My Presentation at the Workshop on Responsible Investment for Investors held at the UMFCCI

Here is a transcript of a presentation I made at the Workshop on 2 July 2015 at the Workshop on Responsible Land Investment at the UMFCCI:

Land Acquisition and Human Rights in Myanmar

The ICJ is a human rights organization. It is a measure of reform in Myanmar that I am able to discuss sensitive human rights topics with an audience of foreign and national investors. Five years ago this would have not been possible. So before delving into the human rights deficiencies of Myanmar’s regulatory framework for land acquisition let’s acknowledge this increased freedom as positive change.

To address a room full of investors concerned about land rights in Myanmar is heartening. I was pleased to learn over coffee this morning that many of you have taken an interest in this issue. But we must all understand that you have a responsibility to respect the land rights of people affected by your business activity. Land rights are human rights.

Of course, it is the government that has the primary obligation. It has a duty to protect human rights under international law. Likewise, individuals and companies have a recognized obligation to respect human rights. AS the previous speaker made clear in her historical outline of land law in Myanmar, the government has failed in its duty to protect because it has not created a regulatory framework that protects rights and provides access to remedy. In fact, we were shown that the regulatory framework has resulted in violations of human rights and specifically prohibits recourse to judicial remedy.

I am certain that there are no investors in this room that wish to capitalize on the failure of Myanmar’s regulatory system. There is no one in this room thinking, ‘Aha, we only have a duty to respect human rights and since there is no regulatory framework in Myanmar it will be easy to fulfil our duty.’ No, every investor here recognizes the Myanmar’s legal shortcomings and has attended today to acquire more information. Responsible investor’s concerned with their reputations want to conduct due diligence and apply international standards to their operations to ensure that land rights of local communities are protected.

As a legal advisor in Myanmar I spend a lot of time trying to figure out this system and am sorry to report that I cannot. Land law in Myanmar is a system of legal uncertainty. A friend from the International Finance Corporation told me that the only thing worse for investment than armed conflict is legal uncertainty. Well, it may go against the popular narrative in the business community but the reality is that you are investing in country with plenty of armed conflict and legal uncertainty.

I will keep to my time limits today and make this presentation concise; you all have lawyers to go into the fine details of the myriad laws related to land acquisition. I am going to point out areas of the law that are problematic from a human rights perspective. In doing so, the presentation will show that the laws and their poor implementation make land tenure insecure. It will also demonstrate that land confiscation results in human rights violations due to inadequate consultation and compensation. Finally, it will address the failure of Myanmar to provide access to adequate remedy in land related disputes.

The Current Legal Framework for land regulation is confusing and uncertain. To start with, the 2008 Constitution provides that the State is the ultimate owner of the land. Civil society appears not to view this as public land held for the people of Myanmar. Instead, they view State land as private, belonging to the Military and individual members of government. The Constitution requires the government to “enact necessary laws to protect the rights of the peasants and to obtain equitable value of agricultural produce.” Civil society views this as contradictory to the Constitutions declaration of a market economy protecting private property rights. These rights allow private investors to acquire land or land use rights from the government or a private land rights holders. Foreign investors are also able to lease land.

The context of investment in Myanmar has social and political ramifications beyond the realm of simple economics. Investment requires access to land. The government wishes to provide land rights for investors. The problem is that the majority of the people in Myanmar do not have formal land tenure, use customary means to determine tenure and resolve disputes or have had their land confiscated without due process.

In 2011 the government of Myanmar recognized that its land law is inadequate and dissuaded investors. Myanmar enacted new laws in 2012 such as the Foreign Investment Law (FIL), the Vacant, Fallow and Virgin Land Law (VFV) and the Farmland Law that aim to provide a legal framework to maximise land use and promote agricultural income. Despite legal reforms, Myanmar land law remains a patchwork of at least 34 new and old land related laws governing different aspects of land tenure and have their own implementation committees. This leads to overlap, contradiction, confusion and uncertainty. The enactment of the new laws has failed both to appease investor concerns and secure land tenure for the people. Both will be amended by a future Land Law. As of yet, Myanmar lacks an Umbrella National Land Use Policy and consolidated National Land Law, although a drafting process is currently underway. You should be aware that the legal framework will change.

Myanmar lacks detailed procedures on land acquisition. It relies primarily on the colonial era Land Acquisition Act of 1894, which lacks modern common law substantive and procedural protections and reference to recent international standards. Its application is inconsistent and the procedure often lacks transparency. The law sets out rudimentary procedures, including for undertaking preliminary investigations, notification, and objections. The agreement between the company and the Government must be published in the National Gazette; public notice must be given, and notices are to be posted at the land. Notice to the occupier of the land must be given once there is a declaration of intended acquisition. Although there are provisions for objections the President has discretionary power to overrule them.

The human rights violations associated with land acquisition would be reduced if land acquisition actually followed the basic procedures in the Land Acquisition Act. Lawyers have repeatedly told me that under the past government these procedures were never applied and that currently they are applied rarely. A lawyer in Bago successfully defended her client from charges of trespassing on his land that had been acquired by the government by demonstrating that the Act’s procedure had not been followed and therefore the land remained in her client’s possession. Many people evicted from their land after expropriation are convicted and jailed with trespassing if they refuse to leave. The ICJ is working with lawyers to defend their clients in a similar manner.

As investors, you must be aware that land acquired legally from the government was not necessarily obtained legally and may have undermined legitimate land tenure of local people. You may find yourselves with a protest at your investment site in the future as people become aware that they have rights and question the actions of previous government.

Myanmar law allows for expropriation in general terms open to misuse. The Land Acquisition Act allows the government to expropriate land when it is ‘likely to prove useful to the public’ or when it ‘is or was bound’ to provide land to a company. Even the more recent VFV and Farmland Law authorises acquisition ‘in the public interest’. Given the confusion in Myanmar between public and private interests and a history of military rule, it is easy to understand how vague terminology concerns civil society and contributes to land tenure insecurity.

Myanmar’s development policy is based on attracting as much investment as possible and as quickly as possible. The VFV and Farmland laws are criticised for undermining land tenure security to allow for the government to promote development. More than half of Myanmar’s people do not have land title under these new laws. Farmers explained to me that the extent of their property is determined informally according to seasonal water levels in a local river and a system of tree markings. Many practice shifting cultivation on communal lands. The new laws do not adequately protect informal land rights in the land titling process meaning that many local communities suddenly find themselves trespassing on land they have farmed for generations. This is bound to cause local conflict.

The registration process is complicated and expensive. Farmers may not be aware of regulations and not organized communally. Smallholders struggle to meet titling demands giving organized investors an advantage. To make matters worse, local level corruption is common. Farmers in Kyauk Phyu told me that they had to pay a bribe to get a Form 7 registration application, which they could not afford. A supplementary payment of ten thousand kyat is not a lot to an organized investor but may not be possible for a local farmer.

Communities engaged in traditional farming practices or other communal activities occupy much of the land declared VFV by the government. It is preposterous to believe that the amount of land declared VFV is actually uninhabited in a country settled for thousands of years and as populous as Myanmar. VFV land used for communal purposes, such as hunting, fishing, access to river water, for example, is difficult to title. The danger is that the process will cause rifts and inequality in the community.

The Farmland Law makes land rights freely transferable, which is touted as a positive development, allowing farmers to access cash in exchange for land. But Myanmar’s contract law is underdeveloped and does not provide necessary protections against misrepresentation, unfair terms and duress. Local people are often unprepared for market transactions and have a considerable disadvantage to sophisticated and organized local, national and international investors.

For example, many villagers have told me that months or years before an investment project was announced, well connected, well-informed people bought and consolidated the private and communal lands. Locals accept the low prices for reasons from need to ignorance. The informed and well connected then sell it to investors at a great profit. While the practice is probably legal, it raises moral questions about development and I believe most investors in the room would not be happy to contribute to inequality and the destruction of communities.

Inadequate compensation is a reoccurring complaint for those whose land has been expropriated by the government for wither public or private purposes. When people are relocated, they are often not compensated at market value for the land. Instead they are given alternative homes that inadequately compensate for lost livelihood. Even compensation provided for crops is allegedly insufficient. This is despite requirements in the 1894 Land Acquisition Act for fair compensation at market value.

Access to remedy is a problem across Myanmar, not restricted to land rights and land acquisition. The judiciary is dependent on the political and executive branches of government, lacks resources and the capacity to deal with complex land cases. Foreign investors are so concerned with Myanmar’s judiciary that they have pushed their home governments to sign Bilateral Investment Treaties (BITs) with Myanmar to protect their interests, ensure due process and grant access to international tribunals for disputes with the government. The ICJ has travelled Myanmar explaining to civil society organizations what BITs are and I can assure you the reaction has been astonishment. They ask, ‘Why do foreign investors get rights that we do not have?’ Unfortunately, unlike foreign investors, there is no equivalent of the New York Convention on Arbitral Awards for farmers in Myanmar to claim government assets!

Decisions by the implementing bodies related to various land laws, such as the Farmland Management Body and VFV’s Central Committee, are often considered final. This means that in practice lawyers do not challenge their rulings and that the judiciary does not fulfil its role in overseeing executive decisions. This is problematic because the effect is that final decisions on key land disputes are made at the township level with little prospect for review.

This should change in Myanmar. It is uncertain why the law has been interpreted to limit the review of the decisions of these bodies. The 2008 Constitution gives everyone the right to appeal decisions and also provides access to Constitutional Writs such as Mandamus and Certiorari that allow the judiciary to review decisions of administrative bodies. Even if the land law committee’s decisions are final in law, this surely cannot override the rights and duties enshrined in the constitution and should be challenged.

As I am now out of time I will skip over my section on recommendations. Fortunately, we have an excellent resource available for your perusal provided by the Myanmar Centre for Responsible Business. Their new publication entitled, LAND’ provides a helpful set of recommendations for business keen to invest in Myanmar. It is available here: http://www.myanmar-responsiblebusiness.org/pdf/2015-04-02-LAND-Briefing.pdf

Thank you.

For more media coverage of the event see: http://www.kamayutmedia.com/business/social_responsiblity/4634 

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