Sunday, 8 April 2012

United Nations Transitional Administration in East Timor Land Policy

Original Citation: 2004 ETLJ 2

Section 7 of UNTAET Regulation No 1 of 1999 on the authority of the Transitional Administration in East Timor provided as follows:

7.1 UNTAET shall administer immovable or movable property, including monies, bank accounts, and other property of, or registered in the name of the Republic of Indonesia, or any of its subsidiary organs and agencies, which is in the territory of East Timor.

7.2 UNTAET shall also administer any property, both as specified in section 7.1 of the present regulation and privately owned that was abandoned after 30 August 1999, the date of the popular consultation, until such time as the lawful owners are determined.

Pursuant to these sections, the UNTAET Land and Property Unit drafted and implemented a policy on the administration of immovable property of the Republic of Indonesia and private abandoned property. This policy provided for the granting of Temporary Use Agreements on immovable properties administered under section 7 (Guidelines for the Administration of Public and Abandoned Property by District Administrations). UNTAET Notification No 16 of 2000 on fees in relation to land, buildings and property provided for the payment of market value rentals for Temporary Use Agreements. As a result of the administration of this policy and of the implementation of Notification No 16 of 2000, hundreds of the many thousands (approximately 50 000) properties which fell under the administrative powers of UNTAET set out in section 7 were granted with Temporary Use Agreements (TUA’s). These TUA’s were granted to the peacekeeping forces, administrative agencies of UNTAET (including administrative agencies of the East Timor Public Administration), local and foreign businesses, and local and foreign citizens for residential purposes and, up to the dissolution of UNTAET on 19 May 2002, approximately $1 million per in revenues were being collected annually.

Upon the direction of the UNTAET Deputy Special Representative of the Secretary General, the Land and Property unit drafted a set of regulations and directives directed at the constitution of a Land Commission, the registration of land right ownership, alternative dispute resolution mechanisms for land disputes and a Special Panel of the Dili District Court to handle land disputes which could not be resolved by mediation.

However, when this package of draft legislation was submitted to the Second Transitional Cabinet, it was rejected and the following decision was made by Cabinet:

The Transitional Administration should fulfill the following functions with respect to land and property during the transitional period:

(a) assign temporary use agreements to confirm use of the property;
(b) settle disputes relating to temporary use;
(c)  register claims to land, but not land titles;
(d) institute a period for lodging claims to land extending well into independence and a public information campaign;
(e) develop a single national database of land claims;
(f) develop a mechanism to provide some confidence to investors, such as a regulation allowing a longer term (e.g., 20 years) temporary use agreements where the ownership of the land is clearly uncontestable (e.g., government property);
(g) initiate a national debate on the land question with ample use of comparative examples and various possible solutions; and
(h) strengthen the capacity among the East Timorese for resolution of land disputes at the community level.

This Cabinet Decision also “noted that the issue of the jurisdiction of the District Courts to settle land disputes would need to be revisited, preferably once a decision has been made on the location of the Land and Property Unit within the institutional framework of ETTA”.

Since this determination by the Second Transitional Cabinet, the UNTAET Land and Property Unit continued to:

1. assign temporary use agreements in respect of the two classes of land referred to in Article 7 of UNTAET Regulation No 01/1999;

2. register claims to land but not titles and develop a database of land claims;

3. began to implement plans for strengthening the capacity for the resolution of land disputes through mediation (a grant from the Canadian International Development Agency for mediation training was eventually implemented in the post-UNTAET period).

However, this Unit failed to implement any mechanism for the resolution of disputes relating to temporary use; failed to institute a period for lodging claims to land extending well into independence; undertook only minimal efforts to institute a public information campaign; failed to develop a mechanism to promote confidence in investors such as the regulation for long term temporary use agreements for land where the title was uncontestable; and failed to initiate a national debate on the land question with comparative examples and possible solutions.

In relation to a time period for the lodging of claims to property, this was not implemented until after independence with the enactment of Law No 01/2003 on the Juridical Regime on Immovable Properties. Articles 12 and 13 of this law dealt with claims by citizens in respect of illegally appropriated and illegally occupied immovable properties and all claims by foreigners to immovable properties respectively and set a deadline of one year from the date of publication of that law (11 March 2003) for such claims to be lodged. This time period expired on 10 March 2004. Failure to lodge the claims referred to in Articles 12 and 13 of Law No 01/2003 had the consequence that the properties in question forfeited to the State. No time limit was set by this law for claims by citizens to their immovable properties that were not illegally appropriated or illegally occupied.

The Land and Property Unit also failed to ensure the implementation of UNTAET Notification No 16 of 2000 on fees in relation to land, buildings and property that required the payment of a market value rental fee under clause 3.2 of the schedule to that Notification for all property administered by UNTAET under section 7 of Regulation No 01/1999 and many Temporary Use Agreements were made requiring a nil or nominal rental fee of $1 per month. This failure, along with the policy of allowing District Administrators to determine Temporary Use Agreements, led to significant problems. In one case, executive intervention was required to stop the development of a property because it had been granted with a Temporary Use Agreement with a rental fee of only $1 per month - far below the market value. The property in question was the pousada in Baucau. Executive Order No 2002/5 on the Cessation and Removal of All Construction Activities at the Pousada de Baucau was enacted on 15 April 2002 because, amongst other things, of the irregularities in the Temporary Use Agreement. Although the considerations in this Executive Order stated that "a developer or group comprised of developers, purported owners and prospective operators is constructing and renovating a hotel facility known as the Pousada de Baucau (Complexo de Hotel e Piscina/Hotel Flamboyant e Piscina, Baucau (the “Facility”) without the approval of the Transitional Administration", a Temporary Use Agreement had in fact been granted by the Transitional Administration under the Land and Property Unit's property administration policy.

The Land and Property Unit's policy of delegating the power to enter into Temporary Use Agreements to District Administrators was a fundamental defect in the policy (see Guidelines for the Administration of Public and Abandoned Property by District Administrations). These officials were not the appropriate officials to grant Temporary Use Agreements because they were not officials of the Land and Property Unit, the Department of Infrastructure or the Department of Justice which were the relevant implementing agencies that should have been implementing the Temporary Use Agreement system. The District Administrators were officials of an entirely different part of the Transitional Administration, namely, the Department of Internal Affairs and were not subject to direction or control of the Land and Property Unit. When the Land and Property Unit was transferred from the jurisdiction of the Department of Infrastructure to the Department of Justice, the then Minister for Justice, Ms. Ana Pessoa, terminated this policy, abolished the discretion of District Administrators to grant Temporary Use Agreements and centralised the administration of Temporary Use Agreements into her own jurisdiction. This was a necessary and prudent policy decision by the Minister.

A further problem with the Land and Property Unit's property administration policy was the granting of Temporary Use Agreements in respect of private abandoned land. The granting of Temporary Use Agreements on private abandoned land eventually generated very dangerous disputes as the owners of properties who had been forced to leave East Timor during the violence of 1999 returned to find that their properties had been granted to third parties by the Transitional Administration. In light of these disputes in respect of which the Unit was incompetent to resolve - the policy was eventually revised towards the end of the Transitional Administration to exclude private abandoned properties from the Temporary Use Agreement system. But the legacy of disputes arising from the implementation of the earlier policy remained.

Warren L. Wright

Revised: 20 May 2004 The writer was Property Rights Adviser in the Land and Property Unit for 17 months during the UNTAET period.

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