THE banking and financial institutions have no confidence in the land registration system of Papua New Guinea, the Public Accounts Committee has discovered.
Neither do they have any confidence in the value of State leases given as security for bank loans.
The committee, having considered the performances of the Department of Lands and Physical Planning over many years, concluded that this was the case because of repeated failures by the department to lawfully issue the State leases or ensure that issued State leases are lawful.
The PAC concluded in its report to Parliament: “The committee questioned the secretary on this topic.
“The secretary showed little understanding of the importance of his department in this regard and seemed unable to appreciate that unlawful titles may not give any security at all for loans.”
Banks appeared reluctant to release original titles to the department because the department loses documents and that legal firms employ full time clerks to deal with the department because the level of departmental performance and response to the public is poor.
The committee called for a “deeper inquiry” into this matter.
“The register should be cleansed of illegal or unlawfully issued State leases by a process of forfeiture or cancellation,” it said.
“This will restore confidence in the system and reassure lenders as to the quality of their security.”