The trouble with the concept of ‘resource development’ is that it sounds like a specific form of the general concept of ‘development’. But ‘development’ is just a fairly recent name for what Adam Smith called ‘the wealth of nations’, which is nowadays measured by a pile of social and economic indicators. We do not have to deconstruct this general concept in order to recognise that ‘resource development’ is a very different kind of thing. It is a type of industrial process which involves the transformation of natural resources into commodities. And the relative preponderance of this type of industrial process within a country’s national economy is, if anything, inversely correlated with that country’s general level of ‘development’. Hence the so-called ‘resource curse’ or condition of ‘resource dependency’ which may be seen as an affliction rather than a contribution to national welfare (Auty 1993; Ross 1999; Sachs and Warner 2001; Bannon and Collier 2003). But the concept of ‘resource dependency’ also has its drawbacks, because it seems to condemn the ‘developing countries’ which suffer this affliction to a state of backwardness from which they cannot escape, and draws attention away from the struggles which occur between ‘resource developers’ and other ‘stakeholders’ in the relations of production which surround this peculiar type of industrial process (Ascher 2005; Banks 2005; Filer 2006b). And that is why I propose to use the term ‘resource compensation’, which better serves to highlight the tension between dependency and autonomy which is embedded in the heart of these relations of production.

Where Marx formerly discovered the relationship of wage-labour (or employment) buried within the pile of money and commodities which formed the superficial pattern of the capitalist world, I would argue that this relationship of compensation is the partly hidden ‘secret’ of the much smaller pile of money and commodities which is currently found on customary land in PNG, insofar as this pile of money and commodities emerges from the jaws of what I should now like to describe as the Melanesian version of ‘heavy industry’. This creature has four legs, or four component branches of production — the oil (and gas) industry, the mining industry, the timber (or logging) industry, and the oil palm industry.^[2] The resources transacted through the relationship of compensation are thus rights to extract oil, gas and minerals contained in the ground, the timber contained in the trees which grow on top of it, and the nutrients contained in the soil itself. All four types of heavy industry entail large-scale investment in plant and machinery, but their ‘heaviness’ can also be ascribed to the problem of managing relationships with customary owners of the land on which these investments are made. And that is why the agencies responsible for managing these relationships in all four branches of production have been obliged to think about the merits of land group incorporation as a management strategy.

The products of heavy industry, as thus defined, have accounted for 80–90 per cent of PNG’s annual export earnings over the past decade. While this fact alone provides us with an indication of its significance to the national economy, and more especially to the revenues of the national government, my definition clearly flies in the face of the orthodox argument that agriculture is the real backbone of the national economy because of the vast numbers of people who make a living from it and the sheer volume of land which is devoted to it. But I would argue that the oil palm industry is distinguished from other branches of agricultural production by virtue of its scale, its ‘modernity’, and the peculiar nature of its relations of production, which cause it to resemble the three terrestrial branches of extractive industry rather more than it resembles the colonial plantation economy (which already lies in ruins) and those forms of export crop production (notably coffee and cocoa) which are dominated by a smallholding ‘peasantry’.^[3]

Of course, the four legs of this new-fangled beast all have their own peculiar characteristics. But before I touch on these peculiarities, I shall try to establish the general shape of the beast itself, and thus show how Landowners come to be ‘incorporated’ into it.

As Landowners and Developers enter into their mutual relationship, the State does two things (apart from any role which it may play as a joint venture partner). First, it takes certain rights away from the Landowners, by mutual agreement, not by compulsion, and it hands on these rights to the Developers. This enables the Developers to begin the process of development. Then the State takes a share of the proceeds away from the Developers, by means of taxation, and hands a smaller portion of the proceeds back to the Landowners, in the form of ‘benefits’ which compensate the Landowners for the previous diminution of their rights.^[4] At the same time, the Developers also ‘compensate’ the Landowners directly, by providing them with a mixture of ‘compensation’ payments for damage done to their resources and additional ‘benefits’ which are intended to maintain the relationship in good working order. The Landowners themselves may not recognise the distinction between ‘compensation’ and ‘benefits’, nor even the distinction between the benefits which come from the Developers and those which come from the State. The whole package simply represents their share of the income, or their part of the relationship, which comes from the development of ‘their’ resources.^[5]

The Developers equate the ‘development’ of natural resources with the consumption or extraction of those resources, and thus see ‘landowner compensation’ in the same light as ‘community relations’ — as a cost which has to be incurred in order to achieve this form of ‘development’ (Filer et al. 2000: 3). The Landowners, for their part, equate the ‘development’ of their resources with their own social, political and economic advancement to a level at which they can truly imagine themselves to be the equals of the Developers, so that ‘compensation’ becomes what one Lihir landowner famously described as ‘the state of equilibrium reached when [the] forces of destruction and impact must [be] equal to the forces of compensation ... [so that] the Landowners are forever happy and accept the losses and impact they will suffer’ (Filer 1997: 160).^[6]

But an ‘Integrated Benefits Package’ which is intended to achieve this equation of ‘compensation’ and ‘development’ also has to be distributed amongst the Landowners who receive it. This is not just a problem for the Landowners to solve by themselves. It is also a problem for which the State and the Developers are obliged to offer their own solutions. That is because their understanding and experience of the process of development on customary land has led them to conclude that they must also do something to manage the ‘internal’ relationships of the landowning ‘community’ which has been brought into existence by this process, and even the ‘external’ relationships between this local community and those other ‘landowners’ who live around the edges of it.

Where the State attempts to manage these additional relationships, its efforts could be seen as an extension of its efforts to manage the relationship between Developers and Landowners. But there is a further element of complexity here, which arises from the State’s diminishing capacity to manage anything at all, and which raises the question of whether there really are three parties to this relationship, or only two. It is often the Developers who have to manage the relationship between the State and the Landowners, as well as their own relationship with the State, even to the extent of ‘facilitating’ the process by which the State acquires the rights which it later passes on to the Developers themselves. And where the State is unable to manage the relationships within and between local communities in the vicinity of the development, the Developers may have to extend their own efforts to manage these relationships to the point of compensating for the State’s failure to do so.^[7]

Nor are the Landowners themselves purely passive recipients of all this ‘management’ (or mismanagement). While some Landowners try to manage (or mismanage) the ‘compensation package’ which is meant for all Landowners, some Landowners also try to counter the management strategies of both the State and the Developers with management strategies of their own, which might better be described as political strategies intended to enlarge their control over the total distribution of wealth, status and power within the development relationship. Indeed, all three parties have a tendency to interfere with whatever management strategies or political strategies are adopted by the other two, thus enveloping the relationship in a kind of mutual frustration which tends to defeat the ‘rationality’ of management itself. And so life goes on.

Now this relationship, with all its complexities, can be construed as a sort of bargain, or a sort of game, which is the way that economists are inclined to see it (McGavin 1994). However, it is not my purpose here to elaborate on the general form of the negotiation which takes place between the agents of each party, but rather to pinpoint the role which is played by the practice of ‘land group incorporation’ as a method of managing land, groups, boundaries, or benefits.

We can think of ‘incorporation’, in a general sense, as one of the transformations which are inherent in the social impact of resource development or the social relationship of resource compensation. I am not suggesting that incorporation, in this general sense, is necessarily something which the State or the Developers impose upon the Landowners as a condition of their mutual relationship. Landowners have ways of organising themselves, most obviously through the formation of landowner companies and landowner associations, and many other ways of being organised by politicians who claim to represent their interests. But land group incorporation, considered as a specific and variable feature of this relationship within the realm of heavy industry, has been promoted by the State and the Developers for reasons which we now need to consider in greater depth.