Comments

Hi Vailala, All discussions are very relevant and good for the government, project developers and landowners to take note and comply where necessary. It is however very clear that Exxon Mobil and Government did not complying with Section 47(5) requirement of the Oil & Gas Act. The courts decision to do ADR/Mediation is consistent with this law and decision of the national and Supreme court are final. In this instance, the National Court has ruled that Landowners have not been identified. This is the reason why the ADR/mediation is conducted for identification of landowners and getting them to form ILGs enable landowner benefits to be channelled through for equitable distribution. ILGs formation is requirement by law for benefit distribution and so it is really the requirement under Section 47(5) that matters in this case. Further, if Exxon Mobil is yet to comply with this law which is a pre-requite for the PDL, how did Exxon Mobil get the PDL and is it operating within legal license requirement. Does the world needs to know this? As a social engineer, I have developed a model called - 'Tambiabu Model'. There are four model companies use now and they are all reactive approaches and subject to companies to use their discretion under the Corporate Social Responsibility (CSR), programs. The one I have developed is called Tambiabu model and it is bottom up approached and considers all aspects of Social licensing. The framework of the model is been applied gradually in mining areas. Anyhow, what is happening is that landowners are serious about complying with the law but Exxon Mobil and State are not adhering to relevant provisions with in the parameters of the law we operate in. It is certainly an insult to our intelligence, which may or leads to invite "mobilized community resistance and jungle justice" and the writing is on the wall. regards

Thank you john for your comments. I think that your analysis is basically correct. It seems to me to be important that the basic issues relating to developer legal compliance, especially in relation to landowner issues, be resolved rather than left hanging. I also think that the PNG judiciary deserves great credit for its capacity to bring well-reasoned decisions to bear on the issues. It’s worthwhile looking into the background to the current issues in more detail. Why was the Gas to Australia project abandoned? One reason was that the Australian energy security crystal ball-gazers did not like the fact that Australian energy security might become dependent on PNG landowner satisfaction. The PNG mother would be feeding the Australian energy child through the umbilical pipeline. Needless to say SANTOS and Woodside were standing in the background here. There were other reasons, including misgivings by the ADB (counter party financier for GoPNG JV equity participation) that OSL/ExxonMobil were properly addressing O&G Act compliance issues in relation to SMLIS and more generally as to the planned project’s ability to contribute to the alleviation of poverty on a nation-wide basis. Other misgivings emerged from the New York-based sovereign risk analysis done in conjunction with the bankability studies as to whether or not OSL/ExxonMobil would successfully manage the project’s landowner interface over the long term. In the early 2000s when the legal significance of the Hides Gas Case (1992/4) decision was pointed out by DPE to OSL/ExxonMobil it was airily dismissed with the comment “the judge got it wrong”. The DPE was told by OSL/ExxonMobil that the developer had engaged “world class anthropologists to do social mapping to an international standard” and the fact that the SMLIS reports began and ended with the statement that it was impossible to identify landowners would have to be accepted by the DPE. At the same time OSL/ExxonMobil organised with the PNG Chamber of Mining and Petroleum opposition to the making of a DPE drafted Social Mapping and Landowner Identification Studies Regulation. Why would the developer take up this position? Was it a blunder caused by ignorance and insufficient respect for the laws of PNG? Perhaps all of this and more? I think the answer partly lies in the developer’s reluctance to get involved in what it sees (or saw then) as ‘social engineering’. The anthropologists’ SMLIS reports gave the developer ‘push-back’ against GoPNG. In other words the reports made it appear that the identification of landowners and management of landowners’ concerns was solely the government’s problem. By taking up this position the developer discreetly supported a common outsider view that landowner issues can be characterised as riddled with ignorance, greed, corruption, fraud, delusions, con-men, an inefficient and ineffective public service, and corrupt politicians. This strategy has, to some extent, backfired on ExxonMobil. ExxonMobil did not appeal the P’nyang decision because, had it done so, it would likely have been faced with a very strong rebuttal argument of estoppel. It is for this reason that I conclude that the issue of DPE “acceptance” of the developer submitted SMLIS reports is not dispositive and that to cling to this point is to miss the point. To gain a better understanding of the present position it is necessary to look more deeply into the customary law issues and the not un-related issues of payments and transaction costs relevant to all parties – landowners, developer and government. The Hides Gas Case is described as a ‘landmark decision’. It is so not because it establishes a precedent. The Land Court is not bound by precedent – there is no doctrine of stare decisis. Instead the Case establishes a policy of considering a range of matters under the heading of ‘earmarks of ownership’. These headings function as guidance for the Land Court mediators and Magistrates when addressing the issues raised by the parties to any dispute. However, the overall policy of the Land Court is first to seek resolution by mediation and by statutorily mandated ADR. As Justice Kandakasi indicates it is expected that the Land Court will only very rarely move towards a decision. The reported Land Court decisions fell away very quickly after the adoption of ADR. Mediated agreements are not subject to reporting. I will make a crude summary of Land Court procedure following the dispatch of a mediator to the site of the dispute. Rule 1. Stop fighting. Rule 2. Start talking. Rule 3. Keep talking until you agree what you agree about. Rule 4. Keep talking until you agree what you disagree about. Rule 5. Keep talking until you decide how you can reach an agreement. In the event that the both the Magistrate and the mediators have concluded that mediation has been exhausted and that the parties are deadlocked only then may the Magistrate (assisted by the mediators) move to a decision. The judicial decision must be a reasoned one that applies the concepts of equity and fairness in a manner that addresses the concerns of the parties and appeals to the concept of custom and principles that the parties have brought to the dispute. For an example of a brilliantly-reasoned judgment see Gerato v Konnou [2007] PGLLC 1; DC602 (6 June 2007). From this brief description it can be seen that the PNG Land Court performs its essential functions without benefit of statute and precedent. Some other examples of law courts functioning in this way can be found in pre-1959 Tibetan law and Islamic jurisprudence (especially the Maliki school). Examples of judicial reasoning based on equitable principles and without benefit of statute or precedent can be found in a number of anthropological publications and in the reports of the Judicial Committee of the Privy Council. At this point it’s necessary to mention the role of ILGs and genealogies. Issues in relation to customary land sometimes involve individuals but most often involve groups of people. The main role of genealogies is to establish and confirm that the Court is dealing with a self-defined group. Beyond this there is little probative value attached to genealogies. Eighteen generations does not automatically trump three generations, absent an agreement between the parties. It’s important to note here that the PNG Law Reform Commission sponsored amendments to the ILG Act suggest that three generations are sufficient. There are other good policy reasons why both the Government and the Judiciary are reluctant to include the concept of the ‘genealogical footprint’ within the compass of land legislation and Land Court decisions, absent agreement of parties. The next issue is transaction cost. Earlier payments, in the Chevron era, to Port Moresby-based landowner leaders were most unsatisfactory. Some landowners complained that they received very little money and sometimes none at all. Village-based people faced huge transaction costs when they attempted to address this problem. The DPE then adopted the policy of payment in cash in the village to a nominated person. Doing so substantially increased the transaction cost to the government whilst greatly reducing the transaction costs for the landowner. The use of ILGs as payment destinations both simplifies and reduces the transaction cost for the payer (be it developer or government). But it does involve questions of ILG maintenance. What is at issue here is not just the identification of landowners but also the continuing legal necessity to make payments to entitled recipients. The Supreme Court has provided a timely reminder that the appropriate legal steps must not only be taken to identify landowners, but also to legally pay them not just once but throughout the life of the project. A form of fiduciary responsibility or obligation held against both developer and government. Why should the Court be sending us this message? There are many policy reasons, including some from the political economy of development, but I shall just address a central legal reason. This is that within the PNG legal pluralism universe there are two concepts of property. On the one side we have the ‘state’ system where the existence of property is established by the production of texts and documents. This is especially true of land where ownership is confirmed by certified copy of an entry in a register and reinforced by statutory indefeasibility. On the customary land side there are no documents. In regard to customary land matters what is applied by the Courts is a doctrine of ‘appearances’, derived from the testimony of the parties. For example, undisturbed occupation of land for twelve years creates a presumption of ownership. In this context the appearance of ownership is ownership. It’s a curious fact that a few years after the adoption of the Napoleonic Code which firmly established an absolute textual basis for all property claims the Cours de Cassation invented the judicial doctrine of ‘appearances’ in order to overcome certain problems caused by positive law. From the viewpoint of the Court the relations of payer/payee or debtor/creditor are relatively simple and often well-understood by the parties in the State sector paper-based system. But this is not so for rural landowners who face high transaction costs when things go wrong. It is very appropriate for the Court to remind us that creating a Social Licence to Operate depends on the conjoint fulfillment by developer and government of their responsiblity to identify beneficiary landowners and that sustaining this Licence will depend on the developer and government continuing to meet their conjoint responsibilities to beneficiary landowners throughout the long life of the project. Cheers, Vailala

Michal, Thank you for the discussion. 1.Exxon Mobil did not comply with Oil & Gas Act Section 47 (5). This law does not belong to the Huli's. 2. Exxon and Government (state) sign PNGLNG Gas Agreement on 22 May 2008. In Section E(15) State and Exxon Agreed that Section 47(5) was complied with. 3. The agreement between State and Exxon was challenged in Court and National Court OS 546 of 2010 ruled in favour of Landowners and automatically nullifying Section E(15) of PNGLNG Gas Agreement. 4. Today as we discuss, Section 47(5) of the Act is yet to be complied with by Exxon Mobil. 5. Mind you, granting the PDL is subject to meeting Section 47 (5) requirement or Complying with Section 47(5) is the pre-requisite for granting the PDL. If Exxon Mobil is yet to meet Section 47(5) requirement it means Exxon Mobil does not have legal license to operate. period. 6. Lastly, the law as it is for application in this matter is the Oil & Gas Act and the ILG Act. The people are not refusing to work within the legal requirement. It is the companies and government that do not want to comply with the law. 7. I have been through this process and have mine declared by Justice Kandakasi. If I can do that in 30 minutes and down loaded that on my own website, it can be done. To this end, your suggestion of a super consultant is important but I can provide such support and advice as I am a specialised Project Social Engineer. Have a great day and thank you.

Thanks, John, As far as I understand, SMLIS has been completed by the project developer and vetted by DPE and accepted it. The issue here is the dynamics of Huli Land Tenure System. Any Huli person can claim land ownership from both the mother and father's side for more than 10 generations. In other patrilineal societies in PNG, the cousins or those children from the sister's side will respect the rights of those children (cousins) from their uncle to make decisions over the land. They will accept whatever benefits that are decided by the uncle and his children. This is not the case in Huli. They claim somewhat equal rights to the land and the benefits. This is where SMLIS is said to be incomplete. Any person from Koroba, Tari Pori, Tigibi, Magarima, Benaria and Homa Paua can claim somewhat equal rights over land in Angore, Hides 1, Hides 4, Nogoli where they traced their route of migration and family genealogy back to the project area. Having said that, the issue here is about accommodating the landowners outside of the PDL Area into the benefit sharing. It does not matter whether they physically live within the PDL or not. The main concern is that they must be included in the benefit-sharing structure. For this to happen, it would not be appropriate for the government to make a decision as to who will be included and who will not. This is something which I believe will be best sorted out internally by the impacted clans living in the PDL Area. Whether through ILG or any other benefit sharing mechanisms, the distant clansmen and family members must be included. This is the very problem that we are talking about. Another issue here is the amended ILG Act 2009, which requires one person to become a member of only one ILG. Huli system does not fit in the amended ILG Act. Hence, I mentioned that ILG will not work in Huli. However, ILG is not the only mode of benefit distribution and I opt for another mechanism that will work for inclusiveness. I know one option that will work but will not mention it here. It is up to some super consultants to think about it.

Thanks for sharing Jo

Hi John, I think it is very important that everyone say very clearly that the earthquakes are not the result of human activity. Regards, Stephen

Hi Vailala, Your comment relating to Rimbunan Hijau is as below: PAPUA NEW GUINEA [IN THE SUPREME COURT OF JUSTICE] SCA 126 OF 2011 BETWEEN: RIMBUNAN HIJAU (PNG) LIMITED Appellant AND: INA ENEI on his behalf and on behalf of Moga clan of Loupom Island, Abau District, Central Province First Respondent AND: PUBLIC CURATOR OF PAPUA NEW GUINEA AS REPRESENTATIVE OF THE ESTATE OF IBI ENEI (Deceased) Second Respondent Waigani: Salika DCJ, Kandakasi & Toliken JJ. 30. Kandakasi J., in his decision in the P’Nyang and Kanga Kawira cases correctly calls them “fraudsters and thieves.”[27] As was noted by his honour in his judgments, the PNG LNG project presents a clear case on point. In this project, despite s. 47 of the Oil and Gas Act, both the State and the developers have failed to properly identify the true and correct landowners, properly organising them into ILGs, enable the landowners to fairly and meaningfully enter into negotiations with the developers and the State and for the developers and the State to seek and secure from the true and correct landowners through their duly elected or appointed leaders the landowners free and informed consent and approval and ultimately, their social license to operate. The contracts or agreements and the deals the State and developers enter into with persons not properly identified and appointed by the landowning clans, or groups, remain null and void ab initio or void and of no effect from the very beginning. Given that, when the true and correct owners eventually assert their ownership rights and exercise their rights, challenging the contracts or deals with the fraudsters and or thieves, they must give way. Such contracts do not bind the true and correct landowners. If need be, the State and or the developer concerned need to enter into completely new contracts with the true and correct landowners on terms that are fair and reasonable with reasonable compensation being paid for the earlier illegal entry, occupation and conduct of their businesses. ...................................................... The above supreme Court ruling refers to Section 47 of the Oil & Gas Act, PNG LNG case before the ADR/Mediation is leading toward the ruling in above case. regards

Advocacy is nice from an Aus point of view but on the ground where I am in the Solomons, the Australian foreign aid agenda has a poor reputation of suiting Australia more than Solomons (boomerang aid). From some of the programs I interact with, the impact is low and the overheads are high - more money on consultant salaries and other expenses than on partnerships. Not with all cases. Putting more money into a bad model doesn't have my support. Better advocacy is just putting lipstick on the pig. Fix the real issues.

I strongly endorse this. I would contribute 0.5% of the funding I received. The mining industry was able to do so much (damage) with their $20m televised advocacy program a few years ago. We could do quite a bit (of good) with $9m!

Hi Hillary. Thanks so much for the comment and for sharing the open knowledge maps resource. I love how it categorizes material in a simple and visually-appealing way - a big tick for my visual-thinking self! Though I did find that it linked to some non-open-access articles, like <a href="http://access.portico.org/Portico/#!journalAUSimpleView/tab=PDF?cs=ISSN_17459656?ct=E-Journal%20Content?auId=ark:/27927/phx64r6gfj0" rel="nofollow">this sweet potato article</a> that I clicked through to which even the ANU doesn't subscribe to, it seems. Nonetheless, it is very cool. I'll add it to the toolkit and can definitely see myself (and I'm sure others too) using it going forward. Thanks!

Foreign aid seems to be a matter that the public is broadly indifferent, neither strongly supportive, nor strongly opposed. It is therefore up to government to lead the way, and not feel constrained by public opinion. There is a role for leadership and moral reflection about what goals and commitments are valuable, whether valued intrinsically or valued instrumentally. Both types of value are relevant.

Hi Stephen and Vailala, We now have big earthquake in Hela and Southern Highlands province now. It is sad how all this will come to end but many believes that it is a man made earth quake. Lot of challenges now for the developer and all stakeholders of the project. regards