|Wikileaks:||View 02TEGUCIGALPA2967 at Wikileaks.org|
|Classification:||UNCLASSIFIED//FOR OFFICIAL USE ONLY|
|Tags:||EINV EAID EAGR PGOV AMGT HO|
|Redacted:||This cable was not redacted by Wikileaks.|
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 05 TEGUCIGALPA 002967 SIPDIS SENSITIVE STATE FOR WHA/CEN, WHA/PPC, AND EB/OIA LABOR FOR ILAB STATE PLEASE PASS TO USAID FOR LAC/AA STATE PASS TO USTR, EXIM, OPIC STATE PASS TO USED IDB, USED WB, USED IMF E.O. 12958: N/A TAGS: EINV, EAID, EAGR, PGOV, AMGT, HO SUBJECT: GOH POSITIVE INITIATIVES TO RESOLVE OUTSTANDING LAND CASES: DRAFT LAW AND ARBITRATION REF: a) Tegucigalpa 01756 b) Tegucigalpa 02833 1. (SBU) Summary. Clear property ownership is important to improving the well-being of the Honduran urban and rural poor, as well as to the resolution of outstanding Amcit investment disputes. Although the GOH has not formed a small Commission to address the outstanding Amcit disputes as Embassy had encouraged (see ref a), Honduran officials instead plan two complementary efforts: legislation to create a National Property Institute (INAP) and a legislative change that would allow arbitration of selected land expropriation claims. These actions are welcome and indicative of a thoughtful approach by the Maduro government but are not expected to result in significant progress on Amcit land cases in the near term. Embassy has supported GOH efforts to address the complicated land tenure issue with a variety of USAID and Public Affairs projects and through extensive discussions with Embassy contacts. End Summary. ------------------------ A System for Arbitration ------------------------ 2. (SBU) The Supreme Court will soon recommend to the National Congress an amendment to Honduran law to allow arbitration of pending land cases. This draft bill, which was provided to former Ambassador Almaguer and WHA A/S Reich during his recent visit to Honduras, deals explicitly with cases involving action or inaction by the Honduran government at the national or local level (expropriation claims). The claimant's case must currently be in process under administrative or judicial procedures. If the case has already exhausted all legal avenues (final Supreme Court decision made) the claimant cannot apply for arbitration. Note: This prevents use of the arbitration mechanism by a claimant in one of the Embassy's oldest land cases, Alfred McDaniels, who lost his appeal to the Honduran Supreme Court for compensation for his investment in a banana farm that was taken over by squatters. Mr. McDaniels requested USG espousal for his case in 2000. End note. 3. (SBU) Under the proposed legislation, a case would be eligible for arbitration if: a) The legal proceedings have taken more than half the allowed time and the case has not yet been resolved; b) The delay in the proceedings is not caused by a lack of action on the part of the individuals, their representatives, or attorneys; c) The deadline to file the petition in the case's respective court level or procedure has not passed; d) The private party requests arbitration within six months of the effective date of this law; and e) The Attorney General determines that arbitration is consistent with this law. 4. (SBU) Once the Attorney General's office concurs with arbitration in a particular case, the parties would sign an arbitration agreement. The signed agreement would be submitted to the judge or other authority working on the dispute, requesting that the legal case be suspended. The case would then go to arbitration. ---------------------------- A Land Institute is Proposed ---------------------------- 5. (SBU) A small group of lawyers working for the Minister of the Presidency is preparing a proposal for the National Congress to create a unified property registry called the National Property Institute (INAP). The INAP would be responsible for the development, execution and administration of a national policy on real estate, liquid assets, business property and intellectual property. This institute would be composed of a board of directors, an executive directorate, the National Center for Registry and Surveys, the National Center for Property Policy and Regulations, an Inspector General, a Complaint Resolution Commission and the Director Generals. 6. (SBU) The Board of Directors would be made up of the President of Honduras and various Ministers such as the Minister of Industry and Trade, Minister of Justice, President of the umbrella association for the private sector group (COHEP) and others. It does not include a member representing the National Agrarian Institute (INA), the Honduran agency that implements the Agrarian Reform Law. INA will continue to be responsible for titling national lands fit for farming and distributing land to peasant groups; however, INA would have to get their titles through the proposed National Property Institute. 7. (SBU) Within the INAP, the National Center for Registries and Surveys would be responsible for unifying and regulating the efficient functioning of registries and surveys for all of Honduras. The National Center for Property Policy and Regulations would serve as a body for proposals and dialogue dealing with property issues such as the security and transparency of registered transactions, dispute settlement, and public outreach, among others. 8. (SBU) Whereas the arbitration proposal is designed to facilitate resolution of old squatter and expropriation cases involving the State, the land institute is designed to avoid the current proliferation of private land title disputes in the future. In the proposal, land registration would be the exclusive jurisdiction of the INAP. Any negative responses to land inscriptions would be sent before the Dispute Resolution Commission. All resolutions issued by the Dispute Resolution Commission division would be considered final and binding. ---------------------- A Resistance to Change ---------------------- 9. (SBU) The Property Registry proposal recently ran into some resistance within the Honduran Supreme Court. Under the 1974 Property Registry Law, the courts ordered that the National Registry be combined with the national cadaster (a public record, survey, or map of the value, extent and ownership of land as a basis of taxation). However, the National Registry falls under the jurisdiction of the Supreme Court, while the Ministry of Government and Justice houses the national survey. In the last 28 years, neither of these two government entities has been willing to give up its jurisdiction to the other, so the registry and the survey have remained separate, non-communicating entities. Meanwhile, the cadastral survey was not maintained and became outdated. The Maduro administration therefore had to begin from scratch in early 2002. The proposed legislation creating the INAP would pull both the registry and cadastral survey from their respective ministries, moving them to the new agency that would be independent of any ministry and would fall under the authority of the executive branch. Supreme Court Magistrates, despite participation in some of the planning and recent regional land tenure seminar, have indicated reluctance to relinquish control of, and revenues from, land registration. ----------------------------------------- A National Survey and Registration System ----------------------------------------- 10. (U) Former Tegucigalpa Mayor, Henry Merriam, is the national coordinator for the World Bank-funded Administration of Rural Areas Project (PAAR) under the auspices of the Ministry of Agriculture, and is expected to become the first director of the INAP. Under Merriam, the PAAR has coordinated two pilot topographic, satellite and global positioning system (GPS) surveys in the areas of Comayagua and the Bay Islands. In the Islands, an Inter- American Development Bank (IDB) sustainable development project team, PMIB, under the auspices of the Ministry of Tourism, was responsible for preparation of the USD 1.5 million catastral survey. 11. (SBU) The GOH intends to complete all future surveys throughout Honduras directly through PAAR. After each regional survey is completed, it will be integrated with the local registry. This is when ownership of the surveyed land will be accounted for and discrepancies and/or title disputes will be flagged under the new system. 12. (SBU) In the Bay Islands, once the cadaster was completed, the GOH began the process of determining land ownership. This includes the process of joining the survey results with the existing public registry, which is anticipated to take 2 to 3 months to complete. In the Bay Islands, is estimated that 5 percent of all land parcels equivalent to roughly 32 percent of all land area is in dispute. Of the roughly 12,000 total plots of land in the Bay Islands, about half have been registered. There are still almost 6,000 parcels to be titled and registered. The remaining land to be titled is labeled as "occupied," meaning people live on it, but it is national land and no title has ever been issued. The squatters will have to pay the government just 10 percent of the assessed value of the land in order to title and legally take possession of it. In the second project area, Comayagua, surveys have been completed in just 8 of the 21 municipalities. The remaining surveys and process of rectification with existing registries should be completed by July 2003. 13. (U) Upon completion of the surveying process, in order to keep the cadaster current it must be merged with the public land registry. This is no easy job given the aged, disorderly state of the records. In the Bay Islands, for example, public registry book volumes 3 and 5 are in pieces in shoeboxes due to old age and rodent appetites. Nevertheless, a new software system is being developed to unify the cadaster and the registries and should be ready for use by October 31, 2002. This computer system will have computer generated survey drawings, digital satellite downloaded imagery, and scanned registry documents. As an attempt to combat fraud, the new land registry will not only maintain an image of the parcel, but also a photograph of the owner of record and a fingerprint. The proposed land registry computer system will be able to cross-reference the fingerprint and photos of the owner from any public registry in Honduras. The project hopes to be able to issue real documents to the public by January 2003. By February 2003, the first registry link between the Bay Islands and Comayagua computer systems should be connected and communicating to one another. --------------------------------------- A Financial Lift for the Municipalities --------------------------------------- 14. (U) Earlier this year, the Honduran Supreme Court signed a decree which requires any party wishing to buy property in the Bay Islands to present the cadaster for the piece of property first, in order to prove the land is not in dispute, before the transaction can take place. Though the cadaster is currently only an administrative tool, under the proposed legislation, the cadaster would become a legal document as well. Since the cadaster in the Bay Islands became effective, the municipalities on all three major islands have seen an increase in tax revenues. On the island of Utila until recently, the average tax collection was 300,000 lempira a year (around USD 18,000). Thanks to the cadaster, the municipality is now expecting to receive 6.5 million lempira (USD 388,600) annually. During the first month, the municipality had reported receiving 4.5 million already (roughly USD 270,000). On the island of Roatan, the municipality of Roatan should receive 16 million lempira (USD 956,000) in tax revenue and the municipality of Santos Guardiola expects 8.5 million lempira (USD 508,000). The municipality on the island of Guanaja will benefit by 7 million lempira (USD 418,000) in annual tax revenue. ------------------------------------- Implications for Amcit Land Disputes ------------------------------------- 15. (SBU) The Embassy continues to manage a caseload of roughly 180 cases, of which 32 are active land cases and 22 are active commercial disputes. Of the total cases, we are aware of 13 American citizen claims totaling 17 expropriation cases against the GOH (some Amcits have more than one property case pending). Only three of those cases have exhausted all legal avenues up through the Honduran Supreme Court and would therefore not be eligible to apply for the proposed arbitration process. On the face of it, it appears that 13 of the 17 pending cases could qualify for the arbitration process if requested by the American citizen claimants. One case could potentially qualify for arbitration if the Amcit's attorney files for unconstitutional recourse with the Honduran Supreme Court to reactivate her case. It would remain to be seen, however, how the eligibility criteria would be enforced. 16. (SBU) Post has found that even when an American citizen receives a favorable court ruling, it is difficult if not impossible to get the local municipalities to enforce the rulings, such as the long standing case of the Valenzuela family. The Honduran Supreme Court ruled in April 1992 in the Valenzuela's favor, recognizing the Valenzuela's clear title over the property known as "Jerico". However, the local Mayor refuses to recognize the Supreme Court's ruling and allegedly continues to allow the municipal land registrar to register some Jerico lands under a different name, "Capiro", but using the same known tax identification number. 17. (SBU) The level of alleged corruption in the Honduran judicial system also remains high. In August 2002, American citizens Jean and Roger Moore were forcefully evicted from their home in the Bay Islands on Roatan (ref b). Government officials openly admit the judge in the Islands ignored legal guidelines and available evidence in allowing this eviction to occur and in delaying the processing of their requests for appeals and injunctions. It is possible that Embassy advocacy and high level government and Supreme Court attention in this case may help push it toward a just, prompt resolution. However, it is indicative of the frustrations that Amcit claimants face in these private (non- expropriation) land disputes. 18. (SBU) Another important variable for the future is the continuing problematic role that the National Agrarian Institute plays in squatter cases. In some Amcit cases, INA has agreed to expropriate land for land reform despite the unsuitability of the land for agriculture and the lack of funds to compensate the owners. In some cases, such as the Norma Bogran case, INA has failed to pay compensation and then reversed its expropriation decisions long after communities have been built on the land, thus denying the Amcit claimants both compensation and his or her property. To add insult to injury in the Bogran case, the land was not used by the landless farmers but was instead sold quickly to wealthy Hondurans; the appeals court in this case recently ruled that the statute of limitations was expired, even though INA had waited ten years to reverse its expropriation finding). Finally, INA (and the GOH as a whole) do not have a consensus on how to deal with conflicting land claims that involve Garifuna and other indigenous groups. All that said, the Embassy has not seen any new INA cases arise since the advent of the Maduro administration. -------------- USG Assistance -------------- 19. (SBU) The lack of a clear property ownership system is a major problem in Honduras and a constraint in providing access to assets by the poor. Security of property rights is an essential element of a sound environment for broad- based economic growth. USAID is actively involved in supporting the policy debate surrounding land administration and land-use planning issues. Through the Honduran municipal association, USAID has financed the creation of mayoral commissions that participate in the policy dialogue of specific issues with their respective legislative commission counterparts. In the case of legislative bills that have been introduced in the Honduran Congress, such as the land-use planning framework, these commissions have engaged in working sessions to address specific policy issues. Similar commissions will be established once the land administration bill is introduced. USAID is also organizing study tours around these land issues for the benefit of both the legislative and mayoral commissions. 20. (SBU) In 2001, USAID sponsored a study to assess the property registration system in Honduras. This study was conducted by Instituto Libertad y Democracia (ILD) and the Honduran Counsel for the Private Sector (COHEP). The Public Affairs section of the Embassy has supported this work with distribution of Hernando De Soto's book The Mystery of Capital. On July 16, Embassy PAS held an Interactive Dialogue Program (video conference) with Hernando de Soto. The Honduran interlocutors included: Luis Cosenza, Minister of the Presidency, Sergio Zavala, Attorney General, Miguel Pastor, Mayor of Tegucigalpa and Segisfredo Infante editor of the daily newspaper, la Tribuna. Former Ambassador Frank Almaguer served as moderator for this dialogue. The Embassy received wide press coverage of the event. 21. (SBU) Last February, ILD presented the findings of the ILD/COHEP study to President Ricardo Maduro, the Economic Cabinet and other institutions. There was consensus among government officials of the importance of implementing a sound property registration system in Honduras, and the work to date on development of the INAP and trying to improve land cadasters and the land registry reflects this consensus. 22. (SBU) ILD is proposing follow-on work to the 2001 registration project. Full implementation of the ILD program takes place in five phases: awareness, diagnosis (assessment done by ILD/COHEP in 2001), reform design, implementation, and capital formation and good governance. On October 14, ILD met with GOH officials (Arturo Alvarado, Ministry of Finance and Ricardo Callejas, President of the Commission for Modernization of the State) to present the proposal for the "reform design" phase, with an estimated cost of USD 6 million. Implementation costs (phase 4) can range between USD 50 million to USD 80 million. 23. (SBU) On September 24-26, the Fourth Meeting of the Central American Legislators Group (Red Centroamericana de Legisladores) took place in Tegucigalpa. The main objective of the event was to promote awareness of the need for national and regional legal frameworks that support decentralization processes and good local governance. Approximately 140 participants, consisting of legislators, mayors, and heads of land registries discussed land administration policy and municipal management issues, experience with land cadasters, land tax policies, land titling and management. This event was sponsored by USAID and the IDB. 24. (SBU) GOH officials remain in close contact with the Economic Section of the Embassy and USAID on their plans and possible obstacles. They have asked for continued assistance, as feasible, in raising public awareness of the importance of improved land tenure and property rights. The GOH is also working closely with the World Bank, IDB and other donors to seek funds for the cadastral and land registration projects. PALMER
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