By Andrew Lattas

My own experience of landowner companies in Papua New Guinea (in the Kaliai area and in Pomio where different forestry concessions operate) is that the local landowner company is often made up of different kinds of  villagers keen on development. Some are educated individuals who find the life of gardening hard and arduous, others can be remote villagers who are desperate for some roads, while other villagers are drawn in by the high cost of school fees and low cash crop prices. Many villagers who initially support logging can change sides once the project starts, when they see the poor quality of the roads and bridges, and the low royalty payments.

Generally the initiators of the project are locals who end up being financed by an overseas contractor (often RH). They will hunt for an interested contractor who is able to fund their legal, travel, accommodation and entertainment expenses whilst in town. The local member of parliament can also put a fair bit pressure on the directors to go with a contractor with which he has existing ties. 

My experience has been that the landowner company generally receives a "premium" and even “advance” payments from the overseas logging company to cover its startup costs and its ongoing running “expenses.” The initiators of the project generally choose the directors and it is often on the basis of their ability to be complicit and silent with regard to the allocation of Premium money within the company. There are generally no minutes or records of how the money is used and this in turn serves to create an internal culture of solidarity, collaboration and collusion between directors. Some of the money is used to keep junior directors bound in relations of debt to the general manager and other key directors of the company who control the purse strings. Many directors in the landowner company can be illiterate or only able to read basic Pisin. They will be unable to read legal documents in English and, consequently, will depend heavily on educated directors for information. This will privilege certain individuals and groups within the landowner company, generally, those who have contacts with politicians and the government bureaucracy.

The Premium money that the landowner company receives from the overseas logging company is nominally to cover its expenses, but it also operates as gift that co-opts the directors and obligates them to the overseas contractor at the expense of their local ties to villagers. The landowner company is expected to manage public relations for the Malaysians. It is that the landowner company that should be seen publicly as calling in the riot squad to come and remove road blocks and to arrest those responsible. It is also expected to distribute covertly the necessary gifts to placate opposition and prevent organised protests.

In the Kaliai area, the contractor provided free trips to Malaysia for key landowner company directors for their “good work.” My experience of some of the Arawe directors on the south coast of West New Britain is that "gifts" from the contractor plus a popular critique of the corruption and inefficiency of state development, can generate fierce loyalty by some directors to the overseas contractor. The local landowner directors (especially at the start of the project) can be effective in mobilising people’s discontent with state officials and institutions.

The directors of the landowner company are not so much elected as chosen by each other largely through their perceived ability to work together, that is, to be on side and unquestioning of the key director and the overseas contractor. Some times they are local big men or clan leaders but more often they can claim in a token way to represent certain key clans or areas. Meetings are rare and not advertised, and if votes are held in the local landowner company, they are to ratify agreements achieved beforehand through other means. The overseas logging company can play a key role (through money and legal means) in empowering certain directors so that they become the managers and spokesmen for the landowner company. The end aim is that the local landowner company operates as the public relations arm for the foreign contractor in its interface with the wider public, and also with local villagers. The latter involves producing a process of divide and rule whereby Melanesians confront each other over their support and opposition to logging. This serves partly to undercut the transformation of economic conflicts into forms of racial conflict between Melanesians and Malaysians.

Above all the local landowner company is not the landowners. 

As the project proceeds, the landowner company can meet increased opposition and criticism from local villagers. It does not take villagers long to recognise that the directors are not operating for the public benefit but are a privileged group looking after themselves. The directors in turn recognise that strong local opposition means that the project might have a limited term and so some directors can then choose to operate on the basis of needing to get whatever they can as quickly as they can. This generally means subordinating themselves to the most powerful and wealthiest participant, the overseas contractor, who demands quick solutions to local disputes that disrupt production and the export of logs. The two main ways of ending disruptive disputes are intimidation through the riot squad or through strategic gifts of money, goods, and jobs to key opponents so as to compromise and co-opt them.

My experience of landowner companies is that they use an ideology of democratic representation and nationalism to perpetuate some of the most exploitative relations on behalf of foreign companies. They are a scam that siphons off money that might otherwise go to villagers, and instead the landowner company looks after key local players, namely, politicians, local big men and vocal opponents who are bought off by the landowner company’s gifts. The landowner company can also use its substantial financial resources, motor vehicles, boats and personnel to become powerful political brokers at election time. This is now the looming threat in Pomio where the existing member who is being investigated for corruption has been a strong supporter of logging, oil palm development and the appropriation of land through lease-lease back agreements

See the author's article on landowner company politics in the Kaliai area
2011. Logging, violence and pleasure. Neoliberalism, civil society and corporate governance in West New Britain. Oceania 81(1): 88-107.