1989 was a good year for anyone who had a ready-made solution to the problem of managing the social relations of resource compensation — not just because of the Barnett Inquiry, but also because of the Bougainville rebellion. While Barnett (1989: 368) found that landowners were ‘gaining a maximum of dislocation and alienation in exchange for minimum benefit from the harvesting of their timber’, Francis Ona and the other members of the new Panguna Landowners Association had come to a very similar conclusion with respect to the harvesting of copper from their land. What I wrote about the ‘titleholders’ whom the Land Titles Commission had appointed as agents of the Panguna landowners could just as well have been written about the ‘clan agents’ who had been responsible for signing Timber Rights Purchase Agreements with the Department of Forests, or Dealings Agreements with the directors of ‘their’ landowner companies:
Although the titleholders constitute a relatively small minority within the landowning community, there is no outside interest in the question of whether and how they will use these monies for the benefit and satisfaction of their respective family groups. It has evidently been assumed that ‘customary’ norms of distribution and consumption will apply to this new form of wealth, and this will raise no special problems for the company or for the government. But the complaints of the new PLA have shown that this assumption is false. The titleholders stand accused of keeping all the money to themselves, not even giving any to their closest relatives. If this is true, it might be taken as a sign of selfishness or greed, but I suggest that it may also be a sign of something else — the simple absence of a custom which prescribes the proper way to redistribute rent (Filer 1990: 90).
Of course, the Bougainville rebellion showed that the stakes were much higher, and the consequences could be far more serious, in the mining sector than in the forestry sector. But it also added some serious weight to the argument that dysfunctional ‘clan agents’ were only one part of a larger problem, that landowner organisations of all sorts were suffering from a serious lack of democracy, transparency and accountability, that their directors or managers were ripping off the ordinary members, shareholders or beneficiaries, and that the State had better do something about it.
It is therefore somewhat ironic that the first application of the LGIA to the problem of managing the social relations of resource compensation was neither made in the mining sector nor made by the State. It began in April 1990, when Chevron Niugini Limited (CNGL) appointed Tony Power as its Business Development Manager, or perhaps in May 1990, when the company formally lodged its application for the Kutubu Petroleum Development Licence and Pipeline Licence, and began to prepare the ground for project construction.[10] Power was able to persuade the Developer, and then able to persuade the State, that the royalty and equity benefits due to the customary owners of both licence areas should only be paid to ILGs, and that these groups should be the sole shareholders of the landowner companies which were due to receive the benefits of CNGL’s Business Development Program. In the five years following his appointment, he masterminded the incorporation of more than 400 land groups in the project impact area.
Power had become an advocate of land group incorporation during his previous incarnation as a senior bureaucrat in the Department of East Sepik Province,[11] where he had played a key role in promoting the Provincial Land Act and the Customary Land Registration Act which were passed in 1987 (Power 1991; Fingleton, this volume). Having departed the ranks of the bureaucracy in 1988, he initially entered the petroleum sector as a consultant to Oil Search and Ampolex, which were both partners in the Kutubu Joint Venture. It was from this vantage point that he began, in his own words, to ‘fight bloody hard’ to make ILGs into an essential feature of the Kutubu project landscape (Tony Power, personal communication, September 2000). By November 1989, he was able to announce the first signs of his impending victory, and this was done at a forest policy seminar held at the Forest Research Institute (Power and Waiko 1990: 46). That meeting was part of the policy reform process engendered by the findings of the Barnett Inquiry, and Power believes that his own intervention in this process was partly responsible for that part of the 1991 National Forest Policy which requires, as a precondition of any future Forest Management Agreement between local resource owners and the State, that
Tenure over the resource must be made certain by: title to the affected resource being vested in a Land Group or Groups under the Land Groups Incorporation Act, or title to the resource being registered under a customary land registration law; or where the above two options are impractical — at least 75% of customary resource owners in each clan owning timber affected by the agreement must give their written assent to the Agreement (PNGMoF 1991: 17).
The process of ‘resource acquisition’ prescribed in Sections 54–60 of the 1991 Forestry Act reiterated this requirement.
This meant that the function of land group incorporation in the forestry sector was quite different to the function which it performed in the development of the Kutubu oil project. In one case, a Developer was persuaded to incorporate Landowners as part of a strategy designed to promote the values of equity, transparency and accountability in the distribution of project benefits, and the Developer then had to persuade the State to set its own seal of approval on this strategy, at a time when the LGIA did not rate a mention in any of the laws and policies which regulated the petroleum sector. In the other case, the State was persuaded to incorporate Landowners as part of a policy and a law which were intended to produce a certain level of ‘informed consent’ to the State’s acquisition of the right to harvest their timber resources, and to protect Landowners from Developers who had proven adept at manipulating the appearance of such consent to their own advantage.
When the new Forestry Act was finally gazetted and implemented in 1992, officers of the newly designated National Forest Service were thus confronted with a task which was already taxing the patience and resources of a multinational oil company, and were expected to perform this task in many different parts of the country. If this were not daunting enough, the 1993 National Forestry Development Guidelines indicated that the process of land group incorporation should be preceded or accompanied by a Landowner Awareness Programme which would provide landowners with the information required for them to make their own assessment of ‘the likely costs and benefits, impacts and responsibilities associated with a forest development project’ and enable them to ‘truly participate in the project formulation process and ensure that it is sensitive to their needs and concerns’ (PNGMoF 1993: 4). But help was at hand, in the shape of a Forest Management and Planning Project organised by the World Bank as part of the National Forestry and Conservation Action Programme. This project included a ‘Landowner Involvement Component’ which was meant to strengthen the capacity of the National Forest Service to practice the arts of land group incorporation and landowner awareness (PNGFMPP 1995). In a fitting tribute to his own experience at Kutubu, Tony Power was one of several consultants engaged to implement this project component. His manual of procedure, entitled ‘Village Guide to Land Group Incorporation’, was printed and circulated in March 1995 (Power 1995).
In the three years which had then elapsed since the function of land group registration was transferred from the Registrar of Companies to the Department of Lands and Physical Planning, 700 land groups had already been registered, and another 500 applications were awaiting the department’s attention (Whimp 1995: 71). These figures suggest that officers of the National Forest Service had already completed the fieldwork and paperwork required to register more land groups than had so far been registered through the efforts of their counterparts in CNGL. On the other hand, none of the Forest Management Agreements which resulted from this process had formed the basis of a new timber concession. The first Timber Permit issued under the new Forestry Act was granted in June 1995, as an ‘extension’ of the permit already held by Turama Forest Industries in Gulf Province. And it seems that the logging company played a fairly active role in the process of land group incorporation which laid the ground for the Turama Forest Management Agreement (Hartmut Holzknecht, personal communication, March 1997). At any rate, some local NGOs referred the decision of the National Forest Board to the Ombudsman Commission, which eventually found (in August 1997) that there had indeed been some breach of the procedures laid down in the Forestry Act.
This dispute served to confirm the fear previously expressed by the Forest Industries Association, that the long drawn out process of land group incorporation had another, ‘latent’ function, beside the function of protecting the property rights of innocent landowners. This other function was to implement one of the key recommendations of the Barnett Inquiry, which was to ‘slow down’ the whole process of resource acquisition and allocation in the forestry sector while new forms and standards of regulation were applied to existing concessions. The very small volume of timber resources which has since been allocated through the production of Forest Management Agreements and the distribution of new Timber Permits would seem to support this interpretation (IFRT 2001, 2004). But this means that hundreds of land groups which have been incorporated through the bureaucratic efforts of the National Forest Service have yet to complete their passage into the social relations of resource compensation in the logging industry, even if they wish to do so. That is because most logging operations are still governed by agreements signed under the previous legislation, and most of the payments or benefits which they yield for local landowners are still distributed to the clan agents and landowner company directors who signed these agreements.