Port Moresby, Papua New Guinea, 24 March 2025 – The Minister for Oil Palm, Hon. Francis Maneke, has announced a series of comprehensive reforms aimed at transforming the oil palm industry and ensuring that all stakeholders, particularly local farmers, receive fair treatment and economic opportunities. His remarks came in response to a question from Deputy Opposition Leader, Hon. James Nomane, during Parliament’s session on Friday, March 21, 2025.
Minister Maneke acknowledged that the oil palm industry remains one of Papua New Guinea’s leading revenue-generating commodities, but stressed that outdated legislation is holding the sector back from achieving its full potential. The Oil Palm Smallholder Extension Service Act, enacted 50 years ago, only covers five major projects: Hoskins, Biala, Opondeta, New Ireland, and Milne Bay.
“Papua New Guinea’s oil palm industry has expanded significantly beyond the scope of the original legislation. Projects in East New Britain, West Sepik, Central Province, and other areas are not covered by the existing framework. This creates a major gap in regulation, making it difficult for these projects to secure a fair and regulated pricing structure,” Minister Maneke said.
He emphasised that many of these projects are developed under the Special Agricultural and Business Lease (SABL) and Incorporated Land Group (ILG) systems, which were not designed to accommodate the complexities of oil palm production. As a result, local farmers operating outside the protected framework face significant disadvantages in terms of pricing, market access, and general support.
Urgent Need for Legislative Overhaul
Minister Maneke highlighted a comprehensive report compiled by Minister for International Trade and Investment, Hon. Richard Maru, which revealed that East New Britain Oil Palm Ltd. had underpaid smallholders by a staggering K38 million. According to Minister Maneke, this case represents just a fraction of the larger issues confronting the oil palm industry.
“This K38 million underpayment is just the tip of the iceberg. The current legislation fails to provide adequate protection for new projects established under SABL or ILG frameworks. Without proper regulation, our farmers continue to face unfair treatment and miss out on the true value of their produce,” Minister Maneke stated.
He confirmed that the National Oil Palm Policy, a pioneering initiative for Papua New Guinea, was submitted to the National Executive Council (NEC) on 10th March 2025. The policy, once endorsed, will provide a comprehensive framework for the development and regulation of the oil palm industry. Furthermore, a draft legislation is currently being prepared to modernise the sector and ensure all stakeholders are fairly represented.
“The Marape-Rosso Government has identified oil palm as a commodity that will drive economic growth for the next 50 years and beyond. We are committed to ensuring that the necessary policies and legislative frameworks are in place to support this vision,” he said.
Environmental and Land Ownership Concerns
Minister Maneke also underscored the importance of environmental sustainability in developing the oil palm industry. He noted that the global market increasingly demands environmentally responsible practices, and Papua New Guinea must align with these standards to remain competitive.
“We cannot afford to ignore environmental considerations. As we expand the oil palm industry, we must adopt modern, sustainable practices that will protect our natural resources. Environmental sustainability will be a key pillar of the new legislation,” he said.
He added that the proposed legislation would address critical issues of land ownership and usage, acknowledging that customary landowners must be part of the process. Collaboration with the Department of Lands will be essential to ensuring their rights are respected and protected.
Stakeholder Consultations and Inclusive Growth
The Minister called for broad consultations with all stakeholders, including milling companies, landowners, and farmers, to ensure their interests and concerns are adequately addressed in the new legislative framework. He emphasised that the reforms are intended to create a fairer, more transparent, and more prosperous oil palm industry for all Papua New Guineans.
“We are committed to working with all stakeholders to ensure the future of the oil palm industry is secure. The new policies and legislation will address long-standing inequalities and lay a strong foundation for future growth. It is about safeguarding the livelihoods of our farmers, ensuring they receive fair prices, and establishing Papua New Guinea as a reputable player in the global oil palm market,” Minister Maneke said.
According to Minister Maneke, the reforms will also involve alignment with international standards to enhance the country’s credibility and marketability on the global stage. This will include developing mechanisms for proper consultation, effective implementation of environmental standards, and collaboration with the milling companies to enhance transparency and accountability.
“We have already made significant progress, but more work remains to be done. Our intention is to present a well-consulted, comprehensive legislation to the NEC soon. It is crucial we get this right for the benefit of our people and the growth of our nation’s economy,” he concluded.
Stakeholders in the oil palm industry have welcomed Minister Maneke’s commitment to reform and are hopeful that the new policies will deliver lasting benefits to the nation’s farmers and the wider economy.
Village Oil Palm (VOP): A Path to Revitalization and Prosperity Village Oil Palm (VOP) is a program operated by customary landowners with support from the Oil Palm Industry Corporation (OPIC). While the initiative has historically contributed to oil palm cultivation in Papua New Guinea (PNG), it is clear that revitalizing this sector is crucial for fostering economic growth and empowering local farmers.
With the PNG government injecting significant funds into banks to support Small and Medium Enterprises (SMEs), the National Development Bank (NDB) is now well-positioned to reinvest in the VOP scheme. By allocating resources to VOP and appointing OPIC as the monitoring agent, farmers should be provided with proper training to manage their blocks as thriving businesses. This transformation would enable them to maximize revenue generation, overcoming the disadvantages posed by the long-standing pricing formula applied by milling companies.
For nearly 50 years, VOP growers have faced challenges under a pricing system that allocates only 57% of the Palm Product Value (PPV) to smallholders, leaving them suppressed and unable to realize their full potential. A revised pricing policy that prioritizes fairness and transparency could energize the farmers, encouraging them to tend to their blocks consistently and with renewed enthusiasm.
Additionally, customary landowners need adequate compensation to unlock the full potential of their land. Under the current structure, the lack of sufficient incentives has contributed to a reluctance among farmers to maintain their oil palm blocks diligently. By addressing these systemic issues through equitable compensation, enhanced support, and business-focused training, the government and stakeholders can unlock substantial growth in this vital sector.
A revitalized VOP scheme not only promises to benefit individual farmers but also holds the potential to significantly contribute to national export diversification goals, reinforcing PNG’s agricultural and economic sustainability.