Part VII of the Mining Act 1992 is the landholder’s Part. Section 154 sets the principles.
Section 154(1) — who pays, for what
The holder of a tenement is liable to pay compensation, in respect of his entry or occupation of the land for the purposes of exploration or mining or operations ancillary to mining, to the landholders, for all loss or damage suffered or foreseen to be suffered by them from those operations.
“All loss or damage” — the heads in subsection (2) are inclusive, not exhaustive. Subsection (2) says compensation “includes” those matters.
“Or foreseen to be suffered” — future loss is compensable, not only loss already sustained.
“Ancillary to mining” — it is not confined to the pit. Roads, camps, tailings areas, power lines and ports are all within it, and are the subject of a lease for mining purposes or a mining easement.
Section 154(2) — the eight heads of compensation
| Head | What it covers in practice | |
|---|---|---|
| (a) | Being deprived of the possession or use of the natural surface | Land taken out of the landholder’s use for the life of the operation |
| (b) | Damage to the natural surface | Excavation, spoil, subsidence, erosion, siltation |
| (c) | Severance of land from other land held by the landholder | A road or pit that cuts a holding in two |
| (d) | Loss or restriction of a right of way, easement or other right | Tracks to gardens, rivers, hunting grounds or burial sites |
| (e) | Loss of, or damage to, improvements | Houses, fences, water tanks, sheds, plantings |
| (f) | Loss of earnings from land under cultivation | Coffee, cocoa, copra, vanilla, market gardens |
| (g) | Disruption of agricultural activities | Interference with planting, harvesting, grazing or access |
| (h) | Social disruption | The effect of the operation on the community itself |
This is an unusual and valuable head, and it is often under-claimed. It recognises that a mine does not only damage ground: it brings an influx of outsiders, changes the local economy, disturbs settlement patterns, and puts pressure on customary authority and on families.
It sits alongside section 5(a) of the Environment Act 2000, which makes the preservation of Papua New Guinea traditional social structures a matter of national importance that every decision-maker under that Act must recognise and provide for — and with the requirement that an environmental impact statement address social as well as physical impacts.
Support a section 154(2)(h) claim with evidence: population change, effects on gardens and food supply, on schooling, on customary obligations and ceremonies, and on the standing of leaders.
Section 154(3) — economic tree values
Where applicable, compensation shall be determined with reference to the values for economic trees published by the Valuer-General.
The published schedule is the reference point for trees and permanent plantings. Two practical points: count and record every tree before entry, by species and maturity; and check which edition of the schedule is being applied, since the published values are revised.
Section 154(4) and (5) — what may never be paid
(a) in consideration of permitting entry on to the land for exploration or mining purposes;
(b) in respect of the value of any mineral which is or may be on the land; or
(c) by reference to any rent, royalty or other amount assessed in respect of the mining of the mineral,
other than as provided for in the Mining (Royalties) Act 1992.
A person who pays, or agrees to pay, compensation in respect of any of those matters is guilty of an offence: a fine not exceeding K10,000.00 or imprisonment for up to five years, or both.
The logic follows from section 5: the minerals belong to the State, so a landholder cannot be paid for their value. Payments referable to production belong to the separate royalty regime. A “signing fee” or “access payment” for permitting entry is squarely within paragraph (a) — and it is a criminal offence to pay one.
Compensation must be built from the heads in section 154(2) — measured surface areas, counted trees, valued improvements, quantified lost earnings, documented disruption. It cannot be a lump sum for saying yes, and it cannot be a percentage of production.
Benefits linked to production are delivered instead through royalties, and through the agreements that follow the development forum under section 3.
The Mining (Royalties) Act 1992 referred to in section 154(4) is not carried in the PacLII Papua New Guinea legislation databases. It is named here rather than linked, so that no unverified link is given.
Section 154(6) — neighbouring land
Where any land or improvements adjoining or in the vicinity of the tenement land is or are injured or depreciated in value by the exploration or mining, the landholders of that land are entitled to compensation for all loss or damage sustained, determined as provided in this Part.
Two features. “In the vicinity of” goes beyond the immediately adjoining block — which matters downstream of a discharge or downwind of dust. And “depreciated in value” does not require physical injury.
Compare section 87(3) of the Environment Act 2000, which is in almost identical terms for permit holders. Where mining causes environmental harm, both regimes may be engaged.
Preparing a compensation claim
- Establish who the landholders are, and record each interest. A land dispute does not stop the tenement, and section 157(1)(b) lets claimants to disputed land ask a Warden to determine compensation.
- Record the land before entry — photographs with dates, GPS points, areas, tracks, water sources, burial and sacred sites.
- Count and classify the trees and plantings, and check the Valuer-General’s published values.
- Value the improvements — houses, fences, tanks, sheds.
- Document earnings from cultivated land: buyer receipts, volumes, prices.
- Build the social disruption case under paragraph (h) with evidence, not assertion.
- Include foreseen future loss — section 154(1) covers it expressly.
- Include neighbouring and downstream land under section 154(6).
- Never accept an entry fee or a share of production — paying it is an offence under section 154(5).
- Remember section 155: the holder shall not enter or occupy for mining until a registered compensation agreement is in place or compensation has been determined and paid or tendered.
- Get advice — the Public Solicitor, or a firm from the law firms directory.
Sources
- Mining Act 1992 — ss 3–5, 154–160; Part VII
- Environment Act 2000 — ss 5, 51, 87
- Land Disputes Settlement Act (Chapter 45)
- Constitution — s 53
Before relying on anything here, read the current text of the Mining Act 1992 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.