons occupying customary lands at two sites — Buko settlement (40 ha) near Butibam village on the edge of Lae, and Kreer settlement (131 ha) within the Wewak town boundary. The arrangements were approved after extensive consultations with the customary owners of both sites and the people already occupying much of the land (so-called ‘squatters’ — nearly 500 households at Buko and over 400 at Kreer). A meeting was also held with the main commercial banks operating in PNG, whose managers agreed in principle that the proposed land tenure arrangements would provide acceptable collateral for lending to the settlers for their house construction and improvement. One aspect of the arrangements was for the customary groups which owned the land in question (six clans for the Buko site and two clans for the Kreer site) to be incorporated under the LGIA.
This was my first ‘hands-on’ experience of the Act I had been involved in drafting in 1974. My inquiries showed that only a handful of incorporations had been carried out by 1988 — 14 years after the Act was passed. During the period 1988–90, I visited the two sites on a number of occasions, holding village meetings and collecting data for the preparation of clan genealogies. Based on that information I drafted constitutions for the proposed ILGs, setting out their membership rules, decision-making processes, dispute-settlement authorities and so on, as required by the Act. Applications for incorporation were prepared and sent to the Registrar of Incorporated Land Groups and, after lengthy delays,[29] the ILGs were incorporated. The next step was for the ILGs to re-incorporate as companies under the Companies Act — one company made up of the six ILGs for Buko and another company made up of the two ILGs for Kreer. The companies would then be authorised to manage the settlement sites on behalf of the ILGs under management agreements, which included the granting of leases to the individual settlers.
Although by 1991 all the legal arrangements were in place, and house block surveys and the provisions for power, water and sewerage infrastructure had reached an advanced stage at the two sites, the project became a victim of PNG’s financial crisis following the Bougainville rebellion. Negotiations were held with the World Bank, but the project was not included for funding under the Structural Adjustment Program or the Special Interventions Project, possibly partly because of the Bank’s aversion at the time to working with customary land groups. Funding dried up, and the land tenure arrangements were never completed by the grant of leases to the settlers.
In 1992, I had my only other ‘hands-on’ experience of land group incorporation. That year I was engaged by Chevron Niugini Limited (CNGL), together with an anthropologist Dr Tom Ernst, to advise on the incorporation of customary groups within the Kutubu oilfields of the Southern Highlands Province. Tony Power, who had been the moving force behind the East Sepik land legislation in the 1980s, was now working for CNGL as their Business and Community Development Manager, and he drew on the East Sepik experience in conceptualising how ILGs could be used to improve participation by customary landowners in the benefits of the project. After a field trip with Ernst and Power to the area and some brief village meetings, I prepared the ‘Manual of Laws and Procedures for Incorporation of Customary Landowning Groups’, drawing on my previous experience in incorporating the eight ILGs for the Urban Settlement Planning Project. This manual was then used by CNGL staff to incorporate ILGs in the project area for the purposes of royalty distribution and participation in ‘spin-off’ business opportunities.
Mention must now be made of two developments which were to have major significance for administration of the LGIA. In 1992, the new Forestry Act of 1991 came into operation. One goal of the Act was to improve the arrangements for gaining access to PNG’s forest resource, almost all of which stood on customary land. For this purpose, the Act provided that, as a general rule, the timber rights in customary land could only be acquired if the title to the land was vested in land groups incorporated under the LGIA.[30] This requirement threw open the gates for a stream of ILG applications. In anticipation, the PNG Forest Authority adopted my CNGL manual prepared for the petroleum project at Kutubu as the model for its Manual on Land Group Incorporation (GoPNG 1995). Then, in 1998, a new Oil and Gas Act was passed. By one of its provisions (Section 169), payments of landowner entitlements had to be made to ILGs. What had begun as the brainchild of Tony Power, to facilitate involvement of customary landowners in the Kutubu petroleum project, had now become a statutory requirement for all forestry and petroleum projects across the country.[31] And the same basic manual, which I prepared privately for CNGL, was now being used for the purposes of all forestry and petroleum projects in PNG.
The result was that, after almost two decades of negligible activity under the LGIA, the last decade had seen a flood of ILG incorporations. In March 2004 I interviewed the Titles Officer (ILGs) in the Department of Lands and Physical Planning in Port Moresby, who informed me that a total of over 10,000 ILGs had been incorporated by then, and that between 10 and 15 applications for new incorporations were being processed daily. All the duties of checking the suitability of new incorporations, as well as the oversight of existing ILGs, had fallen on the shoulders of this one officer. He had no special training, and was manifestly unable to carry out the statutory responsibilities in anything other than a perfunctory fashion. Most of the applications for incorporation related to forestry and petroleum projects,[32] and it is apparent that the manuals were being slavishly followed without regard to local variations in custom. It was a situation where breakdown in the operation of ILGs was inevitable.
When to this was added the fact that the great majority of ILGs were being incorporated not for the main purpose for which they were designed — holding and managing land — but for the subsidiary purpose of receiving and distributing royalties from their land, then problems were even more to be expected. Management of a group’s money was fertile ground for disputes everywhere: the greatest problems with ILGs in PNG arose from royalty distribution.