Canberra, 1 March 1966
275/468. Urgent
… Minister has approved that any private member’s motion or bill to provide that the ownership of minerals shall run with the land1should be opposed by official members on the following general lines—
(1) The principle that the minerals belong to the Administration and not the owners of the land has been part of the law of Papua and New Guinea for many years. This does not mean that the minerals are retained and the royalties are paid for the benefit of the Government but that the minerals are kept for the benefit of the people as a whole and the royalties are paid to the Administration for the use of the people as a whole.
(2) While it is correct that in certain countries, notably some states of the United States of America, the minerals do run with the surface of the land—this is not normally the case in newly developing countries and the principle adopted in the law of the Territory is similar to that in, for example, India, Malaysia and Nigeria as well as in Australia.
(3) Official members should therefore try to emphasise that a proposition that the minerals should be owned by the individuals owning the surface land would result in great riches for a few people at the expense of the majority of2 in the Territory.
(4) If mineral rights reverted to private ownership the Administration would be deprived of an important source of revenue. It would thus be required to seek heavier grants from Australian taxpayers and increase the Territory’s economic dependence. This would not be in the interests of the Territory.
(5) Private ownership of mineral resources would hamstring also the developmental efforts of any future government of Papua and New Guinea. The Administration would not like this to happen and could not support a change in the law which deprived the people of the Territory as a whole of one of their most valuable assets.
(6) The development of the Territory depends vitally on investment not only by the Australian Government but also by Australian and other private investors. Such investment is not easy to attract. Many other countries both developed and underdeveloped are also looking for capital funds and trying to attract investment and unco-operative and hostile attitude on the part of the local people could set back development for many years.
(7) The local residents always benefit when large mining, timber or other industrial type development occurs in their district. Roads and ports are constructed, electric power and reticulated water usually eventuate, markets for garden products are opened up, there is a demand for local labour, medical, schools and other social facilities are either established or enlarged and improved.
(8) The Government does however accept that the mining ordinances of the two territories do not make adequate provision for payment of compensation to the owners of customary land for disturbance of the surface rights by prospecting and mining operations. It is the intention for the Administration to move amendments to the two ordinances at the next session of the House of Assembly to change the law in this respect.
(9) The Minister has approved that twelve members of the House including the Member for Bougainville3 now on an English language course visit Australia later this month and at the Administrator’s suggestion they will visit Townsville and Mount Isa to see the mining activities in Queensland. If the official members are able to have the bill rejected on the previous arguments this need not be mentioned but it should provide material for obtaining postponement of the debate if it is felt that the majority of the House supports the bill.
The Minister considers that attempts should be made to canvass out of the House with some of the members, particularly the Under-Secretaries, the desirability of mineral royalties being available for the development of the Territory as a whole so as to ensure that they fully understand the effect of the proposed bill before it is debated in the House.
Efforts should also continue to be made to explain to members especially from the less favourably endowed areas such as the Highlands and the Sepik that they would stand to lose whatever the natives of isolated locations, eg Bougainville, might gain if mineral rights were conceded to landowners.
[NAA: A452, 1966/1445]
1 For context, see editorial note ‘Mineral discoveries on Bougainville island’.
2 The word ‘people’ seems to have been omitted here.
3 Paul Lapun.