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Compensation following land reform: four big challenges

Paying compensation following land reform is perhaps one of the most pressing and emotive land policy issues in Zimbabwe today. Delays have caused uncertainty and limited agricultural investment, undermined trust and prevented international re-engagement. Valuation and paying of compensation needs to be dealt with urgently.

With any compulsory acquisition – whether through land reform, or through expropriation for mining or urban development in communal areas or from freehold land – comes the responsibility to pay compensation, and the associated liability is taken on by the state. This is formally acknowledged in Zimbabwe’s new Constitution, but the practice of compensation in Zimbabwe has been found wanting.

Beyond the importance of political recognition of this as a priority, there needs to be a set of practical responses that help build trust between the different parties. This blog is one of an occasional series (for example, here) on priorities for the new Zimbabwe Land Commission, established by the Constitutional settlement. Here are four important challenges around compensation.

First is the methodology for valuation. The Constitution, agreed across political parties, specifies the obligation of the state to pay for ‘improvements’ (and only for land held under investment treaties). This is reiterated in the Zimbabwe Land Commission Bill. However, given the delays in implementing the approach there are many disputes about how such improvements are valued, and what improvements constitute, and who is responsible for them. This results in wildly variant estimates of the total liability, with the ranges of US$2-10 billion being presented. However there are fairly standard approaches to valuation available, and much international experience for dealing with different types of valuation, and depreciation including in volatile currency environments. Key outstanding issues relate to how responsibilities for compensating given ‘improvements’ are allocated. For example, a dam may be both a public and private asset – with water ‘owned’ by ZINWA, the dam infrastructure by the farmer, and the use of the water spread amongst a variety of users in a catchment.

Second is the state’s capacity for valuation. Here there remains wide dispute about appropriate methods, and the scope and comprehensiveness of the existing valuations as well as capacity to conduct and validate them, while maintaining a reliable assets database. The pace of official valuations is a real problem, and parallel initiatives have emerged. To date the government’s response has been piecemeal and slow, with individual farms being processed in ways that does not result in an overall strategic response. At current rates, it would take over 20 years for all farms in the country to be valued to allow compensation to be paid. Limited staff are available in the Ministry of Lands for valuation purposes, and equipment is limited and outdated. Mechanisms for self-financed surveying were proposed by the Minister of Finance in 2014, but private surveyors must work closely with government for such surveys to be accepted. This is not yet the case with valuations. There are major capacity constraints in implementing the process that need urgent attention. Formally transferring tenure, paying compensation and formalising new uses through leases or permits has to happen in one go, as new investments and funding flows are often conditional on all aspects being addressed.

Third is the process for dispute resolution (see next week’s blog). This requires clarification of the administrative process and the rights to recourse. The proposed Bill helps in this regard. Notice and gazetting is required, followed by a process of valuation and the option for arbitration in an administrative court. However while the procedure is specified the capacity to implement this in a way that all parties trust remains open to question. Given the importance of speeding up the process (and so likely increasing the number of disputes needing speedy resolution), there is a clear need for a time delimited administrative solution to deal with the process. The establishment of a specialist tribunal under the Land Commission, may alleviate capacity limits and improve the process’ transparency and legitimacy. Current provisions for dispute resolution are clearly inadequate.

Fourth is the funding of the process. In the context of the on-going fiscal constraints of the Government of Zimbabwe, there is limited capacity to pay for compensation, even if there is a willingness to do so. There is therefore a need to disaggregate the liability and define a series of mechanisms for paying it off. Improvements may include private goods acquired by individual farmers (such as farm machinery, buildings, irrigation equipment etc.), public productive goods (such as wider infrastructure, including roads, dip tanks, dams and so on), and public social goods (including those buildings now converted to schools, clinics, government offices/accommodation, trading centres). This is particularly the case on A2 land, but may relate to public housing for former farm workers on A2 land, as compounds are converted.

There is a clear assumption that land reform farmers will contribute through land rentals, and the purchase of some of the assets found on their farms with A2 farmers paying substantially more than A1 farmers. However, given the public developmental benefits of land reform, the state and development partners can be expected to pay for public productive and social components, including as part of debt clearance and development funding arrangements. The Bill establishes a Land Fund through which this can operate, and provides a channel for investment by development partners in public good/developmental aspects, so as to ensure a fiscally feasible response, given current constraints. In turn, a key challenge will be to ensure revenue flows from new farms are sufficient to pay rentals and so contribute to the fund to pay compensation. The fiscal sustainability of the process for both farmers and the state is crucial, and argues for a speedy resolution so that compensation is paid, new ownership and finance arrangements are established and farms increase productivity to pay contributions – together with the state and other development partners – in order to pay off the liability within a reasonable timeframe.

In order to speed up the process, there is an important imperative to boost capacity for implementation and financing. This requires a one-off effort, together with the establishment of a longer term system. The enhancing of survey and valuation capacity in the Ministry of Lands and the Surveyor General is a priority, together with the establishment of an independent Land Tribunal (operational for a time-limited period, say two years) under the Zimbabwe Land Commission to hear dispute cases, and deal with these swiftly, without them clogging the court system, and overwhelming administrative capacity.

Novel approaches to financing are required that see addressing the outstanding liability from land reform as part of debt restructuring and refinancing of the productive economy. Disaggregating the costs into private and different types of public cost will clarify who has to pay what, and this can be managed through an integrated system under the proposed Land Fund, involving all parties – private farmers, banks/financiers offering loans/mortgages, the government and development partners and international banks/finance institutions.

Ensuring a swift move from acquisition to valuation (via dispute resolution if required) to compensation and then issuing of leases or permits is crucial. This must be a central part of any land administration system for the future, and the backlog created by lack of action in the past 17 years must be dealt with urgently. Issuing of leases, for example, will allow for security of tenure and so potential for new financing, and then payment of rentals which in turn will replenish the Land Fund. Paying compensation must be seen as part of a wider strategy for refinancing the economy and increasing its productive, developmental potential, as well as addressing outstanding debts – including around land – is part of this. This is an urgent, and long overdue, priority.

 This post was prepared by Ian Scoones and appeared on Zimbabweland. It is part of an occasional Zimbabweland blog series on priorities for the new Zimbabwe Land Commission.

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Zimbabwe has a new Constitution, but disputes over the land provisions continue

On March 16th, Zimbabweans voted on a new Constitution in a national referendum. The voting was largely peaceful, and the turnout higher than expected, with over 3 million people voting. With all major parties supporting it, the result was a resounding 93% ‘yes’. This endorsement paves the way for elections in the coming months. It is also an important signal that a new commitment to moving forward has been reached, one that international donors have agreed to respect with the removal of further ‘sanctions’.

The Constitution is naturally a compromise document, one hammered out in parliament by all the parties. It involved wide consultation, with inputs from the public. Given Zimbabwe’s immediate political past, it is in many respects a remarkable achievement. It is of course rough at the edges, and not everyone agrees with every section, but it now does exist, and should, in my view, by celebrated.

Of course one of the controversial areas has been the issue of land (see earlier blog). Some are very unhappy about the provisions, blaming the MDC in particular for conceding too much. Ben Freeth, the former farmer activist, is particularly outspoken. In a slightly more considered contribution, Dale Dore asks, can the new Constitution bring about a just, legal and transparent land policy? He answers, “The prospects, unfortunately, look decidedly bleak. Chapter 16 entrenches the outcome of land invasions and the seizures of farms and property. The draft Constitution also retains provisions under section 72 that are inimical to international law, human rights and the rule of law”.

What then are Dore’s complaints? He argues that the separation of provisions on property rights from rights over agricultural land is a big mistake, as the section on agricultural lands restricts rights, running against natural justice. He is particularly concerned about the long-talked about Land Commission, as he thinks it will not have teeth, and will be easily captured. He notes:

The most important retreat, however, has been to make the Land Commission an advisory body to Government rather than an independent parastatal organisation with executive authority. The Commission may make recommendations on a host of issues – including land tenure and compensation – but it lacks any real powers of implementation or teeth for enforcement. Decisions governing land remain firmly in the hands of the President and his appointed minister”

While Section 297(6)” tries to give the impression of independence and impartiality”, he argues that this is not sufficient. This he worries will mean that a Land Audit, also a requirement in the Constitution, will not be fair, as it will be overseen by the Commission.

Overall he argues, that the section on land – Chapter 16 – “maintains all the discriminatory provisions governing farmland found in the current Constitution”. He argues that there will be inadequate notice of compulsory acquisition and that compensation will be paid for improvements only, and not the full value of the land. He objects to the proposed dispute settlement mechanism, arguing runs against basic principles of ‘rule of law’, being an administrative not judiciary process. He argues that, as a result, the Constitution is not in line with earlier rulings by the now disbanded SADC Tribunal ruling. Yet, as I and others have commented before, this obsession with this particular ruling forgets that the proposed constitutional provisions are actually in line with much international practice, and perfectly compatible with ‘the rule of law’, as long as the rules and regulations are abided by. This of course is the critical point. The test will be in the practice, and the demonstrated impartiality and effectiveness of systems of land acquisition, compensation and dispute settlement. Given recent experience, Dore and others are right to be concerned, but have no real argument for rejecting the provisions as a whole.

Before jumping to excessively negative conclusions, we have to understand the political context for the new Constitution, in order to judge it properly. In a heated debate at the end of February on the new Constitution, chaired by Violet Gonda in the Hot Seat slot on SW Africa Radio, Professor Brian Raftopoulos commented:

“Well I think the first thing to point out is that this constitution was a central part of the mediation process. It was always therefore going to be a compromise document and part of a broader process of trying to establish the conditions for a free and fair election – which was the original objective of the SADC mediation. There’s clearly things in the constitution which are problematic; there’s also things which I think establish a very good basis for moving forward and I think that as part of a long term process of discussion between the parties which was established through the mediation, it’s a step forward and one should look at it as that”.

On land, he notes:

“This land process has produced many contradictory results. As recent research shows, it hasn’t been the complete failure people thought it was but at the same time it hasn’t ended the land question. It’s raised a whole series of new issues, which are going to confront Zimbabweans throughout – for the coming decades. So this issue hasn’t been resolved and there are harder questions ahead”.

Of course the land question is not going to be fully resolved by the Constitution. But hopefully the Constitution sets the basic parameters: the land reform is not reversible; rights to land are circumscribed by the state to avoid abuse; compensation for improvements are offered if land is acquired by the state; land administration and distribution is overseen by a competent authority in the Land Commission; and abuses are corrected through a transparent Land Audit. All of these provisions are actually good ones, and compatible with international practices, but will only work if the appropriate political and administrative conditions apply. Given recent experience, this is of course a concern, and why a wider political resolution of the on-going political impasse in Zimbabwe is so urgently needed.

However, given that it has now been approved by the referendum, and given that the Constitution represents an important moment in the mediation process to create such political conditions, surely its basic principles need now to be respected. Sure, there will be need for working out the details of the Commission, the Audit and the associated regulations to govern any land administration processes, but the overarching basis for these, surely, is now set.

Or is it? Dale Dore refers to a discussion with a ‘senior MDC politician’ who noted that: “The MDC had to make compromises. If it conceded to ZANU(PF) on the land issue, he said, “so what?” Anyway, he added, land is not a major issue for the great majority. The issue of land and land policy was something the MDC could fix once in power”. This seems more like a threat to unravel things that have been agreed, even as reluctant compromises. In an email exchange on Dore’s piece as part of probably the most bizarre email list I am copied in to, Eddie Cross MP, the MDC’s Policy Coordinator General (who supported a yes vote with 10 reasons), commented on 10 March, “Excellent as usual – but so long as everyone understands that this was the main focus of concession to the views of Zanu PF in the negotiation and was a compromise – it is not the final word on the issue of agricultural land”.

Yes the Constitution is a compromise. Yes it emerged through negotiation between parties that did not agree. And, yes, it is not the final word. As Brian Raftopolous pointed out in the SW Africa Radio discussion, “there are still a lot of issues around the land [issue] which wouldn’t necessarily be dealt with simply through the constitution – issues which will have to be dealt with through legislation coming afterwards and through political and technical processes that need to take place in the aftermath of what has happened”.

But does this mean that the basic tenets of the Constitution should be dismissed? Technical and administrative details will be required of course, but should a party go into an election essentially saying that key sections are up for grabs? What if ZANU-PF said the same? There would, quite appropriately, be uproar. Equally, for the resumption of international development assistance to be conditional on changes to the now approved Constitution, as Dale Dore seems to suggest, would be madness.

The new Constitution, with its inevitable flaws, now at last provides the basis for moving forward: hopefully towards the removal of sanctions and free and fair elections in a few months time. This is by no means assured, and the unlawful arrests of MDC officials and their lawyer, Beatrice Mtetwa, does not bode well, with a return to ‘brute power’ suggested by some. But equally we cannot succumb to fatalism, a trait so common among the commentariat. Let us also hope that after the elections, the parties respect the Constitution and the painful, slow, but ultimately successful, process of creating it, with all its difficult compromises, was not in vain. A process of healing, compromise and looking to the future is what all Zimbabweans need above all. If any party comes into power and rips up sections of the Constitution they don’t like, is this a good result? For this reason, I, for one, would favour another coalition government; one that, this time, is genuinely committed to national unity and development, so the spirit of compromise with all its awkwardness and faults, embedded in the Constitution provides the basis for a brighter future.

This post was written by Ian Scoones and originally appeared on Zimbabweland

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