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SABLs: positive or not, that’s the question


THE PURPOSE of this article is to discuss Special Agricultural and Business Leases (SABLs) and to examine whether they are a positive tool for development.

SBALs triggered great interest in PNG after it was revealed that 5.3 million hectares of land had been granted as leases.  Various groups and individuals voiced their concerns and opposition and, after a successful campaign to have the SABLs reviewed, acting prime minister Sam Abal has announced a moratorium and a Commission of Inquiry.

Although the public is supportive of this development, the Opposition - led by new leader Belden Namah - voiced opposition to the inquiry, citing that SABLs are an integral part of provincial and district development and should not be suspended. 

At the time of writing, Mr Abal had not issued the terms of reference for the Inquiry or any detail on the scope of the moratorium.

The term SABL refers to the acquisition of land by the government from customary landowners. A short provision in the Land Act (section 12) identifies that the government may acquire land from customary owners for agriculture and business development.

This same section also states that a lease agreement between government and customary landowners is effective and that the State has title over customary land.  It ends with sub-section 3, which states the government will not pay rent or compensation to landowners.

Once the title has been given, government departments can develop and negotiate projects and investments with prospective partners.  Landowning entities partake in these negotiations and in project formulation.

The system places great reliance on strong government oversight and regulation.  Therefore, at least on paper, it is deemed that all agencies are carrying out due diligence assessments on the project: registration, constitution, social and environmental impact assessments, marketing and production projections, business plans, community service obligations and related issues.

That SBAL is a positive tool for development depends on two main issues.  First, a viable and prudent development plan for the land and, secondly, strong and functional government oversight and regulatory mechanisms. 

The development plan must:

Identify who are the partners of the venture.  Women and youth must feature prominently in the makeup of the landowning entities;

Specify what sort of legal arrangement will represent the landowners

Indicate what sort of agricultural or business product is the focus

Forecast market and production prospects

Show what sort of capital and other financing arrangements will be pursued and clearly identify the commitments and obligations, in particular collaterals

Indicate revenue arrangements for all parties

Canvass community service obligations which must include education, health , religion, gender and other projects to empower the people

Oversight refers to providing technical assistance on the viability of development plans and may include:

An interagency committee to provide technical assistance along with international partners

Various tax and duty free incentives of importing products to be used in the plan

Assistance in progressively looking at the export capabilities of products vis a vis existing trade and economic agreements

Integrating government grants and other international financing mechanisms that may be used for capital financing as well as creating a facility for investors managing the SABL

The imposition of community service obligations

Outsourcing some activities – such as marketing - to participating organisations and companies

Regulatory arrangements are in the area of compliance, monitoring and enforcement of rights and duties of parties in the development plan and these must include:

The role of the Investment Promotion Agency (IPA) must be elevated to assist landowners or resource owners managing the SABLs. Two arrangements must be included as part of the approval process:

The entity must fulfill the requirements of the necessary legislation according to the legislation administered by IPA

Six monthly reporting of revenue inflows and investments beyond a certain threshold, e.g., K500,000

Bonuses and salaries of management

Non-monetary benefit arrangements whereby joint venturers or developers must subscribe to the company. These include skill and technology transfer agreements, capacity building and information sharing.

Where there is a failure to adhere to the arrangements, the IPA must assess what appropriate steps it should take: whether using administrative remedies or, in the case of a crime, advise law enforcement agencies.

The potential of SABLs to be a positive tool for development is contingent on two main factors.  First a clear Development Plan and secondly government oversight and regulation. 

The extent to which these two factors apply remains the larger question and must be addressed not only in the Commission of Inquiry but also in the public arena.

Therefore, Sharp Talk recommends that the following actions be taken:

To circulate this paper to MPs and government ministers

To submit an amicus curie to the Commission of Inquiry identifying the issues to emphasise the need for policy and law reform so that the SABLs will be used as a positive tool for development;

To circulate this paper to the private sector and seek its views on the need to move the discussions of SABLs to improving business practices and government oversight and regulation

To circulate this paper to NGOs and seek their views on the social and economic impacts of SABLS as a positive or negative tool for development.

Source: Views from contributors to Douveru Henao’s Facebook Group page, Sharp Talk


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R Boman

Regardles ofs what this Namah fellow is saying, the whole issue about SABLs is clearly alienating the people from their customary land which is, for many, their main source of livelihood.

Much of these PNG forest areas are being logged under the pretext of SABL in which a lot of other critical issues of sustainability and feasibilty as far as conservation of wildlife are overlooked through this monstrous corrupt government policy.

It must be stopped and some things must be taken stock of.

With the impacts of climatic change gripping the world at large, how is it that we PNG are far too ignorant to have governments driving policies that will benefit few monetarily while putting the livelihoods of the masses at risk?

Stop all SABLs and stop the ruthless destruction of our God-given pristine environment now.

Tim King

I don't think it is correct to say Belden Namah and the Opposition are opposed to the Commission of Inquiry.

They clarified their position on talkback radio this week. You can listen here -

Namah (and Sam Basil) now say they support the Commission of Inquiry but not a blanket suspension of the leases while the Inquiry is on.

But the PM didn't announce a suspension of the leases, just a suspension of the Forest Clearance Authorities, so it looks like the Opposition is still confused.

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