East Timor Land Rights - Restitution Not Possession

East Timor Land Rights: Restitution Not Possession - A Comment on the 2009 Draft Land Law ETLJB 09 July 2009 SYDNEY - Who owns East Timor? The East Timor Department of Justice is presently conducting public consultations on the draft new land law that is purposed to clarifying the vexed question of land ownership and to resolving the chronic violent conflicts over land. Earlier information from the Ita Nia Rai (Our Land) land program in East Timor, which is funded by the United States Agency for International Development (USAID), indicated that the land law principle of possession would be the basis of the new law. In fact, this turns out to be a deception because rather than positing the land law principle of possession as establishing a lawful title to land, the central tenet of the draft is that possession will not be admitted against the most fundamental right of ownership of land. Rather, possession will only apply to the lesser rights that are derived from the right of ownership or from a grant on state land. All of the hak milik and propriedade perfeita rights in East Timor are documentary or documentary-provable rights in respect of which no possession will be allowed. The complete rights of ownership arose from the application of the Indonesian land law and are known as hak milik[1] (right of ownership) or which originated from land right grants effected under the Portuguese colonial land law and which are known as propriedade perfeita[2]. The lesser rights that will be susceptible to the possession rule are derived from the most complete rights of ownership or from state land. These lesser rights that derived from either the Indonesian hak milik or from a grant of a right by the Indonesian state on state land are known as hak guna bangunan (right of use of structures; which can exist on both land the subject of hak milik or state land) and hak guna usaha (right of enterprise; which only existed over state land). Hak guna usaha was granted for enterprises such as forestry, plantations, quarrying and so on including the coffee plantations in East Timor whose original Portuguese-based land titles were converted to the Indonesian statutory right of hak guna usaha. Hak buna bangunan was granted for residential use purposes over both land the subject of a pre-existing private (documentary) full right of ownership or state land. The derivative Indonesian land rights were of only limited duration; with the original grant being for a term of 25 years (extendable once at the state’s discretion for a further 25 years) in the case of hak guna usaha on state land and an initial term of 30 years for a hak guna bangunan extendable once for at most 20 years at the discretion of the hak milik owner or the state if the right is on state land. The former Portuguese lesser right of aforamento[3] is the land right under Portuguese law in East Timor which arose from an agreement over State land where the Grantee of the right was given the authority to fully enjoy the use of the land with the obligation to pay to the State an amount of money referred to as “forro", which is evidenced by an “Alvara de Concessao Definitif” or in respect of which there was already a definitive decision of the Portuguese Government before the coming into force of Law No 7 of 1976 and the land has not been

surrendered by the right holder or his/her legal representative.[4] The lesser rights of hak guna bangunan, hak guna usaha and aforamento will be subject to the proposed 20 year possession rule thus allowing a current occupant of land the subject of those rights (or that occupant relying on his predecessors’ possession where the present occupant’s possession is less than 20 years) to exclude the documentary title holder of the lesser right (but not of the underlying full right of ownership) from the land whose title will be extinguished. The documentary title holder of the lesser right will be entitled to compensation for the historical value of the land which will be paid by the state that will then be entitled to recover the compensation debt from the possessor who has gained title. What will be the practical effect of this rule? The first problem is that those rights (at least the Indonesian hak guna usaha and hak guna bangunan) are of only limited duration anyway. In the absence of an extension of the initial grant of those rights by the hak milik owner or the state (depending on whether the right was granted on private land or state land), the initial terms of 25 and 30 years will have almost expired by the time the period of possession has run against them leaving, at most, 5 or 10 years of ownership to the successful occupant. After that, the land will revert fully to the documentary hak milik owner or the state. In regard to the state land, it is interesting to note that there is a general prohibition of possession against state’s public domain land in the draft as well so there is an internal contradiction in the draft on that point, at least, and it will be interesting to see how this contradiction will be resolved at the practical level when considering claims of occupation of hak guna usaha land which exist on state land or claims to hak guna bangunan land in respect of which the underlying full right is vested in the state itself. Possession can only operate against the documentary holder of the hak guna usaha or hak guna bangunan. It can not operate against the documentary owner of the underlying full right of ownership or the state’s right to the land at the expiry of the term. It is not clear in the draft what the right gained by a successful occupant of hak guna bangunan or hak guna usaha will be. A successful possessor can not gain the full right of ownership because that is vested in the owner of the full underlying right so a successful applicant could only ever gain something which is similar in nature to the original hak guna bangunan or hak guna usaha and to the extent that it can only be of a limited term. It will, in effect, be a type of lease only – which will eventually be lost in any event. So, it might be asked, what real advance is being rendered by this reform? To return to the present purpose, the draft land law does not permit possession to operate against the documentary owners of hak milik or propriedade perfeita. It is only permitted against the lesser, derivative rights that were carved from the underlying full ownership right in the case of private land or from the state’s rights in the case of state land in respect of which the lesser right was granted. Having regard to the limited operation of possession as set out in this draft land law, the most critical edict of this draft is that the owners of documentary title to the fundamental right of ownership in East Timor who were unlawfully dispossessed of their land at any time in the past will not be affected or encumbered by any possession except where there has been possession of any lesser right on the land the existence of which is entirely dependent on the master right of ownership. This will be so whether the possession has been in good faith for 20 or more years or

not. Most dispossessions occurred because the owners were killed or died during the illegal occupation by Indonesia or the owners fled their land and or East Timor itself in the face of violence or the threat of violence as the long conflict dragged on for 24 years or because of their political or ideological alignments. Even in the post independence period, dispossessions have taken place as late as 2006 because of internal political instability and violence[5]. Abandoned land was re-allocated (but not with any legal title) by the military in the early years of the occupation and this was continued by the National Land Agency when the Indonesian civil administration was established in East Timor and into the present era under UNTAET and by the independent state which has continued to administer private abandoned land. These allocations are the root of many disputes and conflicts over land in East Timor. Many of the originally unlawfully occupied properties were transferred on to third parties but not with any formal legal title so these occupants or the last in a series of occupants will have no claim at all since they are not in possession of the lesser rights. Some were fraudulently granted by the Indonesian National Land Agency (one of the most corrupt of all Indonesian bureaucracy). If the fraud can be proven, the otherwise lawful owner who relies on the original documentary title that was fraudulently extinguished, should be entitled to reclaim the land and that will be permitted to because no possession is admitted against the original lawful documentary owner of the hak milik or propriedade perfeita. Many rights created during the occupation were lawfully granted to good faith purchasers. Their titles will not be disturbed by any long term possession because they hold the documentary title. This will be the case for the 40.000+ Indonesian land rights and any extant Portuguese colonial land rights (whose existence is doubtful anyway because Indonesian legislation converted them all to Indonesian statutory rights) - except the lesser ones described at the beginning of this analysis which will be the subject of possession. But again, the underlying documentary (or state) title will continue to exist and will arise fully and completely again in the hands of the original documentary owner when the term of the right that has been gained by possession expires. And so, ultimately, no documentary title can ever be extinguished by possession and those who own the original documentary title to land in East Timor will have their entire property ownership rights in the land restored to them. This is the juridical concept of restitution. It is the opposite of what the initial information issued by the East Timor government’s Department of Justice Ita Nia Rai land program stated and that was that possession would be the principle concept in the forthcoming land law reform. Restitution is not a new idea. In South Africa, for example, with the end of the racist dictatorship, the South African constitution gave people and communities who had been dispossessed of land as far back as 19 June 1913 as a result of racially discriminatory laws or practices the right to restitution of that property or to fair compensation . People who had been dispossessed of their land had until December 1998 to lodge a claim for the restoration with a Land Claims Commission. It is estimated that the total of 67 531 claims were lodged before the deadline (see this link for more information on this exercise in restitution in South Africa). Restitution was also implemented in post-communist states in Europe following the collapse of the socialist empire (see for example, the case of Bulgaria or Romania). Land restitution programs link the past and

the present, and may allow former landholders to reclaim lands which formed the basis of earlier identities and livelihoods. Restitution also has a moral weight that holds broad appeal; it is represented as righting injustice and healing the injuries of colonialism. Restitution - not possession - is the principle concept of the draft East Timorese land law and the evident policy of the Government of East Timor. This point needs to be the central message of the public consultations. The restitution of the documentary owner of the most complete rights of land ownership in East Timor is the critical issue that must be the subject of a complete and participatory consultation process. The central tenet of the draft appears, therefore, not as the deployment of a flawed notion of possession in the limited circumstances described above, but the entire restoration of the documentary owners’ rights through the juridical principle of restitution. Although this is never expressly stated in the draft. This reform highlights another important point and that is the repeal of the present applicable land law in East Timor that admits possession against the owner of the hak milik/right of ownership that is evidenced by a documentary title. This applicable law is contained in Indonesian Government Regulation No 24 of 1997 on land registration which permits good faith 20-year possession against a hak milik (right of ownership) owner as well as the owners of lesser rights. Government Regulation No 24 of 1997 includes the following provision: Subsection 2 Evidence of Old Rights Article 24 (1) The existence of a land right resulting from the conversion of an old right shall be proven with evidence in the form of written documents, witnesses’ information, and/or statements made by the party in question which are evaluated by the Adjudication Committee in the case of systematic registration or the Head of the Land Office in the case of sporadic registration as having an adequate content of truth for purposes related to the registration of the right in question, of the right holder, and of other parties’ rights which encumber it. (2) In the case where there is not any evidence or there is no longer any evidence as meant in paragraph (1), the recording of the right in question can be carried out on the basis of the fact that the land parcel in question has been physically possessed for twenty (20) consecutive years or more by the person applying for the registration of the right in question and his/her predecessors, under the following conditions: a. that the possession of the land parcel in question has been made in good faith and in a transparent way by the person in question as the party which is entitled to it; b. that the possession of the land parcel in question was not questioned by the relevant adat law community or the relevant village/kelurahan community or other parties either before or during

the period of announcement as meant in Article 26. It is equally important that this point be clearly articulated in the public consultation process. But, aside from the strict legalities of restitution of land titles to those dispossessed during the illegal occupation of the homeland by Indonesia, the restoration of the documentary land title owners in East Timor will have some fundamental impacts not just on the legislative landscape, but, perhaps more importantly, on the political, social and economic life of the country. It will mean the restoration of the vast real estate holdings of the political and economic elite those East Timorese aligned to either (or both) the Portuguese and Indonesian dominations – who for whatever reason, were unlawfully dispossessed of their land as the flow of political power in East Timor swung from the European colonists to the Indonesian occupiers and thence into the post-independence era. It will mean the dispossession of occupants of these lands or demands from the land owner for rent. Many fled the Indonesian invasion. Many gained land through their personal integration with the occupation. Still others lost their land because of internal political strife. Even in the post-independence period, lawful owners of land have been terrorised into leaving their homes because of their political affiliations to either Fretilin or the centre-left Gusmao political structures. Documentary title holders whose titles will be confirmed will wish to resume occupation themselves or lease the land out for market-value rent or permit third parties to carry out residential or agricultural developments or other exploitations of natural resources such as quarries, mining, forestry, plantations and the like. If such developments are inhibited by conflicts over land or lack of legal clarity of land right ownership, that will have a considerable impact on economic development and poverty eradication which are critical objectives of the government and the international donor community. But, the level of land conflicts will not be reduced nor will the great bulk of disputes be settled. Indeed, it may be that the restitution of documentary land titles in East Timor holds the potential to destabilise social harmony in land relations in East Timor (such as they are) by introducing a new element that is bound to inflame the situation. This new element is a clear statutory basis for dispossessed documentary title holders of the right of ownership to land in East Timor to reclaim their land. Another feature of the draft is that it provides for mandatory payment of compensation by parties awarded a title based on possession to the dispossessed documentary title holder of the lesser rights mentioned above that will be subject to the possession rule. This state-imposed obligation on citizens in these circumstances is unusual. It has also been pointed out that compensation will not be for present market value but the value of the land at the time of the dispossession. This would violate the normal democratic "just compensation" principle of compensation of the current market value for the involuntary extinguishment of private land rights. The fundamental purpose of the law of land is to provide security of tenure and certainty of title. These are essential ingredients of the civil peace and without them, order is under constant threat; as is the rule of law. Economic development and poverty alleviation are lost. And that is what the new East Timorese draft land law will do to some extent. But it must be very clearly understood that land - and any land law - involves not just fine questions of law but turns

attention to the fundamental social, economic and political structures in all human societies. Property laws entrench private property – and inequality - as a fundamental basis of capitalist social relations. Socialist property laws, and some other developing countries’ laws (including the present basic land law of East Timor; the Indonesian Basic Agrarian Law) favour public or state ownership and or control of land – as well as a central role for the state and those who control the state apparatus and their relatives and cronies – in the economy. The public consultation process must be honest and transparent. It must be participatory and conducted over a sufficiently long period of time to permit input from civil society and other stakeholders - and not merely take account of the interests of the landed class whose titles are about to be confirmed. The government is only proposing a few months of consultations but at least a year is needed. Civil society in East Timor and the international community must ensure that they make heard the claims of the disempowered and vulnerable poor, of farmers, of traditional communities, women, the Church and the youth. Undoing the past injustices relating to land and property ownership and providing access to land and land equity through land reform and redistribution in the present and future, require a fully informed policy process that leads to a regulatory framework - not just one draft law - that pays due regard to human rights and the universal principles of justice, equity and fairness. That should be focus of the land law reform program in East Timor. Instead, after many years, what appears to be a draft that is so limited in its consideration of the broader legal framework that needs to be developed for East Timor. A properly constructed land law reform program would be looking not just at the issue of the confirmation of documentary title holders of the full right of ownership of land in East Timor but an entire policy framework that seeks to address the whole range of central issues. A piecemeal approach is not really a sound solution. The salient features of the draft need to be properly explained to the community and specifically to title holders and occupiers of land in East Timor. The traditional communities of East Timor – each of which has its own customary land law – must also be properly informed by the government about the provisions of the law that do not confer legal status on East Timorese customary land tenure systems or the traditional individualised land rights that have existed in East Timor since time immemorial. Due regard should also be had to the potential implications of this draft, should it become law, for land disputes and conflicts in East Timor. Once occupants realise that any rights they gain will not be long as they are extinguished by the effluxion of time, there will be instability. As the hak guna bangunan or hak guna usaha rights gained through possession on state land (if that can be permitted in light of the general prohibition of possession against state pubic domain land and this is where all of the limited term hak guna usaha exist) or private full ownership rights expire when the terms run out, the land will revert to the formal ownership of the state or to the underlying documentary-evidenced complete right of ownership holder in the case that the right existed on private land. These rights will be found over nearly all residential land in Dili and most district centres as well as the prime agricultural and coffee plantation lands. Occupants who have relied on long-term possession will be liable to eviction or demands for the

payment of rent by their new landlords. Land relations will be destabilised because there is no complete policy solution. A half-hearted and misconceived attempt at land reform is hinted at in the draft but it goes nowhere near the existing applicable Indonesian land reform laws and regulations – which will be, conveniently, avoided. It places the burden of compensation in any inappropriate vessel. It does not permit long term possession against the vast majority of land rights in East Timor. The full rights of ownership evidenced by a documentary title – either hak milik or propriedade – will continue to have complete lawfulness and legitimacy without the risk of any possessory extinguishment. There lies the true policy behind this draft. ----Footnotes [1] Article 20 of the Basic Agrarian Law of 1960 defines hak milik: (1) A Hak milik (right of ownership) is the inheritable right, the strongest and fullest right on land which one can hold, subject to the provision contained in Article 6. (2) A Hak milik can change hands and be transferred to other parties. Hak milik is the Indonesian equivalent of the English common law’s fee simple. [2] The best available English language definition of the propriedade perfeita is in Indonesian Government Regulation No 18 of 1991 on the conversion of land rights in East Timor in accordance with the Basic Agrarian Law where article 1(2) provides as follows: “The right of “Propriedade Perfeita” is the land right under Portuguese law in East Timor, the character of which is complete and absolute, namely, the right to enjoy the produce and use of the land in a full and unrestricted manner provided that it is not in contradiction with the provisions of the law and the rights of other persons, which is evidenced by an “Alvara de Propriedade Perfeita” or in respect of which there was already a decision of the Portuguese Government before the coming into force of Law No 7 of 1976.” It is interesting to note also that the draft ignores the prima facie fact that all of the old Portuguese colonial land rights were extinguished by conversion into the Indonesian statutory rights under the Basic Agrarian Law of 1960. 2004 ETLJ 1 A Note on Land Rights in East Timor [Government Regulation no 18 of 1991 on the conversion of land rights in east Timor] & the Purported Suspension of Article 5 by Government Regulation no 34 of 1992. [3] Interestingly, the draft land law makes no reference to the other lesser Portuguese right; arrendamento. It is defined in Article 1(4) of Indonesian Government Regulation No 18 of 1991 as follows: The right of “Arrendamento” is the land right under Portuguese law in East Timor which arises from a lease agreement to enjoy the use of State land with certain limitations and with the obligation to pay rent to the State which rent is referred to as "renda", which is evidenced by an “Alvara de Arrendamento” or in respect of which there was already a decision by the Portuguese Government before the coming into force of Law No 7 of 1976 and the land is still controlled by the right holder. The draft also omits reference to another of the lesser Indonesian land rights - hak pakai (the right of use) [4] Article 1(3) of Indonesian Government Regulation No 18 of 1991. [5] Those who have been excluded from their land because of their political beliefs in recent times – families have had to move from areas dominated by one or the other “ethnic regional” group – have a legal basis for resuming the full exercise of their property rights by seeking the eviction of unlawful occupants who have been there for less than 20 years. But few would dare. ----Note: This analysis is a draft only. Comments are welcomed by the author and may be sent by either posting a comment or contacting ETLJB at [email protected] See also :

2004 ETLJ 1 A Note on Land Rights in East Timor [Government Regulation no 18 of 1991 on the conversion of land rights in east Timor] & the Purported Suspension of Article 5 by Government Regulation no 34 of 1992 Land Policy in East Timor - The Cart Before the Horse