With more then 85 per cent of lands in the Solomon Islands under customary ownership, many landowners have had difficulties in using it as collateral when seeking capital. The problem is the fact that, despite having huge amounts of land, many lack some sort of legal recognition as they are often not registered.The Minister for Environment and Member of Parliament for Gizo and Kolobangara, Gordon Darcy Lilo, stated in the recent Parliament meeting that commercial banks only accept registered alienated land or crown land as collaterals, but this is very limited given the fact that many Solomon Islanders do not own registered crown land.
Lilo revealed that the Government is looking at options aimed at enabling Solomon Islanders to use their physical resources, such as these customary lands. Lilo said that they are seeking out innovative ways to ensure that people can use their land as collateral, as mortgage for them if they wish to undertake investment.
Mr. Lilo said that the one of the options currently under discussion is that of a Land Recognition Bill, which would recognize tribal ownership. Lilo said that such recognition is important given the fact that most customary land are under tribal ownership.
Lilo said that apart from that, the Solomon Islands could learn from its nearest neighbor, Vanuatu, where pigs could be used as a form of collateral. Lilo said that the government could look at broadening security and collateral considerations, an issue they intend to discuss with commercial banks in the country.
Lilo revealed that the Government is also looking at the need to strengthen the current trusteeship legislation. The trusteeship legislation is a very old law, enacted in 1925 in the United Kingdom. The Environment Minister said that such an amendment would enable resource owners to participate in major investment by providing the kind of security that investors need when investing on a customary land.