Land expropriation law amendments seen instilling transparency

A Bill amending the Land Acquisition Ordinance would be instilling justice, clarity and transparency in the way landowners were compensated when their properties were expropriated, Parliamentary Secretary Edwin Vassallo said.

Speaking in Parliament on Monday, he said it was now being made clear that the Lands Department would, for the future, decide on compensation on the basis of whether or not the properties fell within a development area in terms of the Structure Plan and local plans.

The Bill also regulated the value of land expropriated prior to 2003 where such compensation had not been fixed.

The Constitution did not regulate how such compensation should be paid, but the government was strengthening the citizen's Constitutional rights to compensation.

Authorities in the past used to designate particular land as industrial or semi-industrial. The time had come for the latter designation to be dropped. Today the need was to specify industrial or residential areas and not to allow residential development in industrial areas.

It was also time to let residents of industrial areas know that, according to trading licences, traders still could not do whatever they wanted. The main condition for every such business was that no inconvenience could be caused to neighbours.

Mr Vassallo augured that these amendments would lead to greater efficiency in the way lands were expropriated and paid for.

Labour MP Jose' Herrera said that the formula on which compensation for expropriation was worked out was outdated and unfair as it did not give owners the proper compensation for land taken from them.

It was true that they could take their case before the Land Arbitration Board, but the compensation established by this tribunal was also not based on the real commercial value. And proceedings took far too long. There were cases which had been pending before this board since the 1960s. This was scandalous and rubbed salt into the wound of people whose land was taken from them.

Some time ago the present government rightly proposed that such boards should be presided by a retired, rather than a serving member of the judiciary, so that he would have more time for them. This proposal needed to be implimented at least for the Land Arbitration Board.

Dr Herrera said another issue was the definition of "public purpose" to justify the expropriation of land.

For many years the courts could not define what constituted public purpose. Recently, the courts said that an official declaration that land was being taken over for a public purpose was not enough and the courts could examine whether such public purpose really existed. Subsequently a court declared that land expropriated but never actually developed had to be returned to the owners because the public purpose had not existed.

However, despite such judgments, it was very difficult for one to get his land back. In a particular case he had to spend four and a half years negotiating with the department after an appeals court decision in favour of the landowner.

The issue was complicated by the fact that some land had been taken over by the government (under possession and use) and given to people who built property on it. These people could not buy their property because the land did not belong to the government. This property, he said, was in a very grey area at law. Thus the original landowners had not been given anything for their land and the people who acquired plots on this land from the government were also suffering. It was not an easy situation to solve but it was economically and socially dangerous for the country to have large stretches of land whose ownership was in limbo.

Dr Herrera said that recently, people paying recognition rent for tenements in Merchants Street, where they had been living for 30 years, were informed by the Social Housing Department that they should move out because they were squatters. This had happened as the original owners were lodging a Constitutional case to take the land back after they were not compensated.

This showed the need for new legislation to address this "monumental" problem that had been growing over decades but for which a solution needed to be found so that everybody would know what he owned. If the owners in the Merchants Street case won their court case, hundreds of people would end up homeless.

On a point of explanation, Dr Borg said that in the case of possession and use, the government had the right to deposit a sum and automatically become the owner of the property concerned. This, however, could not be done all at once because Lm7 million were needed.

Continuing, Dr Herrera asked if the government could genuinely revise the requisitioning of certain properties in the past 20 years given to others by rent. It should investigate complaints that the property had since been abusively taken over by squatters who were eventually recognised by government to the detriment of the owners who did not have any other property.

He asked if there could be a departmental board to investigate abuses and solve, at least some, of these injustices.

Winding up, Home Affairs Minister Tonio Borg said the question of compensation had been almost abandoned by the Lands Department for a number of years, with the attitude being to first expropriate land and see later about payment. The outstanding bill for long-expropriated lands amounted to several millions of liri.

In 1993 the Lands Department introduced a policy whereby government departments requesting expropriation would have to deposit funds to cover the purchase of the land. This had greatly improved the situation. This policy became law in 2003 and no expropriation order could be issued without compensation being available. This meant that all government departments asking for expropriation started being more careful about their requests. The new system had the advantage of freezing the property's value because the funds were deposited in favour of the property's owners.

The issue was over outstanding payments for old expropriations, but the government had doubled the amount of funds available for this purpose.

Referring to remarks by Joe Brincat (MLP) last week, Dr Borg said that if a suitable alternative could be found, the President would no longer have to sign expropriation orders himself, even if he was seen as a controlling factor. It was doubtful whether this throwback to colonial times should remain unchanged.

Turning to comments on "possession and use" Dr Borg said that in 1987 the government had taken an administrative decision to eventually pay for purchase of land and not resort to possession and use. But this did not mean that the government could pay for all the properties that had been taken for possession and use between 1931 and 1987; the enormous sum would break the national coffers, because it was almost equal to the sum that the government owed for long-expropriated lands.

With new legislation in 2002 it became possible for the government to redeem possession and use with capitalisation of one per cent, always at its discretion. The government was quadruplicating the amount of funds for such redemption. The question remained of how to administer interest. Administratively the government paid five per cent of the compensation since the expropriation order until the land was paid for. This had since been enacted into law. But should this five per cent be calculated on the original estimated value of the land or the updated value?

Concluding, Dr Borg said that during the committee stage a way out would be sought that would be equitable to both government and owners.

The Bill was then given a second reading.