Division 9 of Part X of the Land Act 1996 is one section long and has generated more controversy than the rest of the Act combined. It is the second half of the lease-leaseback mechanism.
Section 102(1) — land acquired under section 11
The Minister may grant a lease for special agricultural and business purposes of land acquired under section 11.
That cross-reference does all the work. Section 11 is the provision under which the Minister leases customary land from the customary landowners for the purpose of granting an SABL over it — and under which all customary rights, except those specifically reserved in the lease, are suspended for the period of the lease to the State.
An SABL can therefore only exist over land taken under section 11. If the head lease is defective, the SABL has nothing to stand on.
Section 102(2) — who the lease goes to
An SABL shall be granted:
- (a) to a person or persons; or
- (b) to a land group, business group or other incorporated body,
to whom the customary landowners have agreed that such a lease should be granted.
So the landowners choose the lessee. That is the theory, and it is the point on which most SABL disputes turn in practice.
Section 102(3) — the conclusive-evidence rule
A statement in the instrument of lease in the approved form referred to in section 11(2), concerning the person, land group, business group or other incorporated body to whom an SABL over the land shall be granted, is conclusive evidence of the identity of the person (natural or corporate) to whom the customary landowners agreed that the lease should be granted.
Read together with section 11(2) — under which the instrument of lease is conclusive evidence that the State has good title to the head lease — the Act attaches conclusive evidentiary force to a single document executed “by or on behalf of” the customary landowners.
Everything therefore depends on who signed, with what authority under the custom of that place, and whether the form used was the approved form. The conclusive-evidence rule operates on a document in the approved form; that condition is part of the provision, not decoration.
Sections 102(4), (5) and (7) — term, rent and commencement
- Term. Such period, not exceeding 99 years, as to the Minister seems proper.
- Rent. Rent is not payable for a special agricultural and business lease (s 102(5)). Combined with section 11(3) — under which no rent or compensation is payable by the State for the head lease — neither leg of the arrangement generates rent. Any money reaching the landowners comes from the commercial arrangements with the developer, not from the Act.
- Commencement. Notwithstanding anything in the Act, an SABL is effective from the date on which it is executed by the Minister, and is deemed to commence on the date the land was leased by the customary landowners to the State under section 11 (s 102(7)).
That last provision backdates the lease to the head lease date, so the sublease cannot outlast the head lease by the period between the two executions.
Section 102(6) — the machinery that is switched off
Sections 49, 68 to 76 inclusive, 82, 83, 84 and 122 do not apply to the grant of an SABL. That removes:
- section 49 — reservation from lease;
- sections 68 to 76 — advertisement, the Land Board, tender, gazettal of the successful applicant, the Letter of Grant and the Lease Acceptance Form;
- section 82 — the prescribed reservations and covenants, including the implied reservation of minerals and petroleum;
- sections 83 and 84 — rent; and
- section 122.
Separately, section 69(2)(i) lists a lease to be granted under section 102 as a ground for exemption from advertisement. SABLs are not tendered and do not go through the ordinary competitive process.
Section 66 — the head lease still controls
Notwithstanding anything in any other law, a provision of a State lease of customary land leased by the customary landowners to the State that is inconsistent with the terms and conditions of the lease from the customary landowners is, to the extent of that inconsistency, of no effect.
This is the most useful protection landowners have, and it is under-used. The SABL cannot give the developer more than the landowners gave the State. Any examination of an SABL should place it beside the head lease and compare purpose, area, term and reserved rights line by line.
The questions that decide SABL disputes
- Was the head lease executed by people with authority under the custom of that place to bind the group?
- Was there a determination of ownership under section 9 before the head lease was taken?
- Was the instrument in the approved form? The conclusive-evidence rules in sections 11(2) and 102(3) are conditioned on it.
- What rights were specifically reserved in the head lease? Everything not reserved is suspended for the term.
- Is the SABL consistent with the head lease, or does section 66 cut parts of it down?
- Is the purpose genuinely agricultural and business, or is the lease being used to obtain something else — most often timber?
See Tzen Plantation Ltd v Mukurramainga Land Group [2025] PGSC 50; SC2746.
Get advice for the group, arranged and paid for by the group. Ask to see the draft head lease and the draft SABL together. Read the reservations clause line by line — gardens, hunting, water, access, sacred sites. Ask who is named as lessee under section 102(2), and why. And consider whether an incorporated land group should hold the group’s side, so that there are members, rules and accountability.
Sources
- Land Act 1996 — ss 9, 11, 49, 66, 68–76, 82–84, 102, 122, 132
- Land Groups Incorporation Act — PacLII 1986 Revised Edition
- Tzen Plantation Ltd v Mukurramainga Land Group [2025] PGSC 50; SC2746
- Constitution — ss 53, 54; Fourth National Goal
Before relying on anything here, read the current text of the Land Act 1996 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.