Lawyers representing two groups of landowners in the Papua New Guinea (PNG) Highlands have written to Esso Highlands alleging that the legal agreement underpinning the massive PNG LNG project is flawed.
The PNG LNG project is the single largest foreign investment in the country's history and is having a profound impact on all aspects of Papua New Guinean society.
Warner Shand Lawyers are acting on behalf of landowners from Boera and Tuguba. The Tuguba landowners are from the Highlands and are challenging the ownership of the Hides gas fields. The Boera landowners are based outside the capital Port Moresby, near the LNG processing site. As such, the two claims potentially affect the whole of the PNG LNG project. The letter, which was printed in the localPost-Courieron 13 April, disputes the legality of the arrangement on two points.
Firstly, it claims that, contrary to Papua New Guinean law, the natural gas reserves in question belong not to the government but to the customary landowners. Warner Shand cites the United Nations Declaration on the Rights of Indigenous Peoples in support of this assertion. Secondly, Warner Shand argues that the state does not have the right to compulsorily acquire customary land for the purpose of the LNG project. On 14 April Minister for Lands Lucas Dekena stated that Papua New Guinea's Land Act did allow compulsory acquisition of land in cases of national importance, and that the LNG project fell into this category. Esso Highlands managing director Peter Graham said on 14 April that the company was in compliance with Papua New Guinea's laws, noting that Warner Shand's case represents a challenge to those laws on constitutional grounds, rather than an allegation of illegality on the part of Esso Highlands.
Significance:This challenge represents yet another example of Papua New Guinea's difficult operational environment. That said, it is unlikely that the government will allow it to make any headway; the importance of the PNG LNG project to the government's policy programme and the country's economy are too great.
Source: Neil Ashdown, Global Insights, 14/4/2011