Minerals and petroleum are licensed under different statutes, and the ground can overlap. Section 164 of the Mining Act 1992 provides the mechanism for sorting it out.
Section 164(1) — who may refer
Where a dispute arises between (a) the holder of a tenement and (b) a licensee under the Petroleum Act (Chapter 198), concerning any operations carried out or proposed to be carried out by either on the land the subject of the tenement or licence:
(c) the holder of the tenement; or (d) the licensee; or (e) both,
may refer the dispute to the Managing Director for resolution.
The dispute may concern operations proposed to be carried out, not only operations under way. A conflict can be resolved before either party has committed expenditure.
And either party alone may refer it. A referral is not dependent on the other side’s co-operation.
Section 164(2) and (3) — the inquiry and the order
The Managing Director shall, as soon as is practicable after a dispute has been referred, inquire into the dispute and seek the advice of the Council.
(a) make such order and such direction to the tenement holder, the licensee, or both, as he determines to be both just and equitable and in the public interest; and
(b) in that order, direct the payment by either or both of any costs and expenses incidental to the conduct of the inquiry.
“Just and equitable and in the public interest” — both limbs must be satisfied. It is not simply a question of who was there first, or whose licence is more valuable. The Managing Director may weigh the national interest in each resource, the practicality of co-existence, timing and sequencing, and safety.
The order may be directed to one party or both, and may take the form of an order or a direction — which allows a practical outcome, such as sequencing operations or requiring particular working arrangements, rather than simply preferring one licence over the other.
Section 164(4) — the sanction
Where the holder of a tenement, or a licensee under the Petroleum Act, fails or neglects to comply with an order or direction under subsection (3), the Minister may cancel the tenement or the licence, as the case may be.
That is a substantial sanction, and it reaches across statutes: the Minister may cancel a petroleum licence for non-compliance with an order made under the Mining Act. It is one of the few places where the two regimes are joined directly.
The Petroleum Act (Chapter 198) referred to in section 164 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.
Where section 164 fits
The Mining Act has three different mechanisms for competing rights over the same ground:
| Conflict | Mechanism |
|---|---|
| Two applicants for the same ground | Priority by lodgement, or a ballot — s 100 |
| A new tenement over an existing one | Notice, objection and a Council hearing — ss 61–64, 77–79, 93–95; and the Minister’s duty under s 91 |
| A tenement holder and a petroleum licensee | Referral to the Managing Director — s 164 |
| A dispute about customary ownership | Does not affect the tenement (s 4); settled under the Land Disputes Settlement Act; compensation held in a statutory trust (s 160) |
| A dispute about a tenement boundary | The Registrar arranges a survey, at the cost of the party claiming a different location — s 97(9) |
What it means for landowners
The referral right belongs to the tenement holder and the petroleum licensee. A landholder is not a party to it.
But the outcome matters, because it determines what happens on the ground. And the landholder’s own rights are unaffected by it:
- Compensation under Part VII is payable by the holder of a tenement for his entry or occupation — and separately by a petroleum licensee under that Act’s own regime.
- Section 155 forbids entry for mining until compensation is agreed and registered, or determined and paid or tendered — whatever order the Managing Director makes under section 164.
- Compensation under section 87 of the Environment Act 2000 may also be available, to owners, occupiers and any person with customary rights, including for rights to water customarily associated with the land.
- Both projects need their own environment permits, each with its own public review.
Compensation is paid for the loss and damage each operator causes. Where a mining tenement and a petroleum licence both affect your land, keep the records separate — what was cleared, when, by whom, and under whose operations — so that each claim can be made and proved against the right party.
Get advice — the Public Solicitor, or a firm from the law firms directory.
Sources
- Mining Act 1992 — ss 4, 91, 97, 100, 154–160, 164
- Environment Act 2000 — ss 46, 87
- Land Disputes Settlement Act (Chapter 45)
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.