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Eminent Domain Laws: World View

Published on Sat, Jun 09,2012 | 12:27, Updated at Sat, Jun 09 at 12:40Source : CNBC-TV18 |   Watch Video :

In a way - it's the modern day version of the battle of Kurukshetra. And in keeping with the times it's being fought in parliament between the government and the parliamentary standing committee. In 2011, Minister for Rural Development - Jairam Ramesh drafted a Land Acquisition Bill that proposes to allow the government to acquire land on behalf of private companies for public purpose. The bill defines public purpose as the building of roads, highways, strategic defence needs etc- that's all fine. But Jairam Ramesh's version of public purpose also includes projects by private companies such as setting up of manufacturing plants.

The parliamentary standing committee disagrees – the committee's report defines public purpose to mean only state sponsored projects. And that the government should not acquire land for private companies or even public-private partnerships. It's not clear which side will prevail but this face off between economic development and private property rights has posed a challenge across jurisdictions.

In this special story Payaswini Upadhyay examines how eminent domain works across the world

 "no free man shall be….disseised of his freehold….except by lawful judgment of his peers, or by the law of the land."

Eminent domain was first recognized in England 800 years ago. Since then it has taken on a modern nomenclature

Land acquisition in India
Compulsory purchase in the UK
Expropriation in South Africa
Resumption in Australia
Notion of modalities in Mexico
And Condemnation in the United States

In the US, the Constitution limits this condemnation power to say "...nor shall private property be taken for public use, without just compensation.

Originally public use meant just that - but its scope widened in the 1950s due to a US Supreme Court decision that expanded the definition of public use to include slum clearance. Currently the definition of ‘public use' differs from State to State.  In Michigan thee State Supreme Court laid down 3 parameters in 2004. Michigan allows for condemnation if it involves ‘public necessity of the extreme sort otherwise impracticable' such as building of railroad, highways. Second is where the ‘private entity remains accountable to the public in its use of the property' such as land acquired for a pipeline. And the third standard is where ‘the selection of the land to be condemned is itself based on a public concern' such as elimination of a blight.
 
Michael Rikon
Partner, Goldstein, Rikon & Rikon
Specialises in Condemnation Law
"In the United States, each State, as I said, has its own fundamental common law with respect to what is allowable for a public use. In NY, for eg, where I am based, it is almost without limitation that you can take someone's property and turn it over to a well connected developer or something like that to build a shopping centre- you can take someone's home and turn it over to and build a large mall shopping centre. New York is at the forefront of this and it's also very difficult to stop a condemnation in New York."

Connecticut faces the same challenge. In 2005 in a landmark case Susette Kelo put public purpose to test when opposing the city of New London's redevelopment plan

New London, Connecticut, 2005
Reporter: Ms Kelo, what about the City's argument that you're standing in the way of something that would benefit the entire community and it's your interest vs the whole community?

Susette Kelo, Resident, New London, Connecticut
"We've never said that couldn't put it to development. They have more than enough room to develop. We just simply want to keep our homes. Its over 10 acres and we only take up an acre and a half at best."

But the SC ruled otherwise and allowed the condemnation on grounds that economic development served public purpose. Consequent to the Kelo case ruling, 44 out of 50 states in the US changed their laws to better protect private property.

Michael Rikon
Partner, Goldstein, Rikon & Rikon
Specialises in Condemnation Law
"The most pointed argument with respect to eminent domain in United States is taking private property to turn over to another property owner. It's not for a typical public use like a bridge, a library or a school or a highway; it's the taking of private property to turn over to a developer who is going to build a shopping mall or something like that- that is the issue that upsets most people."

It's this upset that led to the founding of Civil liberties law firm- the Institute for Justice – 1991. IJ prides itself for fighting the government against the use of eminent domain powers on behalf of individual property owners.

Christina Walsh
Director- Activism and Coalitions
Institute for Justice
"The expansion of Eminent Domain in the United States has been a disaster. We see Eminent Domain being used as a tool by those with political power against those with no political power. It disproportionately impacts minority and lower income communities. We've seen entire communities, thriving businesses destroyed from projects that ultimately are never built because there was no market for them in the first place. It's led to corruption, bribery and it destroys any incentive for property owners to maintain their own properties because there is lot of condemnation over them and drives away investment from communities."

Further south, in Mexico the definition of public purpose can also be described as expansive. Article 27 of Mexico's constitution prevents expropriation except for public utility and on payment. Public utility has been broadly defined to include the creation of rights-of-way, municipal facilities and public services as well as the creation or development of an enterprise that benefits the public, which could include private development projects. But there are safeguards – for instance farmland or ejidos are entirely off-limit. Besides Mexicos many free trade agreements and bi-lateral treaties also provide protection.

Manuel Rajunov
Co-Managing Partner
DLA Piper, Mexico
"Well Mexico has entered into several bilateral investment treaties and Free Trade Agreements around the world – North American Free Trade Agreement being one of them, The European Free Trade Agreement being another, whereby Mexico affords foreigners certain protection in the exercise of Eminent Domain that go beyond protections afforded under domestic law and under the equal protection clause of the Mexican constitution those protections would also be extended to domestic investors and therefore the body of law in Mexico that protects against Eminent Domain is equally applicable to foreign and domestic investors."

Recent land battles indicate that it's less expropriation and more the fair compensation part that has been hotly contested in Mexico.

Manuel Rajunov
Co-Managing Partner
DLA Piper, Mexico
"There has been certain applications of Eminent Domain that have been controversial only from a political perspective but not from a legal perspective. The most recent example would be when in mid-2000 the President, early 2000 I should say, President  was in the process of building a new airport for Mexico City and had selected some property nearby Mexico City and in the process of exercising Eminent Domain for the acquisition of the land to build the airport there were some political uprising by the landowners arguing that the compensation being offered to them was inadequate and rather than it being ventilated through the courts it became a political issue that was picked up by political parties and other political players in the country and became a political issue but not so much a legal- Eminent Domain related issue. For the most part when Eminent Domain is exercised in Mexico, like I said, is for public works and it's a smooth process."

While land maybe much fought over everywhere, the battles are not quite the same. In the US, 60% of the land is privately owned and eminent domain has most often been used to declare properties as blighted and transfer them  to private redevelopers – all in the name of job creation and higher tax revenues. In Mexico, eminent domain laws are tailored to protect the farming population as well as attract foreign investments in land – a tough balance. In South Africa eminent domain has been used to right a historical wrong.

In South Africa; land ownership is skewed along racial lines.  According to one estimate, 87% of land is owned by whites and used mostly for commercial farming, 13% is owned by blacks, many of whom practice subsistence farming. South Africa's Constitution allows for expropriation if the land is required for the purposes of land reform – that is redistribution to restore equality. Alongside the Restitution Act allows communities to claim for land as well.

Bulelwa Mabasa
Director, Werksmans Attorneys
"Land is a sensitive issue in South Africa. The issues that have been grappled with vary- one of the major ones is that the government set for itself a target in 2008 to resolve as many land claims as possible. To date, very few of those have been resolved. The land that has been restored to communities has found to not be used optimally. It is for this reason that there is this Green Paper which seeks to provide more infrastructural support to emerging farmers and also to farmers who have been awarded land in the context of land claims."

Leaving race and democracy behind, Singapore, at the other end of the globe, has used eminent domain to transform its economy. The 693 square km island nation has had little else to bank on.

Alice Christudason
Department of Real Estate
National University of Singapore
"It has always been pinned on our land scarcity problem and one other factor which is very important to note about Singapore that other than our fantastic geographical position we have absolutely no natural resources. We only have the human resource and in order to spur on economic development and I still want to reiterate the point about land optimization and rejuvenation of all the low-rise developments-the only way forwards seems to be for the government to take the initiative and it has not been customary for infrastructure development or public housing development or the development of industrial estates to be handed over to the private sector."

Singapore's Land Acquisition Act allows the Minister to notify an acquisition if it's for a public purpose in his opinion. The Act does not define what constitutes public, public interest or public utility and experts say most objections in this regard have not passed muster in the courts.

Alice Christudason
Department of Real Estate
National University of Singapore
"Initially when we were part of the Strait Settlements we have been using the Land Acquisition Act borrowed from the Indian Land Acquisition Act. Subsequently when we became part of Malaysia-the Federation of Malaysia-Singapore was part of Malaysia at that time and it is interesting to know that there were provisions within the constitution which provided for adequate compensation. Now what I must highlight here is that upon gaining full independence in 1965 this particular provision about 'adequate compensation' is no longer there and one of the most dire criticisms of Singapore's Land Acquisition provisions is that compensation used to be backdated to a retrospective date. In other words, if a piece of land was being acquired it was not the current market value that was being paid as compensation rather it was pegged at a retrospective statutory date. Now all this changed in February, 2007 when the law was amended. So as things stand today, post-2007, current market value is given as compensation. But having said that it is also important to point out that most of the development had taken place during the years when compensation was paid at a retrospective date."

Since then the Singapore government has upped compensation to aggrieved landowners by providing them with housing subsidies, ex-gratia payments, relocation expenses, legal expenses and priority in the housing queue for public housing.

In democracies even that may not be enough. for instance the big land battles in India, Nano-Singur, Posco-Orissa were less about compensation and more about forcible acquisition. For centuries, in countries across the world, it's been one of the most difficult questions to answer - should the government be allowed to forcibly take away your land?

I've found it easier to answer that question by personalizing it. Would I be okay being forced out of my home? Absolutely not. Maybe yes for a nation critical dam or bridge or highway that cannot be built anywhere else. But absolutely not if someone wants to set up a cold rolled steel plant in my backyard. That too on their terms? No way!

 
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