PublicpurposeAccording toEthiopian expropriation of land holdings for public purpose and payment ofcompensation proclamation No.
455/2005 Article 1(5) public purpose means theuse of land defined as such by the decision of the appropriate body inconformity with urban structure plan or development plan in order to ensure theinterest of peoples to acquire direct and indirect benefits from the use of theland and to consolidate sustainable socio-economic development. LandLand is not only concerned with soil rather everythingattached to the land, whether attached by the nature like trees, herbage, andwater, or bay man made as infrastructures like buildings. Land is importantinput for producing goods and services for urban development (Sujatha, 2012).”Allland in Ethiopia is owned by the state and granted to the people with holdingright, and the land-holding arrangement is dichotomized into rural and urbansystems. In-between urban and rural spaces, there is a transitional peri-urbanagricultural area on which growing urbanization has been exerting unprecedentedpressure” (Adam, 2015)In Ethiopia, landis the common property of the ‘state and the people’, and, hence, is notsubject to sale, exchange or mortgage.
Rural farmers and pastoralists areguaranteed a plot of land free of charge while urban residents can secure thesame through ground lease arrangements (Ambaye D. W., 2009)RealProperty 2.1.
2. Theories ofExpropriation, Valuation and Compensation2.1.
3.The Rationales for expropriationAccording to (Alemu, 2012)many constitutions and legal laws which are concerned with compulsoryacquisition being used for public interest, public use. where as in practicalthese concept often not clearly identified and they tend to be usedinterchangeably. In the constitution of Ethiopia 1995, it is stated that withoutdiscrimination to the right to property, the government can expropriate privateproperty for public purpose, subject to payment in advance of compensationcommensurate to the value of property. Accordingto Ethiopian expropriation of land holdings for public purpose and payment ofcompensation proclamation No.
455/2005 Article 3(1) a woreda or urban administration have been given the powerto expropriate rural or urban landholdings for public purposes through payingin advance of compensation where it believes that it should be used for betterdevelopment projects to be carried out by public entities, private investors,cooperative societies or other organs, or where such expropriation has beendecided by the appropriate higher regionalor federalgovernment organs for the same purpose. Accordingto the above statement the proclamation haven’t define well concerning thedetails of public purpose. This ambiguities forced additional burden towardsurban land to interpret the laws in order to implement the law. On the otherway the demand for land resource for the urban centers have been rising from time to time in scale upping the socialinfrastructures and facilities ensure sustainable development in all aspects (Alemu, 2012). The applied practice shows thatexpropriation in Ethiopia is the main tool that promotes urban expansion andmakes land available to private developments such as residential uses,commercial centers and other investments aspects. These private developmentsare faultily alleged by local officials as development in line with the publicinterest (Adam, 2015). 2.
1.4.The Expropriation Process2.
1.5.The Expropriation Procedures and Transparency2.
2.CompensationDifferent writers tend to define compensation fromdifferent perspectives. For this reason, it is difficult to find acomprehensive definition of compensation. To see some of them, compensation isdefined as “full indemnity or remunerationfor the loss or damage sustained by the owner of the property taken or injuredfor the public use.” Although this definition has some importantelements, it lacks comprehensiveness that should be considered in the issue ofcompensation. To begin with its good sides, it incorporates the concept ofindemnity or remuneration in the event of land taking for public use.
However,it lacks clarity as to time of payment and whether the loss or damage concernsonly actual damage or includes consequential and severance damages. The conceptof “full indemnity” may also be a dubious concept in relation to the existingsituation(Girma Kassa Kumsa, 2011).Thecritical point concerning expropriation is the question of compensation.
Almostall laws of states in the world put this requirement in their laws ofexpropriation. Thus, the necessity of payment of compensation is no morecontentious. Rather the contention lies in what truly constitutes compensationand its adequacy, fairness, or appropriateness.
Under this section, the issueof compensation will be approached from general and local point of view. Thereason compensation should be paid is justified on socio-political, as well aseconomic, theories. Compensation is a means to keep the balance of social justice.It protects the rights of the politically under-represented groups, (Ndjovu2003: 21).Compensationlaws According to Ethiopian expropriation of land holdings forpublic purpose and payment of compensation proclamation No.
455/2005 Article1(1) compensation means payment to be made in cash or kind or in both to aperson for his property situated on his expropriated landholding.So far it has been established that compensation paid upon the expropriation is crucial remedy to protect not only private owners?property rights but also disciplines the government branches to exercise theirpowers only for legally and economically justified reasons. Once it is acceptedthat compensation should be paid in the proceeding of expropriation, and thenit is common to ask how to compensate the owner. The manners of determiningcompensation may be debatable since the terms used in legislations often createconfusion among valuators. In thisrespect, there are two conflicting theories: principle of indemnity (“Owner?sLoss”) theory and the “Taker?s Gain” theory.
In general, the laws of thecountries which follow the indemnity principle/ Owner?s Loss theory, takes theloss of the property owner into consideration in the course of valuation of themain purpose of compensation, as per this theory, is to reinstate the owner ofthe expropriated property in the same economic position at the time when theproperty was taken. Accordingly, the principle of indemnity suggested that anyclaim for increased compensation due to the value of expropriated propertyshould not be allowed. This is so, according to this theory, if theowner/possessor is to be compensated for the increased value of expropriatedproperty which was not the case had taking was not happened, it can be tantamountto compensating him/her for the loss he/she has not suffered.
( Girma Kassa Kumsa, 2011). Principlesof compensation for expropriationAccordingto (Dinda, 2016) compensationfor expropriation should be concerned with the folowing principles: Land shouldbe valued at a clearly specified time, equivalent compensationmeasuring at market price, compensationassessment must be based on free negotiation among all concerned body icludingland owners, provision to share profits of the industrial activities may begiven to the land-losers as a part of the compensation payment, one part ofindustrial or commercial developed plot may be allotted to the land-losers, ifthey are interested, land-loser should not be deprived in the cost of publicinterest and their survival should be ensured providing alternatives, thecompensation is calculated considering the value of land costs and its rightsand the determination of equivalent compensation can be difficult, when landmarkets are weak, or market does not exit, or individual has only rights to usethe land.Justifications for CompensationpaymentPayment ofcompensation can be justified on variety of grounds, including economic andsocio-political. To begin with economic justifications, it is argued thatpayment of compensation can encourage the governments to make wise decisions.Because of the cost of compensation, it is argued that, “it will always striveto make rational economic decisions that will bring beneficial development toall parties.
” The other justification rests up on the principle of distributingthe burden of public improvements. Accordingly, compensation is a means to keepthe balance of social justice. The last,but not certainly least, justification for compensation is to protect privateproperty from arbitrary and unauthorized takings of the government organs thatexercise the power of expropriation. To sum up, although the constitutionalright to private property can be restricted for the protection and advancementof public interests, the owner should be compensated for what he isdispossessed because it is not fair to single him out to bear the costs ofsociety alone. Therefore, the procedure of expropriation should be lawful andhas to guarantee the right of compensation(Girma Kassa Kumsa, 2011).Unlike the principle of indemnity, the Taker?s GainTheory maintains that “the government should pay only for what it gets”. Thisargument emanates from the concern that the discrepancy between the value ofthe thing taken by the government and the loss suffered by the owner is causedbecause of disturbance of a business on the land or other similar remotedamages, which would drain the purse of the government or other beneficiary forthat matter. Accordingly, compensation for “consequential damages” like thefuture loss of profits, expenses of moving fixtures and personal property, theloss of goodwill that inherent in the location, must be denied because as it isnot a benefit goes to the government’s pocket.
Mode ofcompensationConcerningthe mode of compensation there are different types of compensation foraccording to various land-losers having different interest and preferences. Forexample in Indian land acquisition law of 1894 follows cash for land principleand all developed countries like the USA, UK, Denmark, etc follow land for landprinciple (Dinda, 2016)Cash for landCash compensation can provide opportunities for opening family businessand attempt to reduce agricultural- dependency. Amount of compensation isdetermined at current market price considering quality of land, location,access, etc. Cash compensation disproportionately benefits some interest groupbut not small and marginal farmers, or the landless workers but more attractive to rich farmers, who then reinvest it inthe non-agricultural sector(Dinda,2016).
Land For LandThe principle of land-for-land shouldbe focused on compensation policies, especially for the tribal area. In thisprinciple, land is given to the land-losers and they can carry on agriculturalactivities which definitely ensure sustainability of food security and incomegenerations. Having satisfied with new sites they will neverresort to any protests or agitations against acquiring land for public purpose (Chaudhry, 2011).
Job for Land The amount ofcompensation is generally calculated on the basis of land area but does nottake into account of land-loser’s loss, for example, loss of livelihood or lossrelated to dislocation etc. Apart from cash compensation for land, according tothe requirement if any, appropriate jobs can be offered to the skilled orsemi-skilled land-losers as an alternative choice of compensation. It should bementioned that it is not only the land-owner who actually suffers loss becauseof the land acquisition, but there are many other landless people who losetheir means of livelihood attached to the land which is acquired, for example,weavers, barbers, landless labour, potters, carpenters, etc. They face loss dueto the acquisition of land as well as due to the breaking up of the community (Chaudhry, 2011). How do we ensure theirlivelihood for sustainable development? Partial Share Holding Land, in general,is transferred to company for industrial activity after the acquisition ofland. The land-losers get the compensation immediately and one part of theshare of the company should be distributed among the land-losers.
In suchcases, the land-losers hold a partial ownership rights and participate in thedecision-making process, and also receive one part of profit of the company. Compensate as a Part of Developed Land The choiceoptions should be given to the land-owner that they must select and accepteither the fixed amount of compensation for their land or a part of developedland, which is an alternative replacing monetary compensation. This is one kindof forced participation in development activity and visualize the developmentprospects.
Mechanism of compensation as a part of developed land is simple. Forexample, the government acquires land for the residential purpose. FollowingHaryana model (Chau (Chaudhry, 2011)dhry, 2011), it canbe discussed for our understanding.
Suppose 40 per cent of the acquired land isused for civic amenities (i.e., construction of roads, parks, schools, playgrounds, etc.), and remaining 60 per cent of the total land is divided into 3:2ratio between the government and the land-losers. Now, the government is freeto use its 36 per cent land for the project, and the land-loser gets their 24per cent land as compensation for the whole land acquired by the government.So, total land is divided into two parts—one is civic amenities and another is’developed land’. Forty per cent of developed land is allotted to theland-loser as compensation. So, 24 per cent of total Dinda 117 acquired land is used forcompensation.
4 Itis exactly Haryana model except land allocation for civic amenity, whichrequires 45 per cent instead of 40 per cent of acquired land.Regular Rent PaymentGenerally, thegovernment acquires land from owners. After acquiring land, the governmentsales or leases out the whole or part of the acquired land to the company. Thegovernment receives the rent or fixed income from the acquired land since it istransferred to company on lease on fixed rent yearly, while land-losers getone-time compensation. In such cases, part of regular income of the governmentfrom that acquired land can be shared with the land-losers as a part ofcompensation (Chaudhry, 2011). Another way to ensure regular income is theannuity for a certain period. Auction of LandThequestion of adequate or appropriate compensation remains unsolved.
It will beresolved either accepting the agreed formula of determining value of land forcompensation or through auction of land. The actual market price of land willbe emerged as soon as the government creates the provision for auctioning ofland to be acquired. The government should organise and manage such anauctioning and tender price system in a transparent manner (Chaudhry, 2011;Ghatak & Ghosh, 2011; Ghatak & Mookherjee, 2011).Time and manner ofcompensation paymentMany international legal laws shows thatcompensation should be appropriate, additionally concerning to the manner andtime of compensation. According to (Dinda, 2016) compensationfor expropriation should be concerned with the following principles such as Landshould be valued at a clearly specified and reasonable time, equivalentcompensation measuring at market price, compensation assessment must be based on free negotiationamong all concerned body including land owners.
compensation should be paid ontime and legal laws should confirm thatindividuals receive full payment which agreed-upon compensation sum in timelymanner. (Alemu, 2012).The sum goal of compulsory acquisition of property is to promotesociety and facilitates for further development and total welfare of society sosocially economically feasible, and in multi-dimension must be some kind of balance between.