Land Resource Compensation

This news item about the proposed Namosi copper and gold mine in Fiji, first shown on the ABC news in Australia in March 2012, highlights the importance of our ongoing advocacy for customary landowners about Land Resource Compensation:

Source: Downloaded from ABC Australia.  Newcrest faces backlash in Fiji. Updated March 09, 2012 13:06:39.  Landowners at Waivaka in southern Fiji are opposing Australian company Newcrest Mining’s plans to extract copper and gold in the area.  Philippa McDonald  Source: The Midday Report | Duration: 2min 32sec.  Available from: http://www.abc.net.au/news/2012-03-09/newcrest-faces-backlash-in-fiji/3879800

Spike Boydell (L) & Ulai Baya (R) at the World Bank Land and Poverty Conference 2012
Spike Boydell (L) & Ulai Baya (R) at the World Bank Land and Poverty Conference 2012
In 2012 Spike and Ulai presented on “Resource Development on Customary Land – Managing the Complexity through a Pro-development Compensation Solution“, at the World Bank Land and Poverty Conference.  This besuited activism looked at protecting customary interests against external mining interests through a synergistic (or marriage) value approach (see: PDF).

Abstract: This research explores how an equitable compensation model can be formulated for resource rich developing countries, like those in Melanesia, where the principles of customary land ownership are protected by Constitutions and traditions alike.  Currently, the approaches taken to compensate customary landowners for the loss of access to their traditional subsistence and spiritual recognition to the land is somewhat ad hoc.  We use law as an analytical concept to articulate disconnected worldviews between indigenous values and capitalist interests, applying these interpretations to what we refer to as the Plurality of Registers.

Plurality of Registers (source: Boydell & Baya 2012)
Plurality of Registers (source: Boydell & Baya 2012)

We review compensation regimes around the world, analysing legislation, decided cases and resulting problems, basing our findings on a combination of fieldwork and community engagement, discussions with NGOs and government agencies.  We investigate four compensation approaches (tailored to landowner rights, tailored to common rights, development driven quantification, and negotiated agreement), which we incorporate into a ‘hybrid’ model.  Through a stakeholder and rights based analysis of a mining infrastructure scenario, we demonstrate the efficacy of the synergistic value approach, a method more familiar to the valuation profession than mainstream economists, arguing that it has more to offer in the context of equitable land resource compensation in Melanesia.

Spike Boydell (L) and Ulai Baya (R) at the World Bank Land and Poverty Conference 2013
Spike Boydell (L) & Ulai Baya (R) at the World Bank Land and Poverty Conference 2013

This year we evolved that approach to use publicly available data from mining companies to better demonstrate the value of a mining ‘option’ in our 2013 paper “Resource Development on Customary Land – Using Option Pricing Theory to Share the Benefits from the Exploitation of Land Based Resources” (see: Boydell-292_paper.pdf). Listen to Spike’s interview with Radio Australia on 20 March 2013 here.

Abstract: Building on prior research that identified the benefits of engaging a synergistic value approach to land resource compensation, this paper explores the potential of applying option-pricing theory as a proxy for the economic value of the ‘marriage’ of stakeholder interests associated with mineral exploitation.  Drawing on the example of a copper and gold reserve in Fiji, and equally applicable to other Pacific Islands or African contexts, the research adapts, evolves and explains the findings of recent modeling to recommend equitable stakeholder benefit sharing in the context of customary land.  The synergistic compensation model, informed by (and acknowledging the limitations of) option pricing theory, offers a key transparent negotiation tool for all parties – but highlights the need for increased negotiation capacity in developing countries.  Informed by publicly available data, it places the onus on the exploration company to prove or disprove the data.  It also offers a policy framework that enables the custom landowners to be the direct financial beneficiaries of the scheme (potentially by taking a share in bullion rather than cash), with the national fiscal benefit to the State being derived from standard taxation arrangements over the custom landowners newfound source of revenue.

Delegates in the round-table for Land Resource Compensation: A Pacific Regional Symposium, July 2011.
Delegates at the round-table for Land Resource Compensation: A Pacific Regional Symposium, July 2011.

Our more recent work on land resource compensation builds on the July 2011 Land Resource Compensation: A Pacific Regional Symposium that Spike and John convened in association with the International Academic Association for Planning, Law and Property Rights (PLPR).  We used the AusAID International Seminar Support Scheme to assit the participation of key land specialists from Papua New Guinea, the Solomon Islands, Vanuatu and Fiji.

Land Resource Compensation: A Pacific Regional Symposium.  L to R: Pene Baleinabuli (Fiji), William Singh (Fiji), Stanley Waleanisia (Solomon Islands), Spike Boydell (on floor), Flora Kwapena (PNG), Joseph Foukona (Solomon Islands), Menzies Samuel (Vanuatu), Paula Raquekai (Fiji), Solomoni Nata (Fiji), Richard Dick (Vanuatu).
Land Resource Compensation: A Pacific Regional Symposium. Seated (Left to Right) –  Pene Baleinabuli (Deputy PS Lands, Fiji), William Singh (Chief Valuer, Fiji), Stanley Waleanisia (Under-Secretary of Lands, Solomon Islands),  Flora Kwapena (Valuer General, PNG), Joseph Foukona (USP Law School, Vanuatu), Menzies Samuel (Valuer General, Vanuatu), Paula Raquekai (USP School of Land Management & Development, Fiji), Solomoni Nata (Deputy General Manager, iTaukei Land Trust Board, Fiji), and Richard Dick (Senior Valuer, Vanuatu). Seated (on floor, foreground) Spike Boydell. [photo courtesy of Mike McDermott]
Click on image to access the full Symposium report (4mb) and papers.
Click here to access the full Symposium report (4mb) and papers.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s