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News & Events Recap- Land Debate on Land Valuation and Fair Compensation
Recap- Land Debate on Land Valuation and Fair Compensation
Recap- Land Debate on Land Valuation and Fair Compensation

From November 28 to December 23, 2016, Land Portal hosted a successful Land Debate on land valuation and fair compensation. The debate focused on the question of what is fair compensation for land in cases of land tenure changes (e.g. expropriations and voluntary land transfers), and what measures are sufficient to ensure the livelihoods of affected landholders are restored. The Debate was designed to contribute to the Rethinking Expropriation Law’s Conference on Compensation for Expropriation (hosted in Cape Town, South Africa on December 7-9, 2016). The Conference aimed at discussing land valuation, compensation for expropriation, and the creation of a new protocol on fair compensation. The protocol on fair compensation would provide objective guidance or “best practices” for valuing land and compensating landholders affected by land tenure change. This protocol will be designed to serve various actors operating in this field, such as affected people, governments, project developers, financiers, donors and civil society organisation in cases where fair compensation needs to be determined.  

Nine scholars from a wide range of organizations participated in the online debate. Furthermore, 16 scholars participated in the in-person debate on the final day of the Conference in Cape Town. Minutes from the in-person debate can be accessed here.  In total, the Land Debate received 34 contributions, 489 page visits, 219 tweets and 84 retweets.

Here is a recap of the contributions made to the Land Debate on fair compensation and land valuation:

Bjorn Hoops, PhD Candidate and Lecturer at the University of Groningen Faculty of Law, discussed the “public purpose” requirement for expropriating land. He stated “When asking which protection the public purpose requirement can offer, we typically think of the content of the term 'public purpose.' To give content to this term, however, often proves to be a futile exercise because it is so abstract and vague that courts struggle to give this requirement the teeth that are necessary for it to bite.”

Bjorn discussed expropriations for “economic development” purposes and stated “If economic development were declared a private purpose instead of a public purpose, the public purpose requirement would not only prevent undesirable expropriations, but also expropriations for objectively desirable economic development project.”

Nicholas Tagliarino, PhD Candidate at University of Groningen and Research Analyst at Land Portal, discussed fair compensation for poor and marginalized groups. He stated "Where formal recognition is required to receive compensation, customary landholders without statutorily recognized rights, including Indigenous and local communities, may be vulnerable to expropriation without compensation. According to a recent study by World Resources Institute/University of Groningen, only six of 30 countries assessed (Philippines, South Africa, South Sudan, Tanzania, Uganda, and Zambia) have national laws that adequately ensure that customary tenure rights and users of undeveloped common properties are eligible for compensation."

Nicholas recommended a ‘comprehensive’ valuation of compensation, defined as compensation that accounts for the following land value attributes: economic activities, improvements, and intangible land values (e.g. historical/cultural values) associated with the land. Additionally, ‘comprehensive’ refers to procedures that provide alternative land as a compensation option. Furthermore, Nicholas recommended that governments should be legally obligated to follow a gender-sensitive approach to providing compensation to affected persons, accounting for the various ways in which men and women use land.

Peter Veit, Director of the Land and Resource Rights Initiative at World Resources Institute, stated that fair compensation should protect welfare, should be “full” compensation, and should be paid promptly. Regarding protecting the welfare of affected landholders, Peter stated “Development professionals and human rights advocates argue that compensation should improve or at least restore in real terms the living conditions of displaced people to pre-resettlement levels. Fair compensation will ensure that all affected people and populations are not worse off - and preferably are better off - than before their land is taken."

Regarding what level of compensation constitutes full compensation, he stated “To protect the wellbeing and welfare of affected people, compensation must reflect not just the land and the tangible assets and economic activities associated with the land, but also the intangible land values (e.g. cultural and spiritual values of sacred lands held by communities)." Peter further commented that “fair compensation means that full compensation should be awarded to all claimants before the government takes possession of the land. In too many cases, affected people do not receive their compensation ten or more years after the government takes their land.”

In his comment, Sam Szoke Burke, Legal Researcher at the Columbia Center on Sustainable Investment, considered the issue of public expropriation of community lands and the compensation thereof in the context of land-based investments, such as agricultural or forestry concessions. He discussed the risks associated with the expropriation of land and stated “An ‘expropriate and compensate’ approach can create different types of risks for stakeholders and lead to an array of negative outcomes, and as such should be considered with great caution."

Regarding the issue of expropriation decision-making, Sam stated “While projects requiring land for the construction of public amenities and services may well fall within the public interest, it may be more difficult to invoke the public interest where land is taken to enable an investor to carry out a land-based investment. The benefits of such investments are said to lie primarily in their potential for employment creation, leveraged infrastructure, and increased public revenue; however, such potential is often difficult to realize, which may reduce the chances an investment will constitute a public purpose.”

An anonymous participant from India discussed land pooling in Amaravati, India. “Land pooling” is a process by which small parcels of land owned by group are assemble for the development of infrastructure. The participant stated the land pooling schemes "were issued in 24 revenue mandals to pool 33,733 acres which includes patta lands, 1034 acres is endowment lands, 50,000 acres of reserve forest land which will be eventually denotified and rest include from land ceiling and unauthorised layouts. The government has promised compensation in return with commercial land post the completion of capital, besides an annual compensation, loan waiver and government jobs to the local youth. The state government applied land pooling method instead of land acquisition law, as it is easy for governments to extract land from willing owners. The owners of the land were therefore asked to sell in return for combination of upfront cash and or return of developed land. The timeline for the compensation is unclear and it is also unsure about an accurate assessment of the dependents on land in the absence of a social impact assessment."

The participant highlighted the costs and benefits of land pooling as an alternative to land acquisition. S/he stated “Land pooling does avoid the unpleasant step of forcing an unwilling owner to part with land. It reduces the upfront cost for the government. For the sellers, there is the possibility of locking into future appreciation in land value on account of the change in its use.” In terms of costs, however, the participant noted “No clear mandate for people who do not own agricultural land and are dependent like tenant farmers and labourers. A very high probability for lack of food security in the long run.”

An anonymous student from the University of Cape Town provided many recommendations on expropriation and fair compensation. S/he stated “A fair decision-making process for expropriating land would be first to explore all alternatives short of expropriation and only where there is no reasonable alternative and suitable land available for the purpose should the government be permitted to expropriate the land. Furthermore, this should only be in the circumstances where the owner of the land refuses to sell his land or refuses to negotiate on a fair price for compensation."

The student further stated "Fair compensation should not be seen as a synonym for ‘full’ compensation but rather ‘fair’ compensation should be the measure that must be considered in respect of ‘full compensation’. For instance full compensation in each case may not be possible, however so long as the compensation is ‘fair’ and equitable, ie appropriate in the circumstances, the requirement has been fulfilled...In some cases compensation in the form of land may be more appropriate. This is especially the case where vulnerable and disadvantaged communities have had their land expropriated and thus seek immediate compensation in the form of land. Furthermore, due regard should be given to such people to ensure that the compensation in the form of alternative land is for instance, suitable and productive for agricultural purposes or that communities basic needs."

Land Portal Data Analyst and PhD Candidate at the University of Reading, wrote a new blog on fair compensation in transational land deals, which was released on Land Portal in December 2016. The blog argues that a mandatory fair compensation for local populations affected by Large-Scale Land Acquisitions (LSLAs), with clearly established rules can act as a catalyser for those investments that truly constitutes a development opportunity.

Laura Notess, Research Analyst at the Land and Resource Rights Initiative at World Resources Institute, recommended ways of ensuring compensation fairly address’s women’s use of the land. She commented that fair compensation for women “means explicitly including women in consultations and negotiations over compensation. The World Bank’s 2016 Environmental and Social Standards specifically note that the consultation process should incorporate women’s perspectives, including their preferences regarding compensation mechanisms and resettlement planning. One good practice is separate consultations with women and women’s groups.”

She further commented “ recognizing and compensating informal land use rights is key to ensuring gender equitable compensation practices.... Compensating use rights and other non-ownership interests in land does not benefit women if women are not included in compensation schemes. Accordingly, gender equity must be considering in implementing compensation schemes... Finally, special measures may need to be taken for particular groups of women, such as female-headed households, widows, and unmarried women."

The Land Portal team is very thankful for all of the excellent contributions made by the Land Debate participants. Stay tuned for upcoming Land Debates in the near future. The next Land Debate is on Urban Land Conflicts in Latin America and the Caribbean and begins January 23, 2017.