The struggle between development and traditional lands is an issue across much of the Pacific.

In Papua New Guinea, increasing urbanisation around the city of Lae has encroached more and more on the land of the Ahi people - the traditional owners of the area.

Tania Nugent went to Lae to find out more about the land mobilisation challenge.

Jonathon Saing , Ahi leader: My mother told me, land belongs to God and if you look at land, you look at the face of God.

Tania Nugent: The Ahi people say they're blessed.

Gareth Kissing , Ahi businessman: Lae city is our land. The land the water, all these areas which are traditionally owned by us. The source of it is the Ahi people.

Tania Nugent: Lae is Papua New Guinea's second biggest city.

Patilius Gamato, Morobe Provincial Government: If you see Lae geographically, it is in the centre of Papua New Guinea./It's connected to the five highlands provinces and Madang Province and it's also connected by ship by boat and by air to the New Guinea islands provinces.

Tania Nugent: Lae has long been the industrial hub of Papua New Guinea and the city is booming.

Gareth Kissing: Lae's got six gold mines around it in the province of Morobe alone and there's a couple more up the road in Madang and also up the highlands.

Patilius Gamato: We're looking at Lae within the next 20 years being the main growth centre of PNG.

Jonathon Saing: This is Wagang Village. Wagang ,Yanga, Butibam, Kamkumung, Hengali and Yalu, those are the six Ahi tribes surrounding Lae city.

Tania Nugent: The 15,000 Ahi are from 38 clans and six tribes. But the people haven't necessarily benefited from the city's prosperity.

Gareth Kissing: The standard of living in Lae city in PNG especially in the urban villages, urban areas, it's not that particularly good in terms of our village environment.

Tania Nugent: There are disputes with government over ownership and compensation for some of the land the city is on. But mainly, the Ahi have struggled to capitalise on their biggest asset - their customary land which surrounds Lae city.

Gareth Kissing: The last 30 years, 40 years, the Ahi people have suffered as a result of being denied an opportunity to participate.

Tania Nugent: Like 97% of PNG, the land is owned by clans and tribes, not individuals. It's covered by custom law - not Government Land Laws and is mostly unregistered, making it difficult for outsiders to negotiate land use.

As a result, much of the Ahi land has gone undeveloped. Left vacant, the land is being occupied by squatter settlements.

Patilius Gamato: What's happening now is custom land at the fringes of cities and towns are being used by people, settlers, migrants to towns and cities but they don't give greater value to the land so the provincial government's position is to develop land and add value to custom land.

Jonathon Saing: We want to see development go ahead but we want to be a part of the development. We don't want to stand by and watch it.

Tania Nugent: The Ahi want to be able to make money from leasing their land for development and the provincial government needs the land to expand the city.

Patilius Gamato: Customary land are at the fringes of towns and cities and the cities cannot expand until the customary land is brought into full mobilisation.

Tania Nugent: So, in 2001, the Morobe government introduced the Ahi Land Mobilisation Policy, to protect Ahi land and involve the land owners in the future development of the city.

Jonathon Saing: We have our traditional methods of how to use land and how to manage the land.

Tania Nugent: Clans have formed associations to decide which parcels of land will be surveyed and registered for development.

Patilius Gamato: With the support of the provincial government,t we're now beginning to assist them to negotiate a better deal, with companies that are prepared to pay more than migrants or settlers who come and occupy land and don't pay much for the land they are utilising.

Tania Nugent: The developers of the 160 million dollar upgrade to Lae Port will lease land from the Ahi for housing, to resettle more than 400 people living illegally where the new port will go.

Patilius Gamato: The port expansion is a big project and all of us are excited. That's a very critical issue in the development because they cannot start working on the project until the resettlement is done.

Tania Nugent: Other developments proposed for other custom land include a tuna processing plant and a new four lane highway connecting the city to the airport.

Patilius Gamato: They are now beginning to see significant change, significant increase in the value of land.