This paper investigates the role that precolonial institutions play in relation to postcolonial natural resource ownership contests. Papua New Guinea provides a unique case study, as it is recorded as having the most decentralized precolonial political institutions of any postcolonial state. After an examination of its precolonial institutions, colonial land policy and three case studies, it is concluded that persistent highly decentralized customary political units, coupled with customary notions of inalienability of land and overlaid with a state property rights regime, lead to resource contests. It is concluded that resource ownership contests can have serious adverse consequences for resource management and that they are not easily overcome.