IPP205 Public Disclosure Authorized Social Assessment Report for the Smallholder Agriculture Development Project Public Disclosure Authorized (SADP) Papua New Guinea January 2007 Public Disclosure Authorized Curry, G.N., Koczberski, G., Omuru, E., Duigu, J., Yala, C. and Imbun, B. Public Disclosure Authorized SOCIAL ASSESSMENT REPORT List of Tables iv List of Figures vi List of Appendices vi Executive Summary viii 1. Introduction 1 1.1 Project Description 1 1.2 Purpose of the Social Assessment 2 1.2.1 Conceptual Approach and Methodological Framework 3 1.3 Background to Oil Palm in Papua New Guinea 5 1.4 Notes 6 2. Land Access and Tenure Security among Oil Palm Smallholder 7 2.1 Introduction 7 2.2 Land Settlement Schemes (State Agricultural Leasehold Land) 8 2.2.1 Transmission of Land Titles 9 2.2.2 Customary Landowner Demands for the Return of Leasehold Blocks to Customary Ownership 10 2.2.3 Disputes Between Long-term Caretakers and Leaseholders 12 2.2.4 Arrears in Land Rentals 12 2.2.5 Rising Population Pressure on Leasehold Blocks 13 2.3 Village Oil Palm (VOP) Holdings on Customary Land 13 2.3.1 Land Tenure Conflicts between Customary Landowners and other VOP Growers 16 2.4 Land Tenure Conversion (LTC) Blocks (Popondetta) 18 2.5 Customary Purchase Blocks (CPBs) 19 2.5.1 Undocumented Land Transactions 20 2.6 Strategies to Achieve Social Development Outcomes: Recommendations to Address Land Issues. 22 2.6.1 Agricultural State Leasehold land on Land Settlement Schemes 22 2.6.2 Village Oil Palm (VOP) Holdings on Customary Land 25 2.6.3 Land Tenure Conversion blocks 26 2.6.4 Customary Purchase Blocks 26 2.7 Notes 32 ii Context 34 3. Key Social Issues: Socio-economic and Political 34 3.1 Introduction Population Growth 34 3.2 Changing Demographic Environment: Smallholders 37 3.3 Changing Harvesting Strategies Among Under-harvesting and Household Labour Constraints: 3.4 39 Gender and Youth Issues 42 Food Security and Access to Gardening Land 3.5 44 A Diversifying Rural Economy 3.6 45 Roads and Transport 3.7 46 Material Welfare 3.8 51 Savings and Loan Repayments 3.9 53 HIV/AIDS 3.10 54 3.11 Law and Order Development Outcomes: 3.12 Strategies For Achieving Social Recommendations to Address Socio-economic and 54 Political Context and Infill Blocks 54 3.12.1 Loan Repayments for Replant Blocks Improving Living Standards through New Savings 3.12.2 57 Mechanisms Improving Living Standards Through Broadening 3.12.3 62 Research and Extension Programs Improving Income Security by Diversifying the Rural 3.12.4 63 Economy 65 3.13 Notes 66 Assessment 4. Institutional 66 Introduction 4.1. 67 Local-Level Government 4.2 67 Organisational Structure and Responsibilities 4.2.1 68 Administrative and budgetary management practices 4.2.2 70 LLG Relationships with their Communities 4.2.3 71 Summary 4.2.4 72 Local Community Organisations 4.3 73 Church Groups 4.3.1 75 Non-Government Organisations 4.3.2 75 Community and Village-based Groups 4.3.3 76 Oil Palm Grower Associations 4.4 76 Organisational Structure and Responsibilities 4.4.1 77 Administrative and budgetary management practices 4.4.2 78 Relationship with the Smallholder Community 4.4.3 79 Summary 4.4.4 79 Palm Industry Corporation (OPIC) 4.5 Oil 79 4.5.1 Organisational Structure and Responsibilities Practices 81 4.5.2 Administrative and Budgetary Management with Smallholder Community 83 4.5.3 Relationship 84 4.5.4 Summary Papua New Guinea Oil Palm Research Association 4.6 85 (OPRA) iii 4.6.1 Organisational Structure and Responsibilities 85 4.6.2 Administrative and Budgetary Management Practices 85 4.6.3 Relationship with Smallholder Community 87 4.6.4 Summary 4.7 87 Strategies to Achieve Social Development Outcomes: Recommendations to Address Community Driven Development 88 4.8 Strategies to Achieve Social Development Outcomes: Recommendations to Strengthen the Capacity of Oil Palm Institutions in meeting the needs of smallholders. 91 4.9 Notes 96 5. Monitoring and Evaluation 97 5.1 Household-level Baseline Survey 97 5.1.1 Household Questionnaire Survey 98 5.1.2 Participatory Focus Group Discussions 99 5.1.3 Action Plan 100 5.1.4 Estimated Costing 101 5.2 Key Socio-economic Indicators 101 5.2.1 Socio-Economic Indicators for Component 1 101 5.2.2 Socio-Economic Indicators for Component 2 104 5.2.3 Socio-Economic Indicators for Component 3 106 Annex 1: Template for SADP household baseline and monitoring survey for replant blocks. 108 Annex 2: Template for SADP household baseline and monitoring survey for infill blocks. 117 Annex 3: Template for SADP household baseline and monitoring survey (general survey). 124 6. Bibliography 131 List of Tables Table 1.1 Areas planted to oil palm in each scheme and potential for infill. I Table 1.2. Estate and smaliholder production details for Hoskins, Bialla and Popondetta. 6 Table 2.1. The numbers and areas of LSS blocks at Bialla, Hoskins and Popondetta. 8 Table 2.2. The numbers and area of VOP blocks at Bialla, Hoskins and Popondetta. 14 Table 2.3. Potential risks and risk mitigation strategies on iv 31 Customary Purchase Blocks. the early l 990s Table 3.1. Numbers of persons per block from projected through to 2011 for LSS blocks at Bialla, 35 Hoskins and Popondetta. harvesting practices. 38 Table 3.2. Population growth and changing blockholders with export Table 3.3. Percentages of LSS and VOP 44 cash crops other than oil palm. and Oro Province: Mandated minimum and actual LLG Table 4.1. 69 Village Services Grants (8 rural LLGs). LLG West New Britain: Mandated minimum and actual Table 4.2: 69 and Village Services Grants (10 rural LLGs). Organisational strengths and weaknesses and capacity Table 4.3. of building needs of LLGs in the oil palm growing regions 71 WNB and Oro provinces. The main NGO, CBO and church-related groups present Table 4.4: 72 in the three project areas. and capacity Table 4.5. Organisational strengths and weaknesses building needs of the various Church groups in WNB 74 and Oro provinces. and capacity 4.5. Organisational strengths and weaknesses Table and building needs of the grower associations in WNB 79 Oro provinces. at Smallholder initiatives and extension programmes Table 4.6. 81 Bialla, Hoskins and Popondetta. Organisational strengths and weaknesses and capacity Table 4.7. 84 building needs of the OPIC in WNB and Oro Province. 86 Table 4.8. 2005 PNGOPRA research projects. Organisational strengths and weaknesses and capacity Table 4.9. 87 building needs of PNGOPRA. Matrix of data collection sites by type of smaliholder Table 5.1. 99 grower in each project area. Action plan for household surveys and focus group Table 5.2. 100 from survey design to report writing. 1: Table 5.3: Socio-economic indicators for Component v Smallholder Productivity Enhancement. 103 Table 5.4. Socio-economic indicators for Component 2: Local Governance and Community Participation. 105 Table 5.5. Socio-economic indicators for Component 3: Project Management and Institutional Support. 107 List of Figures Figure 1.1. Schematic representation of the relationships among the major tasks of the Social Assessment. 3 Figure 3.1. Housing type among VOP and LSS smallholders at Bialla. 47 Figure 3.2. Housing type among LSS smaliholders at Hoskins. 48 Figure 3.3. Housing type among VOP and LSS smallholders at Popondetta. 48 Figure 3.4. Main types of water supply among VOP and LSS smallholders at Bialla. 49 Figure 3.5. Main types of water supply among LSS smallholders at Hoskins. 49 Figure 3.6. Main types of water supply among VOP and LSS smallholders at Popondetta. 50 List of Appendices 1. Terms of Reference (TOR) for the Social Assessment of the "Smallholder Agriculture Development Project". 134 2. List of people and groups consulted at Hoskins. 141 3. List of people and groups consulted at Bialla. 143 4. List of people and groups consulted at Popondetta. 145 5. Institutional Capacity Assessment of Bialla Rural LLG. 146 6. Institutional Capacity Assessment of Ward Development Committee, Bialla Rural LLG. 148 7. Institutional Capacity Assessment of Hoskins LLG. 150 8. Institutional Capacity Assessment of Mosa LLG. 152 9. Institutional Capacity Assessment of Kokoda Rural LLG. 153 10. Institutional Capacity Assessment of Oro Bay Rural LLG. 155 vi EXECUTIVE SUMMARY is to improve the living The development objective of the proposed SADP of oil palm growing provinces. standards of rural communities in selected areas oil palm sector is to be achieved through: (a) increasing smallholder This and (b) promoting productivity through capitalising on existing infrastructure, mechanisms. Three oil sustainable local governance and community participation located at Hoskins, Bialla and palm schemes are included in the Project; these are project components: Oro. These objectives are to be achieved through three planting additional oil palm Component 1: This component will support: (a) existing provincial access roads blocks, each 2 ha in extent (up to 9,000 ha) along areas covered by oil palm through in-filling on land still available within the demand; (b) the upgrading infrastructure in response to smallholder smallholder oil palm blocks (reconstruction) of provincial access roads to existing roads used for Fresh (about 600 km), and maintaining all existing and upgraded of sustainable financing Fruit Bunch (FFB) collection, with the establishment enhancement of smallholder mechanisms for road maintenance; and (c) productivity through improved extension services. and demonstrate sustainable Component 2: This component will develop development, through the mechanisms for community participation into local project areas and promoting provision of grants to community groups in the at local government and participatory planning and local accountability self-reliant local development community level.