Visitors to Papua New Guinean land law often ask why a country would restrict outright ownership. The answer is in the Constitution, and it is deliberate.
The National Goals set the direction
The Preamble to the Constitution sets out five National Goals and Directive Principles. Two bear directly on land:
That the country’s natural resources and environment be conserved and used for the collective benefit of us all, and be replenished for the benefit of future generations — with wise use of resources “in trust for future generations”.
Development primarily through the use of Papua New Guinean forms of social, political and economic organization — with traditional villages and communities to remain as viable units of society.
Goal 3 adds the sovereignty dimension: strict control of foreign investment capital, and control of major enterprises exploiting natural resources.
These are not merely aspirational. Under section 25(3), where a law can reasonably be read in a way that gives effect to the Goals, it is to be read that way.
Three restrictions expressing one policy
| Restriction | Source | Effect |
|---|---|---|
| Freehold reserved to citizens | Constitution s 56(1)(b), implemented by the Freeholds Act | Outright ownership stays with citizens |
| Customary land not saleable | Section 132 of the Land Act 1996 | Dealings only to citizens in accordance with custom; other contracts void |
| All other land is State property | Section 4 of the Land Act 1996 | Private interests are held under the State, by lease |
Read together, these mean that land in Papua New Guinea is either held by its customary owners or held under the State. There is very little in between.
Custom is the larger part of the picture
The overwhelming majority of land in the country is customary land — held by clans and kinship groups under custom, without title deeds. That is not an accident of history that the law tolerates; it is a position the Constitution actively supports.
Schedule 2 makes custom a source of the underlying law, and the Underlying Law Act 2000 directs the courts to look to custom first where no written law answers a question.
Section 3 defines freehold to exclude “any form of customary ownership of, or of customary interest in, land”. Customary tenure is not a lesser form of freehold; it is a different thing, with its own law and its own courts.
Why leasehold carries the commercial system
A restriction on freehold would be unworkable if it prevented investment. It does not, because a State lease is a term of years and therefore falls outside the section 3 definition of freehold ownership altogether.
So:
- companies and non-citizens can hold land, by lease;
- terms of up to 99 years are available for most lease types — long enough for any ordinary commercial purpose;
- leases are registered, mortgageable and transferable, subject to Ministerial approval; and
- projects on customary land proceed through lease-leaseback and an SABL.
The State keeps the reversion, and with it a continuing say: improvement conditions requiring the land actually to be developed, a bona fide purpose condition, and forfeiture where conditions are not met.
The restriction is protected against evasion
A rule of this kind attracts attempts to work around it, and the drafting anticipates that:
- Section 4 of the Freeholds Act treats ownership of an indirect interest — anything conferring powers equivalent to those of a freehold owner — as freehold ownership.
- Section 15 lists the corporations that count as citizens, and an ordinary company is not among them.
- Section 27 gives the National Court all jurisdiction and powers necessary to prevent or nullify an attempted evasion of section 56(1)(b).
- Section 132 of the Land Act makes a contract to dispose of customary land outside custom void — not merely unenforceable.
The balance the system strikes
Keep the land base with the people — through customary tenure and the freehold restriction. Allow development — through long State leases open to anyone. Keep a public interest in how land is used — through lease conditions, purpose clauses and forfeiture. And compensate where land is taken — through Part IV of the Land Act and section 53 of the Constitution.
Whether the system achieves all of that is a matter of ongoing debate in Papua New Guinea — particularly around SABLs, where the suspension of customary rights for up to 99 years has been heavily contested. But the design intention is clear enough on the face of the Constitution.
Sources
- Constitution — Preamble (National Goals 3, 4 and 5); ss 25, 53, 56; Schedule 2
- Land (Ownership of Freeholds) Act (Chapter 359) — ss 3, 4, 15, 27
- Land Act 1996 — ss 4, 11, 102, 132
- Underlying Law Act 2000
- Resena v The State [1991] PGSC 15; [1991] PNGLR 174
- Tzen Plantation Ltd v Mukurramainga Land Group [2025] PGSC 50; SC2746
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.