21 July 2009

Draft law opens door to foreign ownership of land in East Timor



20 July 2009 Media Release

Draft law opens door to foreign ownership of land

The Gusmao–led AMP government’s consultation process on the draft land law is woefully inadequate and the law itself would open the door to foreign ownership and control of land, former Prime Minister and FRETILIN MP Estanislau Da Silva warned today.

Da Silva said the government’s brief and tokenistic public consultations would heighten community tensions and mistrust.

“This is the most important piece of legislation since Timor-Leste regained its independence in 2002 but many people will not understand or be prepared for the great impact the law will have on their lives,” he said.

“The law is supposed to resolve land disputes and issue the first set of ownership rights to East Timorese citizens.

“But the first two public consultations held in Manatuto on 6 July and in Baucau the following day provided little opportunity for the community to ask questions and voice their concerns.

“According to media releases issued by Land Network, a group of 20 national and international NGOs, the people of Manatuto were only allowed 59 minutes to ask questions and in Baucau, participants got just 90 minutes to ask questions.

”Land Network complained that the Minister for Justice Lucia Lobato has been misleading the people on the length of the consultation process, which will last for 11 weeks only.

“This law requires a much longer period of effective grassroots consultation, particularly considering that half the population is illiterate, most people earn less than a dollar a day and that land is the only real productive and valuable asset which continues to provide livelihoods to East Timorese citizens.

“The government’s consultation process is farcical and inadequate and makes a mockery of the rights of East Timorese citizens.”

Da Silva warned the law as currently drafted would open the door to foreign ownership and control of land in Timor-Leste.

“According to the draft, a company wishing to own land in Timor-Leste only needs to have its head office in Timor-Leste, meaning foreigners could set up companies here and through their majority controlling shareholdings purchase large swathes of land at vastly discounted values.

“The major productive asset of most families, land, would potentially be ripe for exploitation by international speculators as nearly all East Timorese have little experience in land valuation, and being desperate for cash, would be vulnerable to unfair deals.

“This would lead to the displacement of many people and exacerbate social tensions and inequality.”

Da Silva said the draft law again demonstrated the AMP government’s willingness to put the interests of powerful interest groups ahead of vulnerable East Timorese citizens.

“Last year, the current Minister for Agriculture Mariano Sabino agreed to hand over 100,000 hectares of scarce agricultural land to an Indonesian company for use as a sugar-cane plantation.

“This deal was followed by the Secretary of State for Energy Policy Avelinho Coelho signing a contract with the Australian-based biofuel company Enviroenergy Developments Australia for Jatropha development on 59 hectares of prime agricultural land at Baucau.

“Both deals were signed at a time of sky rocketing food prices and despite clear evidence that the projects were highly polluting and severely damaged Timor-Leste’s capacity to become self sufficient in food production.”

For more information, please contact Estanislau Da Silva on +670 733 5062

An unofficial translation of the draft land law is available in English at http://www.sprtl.tl/docs/Land_Law_Draft_English_June09.pdf

1 comment:

  1. The following provision is in the East Timor Draft Land Law 2009:

    Article 11
    1. Properties whose previous right holder is a foreign claimants revert to the State, unless there is special adverse possession.
    2. The State shall grant usufruct to foreign holders of previous rights who maintain the current possession of a property that has reverted to the State's private domain.
    3. The usufruct referred to in the above number is automatically re-granted in favor of the heirs and legatees of the usufruct holder (upon the death of the grantee).

    The constitutional prohibition on land ownership in East Timor does not mean that foreigners can not gain any land rights. There is a similar provision in the Indonesian constitution. Such a provision is usually interpreted to mean that foreigners may not hold the fullest rights in land that exist in the jurisdiction that prohibits such ownership. Lesser rights such as lease - or, in the case of Indonesia - the right of use (hak pakai.

    Prohibiting access to land by foreign entities is not a policy that exists in legal systems whose economy is based on the principles of capitalism. Land - and secure rights on land - are indispensable preconditions for foreign investment. Foreign investment - in the absence of an economy that is capable of existing without it - is crucial for poverty alleviation and eradication goals as well as general economic and social development.

    To argue that foreigners should have no access to land in a developing country's legal and economic system is to argue that country into perpetual poverty, political instability (unless the state is strengthened to suppress dissent) and international isolation.

    The draft land law does this - inhibits foreign access to land by restricting the right which a foreign entity may hold to a mere usufructuary right - one of the most primitive forms of land right - and one that is totally useless for international capital because it will not be transferrable (if it is, it will probably require state consent) and, most importantly, it can not be used as collateral for loans from financial institutions. Such a situation will smother foreign investment and contribute to the exacerbation of East Timor's many social and economic woes.

    It is extraordinary that such a critical matter should be regulated in the way proposed by the draft land law and that only a short provision exists in a land law that is supposed to be directed to more fundamental determination of land ownership issues and the resolution of disputes over land in East Timor.

    It is even more extraordinary that any policy maker or legislative drafter could conceive of such an inadequate and, in the end, detrimental, regulation of the critical issue of foreign land ownership in East Timor.