There is little doubt that newspaper stories about the contested distribution of very large amounts of money to ILGs in the petroleum sector has encouraged a popular belief that land group incorporation is a way for customary landowners to gain access to the social relations of resource compensation, even when the prospect of actual resource development may be quite remote. For example, a crowd of more than 25,000 people is said to have assembled in one Eastern Highlands village to witness the presentation of a certificate of incorporation to a local landowner association whose members thought they had discovered oil in a lake and ‘were currently working on formalities to enable them to sign a memorandum of agreement with a possible developer to carry out a feasibility study and exploration in the area’ (Post Courier, 27 January 2005). According to Fingleton (2004: 101), there were more than 10,000 ILGs registered with the Department of Lands by March 2004, which is an awful lot more than the 700 which had been registered by March 1995. It is hardly possible to attribute the whole of this increase to the diligence of people employed to implement government policies, whether in the forestry and petroleum sectors or any other sector of the national economy. What we do know is that land group incorporation has been deliberately used to promote the expansion of the oil palm industry, but has found little or no favour with the administrators of the mining industry. This should lead us to ask whether the use of land group incorporation as a policy instrument is encouraged or constrained by structural factors specific to each branch of production, or whether its adoption has more to do with contingent historical factors. These contingencies might include the history of decisions and disputes in specific parts of the country, or the influence wielded by individual decision makers in specific policy domains at certain points in time, but they might also extend to the growth of a nationwide ‘cult of incorporation’ that is not part of any formal policy process.

The mining sector is especially notable for the recent appearance of land groups whose spokesmen seem to be staking dubious claims to projects which have not yet been developed, as if the act of incorporation were somehow meant to gain them additional leverage in the process of negotiation with the State and the developers.^[15] However, government officials and company managers responsible for the administration of the mining sector have not followed the example of their counterparts in the petroleum sector by advocating the incorporation of land groups as vehicles for landowner representation or benefit distribution. This is not just because the first group have learnt a salutary lesson from the troubles encountered by the second group (see Weiner 1998, this volume; Sagir 2001; Lea 2002a, 2000b; Koyama 2004), even if that explains the sense of caution currently displayed by the Department of Mining (PNGDoM 2003: 28). Back in 1990, when CNGL was adopting the policy and practice of land group incorporation, the mining mandarins could hardly have foreseen the dysfunctional outcomes. Yet they already knew that one of the factors behind the outbreak of the Bougainville rebellion, which they had also failed to predict, was the dysfunctional outcome of the ‘clan agent system’ as a method of connecting the Panguna landowners to the other parties in the resource compensation relationship (Filer 1990).^[16] So why did they persist with this model when an alternative was being actively promoted in both the forestry and petroleum sectors?

One answer would be that the rest of the mining industry was still engaging former kiaps (colonial district officers) to manage the corporate relationship with customary landowners, and these individuals saw no good reason to change their own customary practice. The practice of ‘land investigation’, through which clan agents and clan boundaries were identified, was still part of the land acquisition process prescribed under the Land Act (Filer et al. 2000: 32–3) and the dispute settlement process prescribed under the Land Disputes Settlement Act (Filer 2005: 913). Rather than blame the clan agent system itself for the outbreak of the Bougainville rebellion, the old kiaps were more inclined to blame the premature localisation of Bougainville Copper Limited’s Village Relations Office or the unique history of local resistance to colonial rule. Discounting Bougainville as a ‘special case’ (Griffin 1990), they could maintain that theirs was still the best way to deal with customary land and landowners in other parts of the country. They were also dealing with landowners in the petroleum sector, where George Clapp’s arguments in favour of the clan agent system were typical of their position. CNGL’s preference for Tony Power’s arguments might therefore have been a contingent effect of that company’s Texan corporate culture, which had little in common with the values of Australian colonial paternalism, and CNGL’s ability to influence the national policy process was simply a function of its dominant role in the development of the Kutubu project.

However, the influence of old kiaps was only one of the factors which kept land groups out of the mining sector in the decade following the Bougainville rebellion. As a result of the mineral exploration boom in the preceding decade, the people responsible for managing ‘community affairs’ had already established relationships with customary landowners in many different parts of the country — not only in places where new mines had been or would soon be developed, but also in places where no development has yet occurred. In 1990 there was no clean sheet on which to inscribe an unfamiliar process of land group incorporation. But if this was partly a matter of timing, it was also a question of scale. The areas of customary land which had to be ‘acquired’ for development of the Kutubu project were much larger than those required for development of any mining project, so the Kutubu Joint Venture could not imagine for a moment that it was dealing with a single ‘landowning community’ with its own unique set of customs and a small number of customary leaders with whom personal ‘community relations’ could be cultivated through the process of mineral exploration. The differential intensity of the social relations of resource compensation is itself a significant structural difference between the two branches of production.

If that is one reason why the mining companies preferred to trust old kiaps to deal with customary landowners, it does not mean that policy makers in Port Moresby saw no reason to change their own approach to the problem of landowner representation. Even before the outbreak of the Bougainville rebellion, they had to deal with an unprecedented set of demands from the Porgera landowners, and those included a demand for greater representation in the development process. The policy response to this demand was the institution of the ‘development forum’, which would henceforth grant formal negotiating rights to representatives of the customary owners or ‘holders’ of land required for the development of a major mining project (West 1992). But the policy makers were careful to avoid making any statement about the way that this representation ought to be achieved. The Mining Act of 1992 leaves that to the discretion of the Minister. The project coordinators in his department were well aware of the extent of variation in the capacity of landowners in different parts of the country to organise or be organised in any particular way. So, when the closure of the Panguna copper mine bore witness to the deficiencies of the clan agent system on Bougainville, they were not inclined to advocate another model of landowner organisation and inscribe it in the national policy framework. Instead, they began to advocate the practice of social mapping by anthropologists as a way of getting beyond or beneath the simplified representations of local social organisation espoused by the old kiaps (Filer 1999).

Needless to say, the anthropologists played their part by revealing the diversity and complexity of the relationship between customary group boundaries and land boundaries in areas of interest to the mining sector.^[17] It is therefore somewhat ironic that the need for social mapping studies found legal recognition in the Oil and Gas Act of 1998, without ever being enshrined in the mining sector’s formal policy framework. Although CNGL conducted one early experiment with social mapping in its own licence area (Ernst 1993), this initially failed to dent the company’s enthusiasm for land group incorporation or promote its appreciation of social anthropology. It was the steady accumulation of disputes about land boundaries and group boundaries in the petroleum sector which eventually caused a change of heart, and that was because of the intervention of lawyers providing donor-funded ‘technical assistance’ to the national government (Taylor and Whimp 1997). It just so happened that these lawyers were familiar with the policy innovations of the mining sector, and government officials from that sector were also involved in framing the relevant provisions of the Oil and Gas Act. However, the official lack of enthusiasm for land group incorporation as a model solution to the problem of landowner representation in the mining sector was matched by an appreciation of the need for flexibility in regulating the social relations of resource compensation (Filer et al. 2000; PNGDoM 2003). The results of social mapping studies in this sector had only served to confirm this prejudice, and that is one of the reasons why social mapping studies themselves have not so far been subject to regulation under the Mining Act.

While the mining industry has hesitated to follow the model of land group incorporation adopted by the oil and gas industry, the oil palm industry has shown more enthusiasm for the model adopted in the forestry sector without any comparable pressure from government regulators. The reason for this may be found in the relative permanence of large-scale agricultural estates and the relative scarcity of land available for their expansion.

By the year 2000, the five main oil palm schemes occupied more than 110,000 hectares of land in four different provinces (Koczberski et al. 2001). More than half of this land was alienated during the colonial period and then dedicated to the development of nucleus estates and ‘land settlement schemes’ for smallholders transplanted from other parts of the country.^[18] For three decades the industry was able to expand by bringing an increasing proportion of this alienated land into cultivation, raising the productivity of the parts that were already under cultivation, and offering incentives for customary landowners to plant ‘village oil palm’ on their own land. By 1997, however, it was evident that this process of expansion could not continue indefinitely without a mechanism for raising the intensity of production on customary land (Oliver 2000).

Although there have been several proposals to establish new oil palm estates on customary land by clear-felling forests initially allocated to a logging company under the Forestry Act of 1992, these have met with disconcerted opposition from the World Bank, the PNG Forest Authority, environmental NGOs, and even customary landowners themselves. That is because they all had good reason to believe that the proponents were using the prospect of long-term agricultural development as a pretext for extracting the native timber resources as quickly as possible (Filer 1998a: 187–97). Nevertheless, the World Bank and the national government have continued to advocate an expansion and intensification of production in areas where nucleus estates have already been established (PNGDNPRD 2004). The mechanism which has been adopted in order to achieve this goal has been a combination of land group incorporation with the rather peculiar arrangement known as ‘lease-leaseback’ under Division 4 of the Land Act.

This arrangement was originally devised in 1978 as a way for customary landowners to secure bank loans and modern managerial expertise for the development of 20-hectare coffee estates in the central highlands without losing their customary title to the land (McKillop 1991). By amendments to the Land Act, the Minister was allowed to ‘lease customary land [from its customary owners] for the purpose of granting a special agricultural and business lease of the land’ to a ‘person or persons’ or ‘to a land group, business group or other incorporated body, to whom the customary owners have agreed that such a lease should be granted’. In effect, this is a way of getting around the legal prohibition against non-citizens dealing in land which has not been registered under the Land Registration Act, for when the State leases land back to a person or body approved by the customary owners, the lease is registered under this Act. This has so far proved to be the only way of mobilising customary land for large-scale agricultural development without actually alienating it.

Although land group incorporation is not an essential feature of this process, it has come to be recognised as the best way to limit transaction costs when mobilising fairly large areas of customary land (Jones and McGavin 2000). Even so, the incorporation and registration of land groups is only one of 16 different steps which the oil palm industry had to take in order to access customary land through the lease-leaseback arrangement, and it was necessary to engage a former Land Titles Commissioner as a consultant in order to make sure that all these steps were taken in the right and proper order (Oliver 2000, 2001).^[19] The first ‘mini-estate’ to be created in this way covered 6,000 hectares of land west of the Kulu River in West New Britain Province. Once Special Agricultural Leases had been issued to four land groups representing the customary owners of this area, each land group issued a 40-year sub-lease to New Britain Palm Oil Ltd.^[20] In return, each land group received an annual rental payment of K50 per hectare, a monthly royalty payment equivalent to 10 per cent of the farm gate price of harvested fruit, and 10 shares in the oil palm company for each hectare covered under the lease (Oliver 2000: 24).^[21]

By the end of 2000, the mini-estates covered roughly 11,000 hectares of customary land, and thus accounted for roughly 10 per cent of the total area planted to oil palm (Koczberski et al. 2001: 6; Oliver 2001: 69). The area devoted to mini-estates in four of the country’s five oil palm schemes seems to have doubled by the end of 2004, and another 4600 hectares had been developed under a similar arrangement, known as Community Oil Palm Development, in the vicinity of the fifth scheme (Bourke 2005). Since the other spatial components of the industry have been relatively static, it is therefore likely that industrial production on customary land now accounts for as much as 25 per cent of the total area planted to oil palm. On the other hand, the existing schemes are now encountering physical and demographic constraints to further expansion along these lines (Michael Bourke, personal communication, April 2006). Although Ramu Sugar Ltd (in Morobe Province) has now joined the ranks of the oil palm industry, and has also taken advantage of the lease-leaseback arrangement to expand its operations, there is as yet no evidence that this arrangement could be successfully applied to the development of an entirely new agro-industrial enterprise in an area where there is no alienated land on which to locate its central processing plant.